Which of the Following Is NOT an Important Attribute of a Bankers

question 17

Multiple Choice

Which of the following is NOT an important attribute of a bankers' acceptance?

• A)makes an unconditional promise to pay the holder of the draft a stated amount on a specified day
• B)effectively substitutes its own credit for that of a borrower
• C)creates a negotiable instrument that may be freely traded
• D)offers the holder a binding agreement to repayment by the exporter if the importer defaults

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Definitions:

Average Common Stockholders' Equity

The average equity held by common shareholders, calculated typically over a year, representing the company's assets minus its liabilities attributable to common shareholders.

Prior Period Adjustment

Adjustments made to the financial statements of a prior period to correct errors or implement changes in accounting policy.

Retained Earnings Account

An equity account on the balance sheet that represents the accumulated net earnings not distributed to shareholders in the form of dividends.

Net Income

The final income of a company, achieved by subtracting expenses and taxes from the total revenues.