Trade Acceptance

Trade Acceptance
A trade acceptance is a time draft that has been accepted by the party to whom it is directed. This financial instrument allows the drawer to demand payment at a future date. Banks or other financial institutions can discount trade acceptances.

Examples:

• Companies accepting payment for goods delivered
• Businesses engaging in international trade
• Parties involved in supply chain transactions

Trade acceptances are legally binding once accepted. They specify the payment amount, due date, and the involved parties.