15 Questions
What is the significance of the signature of the drawer on a cheque?
It confirms the drawer's liability for the payment
How is a cheque typically transferred?
By endorsement and delivery of the instrument to the endorsee
What is a characteristic of a cheque as a commercial paper?
It is negotiable
What is the significance of endorsement on a cheque?
It confirms the transfer of ownership to the endorsee
What is a key aspect of a cheque's formalities?
The drawer's signature and date
What is the characteristic of a cheque that is made payable 'to bearer'?
It can be transferred by delivery
What is the implication of marking a cheque as 'Not Negotiable'?
It makes the cheque non-transferable
What is the primary difference between a cheque made payable 'to bearer' and one marked 'Not Negotiable'?
One is transferable while the other is not
What is the consequence of making a cheque 'Not Negotiable'?
The cheque becomes non-transferable
What is the characteristic of a cheque that is marked 'Not Negotiable'?
It cannot be transferred
What is the minimum requirement for a cheque to be considered valid?
It must contain the term 'Cheque' in the body of the instrument.
Which of the following is a formal requirement for a cheque?
The term 'Cheque' in the body of the instrument
What is the primary purpose of including the term 'Cheque' in a cheque?
To identify the instrument as a cheque
Which of the following is NOT a formal requirement for a cheque?
The payee's name
What is the consequence of a cheque not meeting the formal requirements?
The cheque is invalid and cannot be negotiated
Understand the concept of negotiability of a cheque as a commercial paper, including the process of endorsement and delivery to the endorsee. Learn about the importance of signature of the account holder. Test your knowledge on cheque negotiability!
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