Tag: long term sources of finance

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Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Which of the following statement about negotiable instruments is false?

  1. Once a bank certifies, a cheque, the bank must honor it

  2. When a negotiable instrument is transferred to a holder in due course, he is entitled to enforce the instrument.

  3. Earlier more bills of exchange were used.

  4. An instrument can be negotiated even if it is conditional on some future event, or if the amount to be paid will be determined at some future date.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An instrument can be negotiated even if it is conditional on some future event, or if the amount to be paid will be determined at some future date- this is a false statement about the negotiable instrument. Negotiable instruments refers to the document which guarantees payment for specific amount of money.