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P2 C4 Bills of Exchange — Account STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C4 Bills of Exchange3 Marks
Question
Define promissory note and state its characteristics.
✓

Answer

Meaning: A Promissory note is an instrument in writing containing an unconditionalunder taking, signed by the drawer to pay a certain sum of money only at a spcified timeto a certain person or according to his order or to the holder of the instrument. Characteristics of promissory note: They are as follows: $(1)$ The promissory note must contain a promise to pay certain amount. $(2)$ The amount shown on the promissory note must be definite and clear. $(3)$ In the promissory note there must be a promise for the payment of Indian moneyonly. $(4)$ The promise to pay money made in the promissory note must be unconditional. $(5)$ The duration of promissory note and the date of making the promissory note mustbe clearly stated. $(6)$ The promissory note must be drawn by a definite person and the drawer must puthis signature on it. $(7)$ Revenue stamp of the prescribed amount must be affixed on the promissory note.

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