Associated Token Account (ATA)

Associated Token Account Program defines the convention and provides the mechanism for mapping the user’s wallet address to the associated token accounts they hold.

For example, for a wallet to hold some random SPL token, an associated token account needs to be initialized. That account will be holding the tokens, while the wallet will be the one owning that token account.

Take a look at what TransactionManager.transfer_token function does under the hood:

func transfer_token(token_address:String,receiver:String,amount:float,tx_commitment=Commitment.CONFIRMED,priority_fee:float=0.0,custom_sender:Keypair=null) -> TransactionData:
	var instructions:Array[Instruction]
	
	var sender_keypair = SolanaService.wallet.get_kp()
	var sender_account:Pubkey = SolanaService.wallet.get_pubkey()
	if custom_sender!=null:
		sender_keypair = custom_sender
		sender_account = Pubkey.new_from_string(custom_sender.get_public_string())
		
	var receiver_account:Pubkey = Pubkey.new_from_string(receiver) 
	var token_mint:Pubkey = Pubkey.new_from_string(token_address) 
	
	var sender_ata:Pubkey = await SolanaService.get_associated_token_account(sender_account.to_string(),token_address)
	
	#check if an ATA for this token exists in wallet. if not, add initalize as instruction
	var receiver_ata:Pubkey = await SolanaService.get_associated_token_account(receiver_account.to_string(),token_address)
	if receiver_ata == null:
		receiver_ata = Pubkey.new_associated_token_address(receiver_account,token_mint)
		var init_ata_ix:Instruction = AssociatedTokenAccountProgram.create_associated_token_account(
			sender_keypair,
			receiver_account,
			token_mint,
			SolanaService.TOKEN_PID
			)
		instructions.append(init_ata_ix)
		
	#get the decimals of the token to multiply by the amount provided
	var token_decimals = await SolanaService.get_token_decimals(token_address)
	var decimal_amount = amount*pow(10,token_decimals)
	var transfer_ix:Instruction = TokenProgram.transfer_checked(sender_ata,token_mint,receiver_ata,sender_keypair,decimal_amount,token_decimals)
	instructions.append(transfer_ix)
	
	var transaction:Transaction = await create_transaction(instructions,priority_fee)
	
	if custom_sender!=null:
		var tx_data:TransactionData = await sign_and_send(transaction,tx_commitment,custom_sender)
		return tx_data
	else:
		var tx_data:TransactionData = await sign_and_send(transaction)
		return tx_data

To summarize the code, this script first checks if there is an ATA for this token already created in receiver's wallet. If yes, then it is the account to send the tokens to. If not, then an additional instruction is added to the transaction, which initializes the associated token account and only then it receives the tokens.

For more information about ATAs, check here