Which one of the following time periods is included in the accounts receivable period but not in the cash collection period?
A)the period of time between the receipt of a check and the availability of those funds
B)time it takes a firm to process incoming receipts
C)period of time a check is in the mail
D)the amount of time that it takes a bank to credit a firm's account for a deposit made
E)period of time it takes an invoice to reach a customer by mail

Question

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The accounts receivable period includes the time it takes for customers to pay their invoices after they have been sent out. However, the cash collection period takes into account the additional time it takes for the payment to be processed and deposited into the firm's account. Choices A, B, and D all relate to the processing and depositing of funds, which are included in the cash collection period. Choice C refers to the period of time in which the check is in transit, which is not included in either period. Only option E refers to the time it takes for the invoice to reach the customer, which is included in the accounts receivable period but not the cash collection period.

Which One of the Following Time Periods Is Included in the Accounts