Start free

FLK2 · SQE1 module

Solicitors Accounts

Solicitors Accounts causes disproportionate anxiety relative to its actual scope: a small set of rules about client money, applied consistently to different scenarios.

The single governing idea is separation: client money is not the firm’s money, and the rules exist to enforce that distinction in every transaction.

What this module covers

Every topic in Solicitors Accounts, in the order the course teaches them. This is the whole syllabus for the module, not a selection.

  1. Scope and Application of the SRA Accounts Rules
  2. Definition of Client Money
  3. The Client Account
  4. Paying Client Money into the Client Account
  5. Withdrawals from the Client Account
  6. Mixed Receipts and Placement of Funds
  7. Transfers Between Client Ledgers
  8. Double-Entry Bookkeeping: Cash Account and Client/Business Ledgers
  9. Reconciliations and Statements
  10. Breaches and Prompt Correction
  11. Interest on Client Money
  12. Joint Accounts and Operating a Client's Own Account
  13. Third-Party Managed Accounts
  14. The Accountant's Report and Exemptions
  15. Disbursements and VAT: Agency and Principal Methods
  16. VAT: Rate and Registration Threshold
  17. Deposits: Stakeholder or Agent; Acting for Lenders
  18. Petty Cash

A real question from this module

Answer it before you decide

FLK2 · Solicitors Accounts

Question

A firm receives a single payment from a client. Part of it relates to a bill already delivered for work completed, and the remainder is described by the client as "towards your fees for the next stage", which has not yet been billed or even started. How must the firm treat this payment under the SRA Accounts Rules?

Answer C

Client money includes money received in advance of costs being incurred, even where it is described as being "towards fees", until the firm has actually delivered a bill for that part of the work. The already-billed part may be transferred to the business account, but the unbilled part must be paid into, or kept in, the client account until it is earned and billed. A client’s agreement to be charged in advance does not itself convert an unbilled amount into the firm’s own money, and a mixed payment cannot simply be left to the firm’s choice.

SRA Accounts Rules, client money and the treatment of advance payments for costs.

Pick another option to compare, or try five more free questions.

Related modules

Start freeAll 13 modules