What is a draft drawn on a bank and payable on demand commonly referred to as?

A draft drawn on a bank that is payable on demand is commonly referred to as a check. A check is a written order directing a bank to pay a specified amount of money from one person's account to another person or entity. It can be cashed or deposited by the payee at any time, which aligns perfectly with the definition of being "payable on demand."

In this context, checks serve as a widely accepted form of payment in both personal and business transactions, providing convenience and a written record of the transaction. This understanding is essential in the funeral service industry, as funeral homes often deal with various forms of payment, and recognizing checks as a standard method ensures proper handling of transactions.

While other options such as wire transfers and money orders relate to the transfer of funds, they do not represent the same mechanism as a check. Wire transfers are electronic transfers that typically require advance arrangements, while money orders are prepaid instruments that are also used to send payments but involve different purchasing methods. Cash equivalent refers to assets that are easily convertible into cash, but again, this does not align with the nature of a draft drawn on a bank.