WAEC Commerce 1994 Theory question 106

(a) Commercial banks deal with the general public, accept all kinds of deposits (current, savings, fixed), operate cheques, give short-term loans and overdrafts, have many branches; merchant banks deal mainly with businesses and government, accept large deposits, provide medium/long-term finance, accept and discount bills, act as issuing houses, advise on mergers and investments, have few branches and do not operate current accounts for the public.
(b)(i) Order cheque: payable to the named payee 'or order'; can only be paid to the payee or to whomever he endorses it.
(ii) Bearer cheque: payable to whoever presents it ('or bearer'); no endorsement needed, so risky.
(iii) Certified cheque: one the bank has marked/certified as having funds set aside to pay it, so the payee is sure of payment.
(iv) Non-negotiable cheque: crossed with the words 'not negotiable'; it can still be transferred but the holder gets no better title than the person who gave it to him, protecting against theft.

In (a), compare customers, deposits, loans and services.