Question

Hannah is working with a buyer client on an offer for a property that's just right for the buyer. By the time Hannah receives the check for the earnest money, it's after 5 p.m. on a Friday, the bank has closed, and the seller is out of town for the weekend. Hannah puts the check in her briefcase for safekeeping.

On Saturday morning, Hannah takes the check to her bank and deposits the earnest money into her personal account. Expecting a commission check to clear, Hannah writes a check from her personal account to make her car payment, just in time.
On Monday, she'll write another check from her personal bank account to the seller to deliver her client's earnest money. Has Hannah done her duty of accounting to the client? Select the two best answers.
a. Yes, because the seller will receive the earnest money on Monday.
b. Yes, because Hannah deposited the money as soon as she could into the bank.
c. No, because Hannah deposited the money into her personal bank account instead of an escrow account for the brokerage.
d. No, because Hannah essentially used her client's funds to pay her car payment.

Answer 1

Hannah has not done her duty of accounting to the client because she used the client's funds to make her car payment and didn't deposit the money into an escrow account.

Step-by-step explanation:

No, because Hannah essentially used her client's funds to pay her car payment.

Additionally, no because Hannah deposited the money into her personal bank account instead of an escrow account for the brokerage.