Certified Payroll Professional Practice Exam

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What entities are involved in the ACH process for direct deposit?

Employee, Internal Revenue Service, Employee Union
Payroll Department, Tax Authorities, Financial Regulators
Employer, Originating Financial Institution, Receiving Financial Institution, Employee
Trade Union, Government Agency, Bank Oversight Committee

The correct answer is: Employer, Originating Financial Institution, Receiving Financial Institution, Employee

In the ACH process for direct deposit, multiple entities are involved in facilitating the electronic transfer of funds from the employer to the employee's bank account. The correct answer is C, which includes the following entities: Employer (representing the company making the payment), Originating Financial Institution (the employer's bank initiating the ACH transfer), Receiving Financial Institution (the employee's bank receiving the funds), and the Employee (the recipient of the direct deposit). These are the key participants in the ACH process for direct deposit, ensuring a smooth and efficient electronic payment system. Options A, B, and D are incorrect because they include entities that are not directly involved in the ACH process for direct deposit.