Practice Tests - Incorrect Answers

Question 1

Administrative Return Rate (different from Overall Return Rate) must be below:

Answer 1

3%

Question 2

Unauthorized Entry Return Rate must be below:

Answer 2

0.5%

Question 3

Of the following, which return code does not apply to ARC Entries and may not be used to return an ARC Entry?
a) R03
b) R38
c) R37
d) R10

Answer 3

a) R03 (this is stupid and you’re right to be mad about it)

Reason: R03 is Unable to Locate Account, due to name and number not matching their records. A receiver’s name is not in the MICR line, so RDFI cannot return the Entry for that reason.

Question 4

With respect to Federal Reserve Accounts, Financial Institutions must:

Answer 4

maintain sufficient balances in these accounts to cover net settlement amounts

Question 5

What is the ACH network?

Answer 5

A processing and delivery system that provides for distribution and settlement of electronic items among a large number of Financial Institutions

Question 6

In the event that an ODFI cannot settle ACH transactions originated in the ACH network, the ACH Operator can:

Answer 6

In the event that an ODFI is unable to settle transactions originated into the ACH Network, the ACH Operator will create and transmit reversing entries to the affected RDFIs for each entry that cannot settle if that ACH Operator’s settlement arrangement includes provisions for doing so. The description “NONSETTLED” would appear in the Company Entry Description field in the Company/Batch Header Record.

Question 7

What law protects the consumer regarding re-presented check (RCK) ACH Transactions?

Answer 7

Check law

Explanation: Any item that goes through the check system is covered under check law.

Question 8

Corey would like to have an authorization with his Oil Company that states they will charge him for oil when he requests a delivery. When Corey calls the Oil Company for a delivery and initiates the charge, what type of authorization would this be called?

Answer 8

Subsequent Authorization

Explanation: The Rule defines Subsequent Entries as individual payments initiated based on a Standing Authorization.

Question 9

What is QUEST?

Answer 9

A service mark and set of operating rules which set forth requirements for distribution of government benefits

Explanation: QUEST is a service mark and set of operating rules which set forth requirements for the distribution of government benefits. QUEST rules can be incorporated into contracts with service providers to define requirements for distribution of benefits.

Question 10

For non-Same Day ACH credits, the files should be released to the ACH Operator:

Answer 10

One or two days prior to the Effective Date

Explanation: For non-Same Day ACH Credits, an ODFI could release Entries either one or two days prior to Effective Date.