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

Question

Quizplus · Accepted Answer

The collection float is the total time from when a customer sends their payment to when the funds are available in the company's account. Adding the days for each step (3 days for payments to reach the company, 1 day for processing and depositing, and 2 days for the checks to clear), the total is 6 days.

KJ Enterprises Estimates That It Takes, on Average, Three Days