Business Studies

Cheque explained with its terminologies

len Alfred Ajibola - 20th December, 2019 @ 09:47 PM

Topics in Business Studies

What is an Office? Qualities of a good office layout Small office explained with its characteristics Large office: Characteristics of large office Advantages and disadvantages of small office Advantages and disadvantages of large office Advantages and Disadvantages of Corporations Advantages and Disadvantages of Limited Liability Company Advantages and Disadvantages of Partnership Credit card and Debit card explained with their similarities and differences Business Structure: What is a business structure? Advantages and Disadvantages of Franchise What is a franchise? Types of franchise Corporation explained with its types What is Limited Liability Company? What is Partnership Business? Types of Partnership What is business studies? Concept of business Elements of Management What is Management? Importance of Management Advantages and Disadvantages of Air Transport Advantages and Disadvantages of Rail Transport

Academic Questions in Business Studies

Please click here to see all Questions and Answers

A one-man business is termed _____.

  • A. Proprietorship

  • B. Sole Proprietorship

  • C. Individual Entrepreneurship

  • D. Sole Trader

  • E. All of the Above

  • F. None of the Above

Which of the following is not a function of the wholesaler?

  • A. They distribute goods

  • B. They store goods

  • C. Specialization of goods

  • D. They bring about price variability in goods

  • E. They act as shock absorbers during the movement of goods

  • F. Packaging of goods

A person employed by an organization to carry out the everyday duties of a typical office, and at the same time perform a couple of other functions for their company which may vary from one company to another, is termed a _____.

  • A. Secretary

  • B. Personal Assistant (P.A)

  • C. Secretary General

  • D. Clerical Staff

  • E. Supervisor

  • F. Bookkeeper

Dual Entry System - Len Academy

The above image best describes the _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principles of accounting system

  • F. Balanced accounting system

An accounting system focused primarily on a balanced debit and credit side is termed _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principle of accounting system

  • F. Balanced accounting system

With regards to money, which of the following statement is incorrect?

  • A. Money is crucial for the survival of every human being

  • B. Money is completely advantageous

  • C. Money is defined as anything that is generally accepted as a medium of exchange

  • D. Monopoly is said to exist when money and wealth exists in the hands of a few

  • E. Excess money in an economy can lead to inflation

  • F. When a person receives money that isn't commensurate with the job he or she had done, then that's underemployment

Which of the following statement is wrong with regards to business?

  • A. Business involves the exchange of something for another thing or money

  • B. Business is an economic activity

  • C. In business, profit goes beyond money

  • D. Businesses do not have social responsibilities to their customers

  • E. The exchange of services is an aspect of business

  • F. Businesses can be affected by government policies

Consumer _____ are the laws and methods put in place by various agencies so that consumers can enjoy maximum satisfaction on the goods they buy and services rendered to them.

  • A. Protection
  • B. Policy
  • C. Rights
  • D. Defence
  • E. Guide
  • F. Safety

What is a cheque?

A cheque (spelt as 'check' in America) is a written order to a bank requesting the payment of a specific sum of money to another person through the drawer's account.

The person who writes and signs on the cheque is called the drawer. The bank that issues the cheque to the drawer is called the drawee. The person to whom the cheque is made payable, that is: one who would cash the cheque is called the payee.

You can read on credit and debit cards here.

Below are brief explanations on important terminologies associated with cheques:

  • A drawer is a person who writes, draws or signs a cheque to his bank account ordering his bank to pay the money specified on the cheque to another person called the payee. The drawer is also referred to as the 'maker'.

  • The drawee is the entity (typically a bank) whom the drawer gives an order to pay the payee. The drawee is always the party upon whom the cheque is drawn.

  • A payee is an individual or an entity (organization) to whom the cheque is made payable. The payee is responsible for cashing out the cheque; that is: gets paid through the cheque.

    Please read on the characteristics of cheque here.

Note: Cheques are considered as one of the methods of making payment alongside bank notes and coins, debit card, credit card and bank drafts.

Please read on bank notes and coins here.

Whenever the drawer intends to make a payment via cheque, it is required that they tear out a slip from the cheque book. They are also required to write the name of the payee in the cheque book alongside the amount to be paid. The date and signature of the drawer are also included.

The image below shows what a cheque should look like:

Cheque - Len Academy

Meanwhile, always understand that the amount to be paid on the cheque slip is entered twice. The first entry is made in words while the second entry is made in figures. In this manner, the payee will be able to cash the stipulated amount as indicated in the cheque slip. Importantly, the payee may need a valid identity card as a means of identification before he or she can cash the cheque.

Please read on national symbols in Nigeria here.

When a bank pays the amount written on a cheque to the payee, such cheque is considered as 'honoured'. Conversely, when the cheque order isn't paid, the cheque is referred to as a dishonoured cheque.

The owner of a cheque must have a current account or cheque account with a bank. A savings account can also serve this purpose but the person will need to fulfill all the necessary conditions required to own a cheque book. This will include meeting up with a specific account balance.

A valid reason why cheques are used as a method of making payment is due to its security and convenience. As a result, the process of carrying bulky cash is avoided when making payments via cheques. In this regard, the loss of cash is minimized.

Please read on the advantages and disadvantages of cheques here.

It is important to state that a cheque is always considered as a negotiable instrument. In relation to cash, a cheque can be tendered as a cash document during business negotiations. In this way, it will represent an individual's access to money through the appropriate financial institution.

Types of Cheque

We have various types of cheque. These include:

  1. Open Cheque or Uncrossed Cheque
  2. Crossed Cheque
  3. Bearer Cheque
  4. Order Cheque
  5. Stale Cheque
  6. Cash Cheque
  7. Anti-Dated Cheque
  8. Post-Dated Cheque
  9. Please read the explanations of the various types of cheque here.

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Amazing facts in Business Studies

The world's 100 richest people earned enough money in 2012 to end global poverty four times over

Notable points in Business Studies

Consumer protection refers to the ways or methods through which consumers enjoy maximum satisfaction from the goods they buy and services rendered to them.

The agencies of consumer protection assists in protecting the consumer rights. These agencies may also be referred to as the organs of consumer protection. Basically, we have three of them, they are:

  1. Government Agencies

  2. Independent Agencies

  3. Legislation

Please read on consumer protection here

One of the responsibilities of the government of every nation is to set up agencies or organizations that will protect the interest of the consumers and invariably, the people.

Below are some of the government agencies of consumer protection:

  • National Drug Law Enforcement Agency (NDLEA)
  • National Agency for Food, Drug Administration and Control (NAFDAC)
  • Consumer Protection Council (CPC)
  • Rent Tribunal
  • Ministry of Health
  • Ministry of Commerce
  • Ministry of Transportation
  • Ministry of Environment
  • National Wages and Salaries Commission

Please read on the government agencies of consumer protection here