The proper handling of a stop payment includes all of the following steps EXCEPT:

• A. reversing the direct deposit
• B. canceling the payment in the payroll system
• C. notifying the bank account reconciliation employees
• D. documenting the reason for the transaction

Answer: (A)

Stopping a direct deposit involves coordinating the bank instruction with your internal records and keeping a clear trail for audit purposes. The proper steps include canceling the payment in the payroll system so it isn’t processed, informing the bank reconciliation team so they can adjust records and avoid reconciliation discrepancies, and documenting the reason for the stop to maintain compliance and clarity. Reversing the direct deposit is not part of the standard stop-payment workflow; it would be a separate action handled through the bank or ACH reversal/return processes if the funds have already posted.