Question

Which one of these statements about promissory notes is incorrect? A promissory note is more liquid than an account receivable. The party making the promise to pay is called the maker. The party to whom payment is to be made is called the payee. A promissory note is not a negotiable instrument.

Answer 1

Answer: A promissary note is not a negotiable instrument.

Explanation:

A promissary note is a financial instrument written by an issuer or maker to a payee promising a definite amount of money at a specified date.

A promissary note can either be negotiable or not. It becomes non-negotiable when certain conditions are met. Some of the conditions include:

1. A specific amount has been agreed upon by both parties

2. There are no conditions to be met before payment can be made.

Therefore, the statement, 'a promissary note is non negotiable' is false