Accredited ACH Professional (AAP) Practice Exam

What is the timeframe for sending a reversing entry or file after the Settlement Date of the original transaction(s)?

1. 3 banking days

2. 5 banking days

3. 7 banking days

4. 10 banking days

The correct answer is: 5 banking days

The correct timeframe for sending a reversing entry or file after the Settlement Date of the original transaction(s) is five banking days. This guideline is crucial because it ensures timely resolution of errors within the ACH network. The five-day period is established to allow for the appropriate handling of errors or discrepancies that may arise after an original transaction has been processed. In the context of ACH transactions, if an entry needs to be reversed due to an error such as an incorrect amount or a payment made without authorization, the reversing entry must be initiated promptly within this five-day window. This timeframe helps to maintain the integrity of the ACH system, ensuring that all parties involved have a consistent understanding of when corrections can be made. Other timeframes, such as three, seven, or ten banking days, do not align with the established rules governing reversing entries in the ACH network, and that would prevent the efficient and timely resolution of errors. Hence, five banking days stands as the standard practice to facilitate proper remittance procedures following disputes or mistakes.