"Float" takes place because
A) a firm is early in paying its bills.
B) the level of cash on the firm's books is equal to the level of cash in the bank.
C) a lag exists between writing a check and clearing it through the banking system.
D) a customer writes checks without adequate supporting balances.

Question

Quizplus · Accepted Answer

"Float" occurs because there is a time delay between writing a check and it being cleared through the banking system. This delay creates a temporary increase in the available funds for the party writing the check, known as "float."

"Float" Takes Place Because