Examveda
Examveda

Firm's promise to pay and is backed or guaranteed by bank is classified as

A. customer's acceptance

B. banker's acceptance

C. federal acceptance

D. treasury acceptance

Answer: Option B

Solution(By Examveda Team)

Firm's promise to pay and is backed or guaranteed by bank is classified as banker's acceptance. A banker's acceptance (BA) is a short-term debt instrument issued by a company that is guaranteed by a commercial bank. Banker's acceptances are issued as part of a commercial transaction.

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