TICO Trust Accounting Requirements 5

Question 1

A travel agency is winding down operations. Under TICO requirements, what must happen to the funds remaining in the trust account?

Accepted Answer

They must be refunded to clients or remitted to suppliers as applicable

Answer

Upon closure, all trust funds must be properly disposed of by refunding clients or paying suppliers — they cannot be kept by the agency.

Question 2

What does 'trust account reconciliation' require a travel registrant to compare?

Accepted Answer

Trust account bank balance against client liability records

Answer

Reconciliation means confirming that the trust account bank balance equals the total of all outstanding client liabilities held by the agency.

Question 3

A client cancels a trip and is entitled to a full refund. Under TICO trust accounting rules, the refund should be paid from:

Accepted Answer

The trust account, since the funds were held there

Answer

Since client funds are held in trust, refunds must be issued from the trust account to maintain proper accounting.

Question 4

Which of the following best describes the purpose of TICO's trust account requirements?

Accepted Answer

To protect consumer funds in the event an agency defaults or closes

Answer

Trust account requirements exist primarily to safeguard consumer funds so travelers are protected if an agency fails before the trip occurs.

Question 5

A travel agency receives a supplier commission rebate into its trust account by mistake. What should the registrant do?

Accepted Answer

Transfer the commission to the operating account promptly after identification

Answer

Non-client funds such as commissions must not remain in the trust account; they should be transferred to the operating account as soon as identified.

TICO - Travel Industry Council of Ontario Practice Test