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NCP > XP 187 Cash Letter forward and return exchange > Flashcards

XP 187 Cash Letter forward and return exchange Flashcards

1
Q

What is the purpose of the Accredited Standards Committee (ASC) X9?

A

To create American National Standards Institute (ANSI) standards for financial services

ASC X9, Inc. is commonly referred to as X9.

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2
Q

Where can ANSI standards be obtained?

A

From www.ansi.org

ANSI stands for American National Standards Institute.

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3
Q

What does ANSI X9.100-140 specify?

A

It provides a specification for an Image Replacement Document (IRD)

The IRD is derived from the front and back of the original check.

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4
Q

What is a substitute check as defined in Reg CC §229.2?

A

A document that must conform in paper stock, dimension, and industry standards

Substitute checks are also known as Image Replacement Documents (IRDs).

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5
Q

Is the use of magnetic ink required for an IRD created for a paid item?

A

No, it is not required if the item is returned to the customer as a properly paid item

E-13B MICR font characters may be printed in non-magnetic ink.

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6
Q

What does the ANSI X9.100-140 standard define regarding an IRD?

A

Defines an IRD that can be used as a substitute check

This includes provisions for returns, re-presentment, and inclusion in customer statements.

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7
Q

What information does the Forward Subsequent IRD Front View include?

A

Legal Legend, Reconverting Bank information, Truncating Bank information, MICR line, Original scanned front, Substitute check identification

‘4’ in EPC field in MICR line identifies the substitute check.

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8
Q

What is included in the Forward Subsequent IRD Back View?

A

BOFD Endorsement Area, BOFD Endorsement for Original IRD, Subsequent Endorsements

The last four endorsements are printed in sequence from oldest to newest.

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9
Q

Fill in the blank: The financial industry standard for an Image Replacement Document is _______.

A

ANSI X9.100-140

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10
Q

True or False: The IRD must conform to all requirements of the ANSI X9.100-140 standard.

A

True

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11
Q

What are return reason codes defined in?

A

Annex A of the ANSI X9.100-188 standard

These codes describe reasons for the return of checks.

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12
Q
A
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13
Q

What does ANSI X9.100-160-1 establish?

A

It establishes the placement and location for printing MICR ink on checks, drafts, and other documents intended for automated processing.

Refer to Figures 2.3 and 2.4 for MICR examples.

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14
Q

What is the purpose of MICR ink?

A

MICR ink is used on documents to be read by magnetic ink character recognition.

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15
Q

What is reserved for magnetic encoding in MICR?

A

A band along the bottom edge of the document is reserved for magnetic encoding.

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16
Q

How is the MICR band organized?

A

The band is divided into character spaces, organized into several areas or fields.

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17
Q

What are the common fields with fixed format in MICR?

A

The common fields are: Amount Field, Routing Field, and Optional EPC field.

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18
Q

What is the On-Us Field in MICR?

A

The On-Us Field has a format determined by the needs of the issuing financial institution.

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19
Q

What is the Auxiliary On-Us Field?

A

The Auxiliary On-Us Field may appear at the extreme left side on larger checks.

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20
Q

What does ANSI X9.100-160-2 establish?

A

It establishes the assignment and management of the External Processing Code field or EPC.

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21
Q

What is the purpose of the EPC in MICR?

A

The EPC conveys special information for the correct handling or routing of a check or check data.

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22
Q

What does EPC ‘2’ identify?

A

EPC ‘2’ identifies return items that can be processed within the forward presentment system and delivered directly to the BOFD.

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23
Q

What is the purpose of EPC ‘4’?

A

EPC ‘4’ is assigned for usage in the creation of a forward or return IRD conforming to the ANSI X9.100-140 standard.

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24
Q

What does EPC ‘5’ signify?

A

EPC ‘5’ is assigned for usage in the creation of a return IRD conforming to the ANSI X9.100-140 standard.

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25
What does EPC '6' identify?
EPC '6' is assigned as an identifier of Remotely Created Checks (RCCs), which are unsigned drafts.
26
What is a cash letter?
A cash letter is a group of negotiable instruments, usually checks, that includes instructions for handling.
27
What information does a cash letter include?
It includes information about the presenting bank, receiving bank, types of items included, and control totals.
28
What does ANSI X9.100-187 provide?
It provides the financial industry with the format necessary to perform electronic check exchange.
29
What is the purpose of electronic check exchange?
It facilitates the electronic movement or exchange of check-related data and images for various purposes.
30
31
32
What does the ANSI X9.100-187 standard establish?
File sequences, record types, and field formats for electronic exchange of check MICR line data and check images in cash letters
33
What is a cash letter structure used for?
To support the exchange of posting data only, posting data and check images, or posting data followed by an additional data and image file
34
What records are defined for forward image exchange in ANSI X9.100-187?
20-series records
35
What records are defined for return image exchange in ANSI X9.100-187?
30-series records
36
What is contained in the File Header Record (Type 01)?
Origin/Destination Routing Numbers and Names, Creation Date and Time
37
What does the File Control Record (Type 99) include?
Cash Letter count, Item count, Total amount
38
What information does the Cash Letter Header Record (Type 10) contain?
Destination and ECE Institution Routing Numbers, various dates and codes
39
What does the Cash Letter Control Record (Type 90) provide?
Control totals for cash letter including Bundle Count, Item Count, Total Amount
40
What is the purpose of the Bundle Header Record (Type 20)?
First record of bundle containing destination and ECE Institution Routing Numbers, various dates, Bundle ID, and Sequence Number
41
What does the Check Detail Record (Type 25) include?
Information from MICR line of check, ECE Institution Item Sequence Number, various codes
42
What is the Check Detail Addendum A Record (Type 26) associated with?
Previous Check Detail Record
43
What information does the Return Record (Type 31) contain?
Information from Check Detail Record or original check, Forward Bundle Date, return reason codes
44
What does the Return Addendum D Record (Type 35) include?
Paying bank identification, Return reason code
45
What do Image View Detail (Type 50) and Image View Data (Type 52) Records convey?
Image data and image of the check
46
What is the purpose of the ANSI X9.100-188 standard?
Provides list of Return Reason codes for image exchange and creation of IRDs
47
What is the purpose of ANSI X9 TR 2?
Promote uniformity in design and production of checks through guidelines
48
What does the UCD TR 47 clarify?
How institutions should apply the standard for populating data files with check information for exchange
49
Fill in the blank: The Uniform Commercial Code (UCC) and Regulation CC (Reg CC) place certain responsibilities regarding _______ on the parties handling a check.
[indorsements]
50
True or False: The UCD TR 47 replaces the ANSI X9.100-187 standard.
False
51
What are the types of indorsements that may be found on checks?
Indorsements may be: * Physical: Sprayed, printed or overlaid on the check * Carried electronically in the ANSI X9.100-187 file format * Both ## Footnote Physical indorsements are the traditional method of marking a check, while electronic indorsements allow for digital processing.
52
What happens to physical indorsements when a check is converted to an image?
The image retains any physical indorsements that were present. However, physical indorsements for the image creator will not appear if the image is captured prior to the item being physically indorsed. ## Footnote This means that timing is crucial for the visibility of physical indorsements in digital formats.
53
What is required to maintain a complete indorsement history in electronic records?
Additional electronic indorsements may be included with each item in an ANSI X9.100-187 file. ## Footnote This ensures that all necessary indorsement information is available for tracking and auditing.
54
True or False: Electronic indorsements are acceptable in lieu of physical indorsements on the back of the check.
True ## Footnote This allows for flexibility in processing checks, especially in digital environments.
55
What does Check 21 (Reg CC Subpart D) require for electronic items converted back to paper form?
Previous indorsements must be carried on the substitute check, whether the party indorsed in physical or electronic form. ## Footnote This regulation ensures consistency and traceability of indorsements throughout the check processing cycle.
56
What does the ANSI X9.100-187 file format support?
It supports: * Image cash letter structure for posting data only or posting data & check images * Requirements of IRD specifications * Proper identification of electronic indorsements' purposes * Indorsement audit trails ## Footnote This format is crucial for electronic check processing and maintaining integrity in financial transactions.
57
What types of records are included in the forward item records?
Forward item records include: * Check Detail Record (Type 25) * Check Detail Addendum A Record (Type 26) * Check Detail Addendum B Record (Type 27) * Check Detail Addendum C Record (Type 28) ## Footnote Each record type has specific fields and purposes related to check processing.
58
What is the purpose of the Check Detail Record (Type 25)?
It contains 15 fields with information from the check’s MICR line, including the Item Sequence Number for the institution and other codes. ## Footnote This information is vital for tracking and processing checks accurately.
59
What information does the Check Detail Addendum A Record (Type 26) provide?
It identifies/provides information on the return location for customer returns, typically BOFD. ## Footnote This ensures proper handling of returned checks.
60
What is the significance of the Return Record (Type 31)?
It contains information from Check Detail Record or original check, including codes to indicate return reasons and the number of times returned. ## Footnote This record is essential for tracking returned items and understanding the reasons for returns.
61
What does the Aux On-Us Field indicate?
It is an optional field used for the placement of consecutive serial numbers on business-sized checks. ## Footnote This field is important for tracking and managing check serializations.
62
Fill in the blank: The On-Us field is located between the _______ and Routing fields.
Amount ## Footnote This positioning is based on the ANSI X9.100-160 standard.
63
What happens to characters in the On-Us field that cannot be interpreted?
They are replaced with the non-read symbol of asterisk ('*'). ## Footnote This ensures that the data remains compliant with processing standards.

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