Account principles and procedures Flashcards
True or False: RICS provides guidance on the management of client accounts.
True
What is the primary purpose of client accounts according to RICS?
To hold client money securely and manage it according to client instructions.
Fill in the blank: RICS requires that all client accounts are __________.
separate from the firm’s own accounts
What is one key principle RICS emphasizes for client accounts?
Transparency in financial dealings
Multiple Choice: Which of the following is a requirement for client accounts as per RICS? A) Monthly reconciliations B) Annual audits C) Quarterly reports
A) Monthly reconciliations
What must firms do if they receive funds that are not intended for client accounts?
Return those funds immediately to the sender.
True or False: RICS allows firms to use client funds for their operational expenses.
False
What should a firm do in the event of a discrepancy in client account records?
Investigate the discrepancy immediately and rectify it.
What is the consequence of not adhering to RICS guidelines for client accounts?
Potential disciplinary action and loss of RICS membership.
True or False: RICS accounting principles are only applicable to the UK.
False
Fill in the blank: RICS accounting principles aim to provide __________ in financial reporting.
transparency
Which principle emphasizes the importance of consistency in financial statements?
The consistency principle
What is the primary purpose of RICS accounting principles?
To ensure accuracy and transparency in financial reporting.
Multiple Choice: Which of the following is NOT a RICS accounting principle? A) Prudence B) Going Concern C) Revenue Recognition D) Profit Maximization
D) Profit Maximization
What is the ‘going concern’ principle in RICS accounting?
It assumes that an entity will continue to operate for the foreseeable future.
True or False: RICS accounting principles only apply to real estate transactions.
False
Name one key benefit of adhering to RICS accounting principles.
Improved reliability of financial statements.
What does the prudence principle entail in RICS accounting?
It requires that revenues and profits are not overstated and expenses are not understated.
What is the minimum limit of professional indemnity insurance need base on turnover!
Up to £100K - £250K
Up to £200K - £500K
Over £200K - £1 million
What might be a red flag for money laundering?
Large cash transactions, parties changing their names mid transaction
