It's a Cheque that's "bounced". The bank refuses to pay out on it for whatever reason. It could be that there wasn't enough money to cover the Cheque, or the account that the cheque was drawn on had been closed, or even fake.
What Is A Dishonored Cheque?
Dishonour of cheque can be due to may reasons such as...1.invalid date 2.insufficiency of funds in a/c 3.presentation of cheque after 6 months frm the date 4.signature did not tally
People don’t always carry around cash with them and it is also not uncommon for people to pay via a check, or a promise to pay at a later date. When the person tries to get cash by presenting the check or get the amount transferred to his/her own account, he is told by the bank that the claim can not be satisfied and you can not get the promised amount. This is called a dishonored check; when the bank refuses to accept the check. The reasons can be many including that the person who wrote the check promised an amount larger then there is in the bank account. This makes the issuing person a defaulter giving the right to the receiver to take that person to court for not satisfying the claim as he has signed the check himself but failed to pay. You can download a notice of check dishonor from the website www.allbusiness.com/accounting-reporting/accounts-receivable-debt-collection/111-1.html
A cheque which is found to be worth nothing