Question

In: Finance

Define cheque. Discuss the characteristics of cheque.

Define cheque. Discuss the characteristics of cheque.

Solutions

Expert Solution

A cheque is an instrument that instructs the bank to pay a specified sum of money from the bank account of the writer to the person who's name is mentioned on the cheque. The person who writes the cheque is know as the drawer and has a bank account where his money is held. Following are the characteristics of a cheque-

  • Written format- A cheque should always be in writing. It is only considered as an instrument if it is in written format.
  • Specific amount and signature- A cheque should have the amount clearly written on it and signed by the drawer.
  • Unconditional order to pay- A cheque that contains an unconditional order by the drawer to the drawer bank to make the specific amount of payment as instructed. A cheque that has a condition is not considered valid.
  • Date on the cheque- a cheque should be dated and is valid upto 6 months from the date mentioned on it. After the six months period it is called a stale cheque.
  • Can be drawn on one's own self-  The drawer can write a cheque on their own name. The cheque is to be paid to the drawer himself.
  • No acceptance required- A cheque does not require any acceptance or stamp from the bank to be considered as valid.

Do let me know in the comment section in case of any doubt.


Related Solutions

Define culture and discuss the primary characteristics of culture
Define culture and discuss the primary characteristics of culture
a. Define the two major types of corporate stock. Discuss the characteristics of each of the...
a. Define the two major types of corporate stock. Discuss the characteristics of each of the two types. How does an investor realise a return on a stock investment? b. “Shareholders of corporate stock may have claims to a company’s assets and income.” Discuss and analyse this quote. c. Using the Dividend Valuation Model, calculate the following: What is the value of a common stock that paid a $1.50 dividend at the end of the last year and is expected...
a. Define four different classes of mutual funds? Discuss the characteristics and risks of each of...
a. Define four different classes of mutual funds? Discuss the characteristics and risks of each of the four classes you defined. b. Discuss the different ways an investor can realize a return on a mutual fund investment.
Define the two major types of corporate stock. Discuss the characteristics of each of the two...
Define the two major types of corporate stock. Discuss the characteristics of each of the two types. How does an investor realise a return on a stock investment? (5 points)
Define four different types of mutual funds? Discuss the characteristics and risks of each of the...
Define four different types of mutual funds? Discuss the characteristics and risks of each of the four classes you defined.
What is meant by crossing of cheque, discuss the different types of Crossing? (300 words)
What is meant by crossing of cheque, discuss the different types of Crossing? (300 words)
Define and Discuss the followings 1) Commercial Paper (What are the characteristics of commercial paper, what...
Define and Discuss the followings 1) Commercial Paper (What are the characteristics of commercial paper, what period of time is commercia paper issued for, etc.) 2) Municipal Bonds and taxation 3) Term Structure of Interest Rated aka the Yield Curve
2. a. Discuss four different classes of bonds and define the characteristics of each. Which class...
2. a. Discuss four different classes of bonds and define the characteristics of each. Which class of bonds tends to have the least amount of risk and why?
1. Define four different classes of mutual funds? Discuss the characteristics and risks of each of...
1. Define four different classes of mutual funds? Discuss the characteristics and risks of each of the four classes you defined. 2. Discuss the different ways an investor can realize a return on a mutual fund investment
list and define function of the five phyletic characteristics of the Chordata. Then define larval and...
list and define function of the five phyletic characteristics of the Chordata. Then define larval and adult form in regard to the presence of four of the phyletic characteristics in larva vs adult form of the Ascidacea. Define neoteny and the evolutionary origin of the Vertebrata.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT