What is an essential document that tracks all transactions involving escrow funds?

The essential document that tracks all transactions involving escrow funds is the ledger. A ledger is a comprehensive record that details every transaction related to the escrow account, including deposits, withdrawals, and disbursements. It allows for accurate tracking of funds and ensures transparency and accountability. Maintaining an up-to-date ledger is crucial for all parties involved in a real estate transaction, as it provides a clear audit trail and helps to resolve any discrepancies that may arise.

The other options do serve important roles in real estate transactions, but they do not specifically fulfill the function of tracking escrow funds in the same comprehensive manner. A registration form is typically used to collect information and register parties in a transaction. A contract agreement establishes the terms between parties but does not track funds. A closing statement summarizes the financial aspects of a transaction at the closing stage, but it is not used to continuously monitor escrow transactions over time.