The drafts which are backed up by banks and are payable to seller of products or services are classified as ___________?
Correct answer: A. banker acceptance
- A. banker acceptance
- B. secured acceptance
- C. unsecured acceptance
- D. economic acceptanceAccounting & Auditing
Explanation
A banker’s acceptance is a time draft accepted and guaranteed by a bank, making it payable to the seller or beneficiary in a trade transaction. The bank’s acceptance provides assurance of payment.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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