Aap Study Quiz #2

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  • 1/35 Questions

    __________ to the Consumer prior to reciept of a check is required by and Merchant/Biller wishing to use the RCK application.

    • An Email only
    • Notice
    • A Telephone Call only
    • A Letter only
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About This Quiz

This quiz is a tool to help study the ACH Material for the 2008 AAP Exam.

Finance Quizzes & Trivia

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  • 2. 

    A ________ entry will not be sent through the ACH Network.

    • Government

    • On-Us

    • Corporate

    • Two-sided

    Correct Answer
    A. On-Us
    Explanation
    An "On-Us" entry will not be sent through the ACH Network. This means that the transaction will not be processed through the Automated Clearing House (ACH) system, which is used for electronic funds transfers in the United States. Instead, an "On-Us" entry refers to a transaction that is processed internally within a financial institution, without being sent through the ACH Network.

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  • 3. 

    Application used by Merchants/Billers to collect funds from a check returned as NSF or Uncollected Funds.

    • RCK

    • XCK

    • CCD

    • PPD

    Correct Answer
    A. RCK
    Explanation
    RCK stands for Returned Check. It is an application used by Merchants/Billers to collect funds from a check that has been returned due to insufficient funds (NSF) or uncollected funds. This application allows the Merchants/Billers to attempt to retrieve the funds from the account holder again.

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  • 4. 

    ANSI 823

    • Remittance Detail

    • Electronic Tax Filing

    • Health Care Claim/Advice

    • Lockbox

    Correct Answer
    A. Lockbox
    Explanation
    A lockbox is a service provided by banks to receive and process payments on behalf of a company. It involves the bank providing a unique mailing address where customers can send their payments. The bank then collects the payments, processes them, and deposits the funds into the company's account. This service is commonly used by businesses to streamline their payment collection process and improve cash flow management.

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  • 5. 

    Authentication Process has to be ___________. 

    • Commercially Reasonanable

    • Written Agreement

    • Written Authorization

    • Telephone Authorization

    Correct Answer
    A. Commercially Reasonanable
    Explanation
    The authentication process needs to be "Commercially Reasonable" in order to ensure that it is conducted in a manner that is practical and appropriate for the specific commercial context. This means that the process should be reasonable and balanced, taking into account factors such as the nature of the transaction, the potential risks involved, and the cost and convenience for both parties. It should strike a reasonable balance between security and usability, ensuring that it is neither too strict nor too lenient. A commercially reasonable authentication process helps to protect against fraud and unauthorized access while also providing a smooth and efficient user experience.

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  • 6. 

    A Business Stop Payment is only valid for _______ days unless the Stop Payment is in writing.

    • 14

    • 30

    • 35

    • 60

    Correct Answer
    A. 14
    Explanation
    A Business Stop Payment is only valid for 14 days unless the Stop Payment is in writing. This means that if a business requests a stop payment on a check or transaction, the stop payment will only be effective for a period of 14 days unless it is confirmed in writing. After 14 days, the stop payment request may no longer be valid, and the transaction may proceed as usual. It is important for businesses to follow up with written confirmation to ensure that the stop payment remains in effect beyond the initial 14-day period.

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  • 7. 

    __________ was amended in 1990 by the American Law Institute and National Conference of Commissioners of Uniform State Laws to reflect changes in state law.

    • UCC 3A

    • UCC 4A

    • Regulation E

    • Regulation J

    Correct Answer
    A. UCC 4A
    Explanation
    The UCC (Uniform Commercial Code) is a set of laws that govern commercial transactions in the United States. UCC 4A specifically deals with funds transfers and electronic payments. In 1990, it was amended by the American Law Institute and the National Conference of Commissioners of Uniform State Laws to update it and align it with changes in state law. Therefore, the correct answer is UCC 4A.

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  • 8. 

    BOC conversion entries are able to be Originated from the Receiver's source document as long as the check contains ______________.

    • A pre-printed serial number

    • An Auxillary On-Us field

    • No image on the check

    • Dollar amount less than $999,999,999.99

    Correct Answer
    A. A pre-printed serial number
    Explanation
    BOC conversion entries can be originated from the receiver's source document as long as the check contains a pre-printed serial number. This means that the check must have a unique identification number already printed on it before it is used. This helps in tracking and identifying the check during the conversion process.

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  • 9. 

    ___________ was promulgated by the FED Board in 1988 to implement the Expedited Funds Availability Act for check collection.

    • Regulation CC

    • Regulation J

    • Regulation E

    • Regulation F

    Correct Answer
    A. Regulation CC
    Explanation
    Regulation CC was promulgated by the FED Board in 1988 to implement the Expedited Funds Availability Act for check collection. This regulation sets forth the rules and procedures that financial institutions must follow when they receive deposits of checks. It establishes the maximum hold periods for different types of checks and provides guidelines for the availability of funds to consumers.

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  • 10. 

    A legal agreement should bind the Originator to ______________.

    • The receiver

    • The NACHA Operating Rules

    • The entry

    • Regulation E

    Correct Answer
    A. The NACHA Operating Rules
    Explanation
    A legal agreement should bind the Originator to the NACHA Operating Rules. The NACHA Operating Rules are a set of guidelines and regulations that govern the electronic movement of funds in the United States. By binding the Originator to these rules, it ensures that they comply with the standards and requirements set forth by NACHA, the organization responsible for managing the ACH network. This helps to maintain the integrity and security of electronic payments and provides a framework for resolving disputes and enforcing compliance.

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  • 11. 

    ANSI 835

    • Remittance Detail

    • Electronic Tax Filing

    • Lockbox

    • Health Care Claim/Advice

    Correct Answer
    A. Health Care Claim/Advice
    Explanation
    The correct answer is "Health Care Claim/Advice". This term refers to a transaction that is used to submit healthcare claims, receive remittance advice, or both. It is a standard format for electronic data interchange (EDI) used in the healthcare industry to transmit healthcare claims and related information between healthcare providers, payers, and other entities. The ANSI 835 transaction provides detailed information about the payment and adjustments made on a claim, allowing healthcare providers to reconcile their accounts receivable. It plays a crucial role in streamlining the healthcare billing and payment process.

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  • 12. 

    The Standard Entry Class codes used for Acknowledgement Entries.

    • TCK and TTX

    • ACK and CTX

    • ECK and ETX

    • TCK and ACK

    Correct Answer
    A. ACK and CTX
    Explanation
    The Standard Entry Class codes used for Acknowledgement Entries are ACK and CTX. These codes are used in the Automated Clearing House (ACH) system to identify the type of transaction being processed. ACK stands for Acknowledgement Entry, which is used to confirm the receipt of a previous ACH transaction. CTX stands for Corporate Trade Exchange, which is used for business-to-business transactions that include additional payment-related information. Therefore, the correct answer is ACK and CTX.

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  • 13. 

    Correct Terminology: A Fraudulent Transaction Detection System is used to _________ the Receiver.

    • Authenticate

    • Validate

    • Detect

    • Recognize

    Correct Answer
    A. Authenticate
    Explanation
    A Fraudulent Transaction Detection System is used to authenticate the Receiver. This means that the system verifies and confirms the identity of the receiver, ensuring that they are who they claim to be. By authenticating the receiver, the system can prevent unauthorized access and ensure that only legitimate transactions are processed.

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  • 14. 

    Authorizations for WEB entries are signed using ____________.

    • Comercially reasonable standards

    • Comercially written proceedures

    • Similarly authenticated procedures

    • Pen and paper

    Correct Answer
    A. Similarly authenticated procedures
    Explanation
    The correct answer is "similarly authenticated procedures." This means that authorizations for WEB entries are signed using procedures that are authenticated in a similar manner. This suggests that there is a specific process or method in place to verify and authenticate the authorizations for WEB entries, ensuring that they are legitimate and authorized.

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  • 15. 

    "Simplified Enrollment" is _______.

    • Written Statement Under Penalty of Perjury

    • A letter

    • A call

    • Written notification

    Correct Answer
    A. A call
    Explanation
    "Simplified Enrollment" refers to a process or method of enrolling or registering for something. In this context, it is likely that "Simplified Enrollment" involves a call, where individuals can enroll or register for a service or program by making a phone call. This method may be more convenient and streamlined compared to other options such as written notification or sending a letter.

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  • 16. 

    __________ laid the groundwork for ACH in _____.

    • FOMF, 1974

    • FOMF, 1972

    • SCOPE, 1974

    • SCOPE, 1972

    Correct Answer
    A. SCOPE, 1972
    Explanation
    SCOPE, 1972 is the correct answer because it suggests that SCOPE (the Society for Computers and Planning in Education) laid the groundwork for ACH (Automated Clearing House) in 1972. This implies that SCOPE was instrumental in establishing the foundation for ACH during that year.

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  • 17. 

    You have the ability to represent an RCK item ________ days.

    • 60

    • 80

    • 100

    • 180

    Correct Answer
    A. 180
    Explanation
    The given answer, 180, suggests that the individual has the capability to represent an RCK item for a duration of 180 days.

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  • 18. 

    XCK entries should be retained for _____ years.

    • 3

    • 4

    • 6

    • 7

    Correct Answer
    A. 6
    Explanation
    The correct answer is 6. This suggests that XCK entries should be retained for a period of 6 years.

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  • 19. 

    (Appendix 10) The Arbitration Process can be filed if the amount of damage/loss is __________ .

    • >=$500.00

    • >= $250.00

    Correct Answer
    A. >= $250.00
    Explanation
    The correct answer is ">=$250.00". This means that the arbitration process can be filed if the amount of damage or loss is equal to or greater than $250.00. This indicates that the arbitration process is only applicable for cases where the damage or loss reaches a certain threshold amount, ensuring that minor disputes are not unnecessarily escalated to arbitration.

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  • 20. 

    Authorization for ARC entries are on the Receiver's __________.

    • Statement

    • Receipt

    • At the register

    • On the sales receipt

    Correct Answer
    A. Statement
    Explanation
    The correct answer is "Statement" because authorization for ARC entries is typically indicated on the receiver's monthly statement. This statement provides a summary of all transactions made during the billing cycle, including ARC entries, which are Automated Return to Maker entries. These entries allow a bank to automatically return a check to the maker's account if it is deemed insufficient or invalid. Therefore, the statement is the appropriate document to reference for authorization of ARC entries.

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  • 21. 

    An ACH Operator must retain a record of all entries for a period of ___ years.

    • 1

    • 2

    • 6

    • 7

    Correct Answer
    A. 1
    Explanation
    An ACH Operator must retain a record of all entries for a period of 1 year. This is important for compliance and audit purposes, as it allows for the tracking and verification of all transactions processed by the ACH Operator. Retaining these records for a year ensures that there is a sufficient timeframe for any necessary investigations or inquiries to take place.

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  • 22. 

    Alternate terms used for Authentication and Authorization:

    • Notify and Agreement

    • Identify and Agreement

    • Written Statement and Signature

    • Written Statement and Comercially Reasonable

    Correct Answer
    A. Identify and Agreement
    Explanation
    Authentication is the process of verifying the identity of a user or entity, ensuring that they are who they claim to be. It involves providing credentials such as a username and password. On the other hand, authorization refers to granting or denying access to specific resources or actions based on the authenticated user's privileges. In this context, "Identify and Agreement" can be seen as alternate terms for authentication and authorization, respectively. "Identify" represents the process of establishing identity, and "Agreement" signifies granting access based on agreed-upon terms or permissions.

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  • 23. 

    ANSI 521

    • Lockbox

    • Income /Asset Offset

    • Remittance Detail

    • Electronic Tax Filing

    Correct Answer
    A. Income /Asset Offset
    Explanation
    Income/Asset Offset refers to a financial transaction where income or assets are used to offset or reduce the amount owed for a particular liability or debt. This can be done to satisfy tax obligations, outstanding debts, or other financial obligations. The term "Income/Asset Offset" suggests that the given answer is related to this specific financial transaction or concept.

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  • 24. 

    You are allowed ________ days to return an XCK entry.

    • 2

    • 60

    • 30

    • 15

    Correct Answer
    A. 60
    Explanation
    The correct answer is 60 because it states that you are allowed a certain number of days to return an XCK entry, and out of the given options, 60 is the only one that matches this requirement.

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  • 25. 

    ______________ governs the clearing and settlement of ACH debit and credit entries.

    • FRB Operating Circular 4

    • UCC 4A

    • Part 210 of the Greenbook

    • Regulation E

    Correct Answer
    A. FRB Operating Circular 4
    Explanation
    FRB Operating Circular 4 governs the clearing and settlement of ACH (Automated Clearing House) debit and credit entries. This circular provides guidelines and regulations for financial institutions regarding the processing, settlement, and reporting of ACH transactions. It ensures that the ACH system operates smoothly and efficiently, promoting the secure and timely movement of funds between banks. Compliance with this circular is essential for financial institutions to ensure the proper handling of ACH transactions and maintain the integrity of the ACH system.

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  • 26. 

    ANSI 103

    • Abandoned Propert

    • Remittance Detail

    • Electronic Tax Filing

    • Lockbox

    Correct Answer
    A. Abandoned Propert
  • 27. 

    ANSI 813

    • Remittance Detail

    • Electronic Tax Filing

    • Health Care Claim/Advice

    • Lockbox

    Correct Answer
    A. Electronic Tax Filing
    Explanation
    The given answer, "Electronic Tax Filing," is the correct option because it is the only term related to tax filing, while the other options are unrelated. ANSI 813 is a standard for electronic data interchange, Remittance Detail refers to information about payments, Health Care Claim/Advice pertains to healthcare billing, and Lockbox is a service for collecting and processing payments. Therefore, "Electronic Tax Filing" is the most appropriate choice within the given options.

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  • 28. 

    Addenda Records begin with_________ and ____________.

    • BPR, BPS

    • EFT, ACH

    • PBR, PBS

    • HIA, HIS

    Correct Answer
    A. BPR, BPS
    Explanation
    The correct answer is BPR, BPS. This suggests that Addenda Records typically start with the abbreviation "BPR" and are followed by "BPS". These abbreviations likely represent specific codes or identifiers used in record-keeping or data management systems. Without further context, it is difficult to determine the exact meaning of these abbreviations or the purpose of Addenda Records.

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  • 29. 

    Approximately _______ DFIs use FEDwire Funds Service.

    • 6,000

    • 6,500

    • 7,000

    • 7,500

    Correct Answer
    A. 7,500
    Explanation
    Approximately 7,500 DFIs use FEDwire Funds Service.

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  • 30. 

    An Access Device is:

    • Used in ACH Network; iniate a ARC transaction

    • Used in ACH Network; initiate a POP transaction

    • Used in Card Network; access ATM

    • Used in the Card Network; access consumer Account to iniate EFT

    Correct Answer
    A. Used in the Card Network; access consumer Account to iniate EFT
    Explanation
    An Access Device is used in the Card Network to access a consumer's account and initiate an Electronic Funds Transfer (EFT). This device allows individuals to electronically transfer funds from their account to another account, making it a convenient way to make payments or transfer money.

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  • 31. 

    Operating Circular 235 addresses:

    • Marketing

    • Risk

    • Converted ACH items

    • Check Collection Process

    Correct Answer
    A. Risk
    Explanation
    Operating Circular 235 addresses risk. This means that the circular provides guidelines and instructions on how to manage and mitigate risks in the operations of a business or organization. It may include information on identifying and assessing risks, implementing risk management strategies, and ensuring compliance with risk-related regulations and policies. The circular may cover various types of risks such as financial, operational, legal, and reputational risks. By addressing risk, the circular helps businesses and organizations to protect their assets, maintain stability, and make informed decisions to achieve their objectives.

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  • 32. 

    ________ and individual FED Operating Circulars govern the check collection process.

    • Regulation J

    • Regulation CC

    • UCC A4

    • Regulation E

    Correct Answer
    A. Regulation J
    Explanation
    Regulation J governs the check collection process between depository institutions and the Federal Reserve Banks. It sets out the rights and obligations of both parties, including the timeframes for presenting and returning checks, the settlement process, and the availability of funds. While other regulations, such as Regulation CC (which governs funds availability), UCC A4 (which governs the rights and obligations of parties involved in the check collection process), and Regulation E (which governs electronic fund transfers), may also have some impact on the check collection process, Regulation J specifically addresses this process.

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  • 33. 

    ANSI 820

    • Remittance Detail

    • Electronic Tax Filing

    • Remittance Detail

    • Health Care Claim/Advice

    Correct Answer
    A. Remittance Detail
    Explanation
    The correct answer is "Remittance Detail" because it is a specific document or report that provides detailed information about payments made by a healthcare provider or insurance company to a healthcare organization. This document includes information such as the date of payment, the amount paid, the reason for payment, and any adjustments made. It is an important tool for healthcare organizations to reconcile their accounts and ensure accurate payment processing.

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  • 34. 

    Approximately ________ FIs used FEDwire Securities.

    • 6,000

    • 6,400

    • 7,000

    • 7,400

    Correct Answer
    A. 6,400
    Explanation
    Approximately 6,400 financial institutions (FIs) used FEDwire Securities.

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  • 35. 

    By who is settlement not defined by the ACH Operating Rules?

    • ODFI and ACH Operator

    • Originator and ODFI

    • Receiver and RDFI

    • ODFI and RDFI

    Correct Answer
    A. Originator and ODFI
    Explanation
    Settlement is not defined by the ACH Operating Rules for the Originator and ODFI. This means that the ACH Operating Rules do not provide specific guidelines or regulations regarding the settlement process for these parties.

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  • Mar 21, 2023
    Quiz Edited by
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  • Sep 10, 2008
    Quiz Created by
    Tmarkey
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