California Real Estate SalespersonPractice of Real Estate and DisclosuresMedium
Under DRE trust fund accounting requirements, how often must a broker perform a written reconciliation comparing the trust account bank balance with the broker's separate record of individual client balances?
- AAnnually
- BQuarterly
- CWeekly
- DMonthly
Show answer & explanationAnswer & explanation
Correct answer: D. Monthly
California regulations require brokers to reconcile trust account records monthly, ensuring the bank balance matches the sum of individual beneficiary balances and identifying discrepancies quickly.
Why the other options are wrong
- A. Annual reconciliation would allow errors to go undetected far too long.
- B. Quarterly is too infrequent under DRE rules.
- C. Weekly reconciliation is not the mandated interval.
Trust Account Reconciliation
Brokers must reconcile trust fund bank balances against their separate accounting records on a monthly basis.
- Required under Commissioner's Regulations
- Detects shortages or errors quickly
- Failure to reconcile can trigger DRE discipline
Memory trick: Every month, balance the trust — or risk a DRE bust.