Certified Payroll Professional Practice Exam

How is a direct deposit reversed within the ACH system?

1. By submitting a written request to NACHA

2. Through automatic system checks

3. By notifying the Internal Revenue Service

4. By following specific reversal procedures and notifying the employee

The correct answer is: By following specific reversal procedures and notifying the employee

A By submitting a written request to NACHA - This option is incorrect because NACHA does not have any role in reversing direct deposits. NACHA is a non-profit organization that oversees the ACH network but does not handle individual transactions. B: Through automatic system checks - This option is incorrect because while there are system checks in place, they do not automatically reverse direct deposits. Reversals must be initiated and processed by the employer or the ACH operator. C: By notifying the Internal Revenue Service - This option is incorrect because the IRS is not involved in the process of reversing direct deposits. This may be confused with requesting a refund from the IRS, which is a separate process. D: By following specific reversal procedures and notifying the employee - This is the correct answer because reversing direct deposits requires following specific procedures set by the ACH operator and notifying the employee whose account the deposit was sent to. This is typically initiated and processed by the employer.