45-HR. CA REAL ESTATE PRACTICE COURSE » Summer 2021 » Section 15 Unit 1 Exam

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Question #1
The funds placed in trust accounts are insured by the ______.
A.   WNBA
B.   FDIC
C.   NAIC
D.   AARP
Question #2
What is commingling?
A.   Mixing personal and trust funds
B.   Combining different types of trust funds
C.   A social gathering
D.   A blend of different types of non-trust funds
Question #3
Randy, a broker, regularly places his client’s trust funds in the firm’s general business account, noting “trust fund” on the ledger. What is the problem with this approach?
A.   They must be placed in an interest-bearing account.
B.   They should not be marked "trust fund."
C.   They must be placed in a trust fund bank account or neutral escrow.
D.   They must go into a separate general business account.
Question #4
FDIC insurance covers every owner of funds deposited into a trust account, up to __________each.
A.   $400,000
B.   $250,000
C.   $25,000
D.   $150,000
Question #5
If trust funds aren’t placed in a trust fund bank account, where should they go instead?
A.   To the petty cash box in the broker's office
B.   To the broker's business bank account
C.   To an escrow account
D.   To the licensee's personal bank account
Question #6
Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier’s issue?
A.   Xavier is guilty of conversion only.
B.   Xavier is guilty of theft.
C.   Xavier is guilty of commingling only.
D.   Xavier is guilty of commingling and conversion.
Question #7
Which of these is an example of conversion of funds?
A.   Tristan deposited a client's earnest money check into the firm's operating account.
B.   Marcus converted a CD to cash and deposited it in the firm's operating account.
C.   Soo Min transferred funds from her firm's trust account to the closing company's trust account in time for settlement.
D.   Monica used funds from the firm's trust account to pay her firm's rent.
Question #8
What are trust funds?
A.   Rent received from a broker-owned property
B.   Money belonging to others held for a specific purpose in the course of a real estate transaction
C.   Money given as a gift to the broker
D.   Commission money the licensee has earned

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