Chapter 1: Unit 5

Which of the following is true pertaining to possible trust account violations? The Commission issues a Writ of Non-compliance suspending all broker operations. The broker's business license is immediately suspended pending outcome of the Commission hearing. A Commission hearing is required by the Arbitration Committee to resolve trust account disputes. A court may impound the account and appoint a receiver for the property and business.

A court may impound the account and appoint a receiver for the property and business.

According to Georgia Code, which of the following is true concerning accounting systems? Licensees must utilize standardized paper ledgers for records. A firm may utilize either manual or electronic accounting systems. A broker's documents and records must be made available to both the Commission and party principals. The broker's office record keeping must follow standards as set forth by the Georgia Certified Accounting Board.

A firm may utilize either manual or electronic accounting systems.

Concerning abandoned trust funds disbursal, which of the following is true? All abandoned funds must be tuned over to the broker who receives disbursal authorization from the Commission. A licensee may disburse funds if in compliance with the Abandoned Trust Funds Property Act. A licensee may disburse funds if in compliance with the Disposition of Unclaimed Property Act. The abandoned trust monies must be held in the account for a year and then submitted to the Commission.

A licensee may disburse funds if in compliance with the Disposition of Unclaimed Property Act.

Which of the following is true regarding the rules governing escrow accounts? A portion of the deposit may be transferred to the broker for commission payment. All earnest money refunds must be paid by check or credited to the proper party within 5 business days. The broker's commission payment must be made separately from the established escrow account. Upon bankruptcy filing by a licensee, he or she must notify the Commission in writing within 30 days of filing.

A portion of the deposit may be transferred to the broker for commission payment.

In cases of earnest money disputes, which of the following is true? A salesperson must immediately refer the client to the employing broker. The salesperson must arbitrate the dispute between the parties according to the Commission's rules of arbitration. The broker must refer the matter to the Commission's arbitration panel for resolution. The broker must arbitrate any trust money with the parties to determine the proper refund.

A salesperson must immediately refer the client to the employing broker.

Which of the following comprises the minimum information to be included in each account's monthly reconciliation statement? Account number, account balance, and designated broker Account name, account balance, and account history Broker's license number, contract date, and account balance Account balance, reconciliation date, and bank name

Account balance, reconciliation date, and bank name

Which of the following is correct concerning a broker's required record-keeping?

All transactional documents maintained for at least 3 years

In the process of handling earnest money, which statement is true? An earnest money check may be held by the broker until acceptance of an offer. A licensee-associate may hold on to the earnest check until the offer is accepted or rejected. The broker may use the earnest money as all or part of his/her compensation after deposit is made. All earnest money must be immediately returned to a prospective buyer upon termination of any transaction.

An earnest money check may be held by the broker until acceptance of an offer.

If a Georgia licensee wishes to sell or lease his property using a third-party broker other than his or her employing broker, what must he or she do?

Deposit trust money in the third-party broker's trust account.

Which of the following statements is true regarding trust accounts? Each broker who maintains a trust account must authorize the Commission to examine such trust account by an authorized representative of the Commission. The Commission does not have the authority to examine such account at any time. The Commission does not need to examine a broker's trust account unless an allegation of improper handling of funds has been levied by the bank. Every broker who is required to maintain a trust or escrow account has the option whether or not to inform the Commission of this account.

Each broker who maintains a trust account must authorize the Commission to examine such trust account by an authorized representative of the Commission.

Which of the following is true regarding earnest money accounts? Earnest money may be deposited only into non-interest-bearing accounts. Earnest money may be deposited into interest bearing accounts if the contract so stipulates. Ernest money must be deposited within 3 business days after receipt. Ernest money must be deposited within 7 business days after receipt.

Earnest money may be deposited into interest bearing accounts if the contract so stipulates.

Which of the following is true regarding trust account disbursals?

If the parties disagree on disbursement, the broker must give immediate written notice of any disbursal made.

Which of the following is true regarding trust account disbursals? If the parties disagree on disbursement, the broker must delay for a Commission ruling. If the parties disagree on disbursement, the broker must give immediate written notice of any disbursal made. A broker may disburse funds immediately after such funds have been deposited in the trust account. If the parties disagree on disbursement, the broker must return all trust funds held to the respective parties.

If the parties disagree on disbursement, the broker must give immediate written notice of any disbursal made.

If an associate licensee owns rental property, which of the following is applicable according to Georgia law?

Must deposit any security or trust funds into a broker designated trust account

Regarding a broker's trust accounts records, which of the following applies?

Must review statements monthly and retain for 3 years

Brokers must notify the Commission of the name of the bank in which each trust account is maintained and each account's name or number within how long of opening each account?

One month

Which statement is true pertaining to non-resident brokerage trust accounts? The designated broker is required to submit to the Commission the required Georgia Reciprocity Records form. Non-resident trust accounts are allowed only in banks located within the state of Georgia Prior to disbursal, non-resident trust accounts must be transferred to the local bank affiliated with the Georgia broker. The Commission may allow bank trust accounts in the broker's state of residence.

The Commission may allow bank trust accounts in the broker's state of residence.

Which is true related to a licensee marketing his/her own property? A) The broker must approve only the procedures related to in-house listings. B) The property must be handled by an associate other than the owner-licensee. C) The broker must verbal approval to all advertising procedures. D) The broker is responsible for all licensee's transactions.

The broker is responsible for all licensee's transactions.

Which of the following is true of trust accounts of brokers in Georgia? The license law in Georgia requires that all real estate licensees deposit all funds or place any valuables held on the behalf of others in a trust account. These funds are not the possession of the broker, but they are the possession of the brokerage company. The funds may be used by the broker if they are replaced within 7 working days. The funds can be seized in order to pay the broker's or the firm's debts.

The license law in Georgia requires that all real estate licensees deposit all funds or place any valuables held on the behalf of others in a trust account.

Under law, which is true concerning a property manager's trust account? The trust account balance must always be equal to or greater than the prior year's assessments. Trust accounts must always be a balance equal to the security deposits total less outstanding bills. Trust accounts must always be a balance equal to the security deposits total. Security deposits must always be credited to the owner or association.

Trust accounts must always be a balance equal to the security deposits total.

Which of the following is correct concerning Georgia trust account law? A) Trust funds must be replenished by the broker prior to submitting a monthly report. B) Trust funds must remain separate and cannot be used for company expenses. C) Commingled funds must be separated prior to submitting the monthly report. D) Trust account funds may be garnished by the Commission to cover delinquent broker funds.

Trust funds must remain separate and cannot be used for company expenses.

Which of the following is correct concerning Georgia trust account law? Trust funds must be replenished by the broker prior to submitting a monthly report. Trust funds must remain separate and cannot be used for company expenses. Commingled funds must be separated prior to submitting the monthly report. Trust account funds may be garnished by the Commission to cover delinquent broker funds.

Trust funds must remain separate and cannot be used for company expenses.

In terms of trust account maintenance, Georgia Code

allows a broker to maintain more than one designated trust account.

The Commission considers disbursing funds contrary to the terms of the contract to be

an incompetent act.

The illegal act of mixing the client's monies with the broker's or firm's funds is known as

commingling.

In the case of a licensee owning a trust account, a written reconciliation statement comparing the licensee's total trust liability with the reconciled bank balance of the licensee's trust account must be provided to the licensee's broker at least

on a quarterly basis.

In terms of trust account examination, Georgia Code

requires that outside CPA's must use the specific form provided for in the laws.

The broker must review the monthly reconciliation statement and maintain copies in his files for a period of

three years.