Future Business Leaders of America (FBLA) Accounting Practice Test

What is one of the common uses of Electronic Funds Transfer?

1. Transferring cash to international accounts

2. Transferring funds without physical checks

3. Writing checks to vendors

4. Storing money in a safe

The correct answer is: Transferring funds without physical checks

Electronic Funds Transfer (EFT) is a system that allows the transfer of money from one bank account to another through electronic means rather than through traditional physical methods like checks or cash. One of the main advantages of EFT is that it facilitates transactions without the need for physical checks, making the process faster, more efficient, and secure. Options like transferring cash to international accounts may also involve electronic means, but they can be subject to additional regulations and currency exchange considerations, which might not apply universally in all uses of EFT. Writing checks to vendors inherently involves the physical exchange of checks and thus does not align with the concept of electronic funds transfer. Storing money in a safe does not pertain to the transfer of funds at all and refers more to the physical security of cash. Therefore, the choice highlighting the ability to transfer funds without physical checks accurately reflects one of the primary functions and benefits of Electronic Funds Transfer, focusing on modern banking practices that enhance efficiency and security in financial transactions.