Which of the Following Attributes of a Bankers' Acceptance Greatly

question 34

Multiple Choice

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

• A)the authenticity of an accepted draft is separated from the underlying commercial transaction
• B)the accepted draft may not be dishonored for reason of a dispute between the exporter and importer
• C)the accepted draft is automatically guaranteed by the Eximbank
• D)both a and b

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Definitions:

Price Variance

The difference between the expected price and the actual price paid for an item.

Factory Overhead Volume Variance

The difference between the budgeted and actual overhead costs due to variations in the volume of production.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the hours actually worked.

Time Variances

The difference between actual time taken to perform an activity and the standard time expected.