As we all know, when we deposit a cheque issued is our name in the bank, the bank always checks if the cheque has been crossed or not. Why is this done?

It ensures that the money is deposited only in the amount of the person in whose name the cheque has been drawn.

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It is, a process by which the person who has issued the cheque comes to know whether the cheque is encashed or not.

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The bank insists on it only when the party wants the payment immediately and that too in cash only.

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This is the instruction of RBI that all the cheques of the amount of Rs 10,000 should be accepted only if they are crossed.

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Solution

The correct option is C It ensures that the money is deposited only in the amount of the person in whose name the cheque has been drawn.
When we deposit a cheque issued is our name in the bank, the bank always checks if the cheque has been crossed or not because it ensures that the money is deposited only in the amount of the person in whose name the cheque has been drawn.The cheque amount should be received by the person whose name is mentioned.

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Q. A ________ is a paper instructing the bank to pay a specific amount from a person's account to the account of the person in whose name the cheque has been issued.

Kumar finds that the bank balance shown by his cash book on December 31, 2010, is Rs. 90,600 (Credit) but the pass book shows a difference due to the following reason

A cheque (post dated) for Rs. 1,000 has been debited in the bank column of the cash book but not presented for payment. Also, a cheque for Rs. 8,000 drawn in favour of Manohar has not yet been presented for payment. Cheques totalling Rs. 1,500 deposited in the bank have not yet been collected and a cheque for Rs. 5,000 has been dishonoured.

Q. Prepare a Bank Reconciliation Statement as on 31st Dec., 2012 from the following transactions:
(i) Bank overdraft as per Pass Book ₹ 22,000 as on 31st Dec.
(ii) On 28th Dec., cheques had been issued for ₹ 50,000 of which cheques worth ₹ 6,000 only had been encashed upto 31st Dec.
(iii) Cheques amounted to ₹ 4,500 had been paid into the bank for collection but out of these only ₹ 1,000 had been credited in the Pass Book.
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Kumar find that the bank balance shown by his cash book on December 31, 2017 is Rs 90,600 (Credit) but the passbook shows a difference due to the following reason:

A cheque (post dated) for Rs 1,000 has been debited in the bank column of the cash book but not presented for payment. Also, a cheque for Rs 8,000 drawn in favour of Manohar has not yet been presented for payment. Cheques totaling Rs 1,500 deposited in the bank have not yet been collected and cheque for Rs 5,000 has been dishonoured.

Q. Prepare a Bank Reconciliation Statement as on 31st March 2015 from the following informations:

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(a) Cash Book Balance (Overdraft)	12,500
(b) Cheques deposited but not recorded in Cash Book	2,000
(c) Cheque received but not sent to Bank	1,500
(d) Credit side of the Bank Column has been overcast	60
(e) Bank charges entered in Pass Book twice	75
(f) Bills Receivable directly collected by the Bank	4,000
(g) Deposited cheques returned dishonoured by Bank	1,700
(h) Electricity Bill paid by Bank as per instruction	800
(i) Cheques issued but not presented for payment	5,400
(j) Cheques deposited but not cleared	3,200

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