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JAMB Commerce 2005 Question 31

Question 31

Banking

A cheque drawn by a bank official on the bank's deposits in another bank on a customer's instructions is known as

  1. A.promissary note
  2. B.bankdraft
  3. C.bankers' order
  4. D.travellers' cheque
Show the answer and explanation

Answer: B (bankdraft)

Explanation

A bank draft is a cheque drawn by the bank itself (on its own account), so the payee is sure it will be paid.