CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Assessment Questions RTO 32426 What you need to do: Answer the questions below by writing in the space provided. You are...

The document needs to be answered with simple answers and simple English to achieve a competent mark. The learner guide has been attached and that has the information that has to be used for the answers. No other references needed.


CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Assessment Questions RTO 32426 What you need to do: Answer the questions below by writing in the space provided. You are required to answer all questions correctly. If incorrect answers are provided, you will receive feedback in your ‘grades’ section and you will be requiring to resubmit your work What you will need: Research materials such as books, internet, magazines, workplace documentation etc. Access to legislative and regulatory documentation. What you need to submit: Your answers to these questions. Assessment Questions Question 1 What is the name of the relevant legislation (including sections if applicable) in your state/territory that outlines the requirements for operating a real estate trust account? Question 2 List 5 examples of transactions that would NOT be entered into a trust account accounting system. (e.g. payment of wages to office staff). Question 3 Complete the following table. Give (2) reasons that inaccuracies/discrepancies can occur in trust accounts and a treatment to address these. Source of Discrepancy Treatment Strategy to Address the Discrepancy E.g. Dishonoured cheque · Ensure that a reversal is completed in the cashbook · Do not accept cheques as method of payment Question 4 List (4) transactions you are likely to be handling on behalf of your clients / Principals and group the transactions according to whether they are a receipt or a payment. Receipts Payments e.g. Rent e.g. Rent Settlement Question 5 What is the purpose of trust accounts in real estate? Question 6 What are the requirements under the legislation in relation to being able to operate a real estate trust account? Question 7 What is the difference between a trust account and a general account? Question 8 Explain the roles and responsibilities of the following real estate personnel regarding trust account activities. Trust Account Activity Personnel Responsible Receipting rent from tenant End of month disbursement of funds to the landlord Receipting deposit from purchaser Problem with trust account Issue cheque for balance deposit at settlement Question 9 Refer to the relevant legislation and outline the responsibilities of the licensee relating to account transactions and audits. Refer to the correct section of legislation as part of your answer. Question 10 Read the following case and explain the impacts of trust inaccuracies on clients and agency.The OFT received a complaint in March 2018 alleging irregularities in the agency’s corporate trust account. The OFT undertook a compliance check at the agency’s business address in March 2018, which revealed the agency’s then Principal Licensee had withdrawn a total of $121,000 on eleven separate occasions without authorisation. The then Principal Licensee of the agency cooperated with the OFT and admitted the funds transferred from the trust account were never intended for personal gain, but were used as a ‘short term loan’ to cover business expenses until money could be returned to the trust account. The agency’s clients suffered no loss as a result of the trust account misappropriation. In sentencing, the court stated the offending was of a very serious matter, but considered a number of mitigating circumstances including an early guilty plea, the cooperation with the OFT and no loss experienced by consumers. Question 11 In 200 – 300 words, outline the monthly trust accounting processes required to be undertaken by the real estate agency (including the applicable timeframes) in line with legislation requirements in your state or territory. Question 12 List the name(s) and explain the different types trust account(s) that can be used in real estate in your state/territory? Question 13 What processes need to be implemented and authorities notified of discrepancies in trust accounting? Question 14 What security arrangements need to be in place for trust accounts? Question 15 What are (3) examples of trust records? Question 16 What are the requirements under the legislation relating to the electronic/computer based accounting systems. As part of your answer identify the section of the legislation and the specific requirements. Any information direction for the legislation can be copy and pasted as part of your answer. Question 17 In 25-100 words, explain what role will you be going into and what are the legislative requirements/limitation regarding your involvement in trust account activities. Question 18 What are the legislative requirements pertaining to; a) Issuing receipts b) Banking of trust money. Question 19 What is the name of a software package that can be utilised for trust accounting and what is its function/purpose? Question 20 In 50-100 words explain the reason behind conducting internal and external trust account audits. Question 21 What are at least (2) methods in which trust moneys can be provided/deposited into the trust account? Question 22 What are the (2) ways that trust monies can be disbursed out of the trust account? Question 23 a) Explain in 50-100 words what is a Cashbook Receipts Journal. b) In the table below write (2) examples of standard transactions into the cashbook receipts journal that you would expect to see in your day to day real estate activity. Date money received Date Receipt Issued Name of person (Payee) Code or client Description of the matter Amount received Account Receipt Number Date Banked 02/08/2013 02/08/2013 Ted Johnson Ted Johnson Advertising payment – 2 Second St, Byron Bay $ 350.00 1206 02/0/2013 Question 24 a) Explain in 50-100 words what is a Cashbook Payments Journal. b) In the table below write (2) examples of standard transactions into the cashbook payments journal that you would expect to see in your day to day real estate activity. Date Payment made Amount Cheque number or EFT number Payment made to Identifier or name of payer Description of matter Ledger identifier debited paid 28/04/2013 $1900.00 1434 Aircold Airconditioning John Jones Airconditioning Repair at 47 Robert St, Byron Bay JJ47 Question 25 a) Explain in 25-50 words what are trust account ledgers. b) What are the standard trust account transactions you would expect to see in a ledger in your day to day real estate activity? Question 26 In 25-100 words explain what is a trust account; a) Trial balance b) bank reconciliation Question 27 Provide (1) example for each of the following which is generated using standard trust account transactions in day to day real estate operations and outline the types of information these contain. a) Report b) Statement Question 28 What are source documents? Question 29 What is a transfer journal and give 1 example of its use? Learner Declaration Complete ALL sections including your legal name and contact details. Indicate Y for Yes or N for No I submit this assessment and certify that: · All work submitted has been completed by me · No part has been completed or copied from any other person · I have referenced and/or acknowledged all necessary authors · I have kept a copy of my assessments · Where necessary, I have attached supporting documents which are clearly identified in line with the specific question · Where required, I have completed any agreements, forms and documents required for this assessment. I understand that partial completion will not be accepted · I understand that federal and state agencies have the right to access any of my assessment materials for auditing and monitoring purposes · I consent that REAA may use my de-identified assessment for internal moderation and validation purposes · I understand that if a third party requests my results that REAA will only do so with my written permission Learner Legal Name (print) Unique Student Identifier Contact Number Home Address Learner Signature Date CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) Student Learner Guide RTO ID 32426 CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) © NREL Pty Ltd. CPPDSM4006A - Establish and Manage Agency Trust Accounts.docx Page 2 of 58 CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) This unit of competency specifies the outcomes required to establish and manage trust accounts in an agency context. It includes reviewing agency accounts for compliance with trust account requirements, establishing and managing trust accounts, maintaining records of trust transactions, and monitoring and reviewing trust accounts. The unit may form part of the licensing requirements for persons engaged in real estate activities in those States and Territories where these are regulated activities CPPREP4005 - Prepare to work with real estate trust accounts (Release 1) © NREL Pty Ltd. CPPDSM4006A - Establish and Manage Agency Trust Accounts.docx Page 3 of 58 Contents Introduction .......................................................................................................................... 5 Key Terms ........................................................................................................................ 6 Acronyms .........................................