All of the following are components of float except:
A)the time it takes the receiving firm to make a sale on credit and receive payment from the purchasing firm.
B)the time it takes the cheque to clear through the banking system so that the funds are available to the firm.
C)the time it takes the receiving firm to process the cheque and deposit it in an account.
D)the time it takes the cheque to reach the firm after it is mailed by the customer.

Question

Quizplus · Accepted Answer

Float refers to the time difference between when a cheque is issued and when it is cleared and the funds are available. It includes the processing time (C), mailing time (D), and clearing time (B), but not the time it takes to make a sale and receive payment (A), which is related to the sales cycle, not the cheque processing cycle.

All of the Following Are Components of Float Except