Which one of the following credit instruments is commonly used in international commerce?
A) Open account
B) Sight draft
C) Time draft
D) Banker's acceptance
E) Promissory note

Question

Quizplus · Accepted Answer

Banker's acceptance is commonly used in international commerce because it is a time draft that is guaranteed by a bank, providing assurance to the seller that they will receive payment. Open account and promissory notes may not provide sufficient security for international transactions, while sight drafts may require the buyer to pay before receiving the goods, which can create cash flow issues.

Which One of the Following Credit Instruments Is Commonly Used