ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Endorsing means the payee can use the same order cheque to pay to someone else (the creditor) by writing that person’s name on the back of the cheque and signing it. When a person gets an endorsed cheque, he can collect the cash himself.

Detailed explanation-2: -To receive the funds, the payee must sign, or endorse, the back of the check. This signature, called an endorsement, informs the bank or credit union that whoever signed the check is the payee and wants to accept the money.

Detailed explanation-3: -An endorsement may be in favour of another individual or legal entity. An endorsement provides a transfer of the property to that other individual or legal entity. The person to whom the instrument is endorsed is called the endorsee. The person making the endorsement is the endorser.

Detailed explanation-4: –The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.