Question 7
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Explain the following business terms:
- standard orders;
- bank draft;
- legal tender;
- money order;
- I.O.U.
Observation
MosMost candidates attempted this question and their performance was very good.
The expected responses are.
a. Standing Order
This is an order or instruction to the bank by a customer, to pay a certain sum of money to a named person or organisation on his behalf at regular intervals.
b. Bank Draft
It is a cheque drawn on a bank by itself or its branch to guarantee payment.
c. Legal Tender
This is a form of payment which by law a creditor must accept in settlement of a
debt.
d. Money Order
This is a form of payment through the Post Office where the payer fills a form to include the payee's name, amount payable and the post office of collection.
IOU