The time between when a payee sends payment and the funds are credited to the payer's bank account is called the:
A)collection float
B)disbursement float
C)total float
D)transmittal float

Question

Quizplus · Accepted Answer

Collection float refers to the time gap between when a payment is made by the payee and when the payment is actually credited to the payee's bank account. It consists of the processing time taken by the bank to clear and credit the funds to the payee's account. Hence, option A is the correct choice. Disbursement float refers to the time between when the payer initiates payment and when the funds are actually debited from their bank account. Total float is the sum of collection and disbursement float. Transmittal float is not a relevant term in this context.

The Time Between When a Payee Sends Payment and the Funds