Which firm will benefit the most from a lock-box service?
A) A firm that has a large number of suppliers
B) A firm that writes a large number of checks daily
C) A firm that has a geographically dispersed customer base
D) A firm that sells goods to a very few customers

Question

Quizplus · Accepted Answer

A lock-box service is designed to expedite collections from a geographically dispersed customer base by providing a regional post office box, where customers can send their payments. A firm that has a geographically dispersed customer base will benefit the most from this service. This will help in reducing the time lag between receiving the payment and depositing the check, thereby improving the cash flow of the business.

Which Firm Will Benefit the Most from a Lock-Box Service