The delay in transferring funds between payer and payee because of the banking system check-clearing processes.
A) Float
B) Transmission float
C) Processing float
D) Clearing float

Question

Quizplus · Accepted Answer

The delay in transferring funds between payer and payee because of the banking system check-clearing processes is known as the clearing float. This delay occurs due to the time taken by banks to perform necessary checks and clear the payment, resulting in a temporary delay between the payer's account being debited and the payee's account being credited. Therefore, option D (Clearing float) is the best choice. The other options are related to different types of floats that occur in the banking system, but they do not specifically refer to the delay in the transfer of funds due to clearing processes.

The Delay in Transferring Funds Between Payer and Payee Because