Which of the following statements is true about checks?

Checks are a financial instrument that require a signature from the account holder, which validates the document as a legitimate form of payment. When a check is issued, it directs a bank to pay a specified amount of money to the person or entity named on the check. This mechanism is intrinsic to how checks function in the banking and payment systems, as the signature acts as an authorization for the transaction.

The other options present inaccuracies regarding checks. While some types of checks may be written as non-negotiable, most checks are negotiable instruments, meaning they can be transferred to others. Contrary to the belief that checks are always processed instantly, processing can take time, especially if they are deposited into a bank account—this may involve a clearing period. Additionally, while checks are traditionally a paper-based form of payment, they can be processed electronically in various forms, such as check imaging or electronic check conversion services. Thus, the nature of checks as requiring a signature and being used for payment validates that the statement selected is accurate.