When a cheque is paid on a bank on which it is drawn, the cheque is?

A. discounted
B. debited
C. credited
D. cleared

Correct Answer: Option D

D. cleared

Explanation

A cleared cheque is the Movement of a check from the bank in which it was deposited to the bank on which it was drawn, and the movement of its face amount in the opposite direction.

Cheque clearing or bank clearance is the process of moving cash from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.