CHECK

A check is an authorization to draw funds from a bank account. In order to do this, a

check must state the name of the payee, the amount to be paid, and the date. A check is
usually negotiable, so that the payee can assign it to another person by endorsing it. The
person to whom the check is assigned becomes the new payee. The use of checks allows
two parties to a transaction to engage in a monetary transaction without physically
exchanging any currency. There are several variations on the check concept, including the
following:

 A cashier’s check, where a bank is responsible for the payment of funds.

 A certified check, where a bank guarantees that the drawer’s account has sufficient
funds in it to keep the check from bouncing.
 A payroll check, where the payment is intended to compensate employees for their
work.

The use of checks has declined as electronic forms of payment, such

as ACH payments and wire transfers, have increased.