The Cash Book - Cheques

4 important questions on The Cash Book - Cheques

What are the three parties to a cheque?Explain each.

1. The Drawer - the person who   the cheque and from those whose accounts the money will be taken.

2. The Drawee- the bank who holds the account  of the drawer and will make the transfer of funds.

3.The PAYEE- the person to whose account the money is payable.

What do you call the central place where the drawee sent cheque if the drawer and the payee don't have the same bank?

CLEARING HOUSE

What is Crossed cheques?

These are cheques preprinted with the crossing ACCOUNT PAYEE or ACCOUNT PAYEE ONLY.
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When is a cheque considered to be DISHONOURED?

-the drawer does not have sufficient funds in his account to meet the amount specified on the cheque.
- if paying the cheque would not bring the drawer's ovredraft above any amount between the bank and the drawer.

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