BPP University College Of Professional Studies Limited (BPP)
COMPLETE set of concise notes for the LPC Solicitors' Accounts exam - covers every area of the module in great detail. Very digestible (achieved a 95%).
BPP University College Of Professional Studies Limited (BPP)
BPP University College Of Professional Studies Limited
Solicitor Accounts
All documents for this subject (4)
Seller
Follow
theultimateLPCguides
Reviews received
Content preview
L.O. Solicitors Accounts SGS 1
EXAM TIPS/KEY Never have to put POUND STERLING sign on ledgers
When recording balances for client, fill in within the balance column in the client/officer ledger, and
INFO put DR/CR after
Copy over the description from the client account when reflecting in the bank account
NEVER put balance on the bank accounts
When a figure is 0 in balance, put a DASH
Deal with mixed payments in separate ledgers
L.O.1: Rule 4.1: Firm has to keep 'client money separate from money belonging to' the firm
Distinguish between - 'Authorised persons' means firms for LOC
Client Money + Office SRA Account Rules: "Firms will need to have systems and controls in place to ensure compliance with
these rules"
Money (SRA Account
Rules) CLIENT MONEY
- Set out in Rule 2.1
- Client money is held/received by [the firm]:
1. Regulated services delivered by firm to client
Regulated services = legal / other professional services provided that are regulated
by SRA
Covers vast majority of work solicitor does for a client (e.g. court application fees,
pre-contract searches)
If firm does not end up paying court fee; firm is holding money and remains client
money
2. Money belonging to someone else but received by firm
e.g. deposit for property purchase
3. Money received by the firm when firm is carrying out non-solicitor roles
e.g. donee
4. Fees and any unpaid disbursements
Disbursements does not include office expenses + courier fees ( factored into client
bill)
e.g. payment made to expert witness in court proceedings
- Once billed delivered to client; stops being client money under Rules
- If firm holds/receives money under Rules; kept separate from money of firm
OFFICE MONEY
- Money owned by/belongs to the firm
TWO BANK ACCOUNTS
- Firms need to have two bank account
- One for office money (office bank account) and client money (client bank account)
- Rule 3.1: Client account has to be at a branch of bank/building society in England + Wales,
name of firm and name 'CLIENT'
NOT a bank account of any client; under the control of the law firm for money
belonging to the clients
L.O.2: DOUBLE ENTRY BOOKKEEPING
Where Money - Issued guidance to firms to minimise errors in accounting + increase book balancing
can/must be paid - Every financial transaction can to be recorded TWICE in separate ledgers (books/online
entry)
into/withdrawn from
- Debits = Credits
Client or Office Matching entries balance each other out
Account Less likely for a transaction not being accounted for
- Client money recorded in two places; client cash ledger + client ledger ( which client
, transaction relates to)
- Ledgers need narratives alongside entry; provide adequate info about transaction
- Current balance (if not on ledger account) should be readily available
- Chronological order and record date of transaction
BANK ACCOUNT LEDGER
- DR - Debt
- CR - Credit
- Details is where to include narratives
THE BANK ACCOUNTS
- Combined ledger of office cash and client cash (two separate ledgers)
- Office cash - the firm's money (will need to write 'office cash' when making reference in
details column)
Shows the office account
- Client cash- money belonging to clients/3rd parties (same expression used in details column)
Shows the office account
All client money must be recorded here as per SRA Account Rules
- IMPORTANT to keep these two accounts and their monies separate
- Show appear as it would appear on the bank statements
- Where no money is leaving/coming into firm's bank account (e.g. sending bill to a client) - NO
ENTRIES need to be made in ledgers
CLIENT LEDGERS
- Separate ledgers for each individual client (relates ONLY to that client)
- Transactions through firm's client cash account are recorded in client ledger
- Sometimes client owes money to firm/firm spent money for client; firm has to keep a record
of debt and done in an office ledger
- Officer ledger and client ledger for each client (same table for each individual client)
- Balance in client's cash ledgers for individual clients = aggregate of individual client's ledgers
L.O.3:
Basic Transactions THE BASICS – LEDGER ENTRIES
involving Client and
Step 1 Client or office?
Office Money
Step 2 Complete the client’s own ledger first
Money coming in = CR
Money going out/creating a debt = DR
Step 3 Enter balance figure, including ‘CR’ or ‘DR’
Step 4 Details and Date
In the ‘Details’ column you must write the name of the
second ledger where you will make the second entry. In
brackets – write a description of the transaction
Step 5 Go to the second ledger and make the opposite entry
In the ‘Details’ column write the name of the ledger from
Step 4 (and copy your brackets description over)
FIRST- start off with entries in client ledger; then go to cash ledger and make opposite entry
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller theultimateLPCguides. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.72. You're not tied to anything after your purchase.
