National Check Professional (NCP) Certification Practice Test

Which adjustment method is specifically for checks that were not cashed?

1. Positive pay

2. ECCHO adjustments

3. Bank reconciliation

4. Payment clearing

The correct answer is: ECCHO adjustments

ECCHO adjustments are specifically designed for handling checks that have not been cashed. This process arises from the need to manage and adjust data related to checks that fall outside the normal clearing process, typically due to being outstanding or stale-dated. Using ECCHO adjustments allows financial institutions to communicate discrepancies regarding checks that may not be cleared, ensuring that the correct balances are maintained and that checks are properly accounted for in the system. This method is crucial in managing risk and ensuring compliance with regulatory practices, particularly when dealing with claims and adjustments for uncashed checks. In contrast, other methods presented do not directly address checks that remain uncashed. Positive pay is a fraud prevention tool that helps banks verify checks presented for payment against the issuer's list of authorized checks. Bank reconciliation is a broader accounting process that ensures records in a bank statement align with those in the company's financial records, addressing discrepancies but not limited to uncashed checks. Payment clearing generally refers to the process of settling transactions rather than adjusting for checks that have yet to be cashed. Thus, the adjustment approach represented by ECCHO is uniquely suited for managing uncashed checks.