Bankers' acceptances: issued by a nonfinancial firm, these financial instruments are guaranteed by a bank. There is less risk involved because of bank backing.
A financial instrument can be defined as a real or virtual document that is typically used to represent a legal and contractual agreement that exist between two parties, which generally involves holds a monetary value.
In Financial accounting, there are five major categories of financial instrument and these include the following:
A banker's acceptance can be defined as a type of financial instrument that is typically used to represent a promised future payment by a bank, rather than an individual accountholder.
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Complete Question:
Financial instruments are assets that have a monetary value or record a monetary transaction. To coordinate the exchange of capital between borrowers and lenders, financial instruments trade in the financial markets. These financial instruments can be categorized on the basis of their issuers, maturity, risk, and other factors.
Identify the financial instruments based on the following descriptions.
Issued by a nonfinancial firm, these financial instruments are guaranteed by a bank. there is less risk involved because of bank backing.
