Chapter 17, Problem 2QP

Summary Introduction

To discuss: Whether the transaction create a disbursement float or collection float.

Introduction:

Float refers to the difference between the cash value mentioned in the books and the cash value mentioned in the bank passbook.

Disbursement float is a condition where the company’s book balance is lower than the available cash balance.

Collection float is a condition where the company’s book balance is higher than the available cash balance.

Summary Introduction

To determine: The available balance and book balance.