James Adams is a California broker (the same broker featured in the textbook). His brokerage sells residential real estate and manages five apartment buildings each owned by different clients. He charges his property management clients a management fee the last day of every month. His trust fund is held at the Bank of Burbank — a California, FDIC-insured bank.
(A) A commission for selling a home.
(B) An option to purchase.
(C) A gold bar offered as earnest money. → §2.1: Trust Funds and Non-Trust Funds , Page 3
(A) frozen.
(B) unaffected. → §2.2: Why a Trust Account , Page 3
(C) distributed among his creditors.
(A) one month.
(B) one year.
(C) three business days. → §2.3: Trust Fund Handling Requirements , Page 4
(A) deposit check pending acceptance of an offer. → §2.3: Trust Fund Handling Requirements , Page 4
(B) security deposit for an apartment lease.
(C) deposit check pending close of escrow.
(A) he deposits the check into his trust account.
(B) his buyer completes escrow.
(C) the seller accepts his buyer’s offer. → §2.4: Identifying Owners of Trust Funds , Page 5
(A) A savings account in the Cayman Islands.
(B) A revolving credit account with American Express.
(C) A checking account in Los Angeles, CA. → §3.1: General Requirements , Page 7
(A) has James’ full trust and confidence.
(B) is sufficiently bonded. → §3.2: Trust Account Withdrawals , Page 7
(C) is also his wife or domestic partner.
(A) The DRE.
(B) broker.
(C) beneficiary. → §3.3: Interest Bearing Accounts , Page 8
(A) 25 days. → §3.4: Commingling Prohibited , Page 9
(B) 2.5 days.
(C) 250 days.
(A) overage results.
(B) shortage results. → §3.5: Trust Fund Liability , Page 12
(C) profit results.
This form is used to record …
(A) all transactions for a single beneficiary.
(B) all trust funds received or paid-out from the trust fund. → §4.3: Bank Account Record [#4522] , Page 16
(C) fees received in trust but not deposited into the trust fund.
(A) $100,000.
(B) $10,000.
(C) $1,000. → §4.5: Record of Undeposited Receipts [#4524] , Page 18
(A) overage.” → §7.4: Overages , Page 24
(B) bonus.”
(C) profit.”
(A) three days.
(B) three years. → §10.0: Audits and Examinations , Page 31
(C) thirty years.
(A) suspend his license and petition the Superior Court for injunctive relief. → §11.0: Consequences of Conversion , Page 33
(B) confiscate the trust funds for DRE’s Recovery Account.
(C) seize the broker’s personal assets.
A plausible explanation for the entries shown below could be: “On May 6th, James deposited the White’s $2,000 earnest money deposit into his trust fund and on the 19th he wrote a check for that same amount to their escrow.”
(A) TRUE → §12.0: Sample Transactions , Page 35
(B) FALSE
James Adams is a California broker (the same broker featured in the textbook). His brokerage sells residential real estate and manages five apartment buildings each owned by different clients. He charges his property management clients a management fee the last day of every month. His trust fund is held at the Bank of Burbank — a California, FDIC-insured bank.
(A) A purchase deposit held by a broker.
(B) Rents held by a property manager.
(C) A management fee owed to a broker. → §2.1: Trust Funds and Non-Trust Funds , Page 3
(A) $250K times two.
(B) $250K times three. → §2.2: Why a Trust Account , Page 3-4
(C) $250K times one.
(A) neutered escrow guardianship.
(B) neural escrow network.
(C) neutral escrow depository. → §2.3: Trust Fund Handling Requirements , Page 4
(A) his seller. → §2.3: Trust Fund Handling Requirements , Page 4
(B) the buyer.
(C) both the buyer and his seller.
(A) the buyer and his seller.
(B) the buyer.
(C) his seller. → §2.4: Identifying Owners of Trust Funds , Page 5
(A) “beneficiary.”
(B) “trustor.”
(C) “trustee.” → §3.1: General Requirements , Page 7
(A) corporate licensee’s designated officer.
(B) beneficiary. → §3.2: Trust Account Withdrawals , Page 7
(C) salesperson licensed to and authorized by the broker.
(A) interest bearing savings accounts.
(B) speculative hedge fund accounts.
(C) non-interest bearing checking accounts. → §3.3: Interest Bearing Accounts , Page 8
(A) paid his office lease from a check drawn from his trust fund. → §3.4: Commingling Prohibited , Page 10
(B) deposited $120 of his own money into his trust to cover the bank’s service fees.
(C) promptly withdrew his management fees from his fund.
(A) conversion.
(B) commingling. → §3.5: Trust Fund Liability , Page 12
(C) fraud.
This form is used to …
(A) detail funds received from and sent to an individual beneficiary.
(B) journalize all funds into and out of the fund. → §4.3: Bank Account Record [#4522] , Page 16
(C) list funds received but not deposited into the fund.
(A) $900; payable to Martha’s Appraisal Service.
(B) $90; payable to Claudio’s Plumbing Supplies.
(C) $9; payable to himself (James). → §4.5: Record of Undeposited Receipts [#4524] , Page 18
(A) remains in the trust fund. → §7.4: Overages , Page 24
(B) should be retained by the broker.
(C) may be used to offset future shortages.
(A) Deposit receipts
(B) Photographs of the transferred property → §10.0: Audits and Examinations , Page 31
(C) Cancelled checks
(A) restitution for the fund‘s beneficiaries. → §11.0: Consequences of Conversion , Page 33
(B) fines payable to DRE’s Recovery Fund.
(C) fines payable to the Board of Equalization.
A plausible explanation for the last entry shown here is: “James received a purchase deposit of $3K from Mr. Olive on May 22nd, held it uncashed, and returned it two days later.”
(A) TRUE → §12.0: Sample Transactions , Page 36
(B) FALSE
James Adams is a California broker (the same broker featured in the textbook). His brokerage sells residential real estate and manages five apartment buildings each owned by different clients. He charges his property management clients a management fee the last day of every month. His trust fund is held at the Bank of Burbank — a California, FDIC-insured bank.
(A) A commission for selling a home.
(B) An option to purchase.
(C) A gold bar offered as earnest money.
(A) frozen.
(B) unaffected.
(C) distributed among his creditors.
(A) one month.
(B) one year.
(C) three business days.
(A) deposit check pending acceptance of an offer.
(B) security deposit for an apartment lease.
(C) deposit check pending close of escrow.
(A) he deposits the check into his trust account.
(B) his buyer completes escrow.
(C) the seller accepts his buyer’s offer.
(A) A savings account in the Cayman Islands.
(B) A revolving credit account with American Express.
(C) A checking account in Los Angeles, CA.
(A) has James’ full trust and confidence.
(B) is sufficiently bonded.
(C) is also his wife or domestic partner.
(A) The DRE.
(B) broker.
(C) beneficiary.
(A) 25 days.
(B) 2.5 days.
(C) 250 days.
(A) overage results.
(B) shortage results.
(C) profit results.
This form is used to record …
(A) all transactions for a single beneficiary.
(B) all trust funds received or paid-out from the trust fund.
(C) fees received in trust but not deposited into the trust fund.
(A) $100,000.
(B) $10,000.
(C) $1,000.
(A) overage.”
(B) bonus.”
(C) profit.”
(A) three days.
(B) three years.
(C) thirty years.
(A) suspend his license and petition the Superior Court for injunctive relief.
(B) confiscate the trust funds for DRE’s Recovery Account.
(C) seize the broker’s personal assets.
A plausible explanation for the entries shown below could be: “On May 6th, James deposited the White’s $2,000 earnest money deposit into his trust fund and on the 19th he wrote a check for that same amount to their escrow.”
(A) TRUE
(B) FALSE
James Adams is a California broker (the same broker featured in the textbook). His brokerage sells residential real estate and manages five apartment buildings each owned by different clients. He charges his property management clients a management fee the last day of every month. His trust fund is held at the Bank of Burbank — a California, FDIC-insured bank.
(A) A purchase deposit held by a broker.
(B) Rents held by a property manager.
(C) A management fee owed to a broker.
(A) $250K times two.
(B) $250K times three.
(C) $250K times one.
(A) neutered escrow guardianship.
(B) neural escrow network.
(C) neutral escrow depository.
(A) his seller.
(B) the buyer.
(C) both the buyer and his seller.
(A) the buyer and his seller.
(B) the buyer.
(C) his seller.
(A) “beneficiary.”
(B) “trustor.”
(C) “trustee.”
(A) corporate licensee’s designated officer.
(B) beneficiary.
(C) salesperson licensed to and authorized by the broker.
(A) interest bearing savings accounts.
(B) speculative hedge fund accounts.
(C) non-interest bearing checking accounts.
(A) paid his office lease from a check drawn from his trust fund.
(B) deposited $120 of his own money into his trust to cover the bank’s service fees.
(C) promptly withdrew his management fees from his fund.
(A) conversion.
(B) commingling.
(C) fraud.
This form is used to …
(A) detail funds received from and sent to an individual beneficiary.
(B) journalize all funds into and out of the fund.
(C) list funds received but not deposited into the fund.
(A) $900; payable to Martha’s Appraisal Service.
(B) $90; payable to Claudio’s Plumbing Supplies.
(C) $9; payable to himself (James).
(A) remains in the trust fund.
(B) should be retained by the broker.
(C) may be used to offset future shortages.
(A) Deposit receipts
(B) Photographs of the transferred property
(C) Cancelled checks
(A) restitution for the fund‘s beneficiaries.
(B) fines payable to DRE’s Recovery Fund.
(C) fines payable to the Board of Equalization.
A plausible explanation for the last entry shown here is: “James received a purchase deposit of $3K from Mr. Olive on May 22nd, held it uncashed, and returned it two days later.”
(A) TRUE
(B) FALSE