Which one of the following best defines cash concentration?
A) Combining all of a firm's receipts into one bank deposit
B) Combining a week's worth of cash receipts into one bank deposit
C) Combining cash from multiple banks into a firm's main bank accounts
D) Using multiple lockboxes for collecting cash payments
E) Combining a firm's bills so that disbursement checks are only mailed monthly

Question

Quizplus · Accepted Answer

Cash concentration refers to the process of consolidating cash from multiple bank accounts into a single account in order to optimize the use of funds. This may involve moving cash from subsidiary accounts to a firm's main bank account, allowing for better control over cash balances and reducing the need for excessive bank fees.

Which One of the Following Best Defines Cash Concentration