CFA Practice Question

There are 120 practice questions for this study session.

CFA Practice Question

Which of the following methods would be least likely to improve the cash collections of a retail organization?

A. Lockbox
B. Debit cards
C. Electronic checks
Correct Answer: A

A lockbox is a deposit system coordinated with a bank; it is useful when the customer is not paying at the time of sale. In retail organizations, the customer normally pays at the time of sale and the best way to improve cash collections are to ensure the payments made at that time have no credit risk for the seller. Debit cards, credit cards, and electronic checks eliminate the credit risk for the seller.

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