When the Drawee of a Draft Has Indicated by Writing

question 21

Multiple Choice

When the drawee of a draft has indicated by writing or record a willingness to pay the amount specified in the draft the drawee is called a(n) :

• A) acceptor.
• B) accommodation party.
• C) payee.
• D) secondary obligator.

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Definitions:

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Acid-Test Ratio

A financial metric used to evaluate a company's short-term liquidity position by dividing its most liquid assets by its current liabilities.

Current Ratio

A financial metric indicating a firm's capacity to fulfill its short-term debts, which are obligations due within the next year, by dividing its current assets by its current liabilities.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the company's leverage level.