Which One of the Following Is NOT an Important Attribute

question 22

Multiple Choice

Which one 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) it allows the bank to hold them on their books as an asset

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Definitions:

Indirect Cost

Expenses not directly tied to the production of goods or services, such as administrative salaries, rent, and utilities.

Days' Payable Outstanding

A financial metric that calculates the average time it takes a company to pay its invoices from suppliers, reflecting its payment process efficiency.

Cash Conversion Cycle

An indicator that calculates how long a business requires to turn its inventory and asset investments into cash earnings from sales activities.

Departmental Contributions

The financial or resource contributions made by individual departments towards the achievement of the overall organizational goals.