Trust Accounts- Keeping Records

Question 1

2. Real estate license law does not include a provision that:
   A. Individual assistants for agents and for accounting must be licensed.
   B. There must be a separate records and accounting on each type of trust account.
   C. Trust accounts must be reconciled monthly.
   D. There must be a written office policy manual.

Answer 1

A. Individual assistants for agents and for accounting must be licensed.

Question 2

3. To account for money along to others, the broker need not maintain:
   A. Escrow bank accounts
   B. Transaction files
   C. Customer/client ledgers
   D. Customer/choir weekly notification of status.

Answer 2

D. Customer/choir weekly notification of status.

Question 3

4. Crust escrow accounts may not be maintained in:
   A. A bank headquartered in another county.
   B. A credit union where the broker and seller are members.
   C. A bank that maintains FDIC insurance.
   D. Interest-bearing accounts when I agreed to by each party.

Answer 3

B. A credit union where the broker and seller are members.

Question 4

5. Commission rules do not allow:
   A. Interest-bearing trust accounts for Colorado affordable housing programs.
   B. Types of escrow deposits other than money and checks.
   C. Mixing of company accounts and security deposits until separate accounts can be opened.
   D. Accepting a treasury bill one escrow deposit when acceptable to both parties.

Answer 4

C. Mixing of company accounts and security deposits until separate accounts can be opened.

Question 5

6. The mixing of funds from separate trust accounts is:
A. Illegal
B. Commingling
C. A balanced Blend
D. Stupid

Answer 5

B. Commingling

Question 6

7. Brokerage bank account identification does not require:
   A. The name of the employing broker.
   B. The name of the account.
   C. The name of the licensing companies name or DBA.
   D. The name of any office assistant allowed to access the account.

Answer 6

D. The name of any office assistant allowed to access the account.

Question 7

1. As long as proper standards are met, trust account records may be kept in any medium except:
   A. Computer programs
   B. Hand posted in real estate office files
   C. Archived in the downtown office of a CPA.
   D. Microfilm

Answer 7

C. Archived in the downtown office of a CPA

Question 8

8. The cash balances for an escrow account are maintained on the:
A. Cash basis of accounting
B. Accrual method of accounting
C. Method according to IRS regulations
D. Accountants desk pad

Answer 8

A. Cash basis of accounting

Question 9

9. The commission does not allow:
   A. Brokers contribution of funds to a property management account when the account is “short”.
   B. Brokers contribution of funds to a property management account from the owners cash reserves.
   C. Retrieval of those contribution of funds by the broker “at will”.
   D. A broker to have multiple business accounts in his/her own name.

Answer 9

C. Retrieval of those contributed funds by the broker “at will.”

Question 10

10. After a sale closes, any balance in the buyers ledger should first be:
    A. Return by the broker to buyers last known address.
    B. Advanced to the seller as net sales proceeds.
    C. Transferred to the brokers operating account.
    D. Used for the next company party.

Answer 10

A. Return by the broker to buyers last known address.

Question 11

11. Proper handling of files does not include:
    A. Storage of licensed activity at a safe and accessible site location in a neighboring county.
    B. storage of each licensed activity for four years.
    C. Having the listing broker associate maintain records in this filing cabinet.
    D. Storage of each licensed activity in the brokers home.

Answer 11

C. Having the listing broker associate maintain records in this filing cabinet.

Question 12

12. And earnest money personal check must be:
    a. Deposited into the listing brokers escrow account within 24 business hours.
    B. Deposited into the brokers trust account by the third business day after receiving notice of contract acceptance.
    C. Held by the cooperating selling agent until the contract is accepted.
    D. Brought to the closing if it is to redeem a promissory note.

Answer 12

B. Deposited into the brokers trust account by the third business day after receiving notice of contract acceptance

Question 13

13. Which of the following documents must have an original signature and the brokers closing file:
    a. The final contract.
    B. The loan documents.
    C. I’ll notarize documents.
    D. A power of attorney naming broker attorney in fact.

Answer 13

D. A power of attorney naming broker attorney in fact

Question 14

14. A document that need not be the sellers listing brokers closing file is:
    a. Buyers agency agreement.
    B. Buyers HUD-1 settlement statement.
    C. Buyers unsigned earnest money promissory note.
    D. Buyers new loan reconciliation /worksheet

Answer 14

a. Buyers agency agreement.

Question 15

15. A document that need not be in a cooperating brokers closing file is:
A. escrow agreement. 
B. Buyer agency agreement.
C. Deed of trust lender.
D. New loan Reconciliation /worksheet

Answer 15

C. Deed of trust lender.

Question 16

16. Computer-generated real estate contract for Must:
    A. Be prepared by only be employing broker.
    B. Be filled in by using a pen with black ink.
    C. Exactly produce the standard language.
    D. Have all blank spaces feeling buyer for negotiating with the parties.

Answer 16

C. Exactly produce the standard language.

Question 17

17. What type of trust account would a license property manager not have?
A. Management trust account.
B. Tenant security deposit.
C. Owner association account.
D. Owners sale escrow account.

Answer 17

D. Owners sale escrow account.

Question 18

18. Without a separate agreement, a licensed property manager must report and expense made on May 3 to the owner/client on or before:
A. May 15
B. June  1
C. June 30
D. And of the clients fiscal year.

Answer 18

C. June 30

Rationale: last day of the following month.

Question 19

19. The chronological record of earnest money deposit and withdrawal transactions is called a:
A. Ledger
B. Journal
C. Bank reconciliation
D. Nightmare

Answer 19

B. Journal

Question 20

20. A separate escrow accounting card for each property transaction would be each of the following except:
    A. A Ledger
    B. An individual depositors bank statement
    C. Specific components from the Journal
    D. A list of escrow instructions

Answer 20

D. A list of escrow instructions

Question 21

21. Bank account reconciliations of the bank statement, journal and ledgers must occur:
    A. Weekly
    B. Often
    C. Monthly
    D. Monthly when ever there is any bank activity.

Answer 21

D. Monthly when ever there is any bank activity.

Question 22

22. The broker for a collapsed Corporation must:
    A. Requalify (test) to become an employee broker at another company.
    B. Access the Real Estate Recovery Fund for the lost wages.
    C. Turn in all corporate records to the real estate commission.
    D. Maintain all closing record for a period of four (4) years.

Answer 22

D. Maintain all closing record for a period of four (4) years.

Question 23

23. When a corporate broker changes jobs, she/he must:
    A. Requalify or test to be an independent broker.
    B. Destroy all records over four years old.
    C. Cancel his group health insurance.
    D. Maintain all his/her closing records for a period of four (4) years.

Answer 23

D. Maintain all his/her closing records for a period of four (4) years

Question 24

24. Brokerage commission fees are best determined by:
    A. Customary privilege.
    B. Contractual agreement.
    C. M LS agreements.
    D. Real Estate Settlement Procedures Act.

Answer 24

B. Contractual agreement.

Question 25

25. The party who would hold security deposits for property that is managed by a licensee is best determined by:
A. The real estate commission.
B. Contractual agreement.
C. The tenants committee
D. The owners attorney

Answer 25

B. Contractual agreement.