In a draft transaction, if the drawee is a buyer of the drawer, then the draft is referred to as a ________.

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Quizplus · Accepted Answer

A trade acceptance is a type of draft that is used in commercial transactions where the drawee (the buyer) accepts the obligation to pay the amount specified in the draft to the drawer (the seller) at a later date. It functions as a type of promissory note, but is specifically used in international trade. A check is a similar instrument, but is typically used in domestic transactions between individuals rather than in international commercial transactions. A certificate of deposit is a type of savings account that earns interest, but it is not a form of draft.

In a Draft Transaction, If the Drawee Is a Buyer