TICO Trust Accounting Requirements 4

Question 1

Under TICO regulations, when a travel agent receives a client's deposit, within how many days must it be deposited into the trust account?

Accepted Answer

Within 2 business days of receipt

Answer

TICO regulations require that client funds be deposited into the registrant's trust account within 2 business days of receipt.

Question 2

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:

Accepted Answer

A prohibited misappropriation of trust funds

Answer

Trust funds belong solely to clients and may never be used for operating expenses regardless of intent to repay.

Question 3

Which of the following transactions would be a proper withdrawal from a travel agency trust account?

Accepted Answer

Remitting funds to a supplier for a client's confirmed booking

Answer

Trust funds may only be withdrawn to remit to suppliers for client bookings or to refund clients — not for agency expenses.

Question 4

An Ontario travel agency has a trust account deficiency discovered during a TICO audit. What is the most likely immediate consequence?

Accepted Answer

Suspension or revocation of the agency's registration

Answer

A trust account deficiency is a serious violation that can lead to immediate suspension or revocation of the agency's TICO registration.

Question 5

Under TICO's trust accounting rules, which type of account is generally acceptable for holding client travel funds?

Accepted Answer

A designated trust account at a recognized financial institution

Answer

TICO requires that client funds be held in a designated trust account at a recognized Canadian financial institution.

TICO - Travel Industry Council of Ontario Practice Test