TICO - Travel Industry Council of Ontario Trust Accounting Requirements Questions and Answers

Question 1

According to Ontario Regulation 26/05, what is the maximum amount of time a TICO registrant has to deposit customer funds into their designated trust account after receiving them?

Accepted Answer

Within two banking days

Answer

By the following Monday

Answer

Within five business days

Answer

By the end of the calendar month

Question 2

A travel agency owner needs to pay the monthly office rent and temporarily uses funds from the customer trust account, intending to replace them when a large commission cheque clears. This practice is known as what?

Accepted Answer

Commingling, and it is a serious breach of the regulations

Answer

A trust surplus transfer

Answer

A standard trust reconciliation

Answer

Bridging, and it is acceptable if the funds are returned within 48 hours

Question 3

Which of the following represents a permissible disbursement from a TICO registrant's Travel Industry Act Trust Account?

Accepted Answer

Transferring funds to a supplier to pay for a client's cruise

Answer

Paying for a new advertisement in a local newspaper

Answer

Issuing a payroll cheque to a travel counsellor

Answer

Purchasing foreign currency for a different client's trip

Question 4

An agency's trust account has earned $50 in interest over the past quarter. According to TICO's trust accounting rules, who is entitled to this interest?

Accepted Answer

The travel agency, which can transfer it to the general account

Answer

The interest must be paid directly to TICO

Answer

The interest belongs to the customers whose funds generated it

Answer

The bank where the trust account is held

Question 5

A registrant performs a trust account reconciliation and discovers the total trust liability (money owed to customers/suppliers) is $50,000, but the trust bank account only holds $48,000. What is this situation called?

Accepted Answer

A trust deficiency

Answer

A trust surplus

Answer

A positive reconciliation

Answer

An asset float

Question 6

Which of the following is NOT a required component of a TICO registrant's trust accounting records?

Accepted Answer

Monthly payroll records for all employees

Answer

Records of all deposits and withdrawals from the trust account

Answer

A sales journal and copies of all customer invoices

Answer

Bank statements for the trust account