National Check Professional (NCP) Certification Practice Test

What does ARC stand for in the context of ACH check conversions?

1. Accounts Receivable entries

2. Back office conversion

3. Point of purchase

4. Represented check entries

The correct answer is: Accounts Receivable entries

In the context of ACH (Automated Clearing House) check conversions, ARC stands for "Accounts Receivable Conversion." This process involves converting a consumer's check payment into an ACH transaction for processing at the back office level. The primary purpose of ARC is to facilitate the collection of funds in a more efficient manner than traditional check processing. When a check is converted under ARC, the organization that receives the check can initiate an ACH debit against the consumer’s bank account, ensuring funds are pulled electronically. This method streamlines the handling of payments and can reduce costly inefficiencies associated with processing physical checks. In this context, options that suggest other interpretations—like Back office conversion, Point of purchase, or Represented check entries—do not accurately define ARC in the framework of ACH check conversions.