Colorado License LawIntermediateColorado Exam
Under Colorado license law, a broker's trust account must be reconciled:
AOnly at year end for tax purposes
BMonthly to ensure the balance matches all client funds heldCorrect
COnly when an audit is conducted by the Commission, in general
DAnnually at license renewal time
Why Monthly to ensure the balance matches all client funds held Is Correct
Answer B: Monthly to ensure the balance matches all client funds held
Colorado rules require brokers to reconcile their trust accounts monthly to ensure the trust account balance matches the total of all client funds that should be on deposit, helping to detect errors or shortages quickly.
Key Colorado License Law Terms in This Question
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Math Concepts
State-Specific Concepts
Trust Account RulesLicense Law
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