TICO Certification: Financial requirements, trust accounts and records

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1. What applies if a registrant wants a second trust account?

   1. It needs the registrar's written consent in advance
   2. It must close its operating account first
   3. It needs the consent of every customer
   4. It may open as many as it likes without telling anyone
   Show answer and explanation

   Correct answer: It needs the registrar's written consent in advance

   No registrant may keep more than one trust account without the registrar's written consent obtained in advance, and copies of trust agreements and changes go to the registrar within five days.

   Based on: O. Reg. 26/05 s. 27(4)–(5); checked 2026-10-24

   Official reference ↗

2. A registrant does not qualify for the specified government-funded non-profit exemption. What working-capital rule applies?

   1. Liabilities may exceed assets for up to six months
   2. Current assets must be greater than current liabilities
   3. Total assets must exceed $1 million at all times
   4. Cash on hand must equal one month of sales
   Show answer and explanation

   Correct answer: Current assets must be greater than current liabilities

   Section 24 requires current assets to exceed current liabilities under generally accepted accounting principles, excluding the section 25 security and capital of interested persons. The regulation contains a specific exemption for qualifying government-funded tourism non-profits, so the rule should not be presented as exception-free.

   Based on: O. Reg. 26/05 s. 24; checked 2026-10-24

   Official reference ↗

3. An agency follows the section 27 trust-account model. How must it hold customer money received for travel services?

   1. In the owner's personal savings account until the day of departure
   2. In cash in a locked safe at the agency's office
   3. In any business account, mixed with operating funds
   4. In trust, in a designated Travel Industry Act trust account
   Show answer and explanation

   Correct answer: In trust, in a designated Travel Industry Act trust account

   Under section 27, qualifying money actually received from customers is held in trust in an account designated as a Travel Industry Act trust account. Section 28 provides a distinct security alternative for qualifying established registrants; this is not permission to mix trust receipts with operating money.

   Based on: O. Reg. 26/05 s. 27(1)–(2); checked 2026-10-24

   Official reference ↗

4. Where must a registrant maintain its business bank accounts?

   1. In Ontario, at an eligible bank, loan/trust company or credit union
   2. Only at a bank chosen and approved by TICO each year
   3. At a money service business licensed in another province
   4. At any financial institution in Canada or the United States
   Show answer and explanation

   Correct answer: In Ontario, at an eligible bank, loan/trust company or credit union

   Section 26 requires the accounts to be maintained in Ontario at a Schedule I or II bank, a loan or trust corporation, or a credit union, in a permitted business name. The requirement is not merely that an account located somewhere else uses a Canadian bank.

   Based on: O. Reg. 26/05 s. 26; checked 2026-10-24

   Official reference ↗

5. After two consecutive annual financial filings, when is section 25 security returned, apart from deductible Fund claims?

   1. Never, because it becomes part of the Fund
   2. After its first month of business, with bank interest added
   3. Within a reasonable time once compliance concerns are resolved
   4. When the owner reaches retirement age
   Show answer and explanation

   Correct answer: Within a reasonable time once compliance concerns are resolved

   After two consecutive annual filings, the registrar returns security within a reasonable time if there are no compliance concerns. Where concerns exist, they must first be resolved. Paid or anticipated eligible Fund claims attributable to the registrant’s failure are deducted; return is not an automatic fixed-date refund.

   Based on: O. Reg. 26/05 ss. 25(2)–(3); checked 2026-10-24

   Official reference ↗

6. Instead of a trust account, what may an established registrant provide to TICO?

   1. A personal guarantee signed by the owner's spouse
   2. A letter from its bank confirming a line of credit
   3. Proof that all of its customers bought trip cancellation insurance
   4. Security of at least one-sixth of a year's customer receipts
   Show answer and explanation

   Correct answer: Security of at least one-sixth of a year's customer receipts

   A registrant in business for at least one fiscal year may instead provide security equal to at least one-sixth of the money it received from customers over the 12-month period in its latest financial documents. The trust obligation continues until the registrar acknowledges the security.

   Based on: O. Reg. 26/05 s. 28; checked 2026-10-24

   Official reference ↗

7. When may a registrant take its commission out of trust money?

   1. As soon as the customer pays the first deposit
   2. Only after the supplier has been paid in full
   3. At the end of each calendar month
   4. Whenever the customer agrees by email
   Show answer and explanation

   Correct answer: Only after the supplier has been paid in full

   The registrant's commission may be withdrawn from the trust account only after the supplier of the travel services has been paid in full.

   Based on: O. Reg. 26/05 s. 27(6)(c); checked 2026-10-24

   Official reference ↗

8. What must every registrant file with the registrar each fiscal year?

   1. A list of every customer it booked during the past year
   2. Financial documents of the type set by its sales in Ontario
   3. A new $10,000 security deposit
   4. Copies of every supplier contract it signed
   Show answer and explanation

   Correct answer: Financial documents of the type set by its sales in Ontario

   Every registrant files the financial documents required by the regulation for each fiscal year; the type depends on its sales in Ontario during the previous fiscal year.

   Based on: O. Reg. 26/05 s. 22; checked 2026-10-24

   Official reference ↗

9. How long must a registrant keep its business records?

   1. At least six years after the transaction
   2. At least three years after the booking
   3. At least one year after the trip
   4. Until the customer's credit card statement arrives
   Show answer and explanation

   Correct answer: At least six years after the transaction

   Accounting and banking records, payment records and the files kept under sections 39 and 40 must be retained for at least six years after the relevant transaction.

   Based on: O. Reg. 26/05 s. 29(2); checked 2026-10-24

   Official reference ↗

10. For which purpose may a registrant withdraw money from its trust account?

    1. To pay the agency's rent while it waits for supplier commissions
    2. To lend money to a customer for a future booking
    3. To pay the supplier of the travel services the money was for
    4. To cover the owner's salary during a slow month
    Show answer and explanation

    Correct answer: To pay the supplier of the travel services the money was for

    Trust money may be paid out only to the supplier of the travel services it was received for, as a refund to a customer, or — after the supplier is paid in full — as the registrant's commission.

    Based on: O. Reg. 26/05 s. 27(6); checked 2026-10-24

    Official reference ↗

11. An agency uses a section 27 trust account. How soon must money it receives for travel services be deposited?

    1. Within two banking days after it is received
    2. Only when the supplier sends an invoice
    3. Within 30 days, at the end of each calendar month
    4. Before the customer's date of departure
    Show answer and explanation

    Correct answer: Within two banking days after it is received

    All money received from customers for travel services must be deposited into the trust account within two banking days after receipt.

    Based on: O. Reg. 26/05 s. 27(3); checked 2026-10-24

    Official reference ↗

12. Where must business records normally be kept?

    1. At the principal place of business or an approved place
    2. Only in a cloud storage service chosen by the registrar
    3. At TICO's office in Mississauga
    4. At the home of any employee who has a key
    Show answer and explanation

    Correct answer: At the principal place of business or an approved place

    Business records are kept at the registrant's principal place of business, or at another place the registrar approves in writing.

    Based on: O. Reg. 26/05 s. 29(1); checked 2026-10-24

    Official reference ↗