BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Acceptance
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Honor
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Dishonor
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Promissory note
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Detailed explanation-1: -In simple terms, the acceptance of a bill of exchange is a guarantee of payment extended by the drawee towards the order of the drawer. Acceptance is vital because without it, the drawee of the bill is under no legal liability to make the payment on any bill addressed to him.
Detailed explanation-2: -A bill of exchange before acceptance is called a draft.
Detailed explanation-3: -When a bill was drawn by the creditor upon his debtor, it has to be accepted by the debtor or someone on his behalf. The acceptance made by debtor makes draft a bill.
Detailed explanation-4: -The promise to pay is an unconditional promise; this means your obligation to pay isn’t subject to any condition such as requiring that a specific event must first happen, or a particular action must first be taken.