Ace the AFP Exam 2025 – Boost Your Financial Wizardry!

A banker's acceptance is a financial tool that facilitates the financing of goods shipments in trade, as it functions as a time draft that a bank guarantees to pay a specified amount at a future date. When a seller ships goods, they can present the banker's acceptance to their bank for immediate payment, rather than waiting for the buyer to settle the invoice. This tool not only assures the seller that they will receive payment but also provides the buyer time to sell the goods before payment is due.

In contrast, other options do not specifically address financing in the context of trade logistics. For instance, a commercial invoice is simply a document detailing the sale and terms between buyer and seller but does not serve as a financial instrument. A letter of credit, while also a financing tool for international trade, works differently by providing a guarantee from a bank to pay the seller contingent on fulfilling the terms of the agreement. A promissory note represents a written promise to pay a debt but is not specifically tailored for the trade financing context like a banker's acceptance.