Which one of the following is an expected result of the Check Clearing Act for the Century?
A) Firms will have to wait three days before having access to their deposited funds.
B) Zero-balance accounts will be eliminated.
C) Lockboxes will be prohibited.
D) Collection float, but not disbursement float, will be reduced.
E) Both collection and disbursement float will be reduced.

Question

Which one of the following is an expected result of the Check Clearing Act for the  Century?
A) Firms will have to wait three days before having access to their deposited funds. 
B) Zero-balance accounts will be eliminated. 
C) Lockboxes will be prohibited. 
D) Collection float, but not disbursement float, will be reduced. 
E) Both collection and disbursement float will be reduced.

Quizplus · Accepted Answer

The Check Clearing Act for the 21st Century, also known as Check 21, allows banks to create electronic images of paper checks, which reduces the time and cost of processing checks. As a result, both collection and disbursement float (the time between when a check is deposited and when the funds are available) are expected to be reduced, making it faster for firms to access their deposited funds. Option A is incorrect as Check 21 actually reduces the time for funds availability. Option B is not related to Check 21. Option C is also incorrect as Lockboxes are not prohibited by Check 21. Option D is partially correct but incomplete, as Check 21 actually reduces both collection and disbursement float.

Which One of the Following Is an Expected Result of the Check