Humber/Ontario Real Estate Course 4 Exam Practice

Which duty does the broker of record have regarding the real estate trust account?

1. Account reconciliation every quarter

2. Accurate transaction recording in a trust ledger

3. Financial audits every fiscal year

4. Monthly adjustments based on market changes

5. Settling disputes between parties regarding interest

6. Trust fund distribution among stakeholders

The correct answer is: Accurate transaction recording in a trust ledger

The role of the broker of record concerning a real estate trust account emphasizes the importance of accurate transaction recording in a trust ledger. This duty is critical for maintaining transparency and accountability in the management of client funds. By accurately recording all transactions related to the trust account, the broker ensures that every deposit, withdrawal, and transfer is documented, allowing for a clear and comprehensive view of the financial activities associated with client trust funds. This meticulous record-keeping helps prevent any potential mismanagement or discrepancies, which is crucial for regulatory compliance and for upholding the trust of clients. Other responsibilities, such as reconciling accounts or conducting financial audits, are important but are often part of broader financial management practices rather than specific duties of the broker of record. Therefore, while these practices contribute to the overall integrity of trust account management, the primary duty in this context revolves around the accuracy of transaction records in the trust ledger.