Cheques

A cheques is a written order to a bank requesting them to pay the sum of money stated on the cheques

from an account to a person or company named.

The following parts of a cheques must be completed:

 The date the cheques was written.

 The person/company o whom the cheques was made out (payee)

 The amount the cheques was made out or- this should be written in words and figures.

 The signature of the person authorized to write the cheques.

Types of cheques

a) Open cheques- this is a cheques on which no amount of money is shown but which has been

signed and may or may not have the payee’s name completed. The amount is left blank for the

payee to complete.

b) Crossed cheques- has two parallel lines drawn across the face with or without the words ‘& Co’

or ‘Account payee’ within the lines. The cheques may only be paid into a bank account and may

not be presented for cash.

c) Certified cheques- is one which is issued by the bank upon the request of the customer. The

customer purchases the cheques just as he would buy a money order. The bank charges the

customer a fee for this service.

d) Post-dated cheques- is one that is dated ahead of the current date. A bank will not honor he

cheques if it is presented before the due date.

e) Counter/ personal cheques- these are made out to the payee. On presentation for payment the

payee must show some form of identification and is required to endorse the cheques in front of

the teller before the cheques is honored.

 Identification and interpretation of entries in a bank statement

A bank statement is prepared at agreed intervals, usually weekly or monthly, by the bank for its

customers. The statement will shoe all the receipts and payments which have been processed through the

account during the period.

Bank statement show the following information

 The name and address of the bank

 The name and address of the account holder

 The account number

 The date of the statement

 The beginning and end dates of the period covered by the statement

 The previous balance, i.e. the balance at the end of the previous statement

 The dates and descriptions, including the amounts, of every debit and credit entry during the

period.

 The amount of any interest or service charges during the period

 A running total in the final column

 The balance at the end of the period.

Debit and credit entries

Debit entries- shows that money has been taken out of the account, by cheques or by standing order.

Credit entries- shows that money has been paid into the account, this may be done by depositing cheques

or cash or by a direct transfer from another account.