Drafts and Checks: Time vs Sight Drafts

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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?

Buyer of the goods Signup and view all the answers

Which draft is the most common form of draft?

Check Signup and view all the answers

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

Payable after a definite period following presentation Signup and view all the answers

Who is the maker of a promissory note?

The bank Signup and view all the answers

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

A type of promissory note Signup and view all the answers

In the context of checks, who is the drawee?

The bank Signup and view all the answers

What does a promissory note promise?

To pay at a definite future time Signup and view all the answers

Who is typically assigned a promissory note?

The payee Signup and view all the answers

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

The bank Signup and view all the answers

What distinguishes a demand instrument from a time instrument?

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

What characterizes a draft among negotiable instruments?

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

What is the most common type of draft?

Check Signup and view all the answers

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

Promissory note Signup and view all the answers

What does a time instrument indicate about payment?

Payable at a future date Signup and view all the answers

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

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

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?

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

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

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

Which draft is the most common form of draft?

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

Who is the maker of a promissory note?

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

In the context of checks, who is the drawee?

What does a promissory note promise?

Who is typically assigned a promissory note?

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

What distinguishes a demand instrument from a time instrument?

What characterizes a draft among negotiable instruments?

What is the most common type of draft?

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

What does a time instrument indicate about payment?

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

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