© Academic_Excellence
ACAMS Prep Mock Exam – Questions & Answers
[Verified Answers] Plus Rationales (2026/27)
1. What is the primary purpose of Anti-Money Laundering (AML)
regulations?
A. Increase bank profits
B. Reduce customer complaints
C. Prevent financial crimes and illegal fund movement
D. Promote international trade
Rationale: AML regulations are designed to detect and prevent money laundering
and related financial crimes.
2. Which stage of money laundering involves introducing illegal funds into
the financial system?
A. Layering
B. Integration
C. Placement
D. Structuring
Rationale: Placement is the initial stage where illicit funds enter the financial system.
3. What does KYC stand for?
A. Know Your Cash
B. Know Your Customer
C. Keep Your Capital
D. Know Your Compliance
Rationale: KYC refers to verifying customer identity and assessing risk.
4. Which of the following is a red flag for money laundering?
A. Small, regular deposits
B. Unusual large cash transactions with no clear purpose
,© Academic_Excellence
C. Payroll deposits
D. Utility payments
Rationale: Large unexplained transactions may indicate illicit activity.
5. What is the purpose of Customer Due Diligence (CDD)?
A. Increase sales
B. Reduce taxes
C. Assess customer risk and verify identity
D. Improve marketing
Rationale: CDD ensures institutions understand their customers and risks.
6. Enhanced Due Diligence (EDD) is required for:
A. All customers
B. Low-risk customers
C. High-risk customers
D. New employees
Rationale: EDD applies to customers with higher risk profiles.
7. Which organization sets global AML standards?
A. IMF
B. World Bank
C. Financial Action Task Force (FATF)
D. WTO
Rationale: FATF establishes international AML guidelines.
8. What is structuring?
A. Investing legally
B. Breaking large transactions into smaller ones to avoid reporting thresholds
C. Loan repayment
D. Currency exchange
Rationale: Structuring is used to evade reporting requirements.
, © Academic_Excellence
9. Suspicious Activity Reports (SARs) are filed when:
A. A transaction is profitable
B. A customer requests it
C. Suspicious behavior is detected
D. Daily transactions occur
Rationale: SARs are mandatory when suspicious activity is identified.
10. Politically Exposed Persons (PEPs) are:
A. Bank employees
B. Individuals with prominent public positions
C. Investors only
D. Auditors
Rationale: PEPs pose higher risk due to potential corruption exposure.
11. Which stage of money laundering involves disguising funds?
A. Placement
B. Layering
C. Integration
D. Structuring
Rationale: Layering hides the origin through complex transactions.
12. Integration stage involves:
A. Depositing funds
B. Hiding funds
C. Reintroducing funds as legitimate assets
D. Reporting funds
Rationale: Funds appear legal after integration.
13. What is beneficial ownership?
A. Account manager
B. The true individual who owns or controls an entity
ACAMS Prep Mock Exam – Questions & Answers
[Verified Answers] Plus Rationales (2026/27)
1. What is the primary purpose of Anti-Money Laundering (AML)
regulations?
A. Increase bank profits
B. Reduce customer complaints
C. Prevent financial crimes and illegal fund movement
D. Promote international trade
Rationale: AML regulations are designed to detect and prevent money laundering
and related financial crimes.
2. Which stage of money laundering involves introducing illegal funds into
the financial system?
A. Layering
B. Integration
C. Placement
D. Structuring
Rationale: Placement is the initial stage where illicit funds enter the financial system.
3. What does KYC stand for?
A. Know Your Cash
B. Know Your Customer
C. Keep Your Capital
D. Know Your Compliance
Rationale: KYC refers to verifying customer identity and assessing risk.
4. Which of the following is a red flag for money laundering?
A. Small, regular deposits
B. Unusual large cash transactions with no clear purpose
,© Academic_Excellence
C. Payroll deposits
D. Utility payments
Rationale: Large unexplained transactions may indicate illicit activity.
5. What is the purpose of Customer Due Diligence (CDD)?
A. Increase sales
B. Reduce taxes
C. Assess customer risk and verify identity
D. Improve marketing
Rationale: CDD ensures institutions understand their customers and risks.
6. Enhanced Due Diligence (EDD) is required for:
A. All customers
B. Low-risk customers
C. High-risk customers
D. New employees
Rationale: EDD applies to customers with higher risk profiles.
7. Which organization sets global AML standards?
A. IMF
B. World Bank
C. Financial Action Task Force (FATF)
D. WTO
Rationale: FATF establishes international AML guidelines.
8. What is structuring?
A. Investing legally
B. Breaking large transactions into smaller ones to avoid reporting thresholds
C. Loan repayment
D. Currency exchange
Rationale: Structuring is used to evade reporting requirements.
, © Academic_Excellence
9. Suspicious Activity Reports (SARs) are filed when:
A. A transaction is profitable
B. A customer requests it
C. Suspicious behavior is detected
D. Daily transactions occur
Rationale: SARs are mandatory when suspicious activity is identified.
10. Politically Exposed Persons (PEPs) are:
A. Bank employees
B. Individuals with prominent public positions
C. Investors only
D. Auditors
Rationale: PEPs pose higher risk due to potential corruption exposure.
11. Which stage of money laundering involves disguising funds?
A. Placement
B. Layering
C. Integration
D. Structuring
Rationale: Layering hides the origin through complex transactions.
12. Integration stage involves:
A. Depositing funds
B. Hiding funds
C. Reintroducing funds as legitimate assets
D. Reporting funds
Rationale: Funds appear legal after integration.
13. What is beneficial ownership?
A. Account manager
B. The true individual who owns or controls an entity
