Question

Select the most appropriate alternative.

In which type of Cheque, the amount is credited to the Payee’s account in the bank directly.
(a) Bearer
(b) Order
(c) Crossed
(d) account payee

Answer 1

Account payee

Explanation:
In the case of account payee cheque, the amount is directly credited to the Payee’s Account because the cheque carries the name of the account holder, i.e. the Payee’s Account in which the amount is required to be transferred.

A bearer cheque is a cheque through which money can be paid to anyone who is holding the cheque and presents it to the bank for payment.

An order cheque a cheque that is payable to the person named on the cheque.

A crossed cheque is a cheque that is crossed with two parallel lines, either across the whole cheque or at the top left-hand corner of the cheque. This indicates that the cheque can only be deposited directly in a bank account and cannot be immediately cashed by a bank or any other credit institution.