On June 17, 2006, Mr. Cham wrote an order cheque for M. Sumarch for D500 drawn on Standard Chartered Bank, Bakau.

(a) State the drawer, the payee and the drawee from the above information .
(b) The cheque is crossed “Account payee only” and “Not Negotiable”
explain four effect of the crossing.
(c) State three advantages of payment by cheque.

observation

It was a straightforward question and many candidates performed very well in it.
However, the effect of crossing a cheque “Account payee only” and “Not negotiable” includes :

(i) Any cheque crossed cannot be cashed over the counter
(ii) The cheque with “Account payee only” can only be paid into the payee’s Account and no other account.
(iii) Nobody can have a better title to the cheque than the payee because of the word “Not negotiable” etc.