What label should you apply when recording an electronic funds transfer (EFT) payment?

• A. Wire
• B. Check
• C. EFT
• D. ACH

Answer: (C)

When you record a payment that moves funds electronically, you want a label that clearly communicates the method used. EFT stands for electronic funds transfer, which is the broad category for any payment sent electronically, not as a physical check. It accurately reflects that the payment was initiated electronically rather than by mailing a check or using a different specific channel. A wire transfer is another electronic method but is treated differently in many systems due to its typical speed and fee structure. A check is a physical instrument, and ACH is a specific electronic network; in many setups EFT is the standard umbrella label for electronic payments. So use EFT to label an electronically initiated payment.