Acceptor

AAA

DEFINITION of 'Acceptor'

The acceptor is the third party who accepts responsibility for payment in a bill of exchange drawn upon it. The bill of exchange will generally have three parties: the drawor, the drawee and the acceptor.

INVESTOPEDIA EXPLAINS 'Acceptor'

The simplest example of an acceptor is a bank who accepts a check drawn against it and assumes responsibility for payment of the check. Company XYZ has paid Electric Company ABC through a check drawn against Bank DEF. When Electric Company ABC presents the check for payment, and the bank agrees to pay the check, it becomes the "acceptor."

RELATED TERMS
  1. Bank Endorsement

    An endorsement by a bank for a negotiable instrument, such as ...
  2. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  3. Check

    A written, dated and signed instrument that contains an unconditional ...
  4. Bill Of Exchange

    A non-interest-bearing written order used primarily in international ...
  5. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  6. Remote Deposit Capture

    A technology-based method that lets banks accept checks for deposit ...
RELATED FAQS
  1. How does your checking account affect your credit score?

    Your credit report provides a snapshot for prospective lenders, landlords and employers of how you handle credit. For any ... Read Full Answer >>
  2. What is the banking sector?

    The banking sector is the section of the economy devoted to the holding of financial assets for others, investing those financial ... Read Full Answer >>
  3. What's the difference between a letter of credit and a bank guarantee?

    Bank guarantees represent a more significant contractual obligation for banks than letters of credit do. A letter of credit ... Read Full Answer >>
  4. How do leverage ratios help to regulate how much banks lend or invest?

    Banks are among the most leveraged institutions in the United States; the combination of fractional-reserve banking and Federal ... Read Full Answer >>
  5. Can I use a prepaid credit card to pay bills or to transfer money to other accounts?

    Prepaid credit cards may be used to both pay bills, either as a one-time transaction or recurring transaction, and to transfer ... Read Full Answer >>
  6. What’s the difference between overdraft protection and overdraft settings?

    Overdrafting refers to the practice of granting short-term credit to an account holder when his or her balance reaches zero. ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  2. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  3. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  4. Credit & Loans

    Banking Stress Tests: Would Yours Pass?

    In weaker economic times, banks may be tested by the government to see how safe they are.
  5. Options & Futures

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  6. Budgeting

    When Good People Write Bad Checks

    Overdraft protection can help when you overestimate your balance, but it will cost you.
  7. Retirement

    The Money Market

    If your investments in the stock market are keeping you from sleeping at night, it's time to learn about the safer alternatives in the money market.
  8. Economics

    Understanding Term Loans

    A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate.
  9. Economics

    Explaining Tier 1 Capital

    Tier 1 capital refers to the core capital a bank must maintain in relation to its assets.
  10. Credit & Loans

    What's a Revolving Line of Credit?

    A revolving line of credit is an arrangement made between a company or an individual and a bank to borrow money on a short-term basis.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center