Property Management Licensing Practice Exam · Question
When handling trust funds, what does the term 'reconciliation' refer to?
Reconciliation in trust accounting is the process of regularly comparing the balance in the trust bank account with the individual balances recorded in the clie
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Question: When handling trust funds, what does the term 'reconciliation' refer to?
Answer options:
- Resolving a dispute between a landlord and tenant. ✅ Matching the trust account bank statement balance with the trust ledger balances.
- Negotiating repairs with contractors.
- Comparing the property's actual expenses to its budget.
Correct answer: Matching the trust account bank statement balance with the trust ledger balances.
Explanation: Reconciliation in trust accounting is the process of regularly comparing the balance in the trust bank account with the individual balances recorded in the client (or property) trust ledgers to ensure they match and identify any discrepancies.
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