Question

Which of the following is not true about a Demand Draft?
A) It is a negotiable instrument. B) It is a banker's cheque. C) It may be dishonoured for lack of funds. D) It is issued by a bank.

Answer 1

Answer:

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Answer 2

Answer:

(C)  It may be dishonored for lack of funds is not true about a Demand Draft.

Explanation:

• A demand draft is a negotiable instrument for transferring payments between banks.
• It is issued by a bank to a customer to instruct another bank or a branch of the same bank to pay the recipient the specified amount of money.
• Because it guarantees the amount of money for which it is pledged and that money is handed out to the recipient in the form of cash or cheque, it cannot be dishonored by a bank due to a lack of funds.