Fundamental Payroll Certification (FPC) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Fundamental Payroll Certification Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Ace your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the role of the Receiving Depository Financial Institution (RDFI)?

An institution that initiates automated clearinghouse transactions
A financial institution that receives direct deposit entries
A bank that handles fund transfers between businesses
An institution that processes loan repayments

The correct answer is: A financial institution that receives direct deposit entries

The Receiving Depository Financial Institution (RDFI) plays a vital role in the automated clearinghouse (ACH) network by acting as the financial institution that receives and processes direct deposit transactions. This means the RDFI is responsible for accepting the ACH credit transactions sent by the Originating Depository Financial Institution (ODFI) and then crediting those funds to the accounts of the individuals or businesses that are the intended recipients. In the context of payroll operations, when an employer processes payroll through direct deposit, the RDFI is the bank where employees' accounts are held. It ensures the funds are deposited into the correct accounts on the scheduled payment date, facilitating smooth and timely salary disbursement. The other choices focus on different roles or functions in the financial sector that do not accurately define the RDFI. Institutions that initiate transactions, handle inter-business fund transfers, or process loan repayments perform distinct functions that do not specifically pertain to the receipt and processing of direct deposit entries.