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Practice Of Real EstateTrust AccountsHARD

A buyer representative in Asheville is reviewing trust account reconciliation, audit trail, and account designation. Which statement is NOT accurate under current North Carolina law?

Correct Answer

D) Trust account designation is optional if the bank clerk understands the arrangement.

This choice is the inaccurate statement. The other three options describe the current North Carolina rule or guidance more accurately.

Answer Options
A
The broker must perform a monthly reconciliation that brings the journal or check stubs, trial balance, and reconciled bank statement into agreement.
B
Negative ledger balances, unexplained math errors, or unresolved shortages are warning signs of trust account noncompliance.
C
Company funds in a trust account are tightly limited and should not be used to mask shortages or commingling.
D
Trust account designation is optional if the bank clerk understands the arrangement.

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Related Topics & Key Terms

Key Terms:

account_designationcomminglingcompany_fundscore_rules_and_definitionsdifficulty_5nc_statenc_trust_account_escrow_requirementsnegative_balancesnorth_carolinareversetrust_account_reconciliation_audit_trail_and_designation
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