Banking Glossary: Understanding Cheques

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Questions and Answers

What is a cheque?

A written order to pay a specified amount of money (correct)

An electronic payment method

A type of credit card

A form of cryptocurrency

What does the 'Personal Information' section of a cheque provide?

Information about the bank's address

Details about the check recipient

Details about the account owner who is paying money (correct)

Information about the issuer's credit history

What does a cheque format typically include?

Account holder's social security number

Personal information about the account owner (correct)

Recipient's email address

Bank's SWIFT code

What is the purpose of a cheque?

To instruct a financial institution to pay a specified amount of money Signup and view all the answers

What does the payee line on a check specify?

The person or organization who will receive the funds Signup and view all the answers

Which part of the check displays the numerical value of the check?

Amount in box Signup and view all the answers

What is the purpose of the memo line on a check?

To provide additional notes about the purpose of the check Signup and view all the answers

What information is usually written at the top right corner of a check?

Date of issue Signup and view all the answers

What type of cheque is only payable to the person named on the check and requires a background check before releasing payment?

Order Cheque Signup and view all the answers

What type of cheque is identifiable by two parallel lines and the words 'a/c payee' on the top left?

Crossed Cheque Signup and view all the answers

Which type of cheque is payable to anyone who presents the check and can be transferred from one payee to another?

Open Cheque Signup and view all the answers

What type of cheque is identified by the words 'or bearer' printed on it?

Bearer Cheque Signup and view all the answers

What does a post-dated cheque refer to?

Payments scheduled for a later date, regardless of when the check is presented to the bank. Signup and view all the answers

What does the routing number on a cheque represent?

Unique identifier for the issuing bank. Signup and view all the answers

What is the term used for a cheque that is no longer valid after three months from the date of issue?

Stale Cheque Signup and view all the answers

Which type of cheque can only be drawn at the issuer's bank?

Self Cheque Signup and view all the answers

Who is the issuer of a Banker’s Cheque?

The bank Signup and view all the answers

What is the main reason for Banker’s Cheques to be called non-negotiable instruments?

There is no room for banks to dishonour them Signup and view all the answers

What do foreigners on vacations usually carry instead of hard cash?

Traveller's Cheques Signup and view all the answers

How long are Traveller’s cheques valid for?

They do not expire Signup and view all the answers

What happens to the specified amount in a Banker’s Cheque when it is issued?

It is debited from the account of the customer Signup and view all the answers

How are self cheques identified?

They have 'self' written in the drawee column Signup and view all the answers

What does it mean when it is said that Traveller’s cheques do not expire?

They have no expiration date Signup and view all the answers

What is the term used for a cheque issued by a bank on behalf of an account holder to make a remittance to another person in the same city?

Banker's Cheque Signup and view all the answers

Why are Banker’s cheques called non-negotiable instruments?

There is no room for banks to dishonor them Signup and view all the answers

Cheques are a form of electronic payment.

False Signup and view all the answers

The 'Personal Information' section of a cheque provides details about the account owner.

True Signup and view all the answers

A cheque is a written order instructing a financial institution to pay a specified amount of money immediately on demand.

True Signup and view all the answers

The 'Personal Information' section of a cheque includes the account owner's name, home address, and phone number.

True Signup and view all the answers

Traveller’s cheques do not expire and can be used for future trips.

True Signup and view all the answers

Self cheques can only be drawn at the issuer’s bank.

True Signup and view all the answers

Banker’s cheques are valid for six months.

False Signup and view all the answers

Foreigners on vacations carry traveller’s cheques instead of carrying hard cash.

True Signup and view all the answers

Stale cheques remain valid after the specified date.

False Signup and view all the answers

Banker’s cheques are called non-negotiable instruments because banks cannot dishonor them.

True Signup and view all the answers

Traveller’s cheques are typically issued by multiple banks.

False Signup and view all the answers

Banker’s cheques are issued by the bank on behalf of an account holder for international remittances.

False Signup and view all the answers

The specified amount in a Banker’s Cheque is credited to the account of the customer.

False Signup and view all the answers

A self cheque can be identified by the word 'self' written in the drawee column.

True Signup and view all the answers

Traveller’s cheques are cumbersome to carry during vacations.

False Signup and view all the answers

Stale cheques are valid for three months after the date of being issued.

True Signup and view all the answers

Bearer cheques are only payable to the person named on the check.

False Signup and view all the answers

A post-dated cheque can be cashed in before the date mentioned on the cheque.

False Signup and view all the answers

An order cheque requires the bank to perform a background check on the cheque bearer before releasing payment.

True Signup and view all the answers

Open cheques can be transferred from one payee to another.

True Signup and view all the answers

Crossed cheques are identified by the words 'or bearer' printed on them.

False Signup and view all the answers

The memo line on a check is used to specify the purpose of the check.

True Signup and view all the answers

The routing number on a cheque represents the unique identifier for the issuing bank.

True Signup and view all the answers

The account number on a cheque represents the unique identifier for the account from which funds will be withdrawn.

True Signup and view all the answers

Bearer cheques are identifiable by two parallel lines and the words 'a/c payee' on the top left.

False Signup and view all the answers

The signature on a cheque authorizes the payment.

True Signup and view all the answers

Traveller’s cheques do not expire.

True Signup and view all the answers

Payments made to the person carrying the check and transferable by delivery are known as order cheques.

False Signup and view all the answers

Match the following parts of a cheque with their descriptions:

Personal Information = Provides details about the account owner Cheque format = An overview of the different parts of a cheque Home address = Part of the personal information section on a cheque Phone number = Part of the personal information section on a cheque Signup and view all the answers

Match the following types of cheques with their descriptions:

Bearer cheque = Identifiable by two parallel lines and the words 'a/c payee' on the top left Order cheque = Only payable to the person named on the check and requires a background check before releasing payment Banker’s cheque = Issued by a bank on behalf of an account holder for remittances Traveller’s cheque = Valid for future trips and used by foreigners on vacations Signup and view all the answers

Match the following terms related to cheques with their meanings:

Post-dated cheque = A cheque that can be cashed in after the date mentioned on the cheque Stale cheque = No longer valid after three months from the date of issue Crossed cheque = Identified by the words 'or bearer' printed on it Memo line = Used to specify the purpose of the check Signup and view all the answers

Match the following actions with their results in relation to cheques:

Signature on a cheque authorizes payment. = Authorization for payment Banker’s cheque issued for international remittances. = Credit to the account of the customer Routing number on a cheque represents unique identifier for issuing bank. = Identification of issuing bank Foreigners on vacations carry traveller’s cheques instead of hard cash. = Preferable form of payment for foreigners Signup and view all the answers

Match the following parts of a check with their descriptions:

Payee line = Specifies who will receive the funds, written as the name of the person or organization. Signature = Authorizes the payment. Routing number = Unique identifier for the issuing bank. Cheque number = Unique identifier for each check. Signup and view all the answers

Match the following types of cheques with their descriptions:

Stale Cheque = A cheque past its validity, three months after the date of being issued Traveller’s Cheque = Foreigners on vacations carry these instead of hard cash, which can be cumbersome Self Cheque = Can only be drawn at the issuer’s bank Banker’s Cheque = Issued by a bank on behalf of an account holder for remittance to another person in the same city Signup and view all the answers

Match the following types of cheques with their descriptions:

Bearer Cheque = Payments made to the person carrying the check, transferable by delivery. Identified by the words 'or bearer' printed on them. Crossed Cheque = Payments made only to the person named on the check, as well as their account number. Identified by two parallel lines and the words 'a/c payee' on the top left. Open Cheque = Payable to anyone who presents the check. Can be transferred from one payee to another. The issuer must sign both sides. Post-Dated Cheque = Payments scheduled for a later date, regardless of when the check is presented to the bank. The bank only processes the payment on the mentioned date. Signup and view all the answers

Match the following types of cheques with their characteristics:

Stale Cheque = Remains valid after the specified date Traveller’s Cheque = Do not expire and can be used for future trips Self Cheque = Identifiable by the word ‘self’ written in the drawee column Banker’s Cheque = Valid for three months and can be revalidated under specific conditions Signup and view all the answers

Match the following types of cheques with their issuer:

Stale Cheque = N/A Traveller’s Cheque = One bank Self Cheque = The issuer Banker’s Cheque = A bank Signup and view all the answers

Match the following check details with their functions:

Amount in box = Displays the numerical value of the check. Memo line = Space for additional notes about the purpose of the check. Bank contact information and/or logo = Identifies the issuing bank. Date of Issue = Date the check was written, usually at the top right corner. Signup and view all the answers

Match the following types of cheques with their primary usage:

Stale Cheque = N/A Traveller’s Cheque = Used by foreigners on vacations instead of carrying hard cash Self Cheque = N/A Banker’s Cheque = Used for remittance to another person in the same city Signup and view all the answers

Study Notes

Checks allow individuals to transfer funds from their checking account to designated payees.
Payee line: Specifies who will receive the funds, written as the name of the person or organization.
Amount in box: Displays the numerical value of the check.
Amount of check: Written out in words.
Memo line: Space for additional notes about the purpose of the check.
Date of Issue: Date the check was written, usually at the top right corner.
Signature: Authorizes the payment.
Bank contact information and/or logo: Identifies the issuing bank.
Routing number: Unique identifier for the issuing bank.
Account number: Unique identifier for the account from which funds will be withdrawn.
Cheque number: Unique identifier for each check.

Types of Cheques:

Bearer Cheque: Payments made to the person carrying the check, transferable by delivery. Identified by the words "or bearer" printed on them.
Order Cheque: Only payable to the person named on the check. The bank performs a background check on the cheque bearer before releasing payment.
Crossed Cheque: Payments made only to the person named on the check, as well as their account number. Identified by two parallel lines and the words "a/c payee" on the top left.
Open Cheque: Payable to anyone who presents the check. Can be transferred from one payee to another. The issuer must sign both sides.
Post-Dated Cheque: Payments scheduled for a later date, regardless of when the check is presented to the bank. The bank only processes the payment on the mentioned date.
Checks allow individuals to transfer funds from their checking account to designated payees.
Payee line: Specifies who will receive the funds, written as the name of the person or organization.
Amount in box: Displays the numerical value of the check.
Amount of check: Written out in words.
Memo line: Space for additional notes about the purpose of the check.
Date of Issue: Date the check was written, usually at the top right corner.
Signature: Authorizes the payment.
Bank contact information and/or logo: Identifies the issuing bank.
Routing number: Unique identifier for the issuing bank.
Account number: Unique identifier for the account from which funds will be withdrawn.
Cheque number: Unique identifier for each check.

Types of Cheques:

Bearer Cheque: Payments made to the person carrying the check, transferable by delivery. Identified by the words "or bearer" printed on them.
Order Cheque: Only payable to the person named on the check. The bank performs a background check on the cheque bearer before releasing payment.
Crossed Cheque: Payments made only to the person named on the check, as well as their account number. Identified by two parallel lines and the words "a/c payee" on the top left.
Open Cheque: Payable to anyone who presents the check. Can be transferred from one payee to another. The issuer must sign both sides.
Post-Dated Cheque: Payments scheduled for a later date, regardless of when the check is presented to the bank. The bank only processes the payment on the mentioned date.
Checks allow individuals to transfer funds from their checking account to designated payees.
Payee line: Specifies who will receive the funds, written as the name of the person or organization.
Amount in box: Displays the numerical value of the check.
Amount of check: Written out in words.
Memo line: Space for additional notes about the purpose of the check.
Date of Issue: Date the check was written, usually at the top right corner.
Signature: Authorizes the payment.
Bank contact information and/or logo: Identifies the issuing bank.
Routing number: Unique identifier for the issuing bank.
Account number: Unique identifier for the account from which funds will be withdrawn.
Cheque number: Unique identifier for each check.

Types of Cheques:

Bearer Cheque: Payments made to the person carrying the check, transferable by delivery. Identified by the words "or bearer" printed on them.
Order Cheque: Only payable to the person named on the check. The bank performs a background check on the cheque bearer before releasing payment.
Crossed Cheque: Payments made only to the person named on the check, as well as their account number. Identified by two parallel lines and the words "a/c payee" on the top left.
Open Cheque: Payable to anyone who presents the check. Can be transferred from one payee to another. The issuer must sign both sides.
Post-Dated Cheque: Payments scheduled for a later date, regardless of when the check is presented to the bank. The bank only processes the payment on the mentioned date.

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Description

Test your knowledge of banking terminology with this quiz focusing on cheques. Learn about the format, parts, and types of cheques, as well as their purpose and usage in financial transactions.

Banking Glossary: Understanding Cheques

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Podcast

Questions and Answers

What is a cheque?

What does the 'Personal Information' section of a cheque provide?

What does a cheque format typically include?

What is the purpose of a cheque?

What does the payee line on a check specify?

Which part of the check displays the numerical value of the check?

What is the purpose of the memo line on a check?

What information is usually written at the top right corner of a check?

What type of cheque is only payable to the person named on the check and requires a background check before releasing payment?

What type of cheque is identifiable by two parallel lines and the words 'a/c payee' on the top left?

Which type of cheque is payable to anyone who presents the check and can be transferred from one payee to another?

What type of cheque is identified by the words 'or bearer' printed on it?

What does a post-dated cheque refer to?

What does the routing number on a cheque represent?

What is the term used for a cheque that is no longer valid after three months from the date of issue?

Which type of cheque can only be drawn at the issuer's bank?

Who is the issuer of a Banker’s Cheque?

What is the main reason for Banker’s Cheques to be called non-negotiable instruments?

What do foreigners on vacations usually carry instead of hard cash?

How long are Traveller’s cheques valid for?

What happens to the specified amount in a Banker’s Cheque when it is issued?

How are self cheques identified?

What does it mean when it is said that Traveller’s cheques do not expire?

What is the term used for a cheque issued by a bank on behalf of an account holder to make a remittance to another person in the same city?

Why are Banker’s cheques called non-negotiable instruments?

Cheques are a form of electronic payment.

The 'Personal Information' section of a cheque provides details about the account owner.

A cheque is a written order instructing a financial institution to pay a specified amount of money immediately on demand.

The 'Personal Information' section of a cheque includes the account owner's name, home address, and phone number.

Traveller’s cheques do not expire and can be used for future trips.

Self cheques can only be drawn at the issuer’s bank.

Banker’s cheques are valid for six months.

Foreigners on vacations carry traveller’s cheques instead of carrying hard cash.

Stale cheques remain valid after the specified date.

Banker’s cheques are called non-negotiable instruments because banks cannot dishonor them.

Traveller’s cheques are typically issued by multiple banks.

Banker’s cheques are issued by the bank on behalf of an account holder for international remittances.

The specified amount in a Banker’s Cheque is credited to the account of the customer.

A self cheque can be identified by the word 'self' written in the drawee column.

Traveller’s cheques are cumbersome to carry during vacations.

Stale cheques are valid for three months after the date of being issued.

Bearer cheques are only payable to the person named on the check.

A post-dated cheque can be cashed in before the date mentioned on the cheque.

An order cheque requires the bank to perform a background check on the cheque bearer before releasing payment.

Open cheques can be transferred from one payee to another.

Crossed cheques are identified by the words 'or bearer' printed on them.

The memo line on a check is used to specify the purpose of the check.

The routing number on a cheque represents the unique identifier for the issuing bank.

The account number on a cheque represents the unique identifier for the account from which funds will be withdrawn.

Bearer cheques are identifiable by two parallel lines and the words 'a/c payee' on the top left.

The signature on a cheque authorizes the payment.

Traveller’s cheques do not expire.

Payments made to the person carrying the check and transferable by delivery are known as order cheques.

Match the following parts of a cheque with their descriptions:

Match the following types of cheques with their descriptions:

Match the following terms related to cheques with their meanings:

Match the following actions with their results in relation to cheques:

Match the following parts of a check with their descriptions:

Match the following types of cheques with their descriptions:

Match the following types of cheques with their descriptions:

Match the following types of cheques with their characteristics:

Match the following types of cheques with their issuer:

Match the following check details with their functions:

Match the following types of cheques with their primary usage:

Study Notes

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