What is a cheque and types of cheques.

KIP254

Member
A cheque is an order to bank to pay the person named the amount specified on the cheque. Parties to a cheque are:
a) The drawer - who is the holder and the person who has written the cheque.
b) The drawee - is the bank which the cheque is drawn. This is the bank which pays the money.
c) The payee - is the person to be paid by the bank.

A cheque contains the following information :
a) Date of payment.
b) Name of the person to be paid.
c) Amount to be paid both in words and figures.
d) The signature of the account holder.
e) Cheque number.
f) The account number of the drawer.
g) The appropriate revenue stamp.

Types of cheques are:
a) Bearer cheque - this is a cheque where payment is made to the bearer.
b) Order cheque - this is a cheque payable to the named person only. The person holding the cheque must be identified before payment is made.
c) Crossed cheque - this type of cheques have two parallel lines drawn across the face of a cheque with either 'Not Negotiable' or 'Account Payee Only'.
 
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