Accredited ACH Professional (AAP) Practice Exam 2025 - Free AAP Practice Questions and Study Guide

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What is the significance of the routing number in an ACH transaction?

It identifies the financial institution of the receiver

It uniquely identifies the Originating Depository Financial Institution (ODFI)

The routing number plays a crucial role in ACH transactions by acting as a unique identifier for the financial institution involved in the transaction. Specifically, when looking at the function of the routing number, it serves to uniquely identify the Originating Depository Financial Institution (ODFI), which is the bank that initiates the ACH transaction. This identification is essential to ensure that the transaction is processed correctly and directed to the correct financial institution.

While the options touch upon various aspects of routing numbers, it's important to clarify that the routing number does not count transactions or indicate security levels. Additionally, although the routing number can assist in identifying the financial institution of the receiver, its primary significance in the context of ACH transactions centers around the ODFI's identification, ensuring that the funds can be transferred through the appropriate channels.

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It counts the total number of transactions

It indicates the security level used for the transaction

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