How does NPSP handle the Account?

A nonprofit is using NPSP with the default account model and settings. A user creates and saves a new Contact leaving the Account Name blank.
How does NPSP handle the Account?
A. The Contact is added to an existing Account.
B. An Account is created with a household name.
C. An Account is created with the same name as the Contact.
D. The Account Name remains blank.

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