Trust records may include balance statements

CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Written Questions

Written Questions

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Property and Stock Agents Act 2002 no. 66 section 89 Property and Stock Agents Regulation 2014 Part 7 of the Act specifically deals with the legislative requirements for trust accounts.

1.2
Research and list the sections of the legislation relevant to the following areas of trust accounting:

Disbursements  General expenses  Staff wages  Commission  Management fees

Question 3

Question 4

Receipts	Payments
e.g. Rent paid into the agency from tenant

repairs	Payment invoice

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Version 1.2 – August 2020

Trust Accounting Legislative’s requirements to effectively operate a Real Estate Office that is involved in handling other people’s money, needs to:- 1. Understand the legislative requirements underpinning trust accounts 2. Apply the requirements to their day to day operations 3. Demonstrate compliance with the legislation through developing and applying office policies and procedures to effectively fulfil requirements that are
monitored and verified on on-going basis.

Question 7
What is the difference between a trust account and a general account?

Version 1.2 – August 2020

CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Written Questions

Question 9

Refer to the relevant legislation and outline the responsibilities of the licensee relating to

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The OFT received a complaint in March 2018 alleging irregularities in the agency’s corporate trust account. The OFT undertook a compliance check at the agency’s business address in March 2018, which revealed the agency’s then Principal Licensee had withdrawn a total of $121,000 on eleven separate occasions without authorisation.

The then Principal Licensee of the agency cooperated with the OFT and admitted the funds transferred from the trust account were never intended for personal gain, but were used as a ‘short term loan’ to cover business expenses until money could be returned to the trust account.

Question 11

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CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Written Questions

Step 2 – Calculate a Trial Balance The licensee is expected to produce a trial balance that details which clients the licensee is keeping trust monies for after the trust cash book has been trust bank statement as an internal control to insure that the trust balance is right. The bank reconciliation is allowed by the regulations 21 days after the month's end.

Trust accounts
Professionals who provide services that enable them to keep money in
"confidence" with their clients must use Trust Accounts. Accountants, Real Estate Agents, and Solicitors are only a few of the professionals who might be expected to maintain a Trust Account in order to facilitate transactions with half of their clients. Interest Bearing Trust Accounts
A client's account that receives interest. When a seller and a buyer want to split the interest on a loan, they tell the agent to put the money in an interest-bearing account. Since, although Trust Accounts receive interest, the interest is paid to the OFT, this is the case.

Question 13
What processes need to be implemented and authorities notified of discrepancies in trust accounting?

CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Written Questions

Question 14

bank reconciliation statements. rental statements. rescission statements.

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(Any information direct from the legislation can be copy and pasted as part of your answer.)

(What are you permitted and not permitted to do as far as trust account activities).

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Question 21
What are at least (2) methods in which trust moneys can be provided/deposited into the trust account?

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The cash payment log, also known as the cash disbursement journal, is used to keep track of all cash payments made by the company. The following are

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Date Payment made	Amount	Cheque number or EFT number	Payment made to	Identifier or name of payer
	$1900.00	1434	Aircold Airconditioning	John Jones	Airconditioning Repair at 47 Robert St, Byron Bay	JJ47

20/3/2021	$580	1435	Glass Boys	Nelly Nelson	Window replaced at 234 Luxford Rd Emerton NSW 2770	JY14
25/3/2021	$450	1436	Blindsmans	John Jon	Blinds replaced at 16 Magga Dan Ave Tregar NSW 2770	HU74

Question 25
a) Explain in 25-50 words what are trust account ledgers.

CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Written Questions

Both transactions on the receipt and payment sides of the cash book are totalled at the end of the month. The licensee must keep original trail balance records (or true copies). Every month's Trial Balance must be completed within 21 days of the month's end.

b) Bank reconciliation

Question 27
Provide (1) example for each of the following which is generated using standard trust account transactions in day to day real estate operations and outline the types of information these contain.

a) Report

A source document is a report that includes information that supports or substantiates a transaction that will be (or has been) entered into an
accounting system. Source papers used to be written on paper. In compliance with legislative requirements, source records for trust transactions are defined and accessed. Documentation of trust records and transactions are produced to give an accurate record of agency transactions on behalf of clients.

Question 29
What is a transfer journal and give 1 example of its use?

an explanation of why the transfer is important, should be included in the journal entry. A trust journal keeps track of all transactions that don't impact the trust bank account, such as: money move from one thing to another, or An error in a previous posting has been corrected. For example, you can transfer items from one warehouse to another warehouse within the same company

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