DEFINITION OF CHEQUE :
Cheque is a negotiable instrument in which there is an unconditional order to the bank is made for the payment of a certain amount to the payee and signed by the drawer.
It can be easily transferred through mere hand delivery. There are three parties to the cheque- Drawer (maker of the cheque), Drawee (bank on which the cheque is drawn), Payee (to whom the amount of the cheque is payable).
TYPES OF CHEQUE
- Bearer Cheque : The cheque in which the payment is made to any person who presents the cheque to the bank.
- Order Cheque : The cheque in which the payment is made only to the person whose name is specified in the cheque.
- Crossed Cheque : Crossed cheque means that the two transverse parallel lines are made on the face of the cheque, to give a better title to the holder of the cheque is known as Crossed Cheque. Such a type of cheque can only be transferred to the payee’s account.
- Uncrossed Cheque :Uncrossed cheque is a kind of cheque which is made payable at the time of presenting it.
- Stale Cheque : The type of cheque, which is presented after the specified time of three months is a stale cheque.