Which of the following is the technique for reducing collection float by having funds sent to several geographically situated regional banks and then transferring to a main concentration account in another bank?
A) lockbox system
B) concentration banking
C) wire transfers
D) collection float

Question

Quizplus · Accepted Answer

Concentration banking involves utilizing several regional banks to reduce collection float by having funds sent to those banks and then transferring them to a main concentration account in another bank. This technique helps in consolidating funds and reducing the time taken for collection and transfer of funds. The lockbox system is another technique that can reduce collection float, but it involves having payments sent directly to a designated PO box for processing. Wire transfers and collection float are not techniques for reducing collection float, but rather factors that can affect it.

Which of the Following Is the Technique for Reducing Collection