When a cheque is written by the firm, it is said to generate:
A)a float.
B)an account receivable.
C)an account payable.
D)none of the above.

Question

Quizplus · Accepted Answer

When a firm writes a cheque, it generates a "float," which is the time difference between when a cheque is written and when it is actually deducted from the payer's account. This can temporarily inflate the apparent balance in the payer's account until the cheque is cleared.

When a Cheque Is Written by the Firm, It Is