ZIMSEC O Level Commerce Notes: Money and Banking: Cheques
- There ar two main types of cheques viz:
- Bearer’s cheques.
- Order cheques.
- These are have the words “Pay the Bearer on demand” written across their face.
- They are payable to anyone who present the cheques to the counter of the drawee.
- The cheque does not have the name of the bearer written on it.
- Bearer cheques are not safe as they can be cashed by anyone presenting them.
- The have expiry dates.
- They have an instruction which reads,” Pay … or Order” written across their face.
- The payee’s name is expressly stated.
- The named person can obtain cash from the bank upon producing a valid ID.
- The named payee can transfer the cheque to someone else by endorsing it at the back.
- Order cheques may be open or crossed.
- Does not have parallel lines on the its face.
- Can be cashed over the counter.
- Anyone in possession of it becomes the owner.
- It is not safe as it can essentially be cashed by anyone.
- The payee sings at the back of the cheque.
- Usually used to pay a payee who does not have an account.
- May be an open or crossed cheque.
- Is signed by the draw without details on the cheque.
- Is issued to the drawer’s trusted people so that the payee can fill in the details.
- It is not safe.
- A cheque may have a general or special crossing on its face.
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