Fact Pattern 24-2A (Questions A3-A4 apply)
Commodity Sales Corporation and Resource Purchasing Company enter a contract for a sale of unprocessed silver.Commodity Sales draws a draft unconditionally ordering Resource Purchasing to pay $50,000 to Commodity Sales's order in sixty days.Resource Purchasing signs and dates the draft.
-Refer to Fact Pattern 24-2A.This instrument is
A)a banker's acceptance.
B)a nonnegotiable instrument.
C)a promissory note.
D)a trade acceptance.

Question

Quizplus · Accepted Answer

The instrument described in the fact pattern is a trade acceptance, which is a type of bill of exchange used in commercial transactions where the seller draws a draft on the buyer, who accepts it by signing and dating it. In this case, Commodity Sales drew the draft on Resource Purchasing, who signed and dated it, thereby accepting the obligation to pay $50,000 to Commodity Sales in sixty days.

Fact Pattern 24-2A (Questions A3-A4 Apply)