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Cheque
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2 Describe different parties to cheque
A cheque involves three main parties:
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3 Describe the key features of a cheque
 Written Document: A cheque is always written and signed by the drawer
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 Bank: It is drawn on a bank
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 Date: The cheque must be dated, and the payment can only be made on or after the date
mentioned
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Primary Cheques
 Bearer Cheque: Payable to the person holding or presenting it
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 Crossed Cheque: Has two parallel lines on the top left, directing the bank to deposit the money
into the payee’s account only
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Secondary Cheques
 Open Cheque: Not crossed, can be cashed at any bank
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 Stale Cheque: A cheque that has not been presented within six months of its issue
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 Mutilated Cheque: A torn or damaged cheque
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 Loose Cheque: A single cheque issued outside of a cheque book
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 Dishonoured Cheque: A cheque that the bank refuses to pay
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 Traveller’s Cheque: A pre-paid cheque used by travellers
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5 Explain crossing of a cheque and its kinds
Crossing a cheque means drawing two parallel lines across it, which restricts how it can be handled
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’ or ‘not negotiable’ between them
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6 Describe termination of a crossed cheque;
A crossed cheque can be terminated (cancelled) by the drawer if they notify the bank before the
cheque is processed or if they issue a stop-payment order
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Causes of Dishonour of a Cheque
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8 Discuss the merits of issuing cheque
Merits of Issuing a Cheque
 Safety: Reduces the risk of carrying large amounts of cash
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 Convenience: Easier than carrying cash, especially for large amounts
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9 draw a specimens of different types of cheque i
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(bearer, ordered
and crossed)
 Bearer Cheque: Payable to whoever presents it
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 Crossed Cheque: Must be deposited into a bank account, not cashed
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10 Analyze the impact of crossing, termination and dishonour of
cheque under different situations;
 Crossing: Increases the security of the cheque, ensuring that only the payee can receive
payment
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 Dishonour: Could damage the drawer's reputation, affect credit standing, and even lead to
legal consequences

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