Question

A shopkeeper Sudha has to make a payment to the wholesaler and writes a cheque for a specific amount to the wholesaler. The wholesaler takes this cheque, and it in his own account in the bank. The money is transferred drom 1 bank account to another in a couple of days. The transaction is completed without any payment of cash. Analyse, by considering the following
a) Check payment
b) interest on deposit
c) Demand deposit
d) Money tranfer

Answer 1

Answer:

Demand deposit is correct

Answer 2

It is a) Check Payment

Explanation:

Sudha has made a cheque payment since the requirements of check payment transactions (as given below) has been met

• A cheque, is a document which orders a bank to pay a particular amount of money from a person's account to another person in whose name the cheque is issued.
• The person writing the cheque, is referred to  as the drawer, has a transaction banking account (often called a current,/savings/checking account) where their money is held.
• The drawer writes the details of the money, date and payer, on the cheque and signs it, ordering the bank, known as the drawee, to pay the specified amount of cash to that person or company.

• Cheques are a type of exchange bill which has been developed to make payments without carrying large sums of money. A check is a negotiable method for a financial institution to pay a certain amount of a certain money  from a certain transactional account kept with that financial institution in the name of the drawer.