Practicing Success
Practicing Success
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Which of the following is correct? |
Commercial paper is a short-term unsecured promissory note, non negotiable and non transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year. Commercial bill is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. Both 1 and 2 None of the above |
None of the above |
Commercial Paper: Commercial paper is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year.
A commercial bill is a bill of exchange (and not a promissiory note) used to finance the working capital requirements of business firms. It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. When goods are sold on credit, the buyer becomes liable to make payment on a specific date in future. |
