AAP HANDBOOK TEST QUESTIONS WITH CORRECT ANSWERS
Which of the following specify the requirements for reserves that a depository institution must maintain
at a Federal Reserve Bank?
☐a. Uniform Commercial Code Article 4A
☐b. Federal Reserve Bank Operating Circular 4
☐c. Regulation D
☐d. Regulation CC - CORRECT ANSWER✅✅C
Which of the following specifically addresses national banks and their need to evaluate large dollar
payment system network risks and requires reporting this to top management and maintaining
agreements with all parties that they do business with?
☐a. OCC Banking Circular 235
☐b. UCC 4
☐c. Regulation Z
☐d. UCC 4A - CORRECT ANSWER✅✅A
When an Originator is initiating an MTE, POS or SHR entry where a personal identification number (PIN)
is required in connection with the authorization, the Originator MUST comply with:
☐a. ANSI ASC X9.8 Standards
☐b. ANSI ASC X12 Standards
☐c. ANSI ASC X8.9 Standards
☐d. ANSI ASC X12.9 Standards - CORRECT ANSWER✅✅A
Which of the following payment systems is referred to as real-time and gross settlement?
☐a. Fedwire Funds Transfer
☐b. Check Processing System
☐c. Debit Card Network
☐d. ACH Network - CORRECT ANSWER✅✅A
,Choose the correct description of the Acquirer in the card network system:
☐a. The entity that has agreed to accept credit and debit cards for the purchase of goods and
services
☐b. The entity that issues a credit or debit card to the card holder
☐c. A financial institution that represents merchants in accepting POS transactions
☐d. The network that provides switching facilities for the card transactions - CORRECT ANSWER✅✅C
Which of the following lists the participants in the check participants in check processing order?
☐a. Payor/Payee/Receiver/Paying Bank
☐b. Payee/Bank of First Deposit/Correspondent Bank/Paying Bank
☐c. Payor/Payee/Payee's FI/Payor's FI/Correspondent Bank
☐d. Payor/Payee/Merchant/ODFI/RDFI - CORRECT ANSWER✅✅B
An unauthorized entry is transmitted into the ACH Network by County Credit Union, there are financial
losses involved and County Credit Union and the RDFI (State Bank) cannot come to an agreement as who
should be paying what amount of money and to whom. What is the minimum amount of dispute
BEFORE a complaint can be filed to initiate an arbitration
proceeding?
☐a. $200
☐b. $250
☐c $1,000
☐d. $2,500 - CORRECT ANSWER✅✅B
Blue Sky Bank does ACH origination for two local companies in town. The bank has agreements in place
with the two originators in which it provides the necessary disclosures for UCC Article 4A as required by
the NACHA Operating Rules. Which provision of UCC
Article 4A can be varied by agreement (with disclosure to Originator)?
☐a. Delay or Failure to Transmit Entries
☐b. Payment Upon Acceptance of Entries
☐c. Duty to Pay ODFI
, ☐d. Choice of Law - CORRECT ANSWER✅✅D
First Bank received a credit return entry as R02 (Account Closed) for $35,000 two weeks after the
original transaction was transmitted to the Receiver. First Bank feels that the RDFI (Oceans Bank) owes
them interest and penalties for failing to return the credit entry timely. What is the minimum dollar
amount of loss suffered to file a claim for compensation?
☐a. $250
☐b. $100
☐c. $150
☐d. $200 - CORRECT ANSWER✅✅D
Anthony opened his checking account with Northern Bank in February. In the initial disclosures provided
by Northern Bank upon account opening, the ATM fee was clearly stated as being $3.00 per transaction.
Effective October 1, the fee for using an ATM will increase to $3.50. According to Regulation E, how
many days prior notice is required when there is a change to the initial disclosures which results in
greater consumer liability?
☐a. 21 days
☐b. 30 days
☐c. 15 days
☐d. 10 days - CORRECT ANSWER✅✅A
According to an original authorization between Georgia and her health club, the monthly membership
dues are $35.00 each month. The health club must increase their monthly membership dues to $40.00
each month to cover increasing costs due to the economy. Which of the following regulations requires
the health club to provide a 10-day notice when there is a change in dollar amount of the original
authorization?
☐a. Regulation D
☐b. Regulation E
☐c. Uniform Commercial Code Article 4A
☐d. OCC 235 - CORRECT ANSWER✅✅B
The pastor at a local church passes away and the president at Lake Area Credit Union attends
Which of the following specify the requirements for reserves that a depository institution must maintain
at a Federal Reserve Bank?
☐a. Uniform Commercial Code Article 4A
☐b. Federal Reserve Bank Operating Circular 4
☐c. Regulation D
☐d. Regulation CC - CORRECT ANSWER✅✅C
Which of the following specifically addresses national banks and their need to evaluate large dollar
payment system network risks and requires reporting this to top management and maintaining
agreements with all parties that they do business with?
☐a. OCC Banking Circular 235
☐b. UCC 4
☐c. Regulation Z
☐d. UCC 4A - CORRECT ANSWER✅✅A
When an Originator is initiating an MTE, POS or SHR entry where a personal identification number (PIN)
is required in connection with the authorization, the Originator MUST comply with:
☐a. ANSI ASC X9.8 Standards
☐b. ANSI ASC X12 Standards
☐c. ANSI ASC X8.9 Standards
☐d. ANSI ASC X12.9 Standards - CORRECT ANSWER✅✅A
Which of the following payment systems is referred to as real-time and gross settlement?
☐a. Fedwire Funds Transfer
☐b. Check Processing System
☐c. Debit Card Network
☐d. ACH Network - CORRECT ANSWER✅✅A
,Choose the correct description of the Acquirer in the card network system:
☐a. The entity that has agreed to accept credit and debit cards for the purchase of goods and
services
☐b. The entity that issues a credit or debit card to the card holder
☐c. A financial institution that represents merchants in accepting POS transactions
☐d. The network that provides switching facilities for the card transactions - CORRECT ANSWER✅✅C
Which of the following lists the participants in the check participants in check processing order?
☐a. Payor/Payee/Receiver/Paying Bank
☐b. Payee/Bank of First Deposit/Correspondent Bank/Paying Bank
☐c. Payor/Payee/Payee's FI/Payor's FI/Correspondent Bank
☐d. Payor/Payee/Merchant/ODFI/RDFI - CORRECT ANSWER✅✅B
An unauthorized entry is transmitted into the ACH Network by County Credit Union, there are financial
losses involved and County Credit Union and the RDFI (State Bank) cannot come to an agreement as who
should be paying what amount of money and to whom. What is the minimum amount of dispute
BEFORE a complaint can be filed to initiate an arbitration
proceeding?
☐a. $200
☐b. $250
☐c $1,000
☐d. $2,500 - CORRECT ANSWER✅✅B
Blue Sky Bank does ACH origination for two local companies in town. The bank has agreements in place
with the two originators in which it provides the necessary disclosures for UCC Article 4A as required by
the NACHA Operating Rules. Which provision of UCC
Article 4A can be varied by agreement (with disclosure to Originator)?
☐a. Delay or Failure to Transmit Entries
☐b. Payment Upon Acceptance of Entries
☐c. Duty to Pay ODFI
, ☐d. Choice of Law - CORRECT ANSWER✅✅D
First Bank received a credit return entry as R02 (Account Closed) for $35,000 two weeks after the
original transaction was transmitted to the Receiver. First Bank feels that the RDFI (Oceans Bank) owes
them interest and penalties for failing to return the credit entry timely. What is the minimum dollar
amount of loss suffered to file a claim for compensation?
☐a. $250
☐b. $100
☐c. $150
☐d. $200 - CORRECT ANSWER✅✅D
Anthony opened his checking account with Northern Bank in February. In the initial disclosures provided
by Northern Bank upon account opening, the ATM fee was clearly stated as being $3.00 per transaction.
Effective October 1, the fee for using an ATM will increase to $3.50. According to Regulation E, how
many days prior notice is required when there is a change to the initial disclosures which results in
greater consumer liability?
☐a. 21 days
☐b. 30 days
☐c. 15 days
☐d. 10 days - CORRECT ANSWER✅✅A
According to an original authorization between Georgia and her health club, the monthly membership
dues are $35.00 each month. The health club must increase their monthly membership dues to $40.00
each month to cover increasing costs due to the economy. Which of the following regulations requires
the health club to provide a 10-day notice when there is a change in dollar amount of the original
authorization?
☐a. Regulation D
☐b. Regulation E
☐c. Uniform Commercial Code Article 4A
☐d. OCC 235 - CORRECT ANSWER✅✅B
The pastor at a local church passes away and the president at Lake Area Credit Union attends
