AAP SEC Codes and Entry Types 1 — Questions and Answers
Question 1: Which SEC code is used for prearranged payments and deposits between a company and consumer accounts?
- PPD (Prearranged Payment and Deposit) (Correct answer)
- CCD (Corporate Credit or Debit)
- CTX (Corporate Trade Exchange)
- WEB (Internet-Initiated Debit)
Correct answer: PPD (Prearranged Payment and Deposit)
PPD is the Standard Entry Class code for ACH credits and debits to consumer accounts where a written authorization has been established in advance.
Question 2: The CCD SEC code is used for:
- Corporate credit or debit transactions between business accounts (Correct answer)
- Consumer telephone-initiated debit entries
- International ACH entries involving foreign banks
- Point-of-purchase check conversion entries
Correct answer: Corporate credit or debit transactions between business accounts
CCD (Corporate Credit or Debit) is used for business-to-business ACH transactions, such as vendor payments or concentration of funds.
Question 3: WEB entries are defined as:
- ACH debit entries to consumer accounts authorized via the internet (Correct answer)
- Wire transfers processed through a web portal
- Credit entries initiated through online banking
- Business-to-business ACH entries submitted via a web interface
Correct answer: ACH debit entries to consumer accounts authorized via the internet
WEB is the SEC code for one-time or recurring ACH debit entries to consumer accounts where authorization is obtained via the internet.
Question 4: The TEL SEC code applies to:
- ACH debit entries to consumer accounts authorized via telephone (Correct answer)
- ACH credit entries initiated by a company via telephone
- Business telephone-initiated ACH entries
- International telephone payment instructions
Correct answer: ACH debit entries to consumer accounts authorized via telephone
TEL is the SEC code for single-entry or recurring ACH debit entries to consumer accounts where authorization is obtained by telephone.
Question 5: Which SEC code is used for point-of-purchase check conversion transactions at a merchant location?
- POP (Point-of-Purchase) (Correct answer)
- ARC (Accounts Receivable Conversion)
- BOC (Back Office Conversion)
- RCK (Re-presented Check)
Correct answer: POP (Point-of-Purchase)
POP is used when a consumer's check is converted to an ACH debit entry at the point of purchase with the consumer present.
Question 6: ARC entries convert:
- Consumer checks received via U.S. mail or a dropbox to ACH debit entries (Correct answer)
- Business checks to ACH credit entries
- Wire transfer instructions to ACH entries
- Returned checks to ACH credit entries
Correct answer: Consumer checks received via U.S. mail or a dropbox to ACH debit entries
ARC (Accounts Receivable Conversion) is used to convert consumer checks mailed or dropped off as payment into ACH debit entries processed in back-office operations.
AAP SEC Codes and Entry Types 1
Which SEC code is used for prearranged payments and deposits between a company and consumer accounts?