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Which type of instrument is payable on demand?
- a)Instrument marked "payable at sight"
- b)Instrument marked "after date"
- c)Instrument marked "payable on demand"
- d)Instrument marked "after sight"
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Which type of instrument is payable on demand?a)Instrument marked &quo...
An instrument marked "payable on demand" implies that the payment is to be made immediately or at once upon demand. This includes instruments such as cheques, as well as promissory notes or bills of exchange marked as "payable on demand" or "payable on presentment."
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Which type of instrument is payable on demand?a)Instrument marked &quo...
Understanding Payable on Demand Instruments
In financial terminology, an instrument that is "payable on demand" refers to a financial tool that can be cashed or settled at any time the holder wishes, without any delay. Let’s break down the options provided:
Options Explained
- Instrument marked "payable at sight"
- This instrument is similar to "payable on demand" but specifically indicates that payment is due upon presentation. While closely related, "payable on demand" is a broader term.
- Instrument marked "after date"
- This type of instrument specifies that it can only be paid after a certain date. Thus, it does not qualify as payable on demand.
- Instrument marked "payable on demand"
- This is the correct answer. It explicitly states that it can be paid whenever the holder requests, making it a true demand instrument.
- Instrument marked "after sight"
- This means that payment will be made after the instrument is presented for inspection, again not immediately available upon request.
Conclusion
The term "payable on demand" clearly defines the ability to receive payment without any conditions or waiting period. It is essential for liquidity and immediate access to funds, making it a crucial component in various financial transactions. Thus, the correct answer is indeed option 'C', as it directly captures the nature of demand instruments.
In financial terminology, an instrument that is "payable on demand" refers to a financial tool that can be cashed or settled at any time the holder wishes, without any delay. Let’s break down the options provided:
Options Explained
- Instrument marked "payable at sight"
- This instrument is similar to "payable on demand" but specifically indicates that payment is due upon presentation. While closely related, "payable on demand" is a broader term.
- Instrument marked "after date"
- This type of instrument specifies that it can only be paid after a certain date. Thus, it does not qualify as payable on demand.
- Instrument marked "payable on demand"
- This is the correct answer. It explicitly states that it can be paid whenever the holder requests, making it a true demand instrument.
- Instrument marked "after sight"
- This means that payment will be made after the instrument is presented for inspection, again not immediately available upon request.
Conclusion
The term "payable on demand" clearly defines the ability to receive payment without any conditions or waiting period. It is essential for liquidity and immediate access to funds, making it a crucial component in various financial transactions. Thus, the correct answer is indeed option 'C', as it directly captures the nature of demand instruments.
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Which type of instrument is payable on demand?a)Instrument marked "payable at sight"b)Instrument marked "after date"c)Instrument marked "payable on demand"d)Instrument marked "after sight"Correct answer is option 'C'. Can you explain this answer?
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