Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

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What does Electronic Funds Transfer enable?

Transfer of funds using paper checks only
A computerized cash payments system
A service for physical cash withdrawals
A way to convert checks into cash instantly

The correct answer is: A computerized cash payments system

Electronic Funds Transfer (EFT) enables a computerized cash payments system, which allows for the transfer of funds electronically between accounts without the need for paper checks or physical exchanges. This system utilizes secure electronic networks to facilitate transactions, streamlining the process of transferring money, paying bills, and managing financial activities. The advantages of EFT include improved efficiency, reduced processing time, decreased costs associated with handling physical checks, and enhanced security. It can be used for various purposes such as direct deposit of payroll, automatic bill payments, and online purchases. Thus, the key aspect of EFT is that it transforms how money is transferred and received by leveraging technology for financial transactions.