Practice Of Real EstateTrust AccountsMEDIUM
A transaction-file auditor in Greenville is reviewing trust account reconciliation, audit trail, and account designation. Which statement is NOT accurate under current North Carolina law?
Correct Answer
D) A trial balance shows only commissions earned by the brokerage.
This choice is the inaccurate statement. The other three options describe the current North Carolina rule or guidance more accurately.
Answer Options
A
Negative ledger balances, unexplained math errors, or unresolved shortages are warning signs of trust account noncompliance.B
North Carolina trust accounts are demand accounts and must be designated clearly as trust or escrow accounts.C
The purpose of monthly trust reconciliation is to protect client money and allow prompt detection of errors or shortages.D
A trial balance shows only commissions earned by the brokerage.Why This Is the Correct Answer
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Why the Other Options Are Wrong
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Related Topics & Key Terms
Key Terms:
account_designationcore_rules_and_definitionsdemand_accountdifficulty_3nc_statenc_trust_account_escrow_requirementsnegative_balancesnorth_carolinareversetrial_balancetrust_account_reconciliation_audit_trail_and_designation
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