Q994
Firm's promise to pay and is backed or guaranteed by bank is classified as
A.
customer's acceptance
B.
banker's acceptance
AnswerC.
federal acceptance
D.
treasury acceptance
Answer: Option B
Solution
Answer: Option B
Solution:
Firm's promise to pay and is backed or guaranteed by bank is classified as banker's acceptance. A banker's acceptance (BA) is a short-term debt instrument issued by a company that is guaranteed by a commercial bank. Banker's acceptances are issued as part of a commercial transaction.