Float is best described by which of the below? a. Investing excess cash balances

Question

Float is best described by which of the below?
a. Investing excess cash balances. b. The time required for a deposited check to clear throughthe commercial banking system and be available for payment. c. The term used to describe payment for the purchase of rawmaterials that are needed to complete production of a luxuryliner. d. The time that is required to receive payment on aZBA. Float is best described by which of the below?
a. Investing excess cash balances. b. The time required for a deposited check to clear throughthe commercial banking system and be available for payment. c. The term used to describe payment for the purchase of rawmaterials that are needed to complete production of a luxuryliner. d. The time that is required to receive payment on aZBA.

Explanation / Answer

         Floatinvolves funds tied up from the time remittance checks aredeposited until these funds become usable to the company. This float occurs because it takes several days for depositedchecks to clear through the commercial banking system. Answer is Option (b) The time required for a depositedcheck to clear through the commercial banking system and beavailable for payment.

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