With respect to a lockbox system of cash collections, which one of the following statements is correct?

Multiple Choice

• Mailing time is reduced while the collection time remains constant.

• Electronic lockboxes have totally replaced traditional lockbox systems.

• Checks can be deposited prior to the payments being applied to the customers accounts.

• Mailing time is reduced but the processing delay is increased.

• Checks are held by the bank until the payee firm approves them to start the check-clearing process.