CPPREP4005_SW_1of1

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Student workbook CPPREP4005 Prepare to work with real estate trust accounts
TAFE NSW would like to pay our respect and acknowledge Aboriginal and Torres Strait Islander Peoples as the Traditional Custodians of the Land, Rivers and Sea. We acknowledge and pay our respect to the Elders, both past and present of all Nations. Version: 20200817 Date created: 15 April 2019 Date modified: 17 August 2020 For queries contact: Technology and Business Services Skillspoint © TAFE NSW 2020 RTO Provider Number 90003 | CRICOS Provider Code: 00591E This resource can be found in the TAFE NSW Learning Bank. The content in this document is copyright © TAFE NSW 2020 and should not be reproduced without the permission of TAFE NSW. Information contained in this document is correct at time of printing: 17 February 2024. For current information please refer to our website or your teacher as appropriate. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 3 of 81 © TAFE NSW 2020
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Contents Icon legends ................................................................................................................................ 5 Getting started ............................................................................................................................ 6 What will I learn by completing this workbook? .................................................................... 6 Video: 11 real estate agents and trust accounts .................................................................... 7 Topic 1: Trust accounts and legislation ................................................................................. 8 Overview ..................................................................................................................................... 9 Purpose of trust accounts ......................................................................................................... 10 Activity 1.1: Multiple choice ................................................................................................. 12 Trust account legislation ........................................................................................................... 13 Knowledge of the Act and regulations ................................................................................. 13 Licensee must ensure employees comply with the Act and regulations ............................. 13 Legislation tables .................................................................................................................. 14 Opening a trust account in NSW ............................................................................................... 18 Requirements when opening a trust account ...................................................................... 18 Audit of licensee’s records ........................................................................................................ 21 Purpose of an internal audit ................................................................................................. 21 Purpose of an external audit ................................................................................................ 21 Legal requirement ................................................................................................................ 21 Audit period .......................................................................................................................... 22 Unclaimed trust monies ....................................................................................................... 24 Additional resources ............................................................................................................. 24 Activity 1.2: Trust account legislation .................................................................................. 25 How did you go? ................................................................................................................... 26 Topic 2: Trust account controls and responsibilities ........................................................... 27 Overview ................................................................................................................................... 28 Trust account obligations and responsibilities .......................................................................... 29 Trust account fraud .............................................................................................................. 31 Internal controls to prevent fraud ....................................................................................... 31 Penalties for trust account offences and impact on agency and consumers ...................... 32 Trust account integrity, security and confidentiality integrity ............................................. 33 Activity 2.1: Identifying the responsibilities when transacting trust accounts .................... 34 How did you go? ................................................................................................................... 35 Topic 3: Trust account transactions and inaccuracies ......................................................... 36 Overview ................................................................................................................................... 37 Trust account transactions ........................................................................................................ 38 Types of trust money ............................................................................................................ 38 Trust receipts and bank deposit slips ................................................................................... 39 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 4 of 81 © TAFE NSW 2020
Trust account payment documents ..................................................................................... 43 Electronic funds transfer ...................................................................................................... 44 Vendor statement ................................................................................................................ 44 Activity 3.1: Identify trust account transactions .................................................................. 45 Trust account cashbooks ...................................................................................................... 47 Activity 3.2: Identify trust account transactions .................................................................. 50 Trial balance and bank reconciliation .................................................................................. 53 Additional resources ............................................................................................................. 53 Bank reconciliations and bank statements .......................................................................... 54 Sources of inaccuracies in trust accounts ............................................................................ 56 Monthly trust account processes ......................................................................................... 57 Computerised trust accounting ............................................................................................ 58 Software packages ................................................................................................................ 58 Computerised trust accounting legal requirements ............................................................ 60 Answers to practice activities .................................................................................................... 63 Activity 1.1: Multiple choice ................................................................................................. 63 Activity 1.2: Trust account legislation .................................................................................. 64 Activity 2.1: Identifying the responsibilities when transacting trust accounts .................... 66 Activity 3.1: Identify trust account transactions .................................................................. 68 Activity 3.2: Identify trust account transactions .................................................................. 70 Hyperlinks .................................................................................................................................. 73 Image attributions ..................................................................................................................... 75 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 5 of 81 © TAFE NSW 2020
Icon legends Icon Description Practice activity Learning activities help you to gain a clear understanding of the content in this resource. It is important for you to complete these activities, as they will enhance your learning. The activities will prepare you for assessments. Collaboration You will have opportunities to collaborate with others during your study. This could involve group activities such as mini projects or discussions that will enable you to explore and expand your understanding of the content. Self-check An activity that allows you to check your learning progress. The self-check activity gives you the opportunity to identify areas of learning where you could improve. If you identify these, you could review the relevant content or activities. Resources (required and suggested) Additional resources throughout this workbook such as chapters from textbooks, online articles, videos etc. These are supplementary resources, which will enhance your learning experience and may help you complete the unit. Assessment task At different stages throughout the workbook, after you have completed the readings and activities, you may be prompted to complete one or more of your assessment tasks. Video Videos will give you a deeper insight into the content covered in this workbook. If you are working from a printed version, you will need to look these up using the URL provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 6 of 81 © TAFE NSW 2020
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Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 7 of 81 © TAFE NSW 2020
Getting started What will I learn by completing this workbook? This workbook has been developed for the unit of competency CPPREP4005 | Prepare to work with real estate trust accounts. Successfully completing this unit of competency will give you the skills and knowledge required to prepare to work with real estate trust accounts. In this workbook, you will learn how to: examine trust accounts identify trust account controls and procedures trust account transactions, report and inaccuracies. Each topic includes opportunities to check your progress and understanding as well as activities that will help you to complete the formal assessments. There are three topics to complete within this workbook. They are: 1. Trust accounts and legislation. 2. Trust account controls and responsibilities. 3. Trust accounts and inaccuracies. Alright, let’s get started! Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 8 of 81 © TAFE NSW 2020
Watch Video: 11 real estate agents and trust accounts Watch the NSW Fair Trading video (duration 04:22). https://youtu.be/PLwr_adYwhA Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 9 of 81 © TAFE NSW 2020
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Topic 1: Trust accounts and legislation Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 10 of 81 © TAFE NSW 2020
Overview In this topic, you will learn about: trust account legislation in NSW the purpose of trust accounts in real estate operating a trust account in line with legal requirements. The activities throughout this resource will assist you in your learning. These activities do not form a part of your final assessment however they will contribute to your understanding of the topic area. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 11 of 81 © TAFE NSW 2020
Purpose of trust accounts The Property and Stock Agents Act requires agents to keep trust monies separate from the agency operating (general) account. The general account is the agencies working account. It is the account from which the agency pays for operating expenses, wages and any other payments. The trust accounts are the accounts in which the agency holds funds on behalf of their clients. Real estate agencies are required to hold and disperse monies on behalf of their clients. The funds are held in trust accounts, generally referred to as the sales or management trust accounts. The Property and Stock Agents Act 2002 (NSW), will be referred to as the Act from here on. The Property and Stock Agents Regulations 2014 (NSW), will be referred to as the regulations from here on. The requirements for operating real estate trust accounts in NSW are in Section 88 , of the Act. It states that these funds must not be used for business operating costs and expenses. Schedule 1.22 of the Property and Stock Agents Regulations 2014 (NSW) requires that separate trust accounts are held for property sales funds and property management funds. Also that funds received from clients are placed into these respective accounts. To assist your understanding of which funds belong in each account review the following table. Table 1 Overview of trust accounts Monies received Appropriate account Marketing fees for new sales listing. Sales trust account. 10% deposit paid by the purchaser. Sales trust account. Sales holding deposit. Sales trust account. Rental Holding deposit of one week. Property Management trust account. Rent. Property Management trust account. Water charges. Property Management trust account. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 12 of 81 © TAFE NSW 2020
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Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 13 of 81 © TAFE NSW 2020
In addition to the above accounts, separate trust accounts may be opened for the exclusive use of vendors and purchasers in the sale of land. Interest earned on the trust account can be transferred to the vendor and purchase on the settlement of the sale. Money held in trust cannot go into the agencies general account as it is NOT the agencies money. It is held in trust for our clients. At the end of a sale, once the agent has received the ‘Oder on the agent’, they can transfer the commission and expenses outlined in the agency agreement into their general account (the agencies working account). In property management, the agency receives its fees at the end of each month, as outlined in the managing agency agreement. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 14 of 81 © TAFE NSW 2020
Practice activity Activity 1.1: Multiple choice Answer the following two questions. Click/check the box in the answer column to select your answer choice. Answers are at the end of your workbook. 1. The purpose of a real estate trust account is: # Choices Answer A. To keep money safe ☐ B. To hold funds in trust on behalf of our clients ☐ C. To use to pay agency accounts ☐ D. Residential Tenancies Regulation 2019 (NSW) ☐ 2. Identify the pieces of legislation that outline the requirements for a licensee to maintain separate trust accounts for sales and management. # Choices Answer A. Property and Stock Agents Act 2002 (NSW) ☐ B. Property and Stock Agents Regulation 2014 (NSW) ☐ C. Residential Tenancies Act 2010 (NSW) ☐ D. Comply with the Residential Tenancies Regulation 2019 (NSW) ☐ Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 15 of 81 © TAFE NSW 2020
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Trust account legislation Knowledge of the Act and regulations An agent must have a knowledge and understanding of the Act and the regulations under the Act, and such other laws relevant to the category of licence or certificate of registration held. Laws relating to residential tenancy, fair trading, competition and consumer protection, anti-discrimination and privacy, may be necessary to enable the agent to exercise their functions as an agent lawfully. Licensee must ensure employees comply with the Act and regulations The licensee-in-charge at a place of business must take reasonable steps to ensure other persons employed in the business, comply with the Act and regulations under the Act. Legislation relating to trust accounting in NSW is located in Part 7 and 8 of the Property and Stock Agents Act 2002 (NSW) and Part 4 of the Property and Stock Agent Regulations 2014 (NSW). NSW Fair Trading, the regulating body, has a dedicated trust account section that explains the requirements under the Act and regulations in simple terms. Go to NSW Fair Trading and familiarise yourself with the trust account requirements. Once you have complete this task look at the trust account legislation tables. These tables provide a summary of the relevant legislation sections, follow the links and to read the full information contained in these sections. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 16 of 81 © TAFE NSW 2020
Legislation tables Property and Stock Agents Act 2002 (NSW), Part 7 Table 2 Property and Stock Agents Act 2002 (NSW), Part 7 summary Section Section heading Brief description 86 Trust money to be paid into a trust account. This section sets out the detail for the agency requirements to place all monies received on behalf of our clients in the relevant trust account. 87 Approval of authorised deposit- taking institution. A trust account can only be opened at an authorised deposit-taking institution as approved by the Secretary of Fair Trading. 88 Trust money not to be used to pay licensee’s debts. Trust money is not available for the payment of the debts of the licensee to any other creditor of the licensee, or liable to be attached or taken in execution under the order or process of any court at the instance of any other creditor of the licensee. 89 and 92 Overdrawn trust accounts. The licensee must notify the Secretary of NSW Fair Trading within five days of becoming aware that a trust account is overdrawn. 90 Interest on trust account money. Interest earned on trust accounts must be paid, by the financial institution holding the accounts, by the 7th business day of the following month. No transaction or statutory charges can be deducted by the financial institution. Part 8 103- 104 Trust account record keeping. These sections discuss the record- keeping requirements in general Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 17 of 81 © TAFE NSW 2020
Section Section heading Brief description and concerning trust account documentation. 111-116 Trust account audit requirements. These sections of the act outline the audit requirements for trust accounts, the audit period in which they must be submitted, the length of time an agency is required to keep audit records (3yrs), obligations and qualification for the auditor. Property and Stock Agents Regulations 2014 (NSW), Part 4 trust money Table 3 Property and Stock Agents Regulations 2014 (NSW), Part 4 Trust money summary Clause Section heading Brief description 18 Banking of trust money. All trust money must be banked within 24 hours or the next business day. 19 Provision of unique identifying number when opening or maintaining a trust account A licensee must provide the authorised deposit-taking institution with a unique identifying number when opening a trust account in NSW. 20 Records of trust money to be kept by licensees. Must be in English and a legible format so the information can be produced on demand, all records must be backed-up of sight and the licensee must within 21 days after the end of the month prepare a trial balance statement for each trust account. 22 Computer control system. The licensee must ensure that either a back-up copy of all records to which this clause refers is made Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 18 of 81 © TAFE NSW 2020
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Clause Section heading Brief description on a computer disk or magnetic tape or by other electronic means not less frequently than once each month, and the most recent back- up copy is kept in such a place at a separate location that any incident (such as fire, or a power or disk failure) that could adversely affect the records would not also affect the back-up copy or all records to which this clause refers are backed up using cloud technology through the internet not less frequently than once each month. 23 Receipts for trust money. This section outlines the requirements of when, how and what information must be included on a trust receipt that is given to a client that has made a trust account payment. 24 Payment of trust money by cheque or electronic funds transfer. This section discusses instructs that trust monies can only be paid via cheque or EFT and the requirements related to each payment type. 25 Trust deposits. Lists the requirements that must be included on a bank deposit slip. 26 Record of trust account transactions. Discusses daily receipts and payments and the recoding requirements concerning the records. 27 Journals. Discusses the recoding requirement for journal between accounts in the trust account ledger that are not affected by EFT or cheques. 28 Trust account ledgers. Directs that separate ledgers must Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 19 of 81 © TAFE NSW 2020
Clause Section heading Brief description be kept for each client and the particulars required in those ledgers 29 Trust account trail balance. Must be completed within 21 days of the end of the month for each trust account held. Schedule 1.22 Rental money and sales money to be in separate trust accounts Schedule 15 Penalty notice offences. Summary of penalty amounts. Note : The ‘Secretary’ refers to the Commissioner for Fair Trading, Department of Finance, Services and Innovation. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 20 of 81 © TAFE NSW 2020
Opening a trust account in NSW Requirements when opening a trust account When opening a trust account, licensees must notify the authorised deposit-taking institution in writing that a trust account is being opened as required under the Property, Stock and Business Agents Act 2002. If when opening the trust account it is held by a corporation, the trust account is to be in the name of the corporation. Otherwise, the trust account must be in the name of the licensee or the firm of licensees of which the licensee is a member. The name of the licensee or firm of licensees or corporation is to appear as a prefix of the account name, followed by any other necessary identifier of the trust account. The words, 'trust account ' must appear in the name of the trust account and all cheques drawn on the trust account. Unique identifying numbers for general trust accounts From 1 January 2015, an online registration system for general trust accounts was introduced. Registration is available through NSW OneGov (previously called the NSW Government Licensing Service), this supersedes the previous standard forms; for opening a trust account (the 'blue form') and for closing a trust account (the 'green form'). A licensee who opens a general trust account must provide the authorised deposit-taking institution (bank) with a unique identifying number obtained from NSW Fair Trading (through NSW OneGov). The authorised deposit-taking institution lodges its monthly returns using this unique identifying number. Each general trust account needs a unique identifying number. You will need to register each account separately (if you maintain multiple general trust accounts). Nominate which unique identifying number is associated with each account with your bank. NSW OneGov will provide licensees with the necessary form(s) to notify the authorised deposit-taking institution in writing that a new or existing general trust account has been registered, and a unique identifying number issued. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 21 of 81 © TAFE NSW 2020
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NSW OneGov will also notify NSW Fair Trading when a general trust account has been closed and provide the licensee with the form to record the account closure details. The form should be kept by the licensee. Exempt trust accounts You are not required to notify NSW Fair Trading when opening a separate trust account. On the instructions of the client to whom those funds belong. Or for the exclusive benefit of a vendor and purchaser of land. These separate trust accounts are exempt from directing interest to NSW Fair Trading. Trust money not available to pay licensee’s debts Trust money is not available for the payment of the debts of the licensee to any other creditor of the licensee, or liable to be attached or taken in execution under the order or process of any court at the instance of any other creditor of the licensee. Interest earned on trust accounts Interest earned on trust accounts to be paid to statutory interest account, each authorised deposit-taking institution must: After the end of each named month, calculate interest on the daily balances of all money held during the month in trust accounts kept with the authorised deposit- taking institution by applying to those balances the prescribed percentage of the trust account rate applicable to the institution for this section, and before the end of the 7th business day of the next named month pay the amount of that interest to the Secretary for crediting to the statutory interest account. The interest rate The Minister is required to determine from time to time, after consultation with the Treasurer, a trust account rate for each authorised deposit-taking institution. The rate may be fixed or variable and is to be determined by reference to an interest rate that applies in the short term money market. The same rate may be determined for some or all authorised deposit-taking institutions. As soon as practicable after determining a trust account rate for an authorised deposit- taking institution, the Minister must inform the authorised deposit-taking institution of the rate by notice in writing and publish a notice of the rate in the Gazette. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 22 of 81 © TAFE NSW 2020
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The prescribed percentage is 60 per cent or such other percentage as the Minister may, from time to time, determines after consultation with the Treasurer and notify by order published in the Gazette. Different prescribed percentages may be determined in respect of different classes of a trust account. Trust account becoming overdrawn A licensee must, within five days after becoming aware that a trust account of the licensee has become overdrawn, notify the Secretary in writing of: the name and number of the account the amount by which the account is overdrawn the reason for the account becoming overdrawn. When an authorised deposit-taking institution becomes aware that a trust account kept with it under the Act becomes overdrawn, the institution must act as soon as practicable (and in any case within five business days) after becoming so aware inform the Secretary of the following by notice in writing: the name and business address of the licensee concerned the name and number of the account the date on which the account became overdrawn the amount by which the account is overdrawn. Dishonoured cheques Within five business days of an authorised deposit-taking institution becoming aware that a cheque drawn on a trust account kept with it under this part has been dishonoured, the institution must, by notice in writing, inform the Secretary of the following: the name and business address of the licensee concerned the name and number of the account the amount of dishonour the date on which the cheque was dishonoured. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 23 of 81 © TAFE NSW 2020
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Audit of licensee’s records Purpose of an internal audit To ensure compliance and to make sure there are not any discrepancies, an internal audit should be carried at every two months. This is to make sure that procedures that are in place are being followed. The audit should be carried out by a senior staff member such as the sales manager, office manager or senior property manager. During this audit, they will check all transactions in both trust accounts, including all the receipts, payments, from the cash book to ledger to trial balance and finally the bank reconciliation statements. These are randomly picked and checked. Internal audits may be used for regular checking before annual audits are due. They are skilled in all areas, not just trust accounting and again randomly check files for discrepancies and failures to follow policy. Purpose of an external audit All trust accounts in NSW must be audited by a qualified auditor once a year. It is a legislative requirement under the Property and Stock Agents Act2002 to ensure that the trust account has been handled and maintained properly. Anyone who collects and holds money on behalf of a client must keep the client’s money in a trust account. And as such, the trust account must be audited once a year to make sure that there are no discrepancies and it has been maintained properly. Legal requirement A person who is a licensee, a former licensee or the personal representative of a licensee must, within three months after the end of the audit period applicable to the person: cause the records and documents relating to any trust money held during that period by the person under this Act to be audited by a person qualified to act as an auditor for the purposes of this Division if the auditor’s report on the audit is a qualified report, lodge the report with the Secretary. An auditor’s report is a qualified report if it sets out any discovery by the auditor that any breach of this Act or the regulations has been committed, that there is any discrepancy relating to the trust account to which the audit relates or that the records or documents concerned are not kept in such a manner as to enable them to be properly audited. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 24 of 81 © TAFE NSW 2020
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Audit period The audit period applicable is the year ending on 30 June or such other period as the Secretary may fix under the Property and Stock Agents Act 2002 (NSW). Qualifications of auditors A person is qualified to act as an auditor for the purposes of this division if the person: is a registered company auditor within the meaning of the Corporations Act, or is an authorised audit company within the meaning of the Corporations Act, or is a member of a professional accounting body within the meaning of the Australian Securities and Investments Commission Act 2001 of the Commonwealth and holds a Public Practice Certificate or Certificate of Public Practice issued by the body, or is a person who has been nominated by the person whose records and documents are to be audited and who has been approved by the Secretary by order in writing. Duties of auditors If an auditor in the course of making an audit for the purposes of this division discovers that any breach of this Act or the regulations has been committed, that there is any discrepancy relating to the trust account to which the audit relates or that the records or documents concerned are not kept in such a manner as to enable them to be properly audited, the auditor must: fully set out the facts so discovered by the auditor in the report made by the auditor for the purposes of the audit, and forward a copy of the report to the Secretary within 14 days after providing the report to the licensee. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 25 of 81 © TAFE NSW 2020
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Random audits The Secretary may at any time appoint a person qualified to act as an auditor for the purposes of act to audit the records and documents relating to any money held in a trust account kept by a licensee and provide a report on the audit to the Secretary. The licensee or associate is guilty of an offence if the licensee or associate, without reasonable excuse (proof of which lies on the licensee or associate): refuses or fails to comply with the requirements of the audit, or otherwise hinders, obstructs or delays an auditor in the exercise or performance of the auditor’s functions under this section. Audit records Licensees are required to hold a copy of their trust account audit (whether qualified or not) at their registered place of business, for at least three years, and make it available to Fair Trading inspectors for examination if required. No trust monies held Licensees who did not hold or receive trust money during the audit year are required to note whether or not they did so when they next re-apply for their license. Closing a trust account A licensee must, within 14 days after closing a trust account, notify the Secretary in writing of the closure. The notification must be in a form approved by the Secretary. This does not apply in respect of: separate trust account kept on the instructions of a client of a licensee or firm of licensees for the exclusive benefit of the client, or a separate trust account opened by a licensee for the exclusive benefit of both the vendor and the purchaser of land. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 26 of 81 © TAFE NSW 2020
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Unclaimed trust monies Occasionally some funds are handled by Real Estate Agents that are unclaimed. In July 2013 Revenue NSW became the authority to handle unclaimed trust money. This responsibility was passed from Fair Trading to Revenue NSW. Unclaimed trust monies are funds that have been held in the trust account for more than two years. The licensee must make try to locate the owner of the monies, failing to try and locate the owner of the monies can incur a penalty of up to $5,500. If the licensee is unable to locate the owner, they must send to the Chief Commissioner Revenue NSW. Resources Additional resources Visit the unclaimed monies page , on Revenue NSW, to view the process that must be followed. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 27 of 81 © TAFE NSW 2020
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Practice activity Activity 1.2: Trust account legislation 1. Describe two trust account records that a licensee must keep. 2. What form must payments from the trust account take? 3. List three requirements for issuing a cheque from the trust account. 4. What are the penalties for breaching Section 25 of the regulations, in penalty points and monetary terms? 5. What effect can trust account offences have on your office reputation and clients? Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 28 of 81 © TAFE NSW 2020
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Self-check How did you go? You have completed the topic on trust accounts and legislation. Check the boxes for the tasks you feel confident you can complete. ☐ I can describe the purpose and types of trust accounts in real estate ☐ I can analyse and interpret the legislative requirements of operating a trust account ☐ I can analyse the regulatory requirements for the operation of a trust account Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 29 of 81 © TAFE NSW 2020
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Topic 2: Trust account controls and responsibilities Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 30 of 81 © TAFE NSW 2020
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Overview In this topic, you will learn about: roles and responsibilities of personnel your role and its limitations licensee in charge role and audit requirements impact of trust account fraud and inaccuracies on agency and consumers. The activities throughout this resource will assist you in your learning. These activities do not form a part of your final assessment however they will contribute to your understanding of the topic area. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 31 of 81 © TAFE NSW 2020
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Trust account obligations and responsibilities Every real estate agency has a responsibility under common law (fiduciary duties) and statute law (Property and Stock Agents Act 2002 (NSW) and Regulations 2014 (NSW)), to account to their principals for any monies received, held, disbursed etc. on behalf of their clients. There are many obligation and responsibilities that real estate personnel must follow, depending on the type of licence they hold, these include: licensee (under supervision guidelines ): o must hold a class 1 license o responsible for all trust account operations o ensure all trust accounts are maintained under part 7 of the act o responsible for all trust account operations o prepare and maintain a document that identifies the licensee in charge and the accounts for which they are responsible o have written procedures for trust accounts transactions and reviews o review all trust transactions conducted at least once a month o verify all incoming and outgoing trust transactions with financial institution records o separate logins for all persons who have trust account access o ensure that any adjustments to accounts are evidenced at the end of month reconciliation o all rental monies owed to landlords are paid to owners at the end of each calendar month o the only person that can approve trust account withdrawals o must have separate accounts for sales and management o maintain records as set out in the act and regulations o must adhere to all legislative requirements listed below Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 32 of 81 © TAFE NSW 2020
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real estate agent (class 2 licence) o must adhere to all legislative requirements listed below o receive and trust monies and enter into trust account system o issue receipts o prepare trust account payments o maintain the security of the password issued to access the trust account o carry out any transactions with due diligence o cannot withdraw monies from the trust accounts assistant real estate agent (registered agent) o must adhere to all legislative requirements listed below o receive and trust monies and enter into trust account system o issue receipts o maintain the security of the password issued to access the trust account o carry out any transactions with due diligence o cannot withdraw monies from the trust accounts All of the above staff dealing with the trust account have obligations under the following: Property and Stock Agents Act 2002 (NSW), Property and Stock Agent Regulations 2014 (NSW), Secretary’s Guidelines for the Proper Supervision of the Business of a Licensee under s 32 of the act Unclaimed Money Act 1995 (NSW) NSW Fair Trading Any issues or concerns regarding the trust account must be referred to the licensee immediately. It is their responsibility to ensure all trust account operation meet legislative requirements. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 33 of 81 © TAFE NSW 2020
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Trust account fraud Fraudulent activities by agents on their trust accounts is a serious concern. The average agency has substantial amounts of money pass through their trust accounts every month. Those that commit offences concerning trust accounts can expect substantial fines and possible imprisonment. In the majority of cases, these acts are committed by an employee of an agency and often the licensee. Resources Internal controls to prevent fraud The supervision guidelines state that it is the licensee’s responsibility to provide procedures for the trust account process and that they must have a good working knowledge of the trust accounting process. Control procedures to prevent fraud are: restrict access to computer software and use unique passwords and usernames for each employee dealing with the trust account licensee to carry out spot checks of the trust account transactions and reports at irregular intervals for accuracy and adherence to legislative requirements licensee to read, verify and sign the end of month reports have written procedures instructing employees of their duties regarding the trust account from receipt of monies to the bank reconciliation. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 34 of 81 © TAFE NSW 2020
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Penalties for trust account offences and impact on agency and consumers Failing to adhere to trust account legislation carries heavy penalties and possible imprisonment for up to 10 years. The type of offence committed will determine the penalty or amount of money the agent will receive. Each section of the act and regulations stipulates the penalty for that specific section. Schedule 15 of the regulations translates the penalty units into monetary amounts. For example, a breach of section 86 of the act, trust money to be paid into a trust account, incurs a maximum fine of 100 penalty units which translates into a sum of $1,100. Unfortunately, the fine or other punishments is only part of the consequences of breaching the legislation. There can be a significant impact on the agencies brand, and the loss of confidence in the agency by current and prospective clients should the offence become public knowledge. This would have a severe impact on the agency’s bottom line and could cause the business to falter or shut-down severe circumstances. With the introduction of the new legislation in March of 2020, NSW Fair Trading has the power to close an agency while they conduct their investigation into any wrongdoings; this would most certainly impact on the agencies reputation and any current and future business dealings. Impact on clients and business Fraud and inaccuracies can have an impact on clients whose funds are held in trust. Imagine not being able to cover the mortgage payments because money has not been released from the trust account on time. Properties for sale may not settle if the 10% deposit has not been banked and is not available. In both these cases, clients may suffer financial difficulties that may result in damages being sought from the agent. There have been cases recorded where the bond has not been transferred to the rental services section and cannot be repaid to tenants when they vacate their property. Fraud has a serious impact as well on the reputation of the business. The term goodwill is associated with all businesses and is best described as the attracting force of a business. The loss of goodwill results in decreased sales and rental activity, and it is difficult for businesses to survive. This could well be the cause of someone in the business and not the whole business. Guarding against fraud and setting up procedures to minimise the chance are always sought. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 35 of 81 © TAFE NSW 2020
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Both areas can severely impact both our clients and the agency brand and cause our clients to seek the services of a more professional agency. Generally speaking, if the agency makes mistakes, the client will tell more people than they would if the agency does a great job. This could prevent new clients from taking up the services of your agency and gives the agency a bad reputation. Trust account integrity, security and confidentiality integrity This relates to the accuracy and reliability of the trust account. The licensee must check the following to ensure the integrity of the trust accounts: carry out periodic checks on the work of employees carry out monthly trial balances and bank reconciliations maintain control over cheque books and receipt books understanding and operating the computer system carry out internal audits carry out yearly external audits. Security Keeping the agency trust accounts secure, involves several steps: create organisational policy against sharing passwords set up at an authorised deposit institution have individual passwords for each employee and restrict access to what the employee is legally allowed to do back up off-site every night if using a computerised trust account system Confidentiality and privacy Measures to address security are also relevant here. The organisational policy is required to ensure trust account information is kept confidential, and information is not shared or disclosed unless authorised. The licensee must keep records confidential under Schedule 1 of the Property and Stock Agents Regulations 2014 (NSW) and the fiduciary duties. The Privacy Act 1988 (Cth) has the same requirement of confidentiality. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 36 of 81 © TAFE NSW 2020
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Practice activity Activity 2.1: Identifying the responsibilities when transacting trust accounts Answer the following questions. 1. List three trust account responsibilities placed upon the licensee under the supervision guidelines. # Answer 1. 2. 3. 2. List three personal obligation of a real estate staff when administering the trust account? # Answer 1. 2. 3. 3. What impact can trust account fraud or inaccuracies have one the agency and their clients? Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 37 of 81 © TAFE NSW 2020
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Self-check How did you go? You have completed the topic on legislative requirements. Check the boxes for the tasks you feel confident you can complete. ☐ I can explain the roles and responsibilities of personnel for trust account activities. ☐ I can explain the limitations of my role. ☐ I can analyse the responsibilities of the licensee in charge in regards to trust accounts and trust account audits. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 38 of 81 © TAFE NSW 2020
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Topic 3: Trust account transactions and inaccuracies Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 39 of 81 © TAFE NSW 2020
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Overview In this topic, you will learn about: standard trust account transactions trust account documentation monthly processes trust account inaccuracies computerised trust accounting. The activities throughout this resource will assist you in your learning. These activities do not form a part of your final assessment however they will contribute to your understanding of the topic area. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 40 of 81 © TAFE NSW 2020
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Trust account transactions This flow chart shows the movement of funds through the trust accounting cycle. Figure 1 Trust account cycle Types of trust money Monies coming into an agency trust account can include but are not limited to the following: Property management Holding deposits, rent, water, repairs payments, advertising fees, utility fees in commercial premises Property sales Advertising fees, holding deposits, deposits (usually 10% but can vary), 10.7 certificate fees and any other additional charges such as the services of an auctioneer. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 41 of 81 © TAFE NSW 2020 Transaction Trust source documents (trust receipts, cheques,bank deposit slip) Trust cashbooks (receipt journal and payment journal) Trust ledger accounts Trust trial balance and bank reconciliation Reports (itemised landlord statements and settlement statements for vendor)
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Trust receipts and bank deposit slips When the agency receives monies, they must immediately issue the person paying the funds a receipt containing the following information. Unless the money was received via electronic funds transfer in which case the agency will need to issue a receipt within seven days of the client requesting a copy of their receipt. A trust account receipt must contain the following information: date of issue the number of the receipt, which must be in numerical sequence the name of the licensee and the words, ‘ trust account’ the name of the person from whom the monies were received from the name and trust ledger account reference number of the principal on whose behalf the money was received, or in the case of bonds and other similar amounts, the name and number of the ledger account in which the funds are held until distributed what the amount received was for. (particulars of the transaction) the amount of money received (both written and in numbers) and the form of payment, i.e.: whether it is cash, cheque, electronic funds transfer (eft) or other forms. Also, if the receipt relates to rent collected, the following information must be shown: position of the rental account at the date of the receipt being issued (total rent in advance) the date to which the rental has been calculated (paid to date). Here are some trust account receipts for you to review. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 42 of 81 © TAFE NSW 2020
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Figure 2 Property management one—rent Figure 3 Property management two—rent and bond Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 43 of 81 © TAFE NSW 2020
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Figure 4 Sales receipt Clause 18 of the regulations requires all trust monies to be banked within 24 hours or the next business day. See the example of a bank deposit slip. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 44 of 81 © TAFE NSW 2020
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Figure 5 Example of a bank deposit slip Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 45 of 81 © TAFE NSW 2020
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Trust account payment documents Trust account payments can only be made in via cheque or electronic funds transfer (EFT). The cheques issued must be: machine numbered marked not negotiable cannot be payable in cash must show the licensee’s firm and the words trust account be signed by the licensee The following information must be recorded for each cheque issued: date of issue, the payee and the amount the cheque was for details to identify the ledger account to be debited the name of the person on whose behalf the cheque was issued sufficient details to identify the cheque and the reason for issuing the cheque The minimum information that should be included on a cheque butt is: date (e.g. 20/10/202X) payment to (e.g. Ron Florencia) reason for payment (e.g. balance of deposit for 25 High St, Maitland) amount (e.g. $12,500). Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 46 of 81 © TAFE NSW 2020
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Figure 6 Example cheque Electronic funds transfer The following information must be retained if using EFT for a trust account payment: the name of the person doing the transfer the reference number and enough information to identify the transfer the date of the transfer, the name of the payee and the amount transferred to or from each ledger account details that identify the ledger accounts to be debited and the name and ledger reference number of each person on behalf of whom the transfer was made the reason for the transfer. Vendor statement A settlement statement must accompany the balance of deposit cheque/EFT that is sent to the vendor post-settlement. This must indicate the amount held in trust and any disbursements made from that amount (see the following example). Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 47 of 81 © TAFE NSW 2020 Note: The two crossed lines in the cheque example mean this cheque has been marked not negotiable.
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Figure 7 Statement example Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 48 of 81 © TAFE NSW 2020
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Practice activity Activity 3.1: Identify trust account transactions Look at the trust receipts provided and identify the transactions that have occurred and the person that would be responsible for the transaction. 1. What transaction occurred in the receipt below and who would be responsible for executing the transaction? Figure 8 Receipt for activity Record your answer in the box provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 49 of 81 © TAFE NSW 2020
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2. What transaction occurred in the receipt below and who would be responsible for executing the transaction? Figure 9 Receipt for activity Record your answer in the box provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 50 of 81 © TAFE NSW 2020
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Trust account cashbooks The details of each transaction are entered into Journals (cash book) from the source documents. The cash book consists of the cash receipts journal and the cash payments journal. All the pages of the cash book must be numbered consecutively. Clause 26 of the regulations states that a licensee must keep a record of daily receipts and payments coming into or out of the trust accounts. All source documents are summarised in these journals. The journals are updated each time funds are entered into the trust account system. They provide a sequential and chronological record of the transaction. This can be done manually. However, agencies now have electronic trust account systems that will automatically complete the journals as monies are receipted into the trust account system. The journals are used to update the trust account ledger and for the preparation of the monthly reconciliation statement. They must contain sufficient information to enable adequate details of the transactions to be posted to the trust ledger. Example cashbook receipt journals Azure Beach Realty Group Property Management Cash Receipt Journal TCR1 DATE REC NO. TYPE RECEIVED FROM ON ACCOUNT OF L.F. (Ledger folio number) TRANS ACTION AMOUNT BANK 1.4.202X Balance B/F 1000 1000 8.4.202X 101 CHQ S Gabrielle M Mitchell 101 2 WKS RENT 790.00 790.00 Azure Beach Realty Group Property Sales Cash Receipt Journal TCR1 DATE REC NO. TYPE RECEIVED FROM ON ACCOUNT OF L.F. (Ledger folio number) TRANS ACTION AMOUNT BANK 1.8.202X Balance B/F 500,000.00 500,000.00 1.8.202X 210 CHQ John Jamerson Jake Wolf to John Jamerson 201 Holding deposit 5000.00 5000.00 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 51 of 81 © TAFE NSW 2020
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Example payment journals Azure Beach Realty Group Property Management Cash Receipt Journal TCR1 DATE CHQ NO. Payee ON ACCOUNT OF L.F. (Ledger folio number) TRANS ACTION BANK 1.8.202X 209 RSS RSS Suspense 250 Bonds 1,200 31.8.202X 210 CHQ John Jamerson 201 Council rates 2,500 Trust account transfer journals Clause 27 of the regulation states, that a licensee must maintain a journal record of all transfers between accounts in the trust account ledger that is not affected by cheque or electronic funds transfer (EFT). Each entry in the journal will contain a narration which will explain what the entry was for. The journal is used to correct errors, make transfers from the wrong account to the correct account. The journal must contain the following: the date of the transfer the amount transferred to and from each ledger account the names of all ledger account to be debited or credited the relevant reference number or other identification sufficient particulars to identify the transfer and the reason for the transfer. Each transfer, when entered in the journal, is to be numbered consecutively. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 52 of 81 © TAFE NSW 2020
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Figure 10 Transfer journal example Trust account ledgers Clause 38 of the regulations state that a licensee must maintain a separate ledger account for trust money received on behalf of or paid to each person on behalf of whom the agent act and that the ledger must include the name of the person, a reference number or other identification and particulars of each transaction. Trust Ledgers consist of individual accounts, one for each principal, one for the trust bank and suspense (holding account) for rental bond monies. Some agencies may have a ledger where unidentified monies from EFT transactions are held until the owner of those funds is identified. If the transaction is completed manually, each receipt must be brought in against the correct principal, or suspense account and a total for the month must be entered in the trust bank ledger. Section 28 of the regulation requires that a licensee maintain a trust ledger for trust money received. Trust Ledger accounts must show the following information: date (the date of the transaction) particulars (description of the transaction) reference (the reference number (name and page) of the journal from which the transaction was transferred (posted)) debit (transactions of a debit nature) credit (transactions of a credit nature) balance (the balance after each transaction and whether it is a debit (Dr) or credit (Cr) balance Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 53 of 81 © TAFE NSW 2020
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When using a computerised trust account system, the ledger will be completed automatically every time a transaction is receipted. Practice activity Activity 3.2: Identify trust account transactions Look at the trust ledger provided and identify the transaction that has occurred and the person that would be responsible for the transaction. 1. What transaction occurred in the receipt below and who would be responsible for executing the transaction? DATE REC NO. TYPE RECEIVED FROM ON ACCOUNT OF L.F. (Ledger Folio number) TRANS- ACTION AMOUNT BANK 1.8.202X Balance B/F 500,000.00 500,000.00 1.8.202X 210 CHQ John Jamerson Jake Wolf to John Jamerson 201 Holding deposit 5000.00 5000.00 Record your answer in the box provided. 2. Transfer the information from the trust cashbook into the ledger. A/C Name J Wolf A/C # 102 Date Particulars LF Debit Credit Balance Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 54 of 81 © TAFE NSW 2020
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3. One of the staff members has accidentally placed a bond payment in the landlord ledger. You are to complete a transfer journal and place the money in the Rental Service section suspense ledger (A/C 130). You will also need to adjust the owner ledger below. See the current ledger below for details. A/C Name Bernie Bracken A/C # 110 Date Particulars LF Debit Credit Balance 5.2./202X Rent R Jones TC1 800.00 800.00 CR Bond R Jones TC1 1600.00 2400.00 CR Transfer ledger. Date Particulars Ledger ref. DR Transfer from $ c CR Transfer to $ c Signature of licensee Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 55 of 81 © TAFE NSW 2020
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Complete a vendor statement using the following information: vendor: Harry Williams date: 23.6.202X property: 546 Lonf Road Wollongong NSW settlement date: 23.06.202X purchaser: Jane Greenwald monies held in trust: 23,000.00 (10% deposit) commission: $13,000.00 Complete the forst section of the vendor statement. Azure Beach Realty Group 144 Symmons Road Azure Beach NSW ACN: 984745632X Statement of Account for Date: Property Address: Settlement Date: Record your entries in the next section. DEBIT $ CREDIT$ Funds held in trust: Disbursements Commission cheque to Azure beach realty Group, as per agreement (GST inclusive) Settlement cheque to Notice: Section 36, Property Stock and Business Agents Act 2002. If you dispute part or all of the amount specified in this statement, and if you have been unable to resolve the dispute, you may apply to the Civil and Administrative Tribunal for a determination of the matter. Legal action to recover the amount specified in this statement account cannot be commenced until 28 days after it has been served on you. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 56 of 81 © TAFE NSW 2020
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Trial balance and bank reconciliation Once you have posted all the transactions to the ledger and finalised the balances for the month, it is time to extract a trial balance. Clause 29, of the Property and Stock Agents Regulations 2014, requires the licensee to prepare a trial balance statement of all current ledger accounts held within 21 days from the end of each month. The trial balance statement must: specify the month to which it refers and the date of its preparation, and list each ledger account that does not have a zero balance at the end of that month by stating the name of the person on behalf of whom the agent is acting, the reference number or other identification and the balance of the account at the end of the month, and show the total of the ledger account balances at the end of that month, and show a comparison between that total and the balance in the cash book reconciled with the balance in the trust account as required by clause 26 (6). A trial balance only involves ledger accounts with a balance. Any accounts with a nil balance are not included. The total number of debits should be equal to the total credits. Be aware that a trial balance which balances does not necessarily indicate that all the ledger posting are correct, it only shows that that equal debits and credits have been recorded. In property management, it is common practice to complete a trial balance on a more regular basis as it is easier to identify and amend errors in a daily or weekly trial balance rather than a monthly trial balance. Resources Additional resources The Real Estate Institute of NSW has created a supervision guideline checklist to assist with the completion of a trial balance. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 57 of 81 © TAFE NSW 2020
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Example trial balance Figure 11 Trial balance In the above example, you can see that the trust bank account contained $3,220, the ledgers listed all contained funds as you can see above. The total of the individual ledgers should equal the total monies in the trust bank account. Bank reconciliations and bank statements A bank statement is a listing of cash and cheque transaction in date order from the financial institution. It shows the monies that came in and out of the trust account for a specific period. Clause 26 of the regulations states that the licensee must, at the end of each named month, prepare a statement reconciling the balance of the licensee’s trust account with the balance of the related cash book or another record. You may recall that after posting to the ledger, we listed all the closing balances that we held on behalf of the principals in a trial balance. Now we are going to compare the agent’s records (cashbook) with the bank’s statement and prepare a bank reconciliation. The Bank Reconciliation provides an essential control over the many cash transactions processed by a Real Estate Agency. The Act, requires that the reconciliation process be carried out every month. Of course, if you receive Bank Statements weekly or fortnightly, you can prepare them more often if you wish, but monthly preparation is the minimum. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 58 of 81 © TAFE NSW 2020
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A bank reconciliation shows the balances as per the cashbook and the bank statement at a particular date and the differences between the two. We calculate the balance in the bank account, based on our transactions and information, the carried down balance in the cashbook. The bank also calculates the balance that it thinks is in the account, based on transactions presented to it during the same financial period (month), the closing balance on the bank statement. Often neither is 100% correct! The purpose of a bank reconciliation is to calculate the correct balance in the trust bank account at a particular date. You do this by the following: check the details, transactions, accuracy and balance of the cashbook against the bank statement make any necessary adjustments or additions to our cashbook notify the bank of any of errors or adjustments that it may need to address if any carrying any bank errors forward until they are resolved prepare the Bank Reconciliation and in doing so, calculating the correct trust bank balance. In other words, we determine and account for the differences between the two balances and calculate the actual balance in the bank account. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 59 of 81 © TAFE NSW 2020
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Figure 12 Bank reconciliation example Sources of inaccuracies in trust accounts There are many ways that errors can occur during the processing of transactions. Here are a few common errors and remedies: 1. Entering the transaction into the wrong client’s ledger, using a journal to transfer the transaction to the correct client’s ledger. 2. Having unqualified or inexperienced personnel dealing with trust accounts, all software providers offer training. Provide mentoring to inexperienced personnel. 3. Unexplained transactions, deposits or payments. Deposits made into the trust account by clients without names or identification on the bank statement. Check tenants in arrears and contact them to find out whether they have paid their rent. Deposits and payments, under the Act, require a reason for the transaction. 4. Unexplained adjustments in the bank reconciliation. These will attract the attention of an auditor so any adjustments should have a reason and detailed information. Correct as soon as possible. 5. Monetary differences between receipts and payments and bank statement. These must be corrected. For example, money may be receipted at $2350 but the deposit on the bank statement is $2305. These are corrected either in the journals or in the bank reconciliation but never both. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 60 of 81 © TAFE NSW 2020
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6. Not backing up daily. Trust accounts should be backed up and a copy kept offsite (in the cloud, for example). In the event of a natural disaster (fire or flood) data may be lost. 7. Not reconciling weekly or daily in most cases. Mistakes are harder to find and correct if left too long. 8. Disbursing uncleared cheques. Dishonoured cheques will result in a client’s ledger being overdrawn which is not compliant with the Act. Allow time for cheques to clear before being disbursed. 9. During the reconciliation process, not ticking the presented cheques off. 10. During the reconciliation process not using the bank’s closing balance to reconcile with the trust cash book account. 11. Bank fees have been deducted from the trust account instead of the general account. Monthly trust account processes We have already discussed the monthly processes that occur in an agency in the previous section of this topic. In summary, section 29 of the Property and Stock Agents Regulations 2014 requires a trial balance to be completed within 21 days after the end of the month. As such at the end of each month, both sales and property management trust accounts must be balanced using an end of month process that ensures that the journals balance with the trial balance and bank reconciliation. The property management department will pay their landlords either at mid-month or end- month or both. They will make sure all of the invoices have been debited against the right landlord, receipt all rent up to that date. Once this process has been completed, the licensee will authorise and sign the disbursement to the landlords, the tradespeople, or other accounts such as the land and water rates and management fees and charges. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 61 of 81 © TAFE NSW 2020
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Computerised trust accounting Agencies don’t necessarily need a computerised system. Those that are starting a new business, perhaps home-based, may want to run their Trust Accounts manually. It all depends on the volume of transactions and the cost and time associated with the introduction of a computerised system. Most of these businesses are mainly sales orientated businesses with a minimal amount of rental properties. Real Estate Legislation does not require agencies to become computerised. Balancing your trust accounts manually though takes time and at the end of each month reconciling the rentals and issuing manually typed statements. As a business grows the cost efficiency of computerised processes become more cost- effective and make for the best use of the time available. Security can sometimes be an issue as well. Modern software systems have evolved to the point where access to information is virtually instantaneous, and month-end reconciliations and payments to owners and creditors can be completed very quickly and easily. Most Landlords require their monies to be paid into their account as soon as possible after the end of the month, as Banks automatically withdraw payment for any mortgages from the Landlord’s account early into the following month. An added advantage of data collected by the software includes financial as well as non- financial information. An example of non-financial is owner and tenant details, inspection history, maintenance and repair history, notes, reminders, sales and booking details, creditor information and tradesmen details. Software packages There are numerous software packages on the market. Those that are Australian orientated are the most sought after, as these are regularly maintained and updated with any Legislation changes that come through. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 62 of 81 © TAFE NSW 2020
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Figure 13 Software cd DVD digital disc program pack Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 63 of 81 © TAFE NSW 2020
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Table 4 Advantages and disadvantages of a computerised system. Advantages Disadvantages Increases efficiency. Reliance on the system can lead to neglect or laziness by staff. High level of accuracy. The system can become out-dated if the software is not properly maintained and updated. Saves time. Initial purchase, set up costs and ongoing maintenance can be expensive. Access to information is virtually instantaneous. Data can be lost with the loss of power. Saves money, once fully operational. Fraudulent activity can be difficult to detect. Less staff required to run the system, freeing them up to attend to other duties. Staff need to be trained and keep up to date with changes. Preparation and printing of information, Reports or Statements are quick and easy. Soft and hard copy information needs to be secured from both physical and electronic damage and loss. The system can generate the necessary documents, receipts, automatically transfer information, update the cashbook, trust ledger, trial balance and generate all reports and statements. Errors and internal workings are not visible and could go undetected or take longer to detect and fix. Maintains the trust records under the requirements of the Privacy Act and regulations. Security breaches can lead to manipulation of information, theft or fraud. Minimises errors during the processing of the information and generation of reports. Back-ups need to be maintained off the premises. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 64 of 81 © TAFE NSW 2020
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Advantages Disadvantages Automatically updated to comply with changes to legislation and procedures. Initial set up can be time-consuming. Lack of corruption in electronic data integrity. Incorrect data entry can result in inconsistencies. Information privacy between collection and dissemination of data. The difficulty of using data while protecting privacy preferences and personally identifiable information. Higher measures of having data confidentiality. Unauthorised people can access and share client’s data. Computerised trust accounting legal requirements Computer systems control If a licensee maintains trust account records utilising a computer system, the licensee must comply with these regulations concerning the records. Changes to records The licensee must maintain a record, compiled in chronological sequence, of all changes (including creation, amendment or deletion) to any of the following information: the name of the person on behalf of whom the licensee acts the address of the person on behalf of whom the licensee acts the code reference number, if any, of the person on behalf of whom the licensee acts agency description trust account number disclosing the details of the information before and after the change. Journal entries The licensee must ensure, in respect of any journal: that entries balance before those entries are made in the ledger, and Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 65 of 81 © TAFE NSW 2020
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that any journal reference numbers are allocated in sequence under program control. Ledger account—debit balance The licensee must ensure in respect of any ledger that no program is capable of accepting the entry of a transaction resulting in a debit balance to an account. Unless a contemporaneous record of the transaction is made in such a manner as to enable the production in permanent legible form, on-demand, of a separate chronological report of all such occurrences. Deleting computer records The licensee must ensure in respect of any ledger that no program enables the deletion of an account unless: the balance of the account is zero, and the account when deleted is retained (as it was immediately before deletion) in a form from which the information can be produced on demand in a permanent legible form in the English language. Visible records The licensee must ensure that any entry in a record produced in visible form appears in chronological sequence. Reports The licensee must ensure that a report, or each page of or entry in a report, is numbered sequentially under program control in a manner that enables the completeness of the records required to be kept by this part to be conveniently verified. Amendments The licensee must ensure that no amendment to the particulars of a transaction already recorded can be made otherwise than by a separate transaction affecting the amendment. The licensee must ensure that each program requires input in each field of a data entry screen intended to receive information required by this part to be included in records. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 66 of 81 © TAFE NSW 2020
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Back-up The licensee must ensure that either: 1. A back-up copy of all records to which this clause refers is made on a computer disk or magnetic tape or by other electronic means not less frequently than once each month, and the most recent back-up copy is kept in such a place at a separate location that any incident (such as fire, or a power or disk failure) that could adversely affect the records would not also affect the back-up copy, or 2. All records to which this clause refers are backed up using cloud technology through the internet not less frequently than once each month. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 67 of 81 © TAFE NSW 2020
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Answers to practice activities Activity 1.1: Multiple choice Answer the following two questions. Click/check the box in the answer column to select your answer choice. Answers are at the end of your workbook.. 1. The purpose of a real estate trust account is: # Choices Answer A. To keep money safe ☐ B. To hold funds in trust on behalf of our clients ☒ C. To use to pay agency accounts ☐ D. Residential Tenancies Regulation 2019 (NSW) ☐ 2. Identify the pieces of legislation that outline the requirements for a licensee to maintain separate trust accounts for sales and management. # Choices Answer A. Property and Stock Agents Act 2002 (NSW) ☒ B. Property and Stock Agents Regulation 2014 (NSW) ☒ C. Residential Tenancies Act 2010 (NSW) ☐ D. Comply with the Residential Tenancies Regulation 2019 (NSW) ☐ Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 68 of 81 © TAFE NSW 2020
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Activity 1.2: Trust account legislation 1. Describe two trust account records that a licensee must keep. 1. What form must payments from the trust account take? 2. List three requirements for issuing a cheque from the trust account. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 69 of 81 © TAFE NSW 2020 Cashbooks, ledgers, trial balance, reconciliations, cheque butts, receipts, audits etc EFT or cheque Answer includes any of the following: • Date of issue. • The number of the receipt, which must be in numerical sequence. • The name of the licensee and the words trust account • The name of the person from whom the monies were received • The name and trust ledger account reference number of the principal on whose behalf the money was received, or in the case of bonds and other similar amounts, the name and number of the ledger account in which the funds are held until distributed. • What the amount received was for (particulars of the transaction). • The amount of money received (both written and in numbers) and the form of payment, i.e.: whether it is cash, cheque, electronic funds transfer (EFT) or other forms. Also, if the receipt relates to rent collected, the following information must be shown: • position of the rental account at the date of the receipt being issued (totalrent in advance) • the date to which the rental has been calculated. (paid to date).
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3. What are the penalty for breaching section 25 of the Regulations, in penalty point and monetary terms? Maximum penalty: (a) 40 penalty units in the case of a corporation, or $1,100 (b) 20 penalty units in any other case or $550 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 70 of 81 © TAFE NSW 2020
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Activity 2.1: Identifying the responsibilities when transacting trust accounts Answer the following questions. 1. List three trust account responsibilities placed upon the licensee under the supervision guidelines. # Answer 1. Answers include any of the following: must hold a class 1 license responsible for all trust account operations ensure all trust accounts are maintained under part 7 of the act responsible for all trust account operations prepare and maintain a document that identifies the licensee in charge and the accounts for which they are responsible have written procedures for trust accounts transactions and reviews review all trust transactions conducted at least once a month verify all incoming and outgoing trust transactions with financial institution records separate logins for all persons who have trust account access ensure that any adjustments to accounts are evidenced at the end of month reconciliation all rental monies owed to landlords are paid to owners at the end of each calendar month the only person that can approve trust account withdrawals must have separate accounts for sales and management maintain records as set out in the act and regulations must adhere to all legislative requirements listed Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 71 of 81 © TAFE NSW 2020
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2. List three personal obligation of a real estate staff when administering the trust account? # Answer 1. Answers include any of the following: must adhere to all legislative requirements listed below receive and trust monies and enter into trust account system issue receipts maintain the security of the password issued to access the trust account carry out any transactions with due diligence cannot withdraw monies from the trust accounts. 3. What impact can trust account fraud or inaccuracies have one the agency and their clients? Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 72 of 81 © TAFE NSW 2020 Loss of business and reputation.
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Activity 3.1: Identify trust account transactions Look at the trust receipts provided and identify the transactions that have occurred and the person that would be responsible for the transaction. 1. What transaction occurred in the receipt below and who would be responsible for executing the transaction? Figure 14 Receipt for activity Record your answer in the box provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 73 of 81 © TAFE NSW 2020 Generally reception, sales assistant or salesperson, but can be completed by a registered person or class 1 or 2 license holder. 10% deposit of $50,000.00 was received from Francene Harimatis for the sale of 125 John Street Newcastle, owned by John James.
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2. What transaction occurred in the receipt below and who would be responsible for executing the transaction? Figure 15 Receipt for activity Record your answer in the box provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 74 of 81 © TAFE NSW 2020 Generally reception or management staff, but can be completed by any registered person or class 1 or 2 license holder.
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Activity 3.2: Identify trust account transactions Look at the trust ledger provided and identify the transaction that has occurred and the person that would be responsible for the transaction. 1. What transaction occurred in the receipt below and who would be responsible for executing the transaction? DATE REC NO. TYPE RECEIVED FROM ON ACCOUNT OF L.F. (Ledger Folio number) TRANS- ACTION AMOUNT BANK 1.8.202X Balance B/F 500,000.00 500,000.00 1.8.202X 210 CHQ John Jamerson Jake Wolf to John Jamerson 201 Holding deposit 5000.00 5000.00 Record your answer in the box provided. 2. Transfer the information from the trust cashbook above into the ledger. A/C Name J Wolf A/C # 102 Date Particulars LF Debit Credit Balance 1.8.202X Holding deposit John Jamerson TCR1 5000 5000 CR Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 75 of 81 © TAFE NSW 2020 A holding deposit of $5,000 was received from John Jamerson for jake Wolfs property.
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3. One of the staff members has accidentally placed a bond payment in the landlord ledger, and you are to complete a transfer journal and place the money in the Rental Service Section Suspense ledger (A/C 130). You will also need to adjust the owner ledger below. See the current ledger below for details. A/C Name Bernie Bracken A/C # 110 Date Particulars LF Debit Credit Balance 5.2./202X Rent R Jones TC1 800.00 800.00 CR Bond R Jones TC1 1600.00 2400.00 CR Transfer ledger. Date Particulars Ledger ref. DR Transfer from $ c CR Transfer to $ c Signature of licensee 5.2.202X R Jones 110 1600 RSS Bond monies incorrectly place in owner ledger, error rectified by transferring the bond from R Jones to RSS suspense ledger account. 130 1600 R Franks Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 76 of 81 © TAFE NSW 2020
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Complete a vendor statement using the following information: vendor: Harry Williams date: 23.6.202X property: 546 Lonf Road Wollongong NSW settlement date: 23.06.202X purchaser: Jane Greenwald monies held in trust: 23,000.00 (10% deposit) commission: $13,000.00 Complete the forst section of the vendor statement. Azure Beach Realty Group 144 Symmons Road Azure Beach NSW ACN: 984745632X Statement of Account for Harry Williams Date: 23.6.202X Property Address: 546 Lonf Road Wollongong NSW Settlement Date: 23.6.202X Record your entries in the next section. DEBIT $ CREDIT$ Funds held in trust: 10% Deposit (Jane Greenwald) 23,000.00 Disbursements 13,000.00 Commission cheque to Azure beach realty Group, as per agreement (GST inclusive) Settlement cheque to 10,000.00 Notice: Section 36, Property Stock and Business Agents Act 2002. If you dispute part or all of the amount specified in this statement, and if you have been unable to resolve the dispute, you may apply to the Civil and Administrative Tribunal for a determination of the matter. Legal action to recover the amount specified in this statement account cannot be commenced until 28 days after it has been served on you. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 77 of 81 © TAFE NSW 2020
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Hyperlinks Hyperlink text Hyperlink The Property and Stock Agents Act 2002 https://www.legislation.nsw.gov.au/ Property and Stock Agents Regulations 2014 https://www.legislation.nsw.gov.au/ Section 88 https://www.legislation.nsw.gov.au/ Schedule 1.22 https://www.legislation.nsw.gov.au/ NSW Fair Trading https://www.fairtrading.nsw.gov.au/housing-and- property/property-professionals/running-a-property- agency/trust-accounts 86 https://www.legislation.nsw.gov.au/ 87 https://www.legislation.nsw.gov.au/ 88 https://www.legislation.nsw.gov.au/ 89 and 92 https://www.legislation.nsw.gov.au/ 90 https://www.legislation.nsw.gov.au/ 103-104 https://www.legislation.nsw.gov.au/ 111-116 https://www.legislation.nsw.gov.au/ Schedule 1.22 https://www.legislation.nsw.gov.au/ Schedule 15 https://www.legislation.nsw.gov.au/ unclaimed monies page https://www.legislation.nsw.gov.au/view/html/inforce/ Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 78 of 81 © TAFE NSW 2020
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Hyperlink text Hyperlink current/act-1995-075 supervision guidelines https://www.fairtrading.nsw.gov.au/housing-and- property/property-professionals/running-a-property- agency/supervision-guidelines Property and Stock Agents Act 2002 (NSW), https://www.legislation.nsw.gov.au/ Property and Stock Agent Regulations 2014 (NSW), https://www.legislation.nsw.gov.au/ Secretary’s Guidelines for the Proper Supervision of the Business of a Licensee under s 32 of the act https://www.fairtrading.nsw.gov.au/search? query=download%20the%20supervision%20guidelines Unclaimed Money Act 1995 (NSW) https://www.legislation.nsw.gov.au/ NSW Fair Trading https://www.fairtrading.nsw.gov.au/housing-and- property/property-professionals/running-a-property- agency/trust-accounts Schedule 15 of the regulations https://www.legislation.nsw.gov.au/ 1186195380 https://www.gettyimages.com.au/detail/photo/houses- streets-suburb-on-edge-of-city-urban-sprawl-royalty- free-image/1186195380?adppopup=true Supervision guideline checklist https://www.reinsw.com.au/REINSW_Docs/Supervision %20guidelines/SG2%20Checklist%20V25012008.pdf Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 79 of 81 © TAFE NSW 2020
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Image attributions Image Page # Attribution Cover 1 © Getty Images copied under licence Credit: Andrew Merry Creative #: 1186195380 Topic 1, 2 and 3 covers 8, 27 & 36 © Getty Images copied under licence Credit: Andrew Merry Creative #: 1186195380 Figure 1 Trust account cycle 41 SmartArt graphic © TAFE NSW 2020 Figure 2 Property management one—rent 43 © TAFE NSW 2020 Figure 3 Property management two—rent and bond 43 © TAFE NSW 2020 Figure 4 Sales receipt 44 © TAFE NSW 2020 Figure 5 Example of a bank deposit slip 45 © TAFE NSW 2020 Figure 6 Example cheque 47 © TAFE NSW 2020 Figure 7 Statement example 48 © TAFE NSW 2020 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 80 of 81 © TAFE NSW 2020
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Image Page # Attribution Figure 8 Receipt for activity 49 © TAFE NSW 2020 Figure 9 Receipt for activity 50 © TAFE NSW 2020 Figure 10 Transfer journal example 53 © TAFE NSW 2020 Figure 11 Trial balance 58 © TAFE NSW 2020 Figure 12 Bank reconciliation example 60 © TAFE NSW 2020 Figure 13 Software cd DVD digital disc program pack 63 Image by Gerd Altmann from Pixabay copied and used under Pixabay License Figure 14 Receipt for activity 73 © TAFE NSW 2020 Figure 15 Receipt for activity 74 © TAFE NSW 2020 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 81 of 81 © TAFE NSW 2020
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52 NOVEMBER 2023 /FIN2203/FIN2063/FIN301 ASSIGNMENT You are required to: i. Select THREE(3) companies in different industries, listed under Bursa Malaysia, and make sure each company that you choose used different policies. Download any financial statement that is relevant for you for this assignment. ii. For each of the company, please identify the following: Permanent Asset Temporary Current Asset Permanent Sources of financing Temporary Sources of financing Spontaneuos Sources of financing iii. From the statements, justify your answer on working capital financing policies adopted by each company. Explain. iv. Assess for each of the companies's: a) Operating cycle. b) Cash conversion cycle. c) Annual savings if the operating cycle is reduced by 10 days.
ADMN 2906 Discussion Forum #2 In this discussion I would like you to share your experience(s) with workplace and/or student Health and Safety training that prepared you to be successful in the workplace/academic setting. For example: What kind of training did you receive? Was it effective? Did you use your new knowledge at work or at school? Requirements for the Discussion forums: 1. A substantive introductory posting which will provide a thoughtful reflection on the question posed. This posting will be between 200-300 words. (3 points) 2. A response to a posting that stimulates an effective and thoughtful dialogue (100-200 words) that contributes to and keeps the discussions interesting and academic. (2 points) Hide Transcribed Text ADMN 2906 Discussion Forum \#2 In this discussion I would like you to share your experience(s) with workplace and/or student Health and Safety training that prepared you to be successful in the workplace/academic setting. For example: What kind of training…
QUESTION 1   The trial balance of The Parker Exclusive Mens Clubs at 31th May 2020 is as follows       GHS Accumulated fund (1/06/2019)   48002400 Massage Palour inventory at beginning (1/06/2019)   9153000 Massage Palour Purchases   17221200 Building (Cost)   43459800 Equipment (Cost)   5424000 Furniture and fittings (Cost)   3390000 Subscriptions   4068000 Affiliation Fees   508500 Savings Account   11526000 Venue of the "Weekend in Paradise Trip"   237300 Executive Mens Club Entrance fees   406800 Massuer's Wages and Salaries   1695000 Accumulated Depreciation Building 17383920   Equipment 1356000   Furniture and Fittings 339000 Salaries   1627200 Rent   650880 "Weekend in Paradise Trip" expenses   406800 Administrative expenses   1179720 Interest on Savings account   644100 Sale of "Weekend in Paradise Trip" tickets   5152800 Bank…
Fact Finding of requirements on Financial advisory service registration in AustraliaAssuming after graduation you would like to work as a financial adviser. Go to the website ofAustralian Securities and Investment Commission, do a fact finding and present an analysisof financial advisor registration to identify whether you are qualified and what steps shouldbe taken to be a financial adviser in Australia. The following questions should be addressed:(1) What is the ASIC’s Financial advisers register?(2) Who should be on the Register, who are not on the Register and who updates theregister?(3) What information should be on the Register?(4) What are the relevant financial products for a financial advisor?(5) What are the professional standards applied for a financial advisor.
Acounting Questions  • If  the chance to go back in time and change anything about acounting Professionexperience, what would that be?• Do you agree with Donald Schön's teachings that “reflecting-in-practice is essentialfor life-long learning and professional development”?
Live Class Wed January 27, 2021 x 9 Dashboard x + - edugen.wileyplus.com/edugen/student/mainfr.uni en Assignment + * 引 CALCULATOR FULL SCREEN PRINTER VERSION 4 ВАСK NEX OURCES Exercise 1-14 (Part Level Submission) g 2021 Cheyenne Corp., a public camping ground near the Four Corners National Recreation Area, has compiled the following financial information as of December 31, 2019. Revenues during 2019-camping fees $190,400 Notes payable $81,600 1-4 Revenues during 2019-general store 63,920 Expenses during 2019 204,000 1-5 1-6 Accounts payable 14,960 Supplies on hand 3,400 Cash on hand 27,200 Common stock 27,200 Original cost of equipment 143,480 Retained earnings ? 1-8 e1-9 e 1-11 w14 v 1-5 Fair value of equipment 190,400 v (a) Your answer is correct. Determine Cheyenne Corp.'s net income for 2019. 11 14 (Part mission) Cheyenne Corp.'s net income 50320 -4A (Part mission) SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER re Eults by Study LINK TO TEXT VIDEO: SIMILAR EXERCISE Attempts: 1 of…
nt Home Content CengageNOWv2| Online teach x Mail - Niyonzima Focus - Ou x + cengagenow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession. * A Calculator A $375,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $320,000. Journalize the redemption of the bonds. If an amount box does not require an entry, leave it blank. Cash Bonds Payable Gain on Redemption of Bonds Cash
What is the correct answer A thru D
ccounting | Spring 2023 uiz Course Home - kar X K Chapter 9 Quiz OA. $18,200 OB. $18,800 OC. $17,500 O D. $20,300 mylab.pearson.com Question 5 of 10 X G At year-end, Snow 0 4 kara harper 04/09/23 10:36 AM This quiz: 10 point(s) possible This question: 1 point(s) possible ? Submit quiz Buddy Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $800. During the year Buddy wrote off uncollectible receivables of $2,100. Buddy recorded Bad Debts Expense of $2,800. Buddy's year-end balance in Allowance for Bad Debts is $1,500. Buddy's ending balance of Accounts Receivable is $20,300. Compute the net realizable value of Accounts Receivable at year-end.
The personal information collected by CRA on the T1 return is   Question 3 options:   is shared with specific other parts of the government, such as Elections Canada   is shared with all other departments of the federal government.   only for CRA use   is readily accessible by everyone in Canada
2019 COBIT Principle 1 Each enterprise needs a governance system to satisfy stakeholder needs and to generate value from the use of I&T. Value reflects a balance among benefits, risk and resources, and enterprises need an actionable strategy and governance system to realize this value. Current Practice Recommendation Principle 2 A governance system for enterprise I&T is built from a number of components that can be of different types and that work together in a holistic way. Current Practice Recommendation
PG Campus PG Campus ←Unit 5 Lab Assignment 302 PG Campus Unsplash B Question 1 of 7 View Policies Current Attempt in Progress Unsplash 1. Fin Calculator - Calcul... 2. 3. 4. Cullumber Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. X Grades - AC302 Intermediate X The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800. The company's funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020. As of January 1, 2020, the company had a projected benefit obligation of $899, 100, an accumulated benefit obligation of $797,300, and a debit balance of $398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 8%. No gains or losses…
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