CPPDSM4006A - Establish and Manage Trust Accounts - Knowledge Questions - Practical Activity - Accounting Assignment Help

Assignment Task:

CPPDSM4006A: Establish and Manage Trust Accounts Accounting Assignment Help

Part A – Knowledge questions

1. Where would a licensee find the legislative requirements to establish and maintain a
trust account?
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2. How does the licensee ensure that the requirements are kept continuously update to date?
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3. What policies and procedures could a licensee establish to ensure that their employees understand and comply with the trust accounting requirements and key principals of accounting in their daily practice?
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4. When selecting a computerised trust accounting programme for an agency the licensee should ensure that it meets the compliance guidelines. What makes the
software compliant in the property industry?

5. Identify 2 (two) source documents and explain their purpose in the trust accounting
process.
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6. What are the 2 methods of withdrawing/disbursing money from a trust account.
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7. Who can sign cheques or effect electronic fund transfers from a trust account?
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8. How can trust accounting records be maintained so that they can be conveniently and properly audited?
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9. How long must trust accounting records be retained?
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10. Where must all transfers between accounts be recorded when they are not effected by cheque or electronic funds transfer?

11. What are the licensee’s duties relating to the preparation a trial balance and bank reconciliation in the trust accounting process?
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12. How does the licensee ensure the security and confidentiality of their client’s funds?
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13. What is the purpose of an audit on the trust account?
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14. What are the duties of an auditor in relation to the trust account?

15. How can a licensee keep themselves and agency staff up to date with knowledge and understanding of the relevant legislation for trust accounting?
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16. “Agents cannot rely solely on statutory appointed auditors to identify theft and fraud in their agency. Misappropriation can occur well before an annual audit is
performed”. What measures or internal controls can a licensee put in place to prevent misappropriation of trust funds?

17. How does the licensee keep clients informed of transactions in the trust account?

Part B - Practical activity

• You have decided to start a property management section in your business ‘Evansdale Realty ‘and are using a manual system until it gets enough clients to
purchase a computerised software programme.
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• You are to complete the appropriate books of account for the dedicated Property Management trust account to ensure an accurate record of client’s transactions,
based on the following scenario:

• Correctly complete the Trust Receipt and Payment Journal (Cashbooks)

• Correctly complete the Trust Ledger and Trust Trial Balance as at 30 May, 2017

• Using the Trust Cash Book and ledger records of Evansdale Realty that you have completed, prepare a Trust Bank Reconciliation so it complies with the Regulations.

You are entitled to assume that the bank statement is correct.

Scenario

• Students to note the following:

• The Trust Cash Book, Trust Ledger, Trust Trial Balance and Bank Reconciliation are to be completed so as to comply with the appropriate legislation in your State.

• The next Trust Receipt Number to be issued is number 101 and the next Trust Cheque number is 710.

• All trust receipts are banked on the day of receipt.

• All receipts and payments are by cheque unless otherwise stated.

• All transactions are GST free unless stated.

• The first client ledger folio number is 110

• Calculate commission on rent received only May 2017

2nd Obtained a new tenant C Moses for M Babbage who paid 2 weeks rent in advance and 4 weeks bond by cheque made payable to agent. Details were:
Bond $1760
Rent $880
Received rent from J English on behalf of H Spicer $450 and $150 for water usage. 3rd Received rent from the tenant C Risbey for the owner M Babbage $900

6th Received $1000 rent from O Cromwell for Y Burgess

7th Paid Darkside Plumbing on behalf of M Babbage $160

Paid outstanding amount due to the Rental Bond Board.

9th Received $450 rent from J English by direct deposit/EFT for H Spicer.

10th Obtained a new tenant L Willis for M Babbage who paid a bond (cheque payable to the agent) as well as 2 weeks rent in advance. Details were:

Bond $2,400
Rent $1,200

16th Obtained new tenant K Cross for a new landlord J Bowers. Tenant paid $800 representing 2 weeks rent in advance and $1600 was paid directly to Rental Bonds Online.

17th Paid outstanding amount due to Rental Bond Board.

18th Paid Metropolitan Water $210 on behalf of H Spicer.

20th Paid Spotless $250 for cleaning of unit belonging to M Babbage

21st Settled with Y Burgess. Property management fees of 7.7% GST inclusive and the balance was paid to landlord.

22nd Paid Evansdale Newspapers the sum of $940.

23rd Received $2000 rent from O Cromwell for Y Burgess

24th Received $400 rent from K Cross for J Bowers.

26th The cheque from K Cross was dishonoured. The tenant agreed to pay cash which was banked today.

30th Received rent from Z Varga $1000 by EFT for Y Burgess

30th Settled the outstanding balance to date with the owners M Babbage, J Bowers and H Spicer. The property management fees are 7.7% including GST calculated on
rent received only (do not included money received for other purposes).

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