What is meant by a 'canceled' check?

A 'canceled' check refers to a check that has been processed and paid by the bank, subsequently returned to the depositor as proof of payment. When a check is presented to the bank for payment and funds are successfully drawn from the issuer's account, it is marked as "canceled" in bank records. This ensures that the check can no longer be used for any further transactions and serves as a permanent record of the payment made to the payee.

In essence, a canceled check provides verification that a payment was completed, often serving as an important document for accounting and reconciliation purposes. This can be particularly relevant for individuals and businesses to track their financial transactions accurately.