Trust Accounting Requirements Flashcards
7 cards from real TICO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Trust Accounting Requirements flashcards as text
Under TICO regulations, when a travel agent receives a client's deposit, within how many days must it be deposited into the trust account?
Answer: Within 2 business days of receipt
TICO regulations require that client funds be deposited into the registrant's trust account within 2 business days of receipt.
A travel agency uses trust funds to pay an office utility bill due to a temporary cash-flow shortage. Under TICO rules, this action is:
Answer: A prohibited misappropriation of trust funds
Trust funds belong solely to clients and may never be used for operating expenses regardless of intent to repay.
Which of the following transactions would be a proper withdrawal from a travel agency trust account?
Answer: Remitting funds to a supplier for a client's confirmed booking
Trust funds may only be withdrawn to remit to suppliers for client bookings or to refund clients — not for agency expenses.
An Ontario travel agency has a trust account deficiency discovered during a TICO audit. What is the most likely immediate consequence?
Answer: Suspension or revocation of the agency's registration
A trust account deficiency is a serious violation that can lead to immediate suspension or revocation of the agency's TICO registration.
Under TICO's trust accounting rules, which type of account is generally acceptable for holding client travel funds?
Answer: A designated trust account at a recognized financial institution
TICO requires that client funds be held in a designated trust account at a recognized Canadian financial institution.
A travel registrant sells a tour package and collects the full payment 11 months before departure. Under trust accounting rules, these funds must:
Answer: Remain in trust until remitted to the supplier or refunded
Client funds collected for future travel must remain in the trust account until properly remitted to the supplier or returned to the client.
Which record must a TICO-registered travel agent maintain to demonstrate compliance with trust accounting requirements?
Answer: A trust account ledger reconciled monthly
Registrants must maintain a trust account ledger and perform regular reconciliations to demonstrate that client funds are properly accounted for.