Which of the following statements is are correct with respect to the Chequeable Deposits 1 Chequeabl...........

Economic Affairs Types of Banks and Banking

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Which of the following statements is/are correct with respect to the Chequeable Deposits?

1. Chequeable deposits consist of any demand deposit account against which Cheque or drafts of any kind may be written.

2. Chequeable deposits are payable on demand.

3. Chequeable deposits act as an asset for the bank.

Which of the above statements is/are correct?

1 and 3 only

1 and 2 only

2 and 3 only

3 only

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Explanation:

Statement 1 is correct: Chequeable deposits are bank accounts that allow the owner of the account to write checks to third parties.
Statement 2 is correct: Chequeable deposits are an important source of bank funds and Checkable deposits are payable on demand. For the owner of the account, a Chequeable deposit is an asset.
Statement 3 is incorrect: Conversely, because the depositor can withdraw funds from an account at any time and the bank is obligated to pay;Chequeable deposits are a liability for the bank. They include all accounts on which Cheques can be drawn e.g. non-interest bearing checking accounts (or demand deposits) or some types of savings accounts offered by certain banks. Usually, Chequeabledeposits are the lowest - cost source of bank funds. Because depositors are willing to forego some interest in order that they have access to a liquid asset that may be used for transactions.