Asked by Maren Williams on Apr 23, 2024
Verified
A draft (or bill of exchange)is a written promise by the maker to pay money to the order of another party,called the payee.
Bill of Exchange
A written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), to a third party (the payee) or to bearer.
Draft
A draft refers to the compulsory enrollment of individuals into military service, or can refer to the preliminary version of a document or plan.
Payee
The person or entity to whom a check, draft, or promissory note is made payable.
- Distinguish between different kinds of negotiable instruments like drafts, money orders, and checks.
Verified Answer
PO
Payton ONeill8 days ago
Final Answer :
False
Explanation :
A draft (or bill of exchange) is an order from one party to another to pay money to a third party, not a promise by the maker to pay; that description fits a promissory note.
Learning Objectives
- Distinguish between different kinds of negotiable instruments like drafts, money orders, and checks.