CRE: Record Keeping & Trust Accounts 1 Exam

A brokerage firm holding 4 earnest money deposits, and 15 security deposits for managed single-family residences must have a minimum of how many trust accounts?

3 Rule E-1 (h) A broker who manages less than 7 single-family residences may deposit rental receipts and security deposits and disburse money collected for such purposes in the "sales escrow" account" Elsewise, you need one escrow account for earnest money, one for rental receipts and one for rental deposits.

Once a contract to purchase has been accepted by the seller, when does the earnest money tendered with the contract need to be deposited into the appropriate escrow account?

3 business days after notice of acceptance

Money received by a property manager must be deposited within __________ days and money received as earnest money in a real estate transaction must be deposited within __________ days after contracted has been accepted.

5,3

A broker managing how many properties must maintain a property management trust account?

7 The law requires that a broker managing seven or more properties must have a property management trust account.

What shows all deposits and payments to and from a broker's escrow account in chronological order?

Account Journal

Which of the following is correct concerning a broker's establishment of an account to hold money belonging to others?

All checks, deposit slips and bank statements must include the word "escrow" or "trust" as part of the account name

If a broker establishes an account to hold money belonging to others, which of the following is correct?

All checks, deposit slips, and bank statements must include the word "escrow" or "trust" as part of the account name.

What must appear in the title of a trust account?

Company name and employing broker's name

In the absence of language to the contrary in the Property Managment Agreement a property manager must:

Deposit security deposit into escrow account

When brokers receive earnest money, the money must be:

Deposited into the broker's trust account

An escrow trust account:

Is a separate account established to hold money belonging to others

Who holds the earnest money in a transaction with a listing broker and a buyer's agent?

Listing Broker

Bank reconciliation of a trust account:

Must be done any month in which the account has had activity

Trust Account journal and ledger documentation of disbursements from trust accounts need NOT include:

Name of the person who wrote the check out of the account

What should you do if a buyer shows up at your office at 1:00 PM with a personal check for the closing funds for a closing scheduled at 2:0 PM?

Take the buyer to the bank to get a cashier's check

If there is a dispute regarding earnest money:

The broker has a choice to interplead the money or await written instructions from the parties

When must an employing broker keep a ledger?

When accepting money belonging to others

A broker writes checks from the trust account into his operating account.

broker is commingling and could have is license revoked

Good funds would be:

cashier's checks, certified checks, or wire transfers

The illegal act of a real estate broker who places his client's or customer's funds with his own funds is known as:

commingling

A broker received an earnest money deposit from a buyer. Under Colorado law, the broker should

hold the earnest money deposit in a secure place in the broker's real estate brokerage office until the offer is accepted.

If a broker has an interest-bearing trust account, the:

interest may accrue to a nonprofit affordable housing fund

How long must transaction records be maintained by an independent broker?

minimum of four years

Money belonging to others best describes:

money a broker would keep in a trust or escrow account

Reconciliation refers to:

monthly review and comparison of the bank statement with your records

Money belonging to others is kept separate from other accounts:

to prevent commingling with your own funds