Acceptance 1
Definition
A bill of exchange that has been so accepted. Acceptances are divided into two categories: banker’s acceptances and trade acceptances.
Example
Example 1:
A Lagos importer receives a bill of exchange from his supplier in China, by signing it, he formally commits to paying the agreed amount on the due date, making it an acceptance that his bank can now trade or guarantee.
Example 2:
A London trader signs a bill of exchange drawn on him by a Manchester supplier, converting it into a banker’s acceptance, a guaranteed, tradeable financial instrument that can be sold on the money market.