ii Explain how you would handle the situation when you discovered that a trust account was overdrawn. In your answer include who you would report the discrepancy to outside your office as required by legislation. The licensee must notify the Commissioner, in writing, within 5 days of becoming aware that the trust account is overdrawn. Failure to do so incurs a maximum penalty of 100 penalty points. The information must include the name and account number, the amount overdrawn and the reason for the account being overdrawn. If any error is found, then Licensee in charge should do the following: 1. Check all additions 2. Work out how much you are out and look for similar amounts in the cash book and check those entries for correctness 3. If the difference is divisible by nine it could be a transposition error. 4. Check that the correct balances for each ledger have been entered in the trial balance - have all ledgers been added up. Check all payments have been entered correctly 5. Check the posting from the cashbook to the ledgers