Solicitors Accounts Exam Ready 'Cheat Sheet'
Contains a table explaining the ledger entries for each transaction in the exam; Multiple Choice Questions with Answers; and Short Answer Questions with Answers!
Transaction Description Action
Client sends the firm £XX generally Cash. On account. CR client account
on account of costs
Firm pays court fees of £XX on Cash. Court fee. DR client account (unless
behalf of Client insufficient funds – in which case,
DR business account)
Firm pays an expert witness £XX on Cash. Expert witness. DR client account (unless
behalf of Client insufficient funds – in which case,
DR business account)
Firm receives a cheque for £XX from Cash. Settlement. CR client account
the other side in full settlement of
the matter
Firm sends Client a cheque for £XX Cash. To ‘Client’. DR client account
Firm sends Client a bill including Profit Costs. DR business account (separate
professional charges of £XX plus VAT. entries for professional charges and
VAT of £XX VAT)
Client sends the firm amount due Cash. Amount due. CR business account
(from the bill)
Purchase
Firm pays a fee of £7 for searches at Cash. Searches. DR business account (unless there is
Companies House money in the client account already)
Firm pays purchase price of shares Cash. To seller’s solicitor. DR client account (if sufficient funds
to seller’s solicitor and shares are – if not, DR business account)
transferred to client’s name
Firm pays stamp duty of £XX Cash. Stamp Duty. DR client account
Probate – Administration of Estate - Abatement
Firm pays £XX in probate fees Cash. Probate Fees. DR business account
Bank sends the firm a cheque for No ledger entry No ledger entry as check is made
£XX for inheritance tax in favour of out to HMRC
HMRC
The executors give the firm £1000 Cash. Found by executor’s. CR client account
cash found at the deceased’s home.
Firm sends copy of the grant of No ledger entry. Bank transaction, money doesn’t
representation to the bank, who pass through firm
then transfers money held by them
for the deceased to the executors
loan account with the bank.
Balance of deceased’s account Cash. From ‘Bank’. CR client account
transferred from bank to the firm.
Proceeds of life policy received by Cash. From Life Policy. CR client account
the firm.
Firm receives a cheque from auction Cash. Proceeds of ‘…’. CR client account
sales of deceased’s assets.
Firm pays debts amounting to £XX Cash. Debts. DR client account
Firm pays funeral expenses of £XX Cash. Funeral Expenses. DR client account
Firm pays a pecuniary legacy of £XX Cash. To legatee. DR client account
to a legatee.
Firm prepares and sends a bill to the Profit Costs. DR business account
executors. VAT.
Executors query bill, firm agrees to Profit Costs. Abatement. CR business account with £XX
reduce by £XX. VAT. Abatement. reduced
Firm transfers amount due with Cash. Amount due. CR business account
agreement of executors. DR client account
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