Answer to Question #213424 in Accounting for Milan

Question

What does "cleared the check" mean?

Can you provide me a simple definition? Thank you.

Answer 1

Cleared the check means that funds from the cheque writer's bank have been transferred to the beneficiary to whose the cheque is written. The process of clearing the check is done by the clearinghouse which is approved by the monetary authority. If the check is between the same bank, it takes place in a matter of hours but if the depositor and owner have different banks then it takes some days.