Question

    The term float is used in:

    A Inventory Management Correct Answer Incorrect Answer
    B Receivable Management Correct Answer Incorrect Answer
    C Cash Management Correct Answer Incorrect Answer
    D Marketable securities. Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The term "float" is most commonly used in cash management. Float refers to the time period between when a payment is initiated and when the funds are actually made available to the recipient. During this time period, the funds are said to be "in transit" and not available for use by either the payer or the payee.

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