What type of information does the Addenda Type Code indicate?

What type of information does the Addenda Type Code indicate?

• A. The type of Company
• B. The type of addenda record
• C. The type of transaction
• D. The type of participant

Answer: (B)

The Addenda Type Code specifically indicates the type of addenda record that accompanies an ACH transaction. Addenda records provide additional information relevant to the transaction that cannot be captured in the standard payment format. This code helps processors and recipients understand how to interpret the accompanying data, such as remittance information or invoice details. Each Addenda Type Code corresponds to a specific set of rules or formats defined by the ACH Network for different types of addenda, allowing for flexibility and clarity in transaction processing. Thus, understanding the Addenda Type Code is essential for accurate handling of ACH items that contain supplementary data.

The Addenda Type Code specifically indicates the type of addenda record that accompanies an ACH transaction. Addenda records provide additional information relevant to the transaction that cannot be captured in the standard payment format. This code helps processors and recipients understand how to interpret the accompanying data, such as remittance information or invoice details. Each Addenda Type Code corresponds to a specific set of rules or formats defined by the ACH Network for different types of addenda, allowing for flexibility and clarity in transaction processing. Thus, understanding the Addenda Type Code is essential for accurate handling of ACH items that contain supplementary data.