MC Enterprises estimates that it takes, on average, seven days for their customers' payments to reach them, two day for the payments to be processed and deposited by their bookkeeping department, and three more days for the checks to clear once they're deposited. What is their collection float?
A)12 days
B)10 days
C)9 days
D)7 days

Question

Quizplus · Accepted Answer

The collection float is the total time from when a payment is mailed by a customer until the funds are available for use by the company. It includes the mailing time (7 days), processing time (2 days), and clearing time (3 days), totaling 12 days.

MC Enterprises Estimates That It Takes, on Average, Seven Days