Answer (C) is correct . Various methods of accelerating cash collections include decentralized collection outposts (normally one in each Federal Reserve District), electronic funds transfers, centralized banking for all company branches to avoid having to maintain minimum balances in several locations, and lockbox systems. A compensating balance is a minimum average or absolute amount that must be maintained in a bank account. Hence, it is not a means of accelerating cash collections. This requirement means that less cash is available to the depositor.
Answer (A) is incorrect because It is a common method of accelerating cash collections.
Answer (B) is incorrect because It is a common method of accelerating cash collections.
Answer (D) is incorrect because It is a common method of accelerating cash collections.
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