Once a check is cleared by a bank, it becomes a canceled check. A check is canceled by payment or charging to the account holder's account. Once a check is processed and all appropriate accounts have been credited, it becomes a canceled check. Cancellation is the proof of payment. A canceled check is not negotiable. Most of the banks return the canceled checks. Some banks keep canceled check and provide copy to the customer. An outstanding check is one that has not been processed. An outstanding check is approved by the originated bank.