BANKER'S ACCEPTANCE Definition

Bookmark and Share

BANKER'S ACCEPTANCE (BA) is a money market instrument that is issued in discounted form. A banker's acceptance is created when a bank accepts responsibility for payment of business debt by signing a letter of credit. Banker's acceptances are sold to acceptance dealers and may be resold to numerous other parties before the loan is repaid. The investor who last owns the acceptance when the debt becomes due has a right to collect from the borrower. Should the borrower default, the investor can also pursue payment from the accepting bank.

Learn new Accounting Terms

DPO see DAYS PAYABLE OUTSTANDING.

HARD COPY is a printed copy of information as opposed to information stored in computer readable form.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.