Question

Bills of Exchange is an Instrument of ______.

Options

• ICD

• Trade Credit

• Loan

• None of these

Answer 1

Bills of Exchange is an Instrument of trade credit.

Explanation:

A written financial document used in business dealings is called a bill of exchange. It is a formal agreement that requires one party to reimburse another party for a certain sum at a later date. It is often used for:

• Using credit to purchase and sell things.
• Giving companies short-term trade credit.
• Ensuring the security of payments in business transactions.