2008 Aap Exam Study Quiz

1. Which ACH applications require the check serial number to print on the consumer's statement?

Internet-initiated entries and Point-of-Sale

Prearranged Payment and Deposit and Death Notification Entries

Corporate Cross Border and Telephone Initiated Entries

Point-of-Purchase and Back Office Conversion

Point of Sale and Back Office Conversion

Point-of-Purchase and Back Office Conversion are the ACH applications that require the check serial number to print on the consumer's statement.

Explanation

Point-of-Purchase and Back Office Conversion are the ACH applications that require the check serial number to print on the consumer's statement.

2. The "Choice of Law" state specified in the ACH Rules is

Washington

Virginia

California

New York

Georgia

The correct answer is New York because the ACH Rules specify that New York is the choice of law state. This means that any legal disputes or issues related to the ACH Rules will be governed by the laws of New York.

Explanation

The correct answer is New York because the ACH Rules specify that New York is the choice of law state. This means that any legal disputes or issues related to the ACH Rules will be governed by the laws of New York.

3. When an ODFI utilizes a third-party processor in the origination process, which party warrants that the entries are authorized?

The RDFI

The ODFI

The ACH Operator

The Originator

The third party

When an ODFI (Originating Depository Financial Institution) utilizes a third-party processor in the origination process, the ODFI warrants that the entries are authorized. This means that the ODFI takes responsibility for ensuring that the transactions initiated by the third-party processor are authorized and legitimate. The ODFI is ultimately responsible for the accuracy and validity of the entries being processed through the ACH (Automated Clearing House) system.

Explanation

When an ODFI (Originating Depository Financial Institution) utilizes a third-party processor in the origination process, the ODFI warrants that the entries are authorized. This means that the ODFI takes responsibility for ensuring that the transactions initiated by the third-party processor are authorized and legitimate. The ODFI is ultimately responsible for the accuracy and validity of the entries being processed through the ACH (Automated Clearing House) system.

4. For a consumer debit entry that was not authorized, the RDFI must transmit the return by its ACH Operator's deadline for the return to be made available to the ODFI no later than:

Midnight on the banking day following the sixtieth calendar day following the settlement date of the original entry.

The correct answer is that the RDFI must transmit the return by its ACH Operator's deadline for the return to be made available to the ODFI no later than the opening of business on the banking day following the sixtieth calendar day following the settlement date of the original entry. This means that the return must be processed and made available to the ODFI within 60 calendar days after the settlement date of the original entry.

Explanation

The correct answer is that the RDFI must transmit the return by its ACH Operator's deadline for the return to be made available to the ODFI no later than the opening of business on the banking day following the sixtieth calendar day following the settlement date of the original entry. This means that the return must be processed and made available to the ODFI within 60 calendar days after the settlement date of the original entry.

5. Which ASC X12 Transaction Set applies to Lockbox?

201

250

823

813

810

201 - Residential Loan Application
250 - Purchase Order Shipment Managment Document
810 - Invoice
813 - Electronic Filing of Tax Return Data
823 - Lockbox

Explanation

201 - Residential Loan Application
250 - Purchase Order Shipment Managment Document
810 - Invoice
813 - Electronic Filing of Tax Return Data
823 - Lockbox

6. How long must each participating DFI retain records of all entries, incuding return adjustment entries, transmitted from or to an ACH Operator?

Seven years

1 year

2 years

Five years

Six years

Each participating DFI must retain records of all entries, including return adjustment entries, transmitted from or to an ACH Operator for a period of six years. This is necessary to ensure compliance with regulations and to provide a record of all transactions for auditing and dispute resolution purposes. By retaining these records, DFIs can maintain a comprehensive history of their ACH activities and have access to important information if any issues or discrepancies arise in the future.

Explanation

Each participating DFI must retain records of all entries, including return adjustment entries, transmitted from or to an ACH Operator for a period of six years. This is necessary to ensure compliance with regulations and to provide a record of all transactions for auditing and dispute resolution purposes. By retaining these records, DFIs can maintain a comprehensive history of their ACH activities and have access to important information if any issues or discrepancies arise in the future.

7. The Financial Organization Master File (FOMF) is

A national financial institution directory maintained by the Federal Reserve Bank

A list of Government only Receivers

Department of Treasury list of financial institutions receiveing Federal Government ACH payments

A NACHA directory that lists ACH contacts and telephone numbers

A NACHA directory that lists Receiving Depository Financial Institutions

The Financial Organization Master File (FOMF) is a Department of Treasury list of financial institutions receiving Federal Government ACH payments. This means that it is a comprehensive directory maintained by the Department of Treasury that includes all the financial institutions that receive ACH payments from the Federal Government.

Explanation

The Financial Organization Master File (FOMF) is a Department of Treasury list of financial institutions receiving Federal Government ACH payments. This means that it is a comprehensive directory maintained by the Department of Treasury that includes all the financial institutions that receive ACH payments from the Federal Government.

8. The RDFI is responsible for...

Posting debit and credit transactions on effective entry date

Receipt and processing of return transactions

Validating prenotifications

Calculating the settlement totals owed to and by DFIs

Retaining source documents for TRX transactions

The RDFI, or Receiving Depository Financial Institution, is responsible for validating prenotifications. Prenotifications are notifications sent by an Originating Depository Financial Institution (ODFI) to inform the RDFI of an upcoming debit or credit transaction. The RDFI validates these prenotifications to ensure that the transaction is authorized and can be processed. This helps prevent unauthorized transactions and ensures the accuracy and security of the payment system.

Explanation

The RDFI, or Receiving Depository Financial Institution, is responsible for validating prenotifications. Prenotifications are notifications sent by an Originating Depository Financial Institution (ODFI) to inform the RDFI of an upcoming debit or credit transaction. The RDFI validates these prenotifications to ensure that the transaction is authorized and can be processed. This helps prevent unauthorized transactions and ensures the accuracy and security of the payment system.

9. The trace number of a contested dishonored return will contain the RT number of which participant?

ODFI

RDFI

Originator

Receiver

ACH Operator

The trace number of a contested dishonored return will contain the RT number of the RDFI. The RDFI, or Receiving Depository Financial Institution, is the bank or financial institution that receives the ACH transaction. The trace number is a unique identifier assigned to each ACH transaction, and it is used to track and identify the transaction throughout the payment process. In the case of a contested dishonored return, the trace number will contain the RT number of the RDFI, allowing for easy identification and resolution of the issue.

Explanation

The trace number of a contested dishonored return will contain the RT number of the RDFI. The RDFI, or Receiving Depository Financial Institution, is the bank or financial institution that receives the ACH transaction. The trace number is a unique identifier assigned to each ACH transaction, and it is used to track and identify the transaction throughout the payment process. In the case of a contested dishonored return, the trace number will contain the RT number of the RDFI, allowing for easy identification and resolution of the issue.

10. The Originator must make the requested change within what time period following the receipt of an NOC/corrected NOC?

Within 6 banking days or prior to the next entry, which ever is sooner

Within 5 banking days or prior to the next entry, which ever is later

Within 10 calendar days or prior to the next entry, which ever is sooner

Within 6 banking days or prior to the next entry, which ever is later

Within 5 banking days or prior to the next entry, which ever is sooner

The Originator must make the requested change within 6 banking days or prior to the next entry, whichever is later. This means that the Originator has a maximum of 6 banking days to make the change, but if there is another entry scheduled before the 6 days are up, they must make the change before that entry.

Explanation

The Originator must make the requested change within 6 banking days or prior to the next entry, whichever is later. This means that the Originator has a maximum of 6 banking days to make the change, but if there is another entry scheduled before the 6 days are up, they must make the change before that entry.

11. How many articles comprise the NACH Operating Rules?

11

12

21

31

14

The NACH Operating Rules consist of a set of guidelines and regulations for the Automated Clearing House (ACH) network. The question asks for the number of articles that make up these rules. The correct answer is 14, indicating that there are 14 individual articles within the NACH Operating Rules.

Explanation

The NACH Operating Rules consist of a set of guidelines and regulations for the Automated Clearing House (ACH) network. The question asks for the number of articles that make up these rules. The correct answer is 14, indicating that there are 14 individual articles within the NACH Operating Rules.