Trust FundsIntermediateCalifornia Exam

A DRE audit of a broker's trust account reveals that the balance of individual client ledgers is less than the total bank balance. This condition is called:

AA trust fund shortage
BA trust fund overageCorrect
CCommingling
DConversion

Why A trust fund overage Is Correct

Answer B: A trust fund overage

A trust fund overage (or surplus) occurs when the total in the trust account exceeds the sum of all beneficiary ledger balances. This may indicate that the broker has deposited personal funds into the account (commingling).

Exam Tip: Trust Funds

Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.

Key Trust Funds Terms in This Question

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Trust Account RulesDRE Regulation

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