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Which type of instrument is considered a foreign instrument?
- a)A promissory note made in India but payable outside India.
- b)A promissory note made outside India and payable outside India.
- c)A bill drawn in India on a person residing outside India and accepted payable outside India.
- d)All of the above.
Correct answer is option 'D'. Can you explain this answer?
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Which type of instrument is considered a foreign instrument?a)A promis...
An instrument is considered a foreign instrument if it is not an inland instrument. This includes a promissory note made in India but payable outside India, a promissory note made outside India and payable outside India, and a bill drawn in India on a person residing outside India and accepted payable outside India.
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Which type of instrument is considered a foreign instrument?a)A promis...
Understanding Foreign Instruments
Foreign instruments refer to financial instruments that involve international elements, typically where the parties, location, or currency are connected to more than one nation. Let’s break down each option to understand why they qualify as foreign instruments.
Option A: Promissory Note Made in India but Payable Outside India
- This note is issued in India but has a payment obligation that extends beyond its borders.
- The transaction involves international jurisdiction, making it a foreign instrument.
Option B: Promissory Note Made Outside India and Payable Outside India
- In this case, both the creation and payment of the note occur outside India.
- The complete transaction is international, qualifying it as a foreign instrument.
Option C: Bill Drawn in India on a Person Residing Outside India
- This bill originates in India but is directed at a foreign resident.
- Since the acceptance and payment occur outside India's jurisdiction, it is also classified as a foreign instrument.
Conclusion: Why All Options are Foreign Instruments
- All three options involve elements of international finance, whether it’s the location of payment, the residency of the parties involved, or the nature of the instrument itself.
- Therefore, each option demonstrates characteristics that qualify them as foreign instruments, justifying the correct answer as option 'D': All of the above.
Understanding these distinctions is crucial for students studying international finance and commerce, as it highlights the importance of jurisdiction in financial agreements.
Foreign instruments refer to financial instruments that involve international elements, typically where the parties, location, or currency are connected to more than one nation. Let’s break down each option to understand why they qualify as foreign instruments.
Option A: Promissory Note Made in India but Payable Outside India
- This note is issued in India but has a payment obligation that extends beyond its borders.
- The transaction involves international jurisdiction, making it a foreign instrument.
Option B: Promissory Note Made Outside India and Payable Outside India
- In this case, both the creation and payment of the note occur outside India.
- The complete transaction is international, qualifying it as a foreign instrument.
Option C: Bill Drawn in India on a Person Residing Outside India
- This bill originates in India but is directed at a foreign resident.
- Since the acceptance and payment occur outside India's jurisdiction, it is also classified as a foreign instrument.
Conclusion: Why All Options are Foreign Instruments
- All three options involve elements of international finance, whether it’s the location of payment, the residency of the parties involved, or the nature of the instrument itself.
- Therefore, each option demonstrates characteristics that qualify them as foreign instruments, justifying the correct answer as option 'D': All of the above.
Understanding these distinctions is crucial for students studying international finance and commerce, as it highlights the importance of jurisdiction in financial agreements.
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Which type of instrument is considered a foreign instrument?a)A promissory note made in India but payable outside India.b)A promissory note made outside India and payable outside India.c)A bill drawn in India on a person residing outside India and accepted payable outside India.d)All of the above.Correct answer is option 'D'. Can you explain this answer?
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Which type of instrument is considered a foreign instrument?a)A promissory note made in India but payable outside India.b)A promissory note made outside India and payable outside India.c)A bill drawn in India on a person residing outside India and accepted payable outside India.d)All of the above.Correct answer is option 'D'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Which type of instrument is considered a foreign instrument?a)A promissory note made in India but payable outside India.b)A promissory note made outside India and payable outside India.c)A bill drawn in India on a person residing outside India and accepted payable outside India.d)All of the above.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which type of instrument is considered a foreign instrument?a)A promissory note made in India but payable outside India.b)A promissory note made outside India and payable outside India.c)A bill drawn in India on a person residing outside India and accepted payable outside India.d)All of the above.Correct answer is option 'D'. Can you explain this answer?.
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