Which One of the Following Describes a Banker's Acceptance

question 18

Multiple Choice

Which one of the following describes a banker's acceptance?

• A)agreement to loan money in exchange for an agreement by the borrower to offer an asset as collateral
• B)written agreement to loan funds in the future once the loan terms have been accepted
• C)postdated check with payment guaranteed by a bank
• D)agreement by a bank to provide short-term funds for the construction phase of a project
• E)the sale of a security by a bank accompanied by an agreement to repurchase the security the following day

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Definitions:

Asset Turnover

A ratio indicating the effectiveness with which a firm employs its assets to generate sales.

Net Sales

This is the total amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Total Assets

Total Assets are all the assets a company owns, including cash, inventory, property, and equipment, showcasing the entity’s financial standing.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a period.