All of the following are different techniques that can be used to help firms reduce collection float except ___________.
A) Use drafts
B) Use wire transfers
C) Use concentration banking
D) Use a lockbox system

Question

Quizplus · Accepted Answer

Using drafts actually increases collection float, as the payment is not immediately withdrawn from the payer's account and may take several days to clear. The other options listed (B, C, and D) are all techniques that can help firms reduce collection float. Wire transfers allow for immediate transfer of funds, concentration banking combines multiple deposits into one large deposit to accelerate availability of funds, and a lockbox system allows for direct deposit of payments directly into the firm's bank account.

All of the Following Are Different Techniques That Can Be