Unit 3 - Personal and Business Finance

Cheques -

Definition - This is a form of payment where by it is in writing and it contains an unconditional order. It is addressed to a banker then signed by the person who is given the money to the banker. Requiring him to pay on demand a certain sum of money only to the name put onto the cheque itself. 

Types of cheques - 

Bearer Cheque

When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment. However, such cheques are risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.

Order Cheque

When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word "or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque…