ACTIVITY 1 - CHEQUE WRITING

Up until the present time cheques have been the main method of one person or company paying another. With the introduction of electronic banking cheques are not so widely used but it is important to know how to write one and to confirm that the person writing the cheque has written it correctly. When writing a cheque fill in all the details in the correct places. A chequebook it has two portions, the cheque and the butt.

Filling in the Cheque portion of the form

If you make a mistake when writing out a cheque cross out the mistake and initial the correction

Fill in the date on the cheque

Fill in the name of the person or company receiving the cheque on the cheque form. This is the line starting with the word Pay.

Fill in the Amount in words for the full amount of the cheque

Fill in the amount in numerals for the amount of the cheque close to the $ symbol

If a personal cheque, sign the cheque with you personal signature as this will be verified by the bank.

If a company cheque it is common to have at least two people to sign company documents in case of fraud.

Cross out the words or bearer is the cheque is being mailed as this is a safeguard against theft.

Diagonally cross the cheque with two parallel lines with the words Not Negotiable written between the lines. The means that the cheque recipient must bank the cheque in the bank account of the company nominated on the Pay line

The Butt

Fill in the date

Fill in the Payee Line with the same name as the Pay line of the Cheque

On the lines below the Payee line fill in a brief description of the account being paid by the cheque. This is used for accounting purposes

The balance B/f is the amount brought forward from the previous cheque’s balance line. On the first cheque for this exercise this will be $1450.00

On the Cheque line fill in the Amount of the Cheque

On the Balance line minus the Cheque line from the Bal c/f line

Example

Write a cheque for the purchase of table napkins
Date 30 March
Name Henry Winkle
Amount $ 12.50
Cross out the words or bearer
Cross the cheque and make it Not negotiable as this is to be mailed
Ensure you fill in the cheque butt correctly working out the balance

Answer