Accredited ACH Professional (AAP) Practice Exam

What is a characteristic of an accounts receivable (ARC) transaction?

1. It can exceed $25,000 and requires signed authorization

2. It is a single-entry debit from a check for a sale

3. It does not require any source documents

4. It cannot have a pre-printed serial number

The correct answer is: It is a single-entry debit from a check for a sale

A characteristic of an accounts receivable (ARC) transaction is that it is a single-entry debit from a check for a sale. ARC transactions involve converting a consumer's check received for payment of goods or services into an ACH entry. This process allows businesses to clear checks electronically, reducing the need for physical handling of checks. The nature of ARC transactions means that the processing resembles a single-entry debit rather than capturing multiple entries or complex forms of authorization. This aligns with the primary purpose of ARC, which streamlines the payment process and enhances efficiency. While other options mention characteristics that apply to various types of transactions, they do not specifically describe ARC transactions as accurately. For instance, ARCs do not inherently allow transactions over $25,000 requiring signed authorization; they require source documentation, such as the original check, and typically, the checks themselves do contain pre-printed serial numbers to identify them. Hence, the defining feature of an ARC as a single-entry debit distinguishes it clearly from other transaction types.