Concept:Legal tender is money that the law recognises as valid for payment of debts and must be accepted when offered in settlement.
Explanation:Bank notes are issued by the central bank and are backed by law.
They serve as a medium of exchange and a legal means of payment for all transactions.
Bank overdrafts and money orders are not money but credit or payment instruments.
Bills of exchange are negotiable documents, but they are not compulsory legal tender.
Only bank notes and coins are legal tender in a modern economy.
Therefore, among the given options, bank notes are the correct example of legal tender.
Answer:A. Bank notes