AAP EXAM QUESTIONS AND ANSWERS 100% PASS

AAP EXAM QUESTIONS AND ANSWERS 100% PASS RCK return deadline - Midnight of 2nd day following the banking day of representment Access Device - A card, code, or other means that may be used by the consumer to initiate electronic fund transfers. This does not include electronic devices, such as telephones, personal computers or terminals, typically used in such transfers. Accounts Receivable Entry (ARC) - A single entry debit initiated by an Originator to the account of a Receiver based on an Eligible Source Document provided to the Originator by the Receiver (1) via U.S. mail or delivery service, (2) at a dropbox location, or (3) in person for payment of a bill at a manned location. ACH Association - An association of member financial institutions and business entities organized to develop and enhance the ACH payment mechanism. Through the association, members receive standardized specifications, a legal framework for the 2 | P a g e Katelyn Whitman© 2025, All Rights Reserved. protection of participants, a link to the nationwide ACH Network and educational programs and materials. ACH Card - A card or other means of access to a Consumer Account held by a Depository Financial Institution that is issued by an entity other than the Depository Financial Institution or a party that has contracted directly with the Depository Financial Institution to issue such cards or other means of access, and can be used at the point of sale to initiate POS entries. ACH - Automated Clearing House Network. ACH Operator - An ACH Operator is an entity that acts as a central facility for the clearing, delivery, and settlement of entries between or among participating DFIs. Who is an ACH Operator - May be a Federal Reserve Bank or an entity that executes an annual agreement with the National Association What does an ACH Operator agree to comply with or do? - 1) adhere to the NACHA Operating Rules (except to the extent inconsistent with the policies or practices of the Federal Reserve Banks) and other applicable legal requirements 2) execute agreements with a minimum of 20 independent Participating DFIs that bind them to the ACH Operator's rules and to the NACHA Operating Rules (except that a Federal Reserve Bank shall not be required to bind a Participating DFI to any provision of such rules of the National Association that is not incorporated by the Federal Reserve Banks Operating Circular 4 on Automated Clearing House Items.) 3 | P a g e Katelyn Whitman© 2025, All Rights Reserved. What does an ACH Operator do? - 1) provide clearing, delivery, and settlement services for ACH entries, as defined by the NACHA Operating Rules, between Participating DFIs that have selected that ACH Operator to perform ACH services (intra-ACH Operator services), and (2) exchange transactions with other ACH Operators (inter-ACH Operator exchange) 2) process and edit files based on the requirements of the NACHA Operating Rules 3) evaluate the credit worthiness of and apply risk control measures to their Participating DFIs 4) adhere to the Federal Reserve's Policy Statement on Privately Operated Multilateral Settlement Systems (as applicable) 5) adhere to any National ACH Operator Performance Standards of the National Association Acknowledgments (ACK and ATX) - A non-monetary entry initiated by an RDFI that provides acknowledgment of receipt by the RDFI of a corporate credit payment originated using the CCD format ("ACK" entry) or the CTX format ("ATX" entry.) Administrative Return Rate - The rate at which an Originator's or Third- Party Sender's debit entries are returned for administrative reasons (Return Reason Codes R02, R03, or R04), as calculated by the Rules requirement in Article Two (ODFI Return Rate Reporting Regarding an Originator's or Third-Party Sender's Administrative Return Rate or Overall Return Rate.) 4 | P a g e Katelyn Whitman© 2025, All Rights Reserved. Administrative Return Rate Level - 3% Addenda Record - An ACH record that contains supplemental data related to an entry. This information may be needed to completely identify an account holder(s) or provide information concerning a payment to the RDFI and the Receiver. Agreement - A contract between entities (i.e., originating company and originating financial institution; originating company or originating financial institution and a Third-Party Service Provider Third-Party sender - A type of Third-Party Service Provider that acts as an intermediary in Transmitting entries between an Originator and an ODFI, including through Direct Access, and acts on behalf of an Originator or another Third-Party Sender. A Third-Party Sender is never the Originator for entries it transmits on behalf of another Organization, however, it may be an Originator of other entries initiated on its own behalf. Algorithm - A mathematical process used to encode or decode a message, or a prescribed set of well-defined rules or processes for the solution of a problem in a finite number of steps. ANSI - The American National Standards Institute is the coordinating organization for America's federated national standards system. Membership comes from industry trade associations and the Federal Government. Special committees within ANSI deal with standards for bank cards and financial communication networks. 5 | P a g e Katelyn Whitman© 2025, All Rights Reserved. Article 4A - Article 4A of the Uniform Commercial Code. This article was developed principally to establish a comprehensive body of law for wholesale wire transfers. However, the scope of Article 4A goes beyond wire transfers and includes all electronic credit transfers made through the ACH Network not otherwise subject to the EFTA (generally business-to- business credit transfers). Its primary purpose is to explain the risks and responsibilities of the parties to the transaction. ASC X9 - The Accredited Standards Committee group that deals with standards involving dealings between Financial Institutions. The standards for the security of financial messages (i.e. authentication and encryption) are developed, maintained, and published by ASC X9 (sometimes referred to as ASC X9 or simply X9). ASC X12 - The Accredited Standards Committee responsible for the development of uniform standards for inter- industry electronic interchange of business transaction data. The data interchange standards consist of transaction set stand