California Recordkeeping Requirements exam
2026 questions and rationales answers
1. How long must a California real estate broker generally retain copies of transaction
records?
A. One year
B. Two years
C. Three years
D. Five years
Rationale: California Business and Professions Code §10148 generally requires brokers to retain
specified transaction records for three years.
2. When a real estate transaction closes, when does the three-year record-retention period
generally begin?
A. When the listing is signed
B. When escrow opens
C. When the purchase offer is accepted
D. On the date of closing
Rationale: For a consummated transaction, the three-year period runs from the date of closing.
3. If a listing does not result in a completed transaction, when does the three-year retention
period generally begin?
A. The date the listing expires
B. The date of the listing
C. The date the broker receives the first offer
D. The date the seller cancels the listing
Rationale: For a transaction that is not consummated, §10148 measures retention from the date
of the listing.
4. Which of the following is specifically included among records a broker must retain?
,A. Personal correspondence unrelated to real estate
B. Listings
C. Employee vacation requests
D. Personal bank statements
Rationale: Listings are specifically identified among the records subject to California's retention
requirement.
5. Which financial document is included in the broker's required transaction records?
A. Personal credit-card statements
B. Deposit receipts
C. Personal tax returns
D. Employee payroll records
Rationale: Deposit receipts are specifically listed in Business and Professions Code §10148.
6. A broker must generally retain copies of canceled checks for how long?
A. Six months
B. One year
C. Three years
D. Ten years
Rationale: Canceled checks connected with transactions requiring a real estate license are
among the records subject to the three-year requirement.
7. Which records are particularly important when a broker handles trust funds?
A. Marketing records only
B. Trust fund records
C. Personal investment records
D. Employee attendance records
Rationale: Trust records are expressly included among records that brokers must retain.
8. A broker's transaction records may be examined by the California Department of Real
Estate (DRE). What is the broker's obligation?
, A. Refuse access unless a court order is issued
B. Destroy records after one year
C. Make required books, accounts, and records available for examination as required by law
D. Provide only verbal explanations
Rationale: California law permits the Commissioner or designated representative to examine,
inspect, and copy required records after notice.
9. Which agency is responsible for regulating California real estate licensees?
A. IRS
B. SEC
C. California Department of Real Estate (DRE)
D. Federal Reserve
Rationale: The DRE administers and enforces California real estate licensing requirements.
10. A broker maintains trust funds in a trust account. What type of record is required to track
trust account activity?
A. Personal check register
B. Columnar record of trust funds received and paid out
C. Marketing log
D. Salesperson attendance sheet
Rationale: Regulation 2831 requires a control record showing trust fund receipts and
disbursements.
11. Trust fund transactions in the control record should generally be entered in what order?
A. Alphabetical order
B. Amount order
C. Chronological order
D. Property-value order
Rationale: Trust fund control records are maintained in chronological sequence.
12. Which information should appear in the broker's trust fund control record?
2026 questions and rationales answers
1. How long must a California real estate broker generally retain copies of transaction
records?
A. One year
B. Two years
C. Three years
D. Five years
Rationale: California Business and Professions Code §10148 generally requires brokers to retain
specified transaction records for three years.
2. When a real estate transaction closes, when does the three-year record-retention period
generally begin?
A. When the listing is signed
B. When escrow opens
C. When the purchase offer is accepted
D. On the date of closing
Rationale: For a consummated transaction, the three-year period runs from the date of closing.
3. If a listing does not result in a completed transaction, when does the three-year retention
period generally begin?
A. The date the listing expires
B. The date of the listing
C. The date the broker receives the first offer
D. The date the seller cancels the listing
Rationale: For a transaction that is not consummated, §10148 measures retention from the date
of the listing.
4. Which of the following is specifically included among records a broker must retain?
,A. Personal correspondence unrelated to real estate
B. Listings
C. Employee vacation requests
D. Personal bank statements
Rationale: Listings are specifically identified among the records subject to California's retention
requirement.
5. Which financial document is included in the broker's required transaction records?
A. Personal credit-card statements
B. Deposit receipts
C. Personal tax returns
D. Employee payroll records
Rationale: Deposit receipts are specifically listed in Business and Professions Code §10148.
6. A broker must generally retain copies of canceled checks for how long?
A. Six months
B. One year
C. Three years
D. Ten years
Rationale: Canceled checks connected with transactions requiring a real estate license are
among the records subject to the three-year requirement.
7. Which records are particularly important when a broker handles trust funds?
A. Marketing records only
B. Trust fund records
C. Personal investment records
D. Employee attendance records
Rationale: Trust records are expressly included among records that brokers must retain.
8. A broker's transaction records may be examined by the California Department of Real
Estate (DRE). What is the broker's obligation?
, A. Refuse access unless a court order is issued
B. Destroy records after one year
C. Make required books, accounts, and records available for examination as required by law
D. Provide only verbal explanations
Rationale: California law permits the Commissioner or designated representative to examine,
inspect, and copy required records after notice.
9. Which agency is responsible for regulating California real estate licensees?
A. IRS
B. SEC
C. California Department of Real Estate (DRE)
D. Federal Reserve
Rationale: The DRE administers and enforces California real estate licensing requirements.
10. A broker maintains trust funds in a trust account. What type of record is required to track
trust account activity?
A. Personal check register
B. Columnar record of trust funds received and paid out
C. Marketing log
D. Salesperson attendance sheet
Rationale: Regulation 2831 requires a control record showing trust fund receipts and
disbursements.
11. Trust fund transactions in the control record should generally be entered in what order?
A. Alphabetical order
B. Amount order
C. Chronological order
D. Property-value order
Rationale: Trust fund control records are maintained in chronological sequence.
12. Which information should appear in the broker's trust fund control record?
