A sight draft that arises when a seller extends credit to a buyer with the sale of goods is known as a ________.
A) check
B) time draft
C) trade acceptance
D) demand draft

Question

Quizplus · Accepted Answer

A trade acceptance is a sight draft that arises when a seller extends credit to a buyer with the sale of goods. The buyer accepts the draft and agrees to pay the seller at a later date. A check is a type of demand draft, but it is not necessarily related to the sale of goods. A time draft is a type of draft that is payable at a future date, whereas a trade acceptance is payable on sight.

A Sight Draft That Arises When a Seller Extends Credit