Question

"Account Payee" crossing warns the collecting banker that the proceeds are to be credited only to the -.

• A. Account of the payee
• B. Party named or his agent
• C. Account of the payee, or the party named, or his agent
• D. None of the above

Answer 1

The correct option is C Account of the payee, or the party named, or his agent

An account payee cheque is a type of crossed cheque increases the security on the cheque. For this type of crossed cheque, you must write “A/c payee only” in between the crossed lines. The payee cannot endorse the cheque. Thus, the cheque amount can only be deposited in the payee account. Thus, it protects the misuse of the cheque. It is a good practice to write cheques as such.