Choice "A" is correct. The use of a draft delays a cash disbursement and increases payable float.
Choice "d" is incorrect. Factoring is the sale of accounts receivable to a factor. This has no effect on cash disbursements.
Choice "b" is incorrect. A lock-box system is used to accelerate the inflow of funds.
Choice "c" is incorrect. Compensating balances are a bank requirement related to a loan. The bank will require a certain balance be maintained in cash. This amount cannot be used for working capital purposes.
