Question

Lockbox payments are collected by a:

1. Employee of the company
2. Customers of the company
3. Commercial banks hired by the company

Answer 1

Answer: C. Commercial banks hired by the company

Lockbox banking is a service provided by banks to companies for the receipt of payment from customers. The bank goes to the box, retrieves the payments, processes them and deposits the funds directly into the company's bank account. In banking, a lock box is a service offered by commercial banks to organizations that simplifies collection and processing of account receivables by having those organizations' customers payments mailed directly to a location accessible by the bank.