Question
Campbell and Campbell Company is considering the use of a lock-box collection system because of the companys high volume of credit sales transactions. They have
Campbell and Campbell Company is considering the use of a lock-box collection system because of the companys high volume of credit sales transactions. They have sought input from you regarding the potential benefits of a lock-box collection system. Which of the following would not be an expected benefit from the utilization of a lock-box collection system?
Group of answer choices
The companys handling of cash collections would be increased significantly, resulting in greater cost to the company and greater security.
Companies with a high volume of cash receipts received via the mail should expect to benefit significantly from the use of a lock-box collection system.
Use of a lock-box collection system should be expected to improve the management of bad debts by reducing the likelihood of the company receiving dishonored checks, and also contributing to the earlier identification of dishonored checks.
Cash would be available at an earlier point in time to help the company meet current liabilities as they become due.
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