247SimpleTests
Real Estate · Trust Accounts and Recordkeeping

What recordkeeping is generally expected of a broker maintaining a trust account?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

Accurate, current records identifying each party's funds — including deposits, disbursements, and a running balance — reconciled regularly against the bank statement

  1. A Accurate, current records identifying each party's funds — including deposits, disbursements, and a running balance — reconciled regularly against the bank statement
  2. B No records are required for trust funds
  3. C Only an annual summary
  4. D Records only when audited

Why this is the answer

A broker who holds client funds must keep complete and current trust-account records that identify whose money is in the account, when it was deposited, to whom and when it was disbursed, and the running balance attributable to each transaction. The account should be reconciled regularly (commonly monthly) against the bank statement to catch errors and confirm that the total held matches the sum owed to all parties. These records must be retained for the period set by state law and made available to auditors. Sloppy or missing trust records are a frequent basis for discipline, so brokers establish clear procedures and often designate who is authorized to handle the account.
Source: ARELLO Broker Trust Account Recordkeeping

Practice more questions

This question is from our Real Estate License Practice Tests practice test. Take the full practice test to test your knowledge across all Trust Accounts and Recordkeeping and other topics.

Take the Broker (National) practice test →

About this topic: Trust Accounts and Recordkeeping

Trust accounts and recordkeeping questions cover what must go into trust, commingling and conversion, reconciliation, interest, disbursement rules and how long records must be kept. This is one of 9 Broker (National) questions on trust accounts and recordkeeping, each with a full explanation on a single study page.

New to this exam? Our Real Estate exam guide explains the format, scoring, and how to prepare.

Related questions

Trust Accounts and Recordkeeping

What is a real estate trust account (escrow account)?

 Trust Accounts and Recordkeeping

What is 'commingling' in real estate brokerage and why is it prohibited?

 Trust Accounts and Recordkeeping

What is the standard procedure for handling earnest money in a real estate transaction?

 Trust Accounts and Recordkeeping

What must a broker do if a buyer demands return of their earnest money and the seller refuses, both claiming the money?

State-specific guides

Need information for your state? Our state guides cover local requirements, fees, and what to expect on exam day.

California Texas Florida New York Pennsylvania Illinois Ohio Georgia

Recommended study materials

Study guide

Real Estate License Exam Prep 3rd Ed. (Performance Programs)

National and state portion prep, contracts, agency law, fair housing, and math — the industry standard.

Check Price → Study guide

Modern Real Estate Practice 21st Ed. (Dearborn)

The most widely used real estate principles textbook: principles, law, practice, and math in one volume.

Check Price → Study guide

Real Estate Math Express (Dearborn)

Commission calculations, financing, proration, area, and all exam math explained step by step.

Check Price →

As an Amazon Associate, CJ Affiliate, and AWIN publisher we earn from qualifying purchases. Links above are affiliate links. Full disclosure →