A Written Order for the Bank to Pay a Third

question 124

Multiple Choice

A written order for the bank to pay a third party a stated amount of money on a specific date without any conditions or strings attached is called a(n)

• A) banker's guarantee.
• B) banker's acceptance.
• C) letter of credit.
• D) international promissory note.
• E) international charge agreement.

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Definitions:

Transactions On Account

Financial activities that are recorded on credit, affecting accounts payable or receivable without immediate cash exchange.

Equipment On Account

The acquisition of equipment that is recorded on credit, where payment is deferred to a later date.

Recording Process

The systematic documentation of a company's financial transactions in the appropriate accounts of its accounting system.

Debit Entries

Bookkeeping entries that increase assets or expenses, or decrease liabilities, equity, or income.