instruments of payment

Question 1

what is a cheque

Answer 1

a written instruction to the bank to transfer a certain sum to the account of the payee.

Question 2

information present on a cheque

Answer 2

date
payee’s name
amount to be transferred
signature of person drawing the cheque
account number
branch number/ name of the bank

Question 3

what does a cross cheque mean

Answer 3

money has to be paid into the payees account

Question 4

when is it an open cheque
what can the payee do with an open cheque

Answer 4

open cheques is when it doesnt have the 2 parallel lines

ask the bank for cash to the amount showed on the cheque

pay it into their own bank account

pay it to someone else after it has been signed

Question 5

2 other types of cheque

Answer 5

manager’s - issues by a bank signed by manager
certified - personal cheque guaranteed by the cheque writers bank

Question 6

money order

Answer 6

a guaranteed instrument for making payment issued by banks or postal office

Question 7

banker’s draft

Answer 7

a cheque drawn on a bank itself

Question 8

bill of exchange

Answer 8

a payment method used in international trade that allows the importer a period of credit

Question 9

debit card

Answer 9

your money

Question 10

credit card

Answer 10

bank’s money (short term loan)

Question 11

electronic banking

Answer 11

payment made electronically

Question 12

direct debit

Answer 12

direct debit instruction that allows the payee’s bank to withdraw regular payments - in different amounts

Question 13

telegraphic money transfer

Answer 13

electronic mean of transferring money from one account to another overseas

Question 14

internet banking

Answer 14

customers directly access their own accounts online

Question 15

drawer /payer

Answer 15

party who draws the cheques

Question 16

payee

Answer 16

party whom the money is to be paid

Question 17

endorser

Answer 17

the payee instead of launching this cheque uses it to pay someone else