The density of each pixel of a transmission image of a bill is primary differentiated. The result of the differentiation is simply binarized by comparing it with a predetermined threshold to extract the outline passing through the same point on the Hough-transformed to extract the outline passing through the same point to the point obtained by the Hough-plane is extracted. If the number of dots in the part, not overlapping with any other parts, of the rectangle is not less than the predetermined threshold, the nonoverlapping part is cut out as the image of the bill. The cut-out image is compared with a reference image, thereby identifying the kind of the bill.