CPPREP4005_SW_1of1

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TAFE NSW - Sydney Institute *

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2320

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Accounting

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Feb 20, 2024

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docx

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Student workbook CPPREP4005 Prepare to work with real estate trust accounts
TAFE NSW would like to pay our respect and acknowledge Aboriginal and Torres Strait Islander Peoples as the Traditional Custodians of the Land, Rivers and Sea. We acknowledge and pay our respect to the Elders, both past and present of all Nations. Version: 20200817 Date created: 15 April 2019 Date modified: 17 August 2020 For queries contact: Technology and Business Services Skillspoint © TAFE NSW 2020 RTO Provider Number 90003 | CRICOS Provider Code: 00591E This resource can be found in the TAFE NSW Learning Bank. The content in this document is copyright © TAFE NSW 2020 and should not be reproduced without the permission of TAFE NSW. Information contained in this document is correct at time of printing: 17 February 2024. For current information please refer to our website or your teacher as appropriate. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 3 of 81 © TAFE NSW 2020
Contents Icon legends ................................................................................................................................ 5 Getting started ............................................................................................................................ 6 What will I learn by completing this workbook? .................................................................... 6 Video: 11 real estate agents and trust accounts .................................................................... 7 Topic 1: Trust accounts and legislation ................................................................................. 8 Overview ..................................................................................................................................... 9 Purpose of trust accounts ......................................................................................................... 10 Activity 1.1: Multiple choice ................................................................................................. 12 Trust account legislation ........................................................................................................... 13 Knowledge of the Act and regulations ................................................................................. 13 Licensee must ensure employees comply with the Act and regulations ............................. 13 Legislation tables .................................................................................................................. 14 Opening a trust account in NSW ............................................................................................... 18 Requirements when opening a trust account ...................................................................... 18 Audit of licensee’s records ........................................................................................................ 21 Purpose of an internal audit ................................................................................................. 21 Purpose of an external audit ................................................................................................ 21 Legal requirement ................................................................................................................ 21 Audit period .......................................................................................................................... 22 Unclaimed trust monies ....................................................................................................... 24 Additional resources ............................................................................................................. 24 Activity 1.2: Trust account legislation .................................................................................. 25 How did you go? ................................................................................................................... 26 Topic 2: Trust account controls and responsibilities ........................................................... 27 Overview ................................................................................................................................... 28 Trust account obligations and responsibilities .......................................................................... 29 Trust account fraud .............................................................................................................. 31 Internal controls to prevent fraud ....................................................................................... 31 Penalties for trust account offences and impact on agency and consumers ...................... 32 Trust account integrity, security and confidentiality integrity ............................................. 33 Activity 2.1: Identifying the responsibilities when transacting trust accounts .................... 34 How did you go? ................................................................................................................... 35 Topic 3: Trust account transactions and inaccuracies ......................................................... 36 Overview ................................................................................................................................... 37 Trust account transactions ........................................................................................................ 38 Types of trust money ............................................................................................................ 38 Trust receipts and bank deposit slips ................................................................................... 39 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 4 of 81 © TAFE NSW 2020
Trust account payment documents ..................................................................................... 43 Electronic funds transfer ...................................................................................................... 44 Vendor statement ................................................................................................................ 44 Activity 3.1: Identify trust account transactions .................................................................. 45 Trust account cashbooks ...................................................................................................... 47 Activity 3.2: Identify trust account transactions .................................................................. 50 Trial balance and bank reconciliation .................................................................................. 53 Additional resources ............................................................................................................. 53 Bank reconciliations and bank statements .......................................................................... 54 Sources of inaccuracies in trust accounts ............................................................................ 56 Monthly trust account processes ......................................................................................... 57 Computerised trust accounting ............................................................................................ 58 Software packages ................................................................................................................ 58 Computerised trust accounting legal requirements ............................................................ 60 Answers to practice activities .................................................................................................... 63 Activity 1.1: Multiple choice ................................................................................................. 63 Activity 1.2: Trust account legislation .................................................................................. 64 Activity 2.1: Identifying the responsibilities when transacting trust accounts .................... 66 Activity 3.1: Identify trust account transactions .................................................................. 68 Activity 3.2: Identify trust account transactions .................................................................. 70 Hyperlinks .................................................................................................................................. 73 Image attributions ..................................................................................................................... 75 Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 5 of 81 © TAFE NSW 2020
Icon legends Icon Description Practice activity Learning activities help you to gain a clear understanding of the content in this resource. It is important for you to complete these activities, as they will enhance your learning. The activities will prepare you for assessments. Collaboration You will have opportunities to collaborate with others during your study. This could involve group activities such as mini projects or discussions that will enable you to explore and expand your understanding of the content. Self-check An activity that allows you to check your learning progress. The self-check activity gives you the opportunity to identify areas of learning where you could improve. If you identify these, you could review the relevant content or activities. Resources (required and suggested) Additional resources throughout this workbook such as chapters from textbooks, online articles, videos etc. These are supplementary resources, which will enhance your learning experience and may help you complete the unit. Assessment task At different stages throughout the workbook, after you have completed the readings and activities, you may be prompted to complete one or more of your assessment tasks. Video Videos will give you a deeper insight into the content covered in this workbook. If you are working from a printed version, you will need to look these up using the URL provided. Document title: CPPREP4005_SW_1of1 Resource ID: TBS_19_001_CPPREP4005_SW_1of1 Page 6 of 81 © TAFE NSW 2020
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