Which description best defines a restrictive endorsement?

Which description best defines a restrictive endorsement?

• A. An endorsement that lists another payee.
• B. An endorsement that restricts what can be done with the check.
• C. An endorsement that verifies the amount.
• D. An endorsement that voids the check.

Answer: (B)

Restrictive endorsement means you place a limit on how the check can be handled after it’s endorsed. The usual form is something like “for deposit only” along with the account number. This tells the bank to deposit the funds only into the named account and prevents cashing the check or transferring it to someone else. It adds a layer of control and helps prevent loss or fraud if the check is misplaced. The other descriptions don’t fit the idea of restricting use: listing another payee points to directing payment to a specific person (a form of endorsement but not a restriction on use); verifying the amount is not a function of an endorsement; and voiding the check isn’t an endorsement at all but a cancellation.

Restrictive endorsement means you place a limit on how the check can be handled after it’s endorsed. The usual form is something like “for deposit only” along with the account number. This tells the bank to deposit the funds only into the named account and prevents cashing the check or transferring it to someone else. It adds a layer of control and helps prevent loss or fraud if the check is misplaced.

The other descriptions don’t fit the idea of restricting use: listing another payee points to directing payment to a specific person (a form of endorsement but not a restriction on use); verifying the amount is not a function of an endorsement; and voiding the check isn’t an endorsement at all but a cancellation.