BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bill of exchange
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Cheque
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Promissory note
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Indorsement
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Detailed explanation-1: -Cheque is a document for easy payment but payment can only be made on demand and a cheque is valid only for 3months. There is no requirement of stamping.
Detailed explanation-2: -It does not require acceptance and stamp: Unlike a bill of exchange, a cheque does not require acceptance on part of the drawee. There is, however, a custom among banks to mark cheques as ‘good’ for the purpose of clearance.
Detailed explanation-3: -(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.
Detailed explanation-4: -Banker’s Cheque This is the reason banker’s cheques are called non-negotiable instruments as there is no room for banks to dishonour these cheques.
Detailed explanation-5: -A crossed cheque can only be paid in account & hence it is not a negotiable instrument.