Drafts and Checks: Time vs Sight Drafts
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Questions and Answers

Which type of draft is payable at a definite future time?

  • Time draft (correct)
  • Check
  • Sight draft
  • Trade acceptance

    • In a trade acceptance, who is the drawer and the payee?

  • Bank
  • Drawee
  • Seller of the goods (correct)
  • Buyer of the goods

    • What type of draft frequently used in the sale of goods is a trade acceptance?

  • Sight draft
  • Check
  • Time draft
  • Banker's acceptance (correct)

    • What is the role of the drawee in a trade acceptance?

    <p>Buyer of the goods</p> Signup and view all the answers

    Which draft is the most common form of draft?

    <p>Check</p> Signup and view all the answers

    What does a draft that is both a time draft and sight draft mean?

    <p>Payable after a definite period following presentation</p> Signup and view all the answers

    Who is the maker of a promissory note?

    <p>The bank</p> Signup and view all the answers

    What is a certificate of deposit (CD) considered as?

    <p>A type of promissory note</p> Signup and view all the answers

    In the context of checks, who is the drawee?

    <p>The bank</p> Signup and view all the answers

    What does a promissory note promise?

    <p>To pay at a definite future time</p> Signup and view all the answers

    Who is typically assigned a promissory note?

    <p>The payee</p> Signup and view all the answers

    On certain types of checks, who is both the drawer and the drawee?

    <p>The bank</p> Signup and view all the answers

    What distinguishes a demand instrument from a time instrument?

    <p>A demand instrument is payable on demand, while a time instrument is payable at a future date.</p> Signup and view all the answers

    What characterizes a draft among negotiable instruments?

    <p>A draft involves an unconditional written order and three parties: the drawer, the drawee, and the payee.</p> Signup and view all the answers

    What is the most common type of draft?

    <p>Check</p> Signup and view all the answers

    Which negotiable instrument is characterized by being payable at a future date?

    <p>Promissory note</p> Signup and view all the answers

    What does a time instrument indicate about payment?

    <p>Payable at a future date</p> Signup and view all the answers

    In the context of negotiable instruments, what role does the drawer play in a draft?

    <p>The drawer is the party who orders another party to pay money.</p> Signup and view all the answers

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