UGM June 2019 Q17
0. A large firm operating over a wide geographical area can speed up its collection by:
- Option : A
- Explanation : Concentration Banking: Large scale organization functions over the wide geographical area. It can increase collections by adopting the method of decentralized collections of accounts receivable. According to this system's number of collections, centers are established by the firm at different places based upon the geographical aspect. In order to speed up its collection in all the places, it has to open its bank accounts in local banks at different places where it has its collection centers. Through this way, collection centers are instructed to collect cheques from their customers and immediately deposit in the local bank account. Every day the amount will be sent to the central office at the earliest.
