California Real Estate Practice Exam

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Depositing a buyer's deposit check into the broker's business operating account is known as what?

  1. Standard practice

  2. Commingling and is a violation

  3. Earmarking

  4. Reconciliation

The correct answer is: Commingling and is a violation

Commingling is defined as mixing a client's funds with the broker's personal or business funds. Doing so is a violation as it puts the client's money at risk. Options A, C, and D are not correct because they do not involve mixing client's funds with the broker's personal or business funds. Standard practice refers to a common and accepted way of handling something. Earmarking refers to setting aside funds for a specific purpose. Reconciliation refers to the process of comparing records to ensure accuracy. Therefore, option B is the only one that accurately describes depositing a client's check into the broker's business operating account.

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