Fundamental Payroll Certification (FPC) Practice Exam

ACH stands for Automated Clearing House, which is a network that facilitates electronic payment transfers and fund transfers between bank accounts. In payroll processing, the ACH system is primarily used for direct deposit, allowing employers to electronically deposit employees' wages into their bank accounts. This method ensures timely and secure payments, reduces the risk associated with handling paper checks, and streamlines the payroll process.

The other choices do not accurately represent the correct term in the context of payroll processing. Automated Credit Handling and Account Handling System do not refer to a recognized standard within payroll practices. Likewise, the Association for Clearing Houses is not related specifically to payroll but rather to organizations that oversee clearinghouse operations, which is not the focal point in this context. Thus, the accurate term and its significance in payroll processing is clearly encapsulated by Automated Clearing House.