Question

Choose the right statements:-

1. In practice, sellers of goods, in general, almost never insist on their rights to demand cash for payment, but readily take certain bills, such as ( ) for substitutes.
A. bill of exchange
B. promissory note
C. cheque
D. draft
2. A bill of exchange involves three parties ( ):
A. drawer
B. drawee
C. payer
D. payee
3. The forms of draft might be different, but the contents are basically the same as listed below including ( ).
A. An unconditional order in writing Date and place of issue
B. Time of payment
C. Name of payee/drawer/drawee
D. Currency and amount
4. According to different the Drawer, the draft can be divided into
A. Banker's Draft
B. Commercial Draft
C. Clean Draft
D. Documentary Draft
5. According to the time of payment, the draft can be divided into
A. Banker's Draft
B. Commereial Draft
C. Sight Draft or demand Draft
D. Usance Bill or Time Bill
6. In case of a ( ), the drawee is required to accept it first and pay it at a fixed or determinable future time, in other words, it requires acceptance before payment.
A. usance bill
B. demand bill
C. Sight Draft
D. Time Bill

Answer 1

To correctly identify payment instruments in business, one needs to recognize the roles of different parties in a bill of exchange, the various types of drafts, and the time of payment classifications. Cheques are commonly accepted in place of cash, drafts contain specific written orders and beneficiary details, and a usance bill requires acceptance before future payment.

Step-by-step explanation:

Choosing the right statements regarding the forms of payment in business transactions involves understanding how financial instruments such as cheques, drafts, and bills of exchange work. Here are the correct answers:

1. In practice, sellers of goods often take cheques as substitutes for cash.
2. A bill of exchange involves three parties: the drawer, the drawee, and the payee.
3. The contents of a draft include an unconditional order in writing, date and place of issue, time of payment, and the name of the payee/drawer/drawee, currency and amount.
4. According to the drawer, the draft can be divided into Commercial Draft and Banker's Draft.
5. According to the time of payment, the draft can be divided into Sight Draft or Usance Bill also known as Time Bill.
6. In case of a usance bill, the drawee is required to accept it first and pay it at a determinable future time.