Explain the following business terms:
(a) standing order
(b) bank draft
(c) legal tender
(d) money order
(e)I.O.U
Explanation
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.
c. IOU; This is drawn by the debtor to the creditor acknowledging a debt.