Transit float is caused by
A) the time necessary for a deposited check to clear the banking system and become usable funds to the company.
B) the time funds are not available, through the company's bank account, until its payment check has cleared the banking system.
C) the elapsed time from the moment a customer mails his remittance check until the firm begins to process it.
D) the time required for the firm to process remittance checks.

Question

Quizplus · Accepted Answer

Transit float refers to the time it takes for a deposited check to clear the banking system, which means that the funds are not yet available for use by the company. This can happen due to various reasons such as bank processing times, weekends and holidays, and other factors. The company may have to wait for several days before the check fully clears and the funds become usable.

Transit Float Is Caused by