Question

A form of payment which is uncollectable, unredeemable and with no present value is:

1) Cash
2) Credit Card
3) Cheque
4) Promissory Note

Answer 1

The correct answer is 4) Promissory Note.

Step-by-step explanation:

A promissory note is a written agreement that states the terms and conditions of a loan or debt. It serves as evidence of a debt and a promise to repay the borrowed amount. However, if a promissory note is uncollectable, unredeemable, and has no present value, it means that the borrower is unable or unwilling to repay the debt. This makes the promissory note effectively worthless.

For example, if someone borrows money from a lender and signs a promissory note to repay the loan, but later becomes bankrupt or disappears, the promissory note becomes uncollectable and has no value.