Question 3 of 29intermediate🔧 ApplyShort Answer2 marks

M. Salim wants to withdraw Rs 20,000 in cash for making payments. How would he write a cheque to withdraw money?

Correct Answer

To withdraw Rs 20,000 in cash, M. Salim would write a cheque for the specific amount of Rs 20,000. A cheque is a paper instructing the bank to pay a specific amount from the person's account to the person in whose name the cheque has been issued.

Since M. Salim wants to withdraw cash for himself, he would write his own name (or "Self") as the payee on the cheque. This instructs his bank to pay Rs 20,000 from his account to him. When he presents this cheque at the bank, he can receive the cash.

Exercise: LET'S WORK THESE OUT | Q: 1 | (Page Page 5)
For More Understanding

Explanation

The textbook defines a cheque as 'a paper instructing the bank to pay a specific amount from the person's account to the person in whose name the cheque has been issued.' For withdrawing cash, the account holder writes their own name or 'Self' as the payee. The bank then pays the specified amount in cash to the person presenting the cheque.

Solution Steps

  1. Step 1: Write the specific amount (Rs 20,000) on the cheque

  2. Step 2: Write own name or 'Self' as the payee since the cheque instructs the bank to pay to the person in whose name it is issued

  3. Step 3: Present the cheque to the bank to receive cash

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