Deck 9: Managing the Client Funds Trust Account

Question 1

IOLTA stands for

A)income on latest trial activity
B)interest on lawyers' trust accounts
C)the name of the bar association
D)the name of the governmental agency governing trust accounts
E)the name of the bank holding trust account funds

Answer 1

B

Question 2

Reconciling the trust account means closing it and sending the funds back to the clients.

Answer 2

False

Question 3

IOLTA first started in

A)England
B)Florida
C)Virginia
D)Washington,DC
E)California

Answer 3

A

Question 4

Which of the following funds are deposited into a trust account?

A)funds from the sale of real estate
B)funds from judgments and settlements
C)fee advances
D)debtor's payments to a creditor
E)all of the above

Question 5

A separate trust account may be opened for a client

A)if there are many transactions from the trust account
B)if there is a lot of money deposited into the trust account
C)for convenience
D)all of the above
E)none of the above

Question 6

Whenever a check is written,it is documented in the cash payments journal.

Question 7

Before a check is deposited into a client's trust account

A)it must be certified
B)it must be approved by the office manager
C)a copy is made of the front and back
D)it is entered in the cash payments journal
E)all of the above

Question 8

Which of the following documents withdrawals of the trust account?

A)management's billing report
B)cash payments journal
C)cash receipts journal
D)pleadings of the case
E)none of the above

Question 9

Segregation of cash is

A)keeping clients' funds separate from firm's funds
B)mixing clients' funds with firm's funds
C)paying the firm's expenses
D)paying the client's expenses
E)none of the above

Question 10

The purpose of a trust account is to

A)pay attorneys' fees on time
B)pay the expenses of litigation on time
C)keep clients' funds separate from the firm's funds
D)make the accounting for a case easier
E)all of the above

Question 11

An individual client's trust account balance is found

A)in the cash receipts journal
B)in the cash payments journal
C)on a check for disbursed funds
D)on the client ledger sheet
E)on the bank statement

Question 12

Some insurance companies require that firms keep manual records of trust account transactions.

Question 13

Commingling is

A)depositing money in the trust account to cover bank charges
B)paying a client's expenses with office funds
C)disbursing funds without authorization
D)removing funds from the trust account without authorization
E)none of the above

Question 14

IOLTA programs

A)provide continuing legal education for attorneys
B)provide seminars for paralegals
C)educate clients on the use of the trust account
D)provide insurance for the needy
E)none of the above

Question 15

When funds are deposited into a client's trust account from a settlement

A)the client is immediately notified
B)the client is notified in 30 days
C)the check is immediately cashed
D)a notation is made in the cash payments journal
E)none of the above

Question 16

When a fee advance is deposited into a trust account

A)the attorney does not have immediate access to the funds
B)the funds are put on hold until it clears the bank
C)the funds are withdrawn once a month when they are earned
D)a statement must be prepared once a month
E)all of the above
211

Question 17

Check kiting is
a.disbursing funds from the trust account before the funds have cleared the bank
b.writing a check with insufficient funds
c.writing a check on a closed account
d.closing the trust account before the check has cleared the bank
e.signing the client's name to the check

Question 18

Nonrefundable nonchargeable true)retainer fees may be deposited directly into the attorney's operating account instead of the trust account.

Question 19

A hard copy is another name for a binder holding client ledger sheets.

Question 20

Which of the following documents deposits in the trust account?

A)management's billing report
B)cash payments journal
C)cash receipts journal
D)pleadings of the case
E)none of the above

Question 21

As soon as a client retains a firm,an) is prepared.

Question 22

Under IOLTA,funds derived from interest on trust accounts go to the state-funded legal programs.

Question 23

In most states,a lawyer must have a client's permission to apply funds in the trust account to an outstanding legal bill.

Question 24

Whenever a check is written from a client's trust account,the transaction is documented on the client ledger sheet and .

Question 25

Whenever a deposit is made into a client's trust account,the transaction is documented on the client ledger sheet and .

Question 26

It is permissible to apply funds in a clients' funds trust account to a disputed bill.

Question 27

An attorney holds the funds "in trust" for clients and acts as an) by maintaining control of the funds.

Question 28

The client ledger sheets,cash receipts journal,and cash payments journal must balance with the statement.

Question 29

If an attorney abuses his or her trust account,he or she may be disciplined.

Question 30

In most states,clients do not receive interest on trust account balances.

Question 31

A statement of the trust account is normally mailed to the client .

Question 32

The client security fund reimburses clients for money lost because of an attorney's fraudulent abuse of the trust account.

Question 33

It is okay to pay office expenses with funds from the trust account.

Question 34

Large cases generally have their own trust account.

Question 35

In the case of Phillips v.Washington Legal Foundation,the Supreme Court ruled that interest derived from clients' trust accounts is the property of the state.

Question 36

If a client must endorse a check,it should be mailed to the client by mail.

Question 37

When a check requires the signatures of the client and the attorney,the
endorses the check first.

Question 38

If a client terminates the attorney-client relationship,all funds in the clients' funds account are immediately applied to the attorney's outstanding bill.

Question 39

An attorney may be disciplined if he or she does not promptly pay expenses that are due to be paid from trust account proceeds.

Question 40

Trust account records should be kept for at least years after the account is closed.

Question 41

Accurate records must be maintained for the trust account in case of an)
claim.

Question 42

What is a client security fund?

Question 43

State bars closely monitor trust accounts because of .

Question 44

What are the three types of IOLTA participation? ,
,and .

Question 45

An) is an indication of mishandling a trust account.