All of the following are false except: a. The mail float is caused by the time l

Question

All of the following are false except:

a. The mail float is caused by the time lapse from the momenta firm receives the check and begins to process it.
b. The processing float is caused by the time necessary for a bankto process the check.
c. The transit float is caused by the time lapse from the moment acustomer mails a check until the firm begins to process it.
d. The disbursing float derives from the fact that funds remain ina firm's bank account until its payment check is cleared throughthe banking system.

Explanation / Answer

          

1. Mail float is caused by the time lapse fromthe moment a customer mails a remittance check until the firmbegins to process it.

2. Processing float is caused by the timerequired for the firm to process remittance checks before they canbe deposited in the bank.

3. Transit float is caused by the time necessaryfor a deposited check to clear through the commercial bankingsystem and become usable funds to the company. Credit isdeferred for a maximum of two business days on checks that arecleared through the Federal Reserve System.

4. Disbursing float derives from the fact thatfunds remain in a firm’s bank account until its payment checkis cleared through the banking system.

Thus, Answer is Option (d)

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