A lockbox plan is
A) A method for safe-keeping of marketable securities.
B) Used to identify inventory safety stocks.
C) A system for slowing down the collection of checks written by a firm.
D) A system for speeding up a firm's collections of checks received.
E) Not described by any of the above statements.

Question

Quizplus · Accepted Answer

A lockbox plan is a system put into place by a business to expedite the processing of payments received by mail. The lockbox plan involves having the payments sent to a special post office box which is controlled by the bank. The bank processes the payments, deposits them directly into the business's account, and transfers the remittance information to the business for efficient collection.

A Lockbox Plan Is