Define: Legal Tender

UK Accounting Glossary

Definition: Legal Tender



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Full Definition of Legal Tender


In law, legal tender is a payment that by statute must be accepted in payment of a debt. In the US, federal law declares that all US currency coins and notes are legal tender. Even the $1,000 note, which has been withdrawn from circulation for many years, is still considered legal tender. The meaning of legal tender is sometimes misunderstood as obligating a merchant to accept payment in as a form of legal tender. However, a grocer may refuse payment for a pack of gum with a $100 bill, which is legal tender, and a jeweller could refuse to sell a gold ring for payment in pennies, also legal tender. Checks, charge cards, and other payment mechanisms are not legal tender.


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Legal Tender. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. March 29, 2020 https://payrollheaven.com/define/legal-tender/.
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Legal Tender. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/legal-tender/ (accessed: March 29, 2020).
American Psychological Association (APA):
Legal Tender. PayrollHeaven.com. Retrieved March 29, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/legal-tender/

Definition Sources


Definitions for Legal Tender are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 10th February 2020.