Please enable JavaScript.
Coggle requires JavaScript to display documents.
Trust Accounting - Coggle Diagram
Trust Accounting
General Trust
LPA s 243
- establishment of a trust
- keeping of a trust account
- payment of trust money
-
LPA s 237
What is trust money
money received by the solicitor in the course of practice as a solicitor, to be held on behalf of another
This money MUST BE
- a) banked to the credit of a general trust account at an approved financial institution in QLD (Trust money)
- b) paid as directed by the person on whose behalf the money is held (this is Transit money - LPA s 253)
- c) dealt with under a power or authority for and on behalf of a person (Power money - LPA s 254)
- d) held under the control of the solicitor and paid as directed by the person on whose behalf the money is held (Written direction money - LPA s 248)
Trust Accounts must be operated at approved "ADIs" as defined at ss 237, 280 LPA
Trust money is not available for the payments of debts of the practice (LPA s 256), nor should it be intermingled with other money (LPA s 257),
Trust accounting records must be kept in permanent form, LPA s 261
Capital
Amount of owners investment in the business. Capital is CREDIT by nature. To increase it (with profit) you Credit it. To decrease capital (a loss) you debit it.
Assets
Something of value the business owns. Eg land, motor vehicle, furniture. Assets by nature are DEBIT. To increase an asset you debit it. To decrease an asset you credit it
Liabilities
Something the business owes. Liabilities are CREDIT by nature. The opposite of ASSETS are DEBITS. To increase liability you credit it. To decrease you debit
Expenses
Recurrent expenditure within the business which decreases profit. DEBIT by nature. Increase an expense you debit it, to decrease you credit it
Revenue
Recurrent amounts that increase income. CREDIT by nature. To increase revenue, CREDIT them. To decrease, DEBIT.
-
-
-
For the double entry system there are always to entries for every transaction. A debit and a corresponding credit