ATTORNEYS’ BOOKKEEPING
(LEGAL ACCOUNTING)
UNDERSTAND DOUBLE ENTRY SYSTEM AND CAPTURE THESE AS LEDGER
ACCOUNTS
The Double Entry Principle
Do not confuse the recording of the receipt on the left hand or debit side of the
cashbook with the subsequent posting of that entry to the right hand or credit side of the
corresponding ledger T-account.
In the Cashbook, receipts are entered on the debit side and this same amount is then
posted from the debit side of the Cashbook to the credit side of the corresponding T-
ledger account.
This is the Double Entry Principle, for every debit there must be a credit.
KNOW VARIOUS BOOKS OF PRIME ENTRY
The Cashbook is a book of prime entry wherein bank transactions are recorded.
Once the transaction has been recorded in the book of prime entry, it must be posted
to the relevant account in the ledger.
The petty cashbook is a book of prime entry.
, TO KNOW THE DIFFERENCE BETWEEN BUSINESS ACCOUNTS [INCLUDING
BANK ACCOUNTS] AND LEDGER COMPARED TO TRUST ACCOUNTS
[INCLUDING BANK ACCOUNTS] & LEDGERS
A ledger is a book containing all the accounts of a practice.
The accounts in a ledger are also known as ledger accounts.
A ledger would not contain the credit side.
There are different types of ledgers in a practice. The most important ones are:
Trust ledger- it records all trust account transactions.
Business ledger - records all the business account transactions.
General ledger
GENERAL LEDGER
A general ledger may have too many ledger accounts causing it to become too big
and cumbersome. If all client accounts are included in the general ledger, it may
have too many ledger accounts in the one ledger. It has therefore become
common practice to split the general ledger into subsidiary ledgers. These
subsidiary ledgers will be opened to contain all the ledger accounts of a similar
type. It is expected that all practices would have many client accounts and it
would be logical to transfer all the client ledger accounts into such a subsidiary
ledger. The ledger would then be known as a business ledger. If a practice should
open a business ledger, all the business account transactions affecting the clients'
business account will be posted into this ledger. The result would then be that
there are no transactions nor balances of clients in the general ledger (except the
control account balance). Other subsidiary ledgers could also be opened, like a
trust ledger.
, POSTING TO A LEDGER ACCOUNT
The trust cashbook, business cashbook and the petty cashbook are books of prime entry,
but an entry in one of these books is also already the one leg of a double entry.
This means that if a transaction has been debited in the trust cashbook, it must be
credited in the corresponding trust ledger account.
Similarly, if a transaction has been credited in the trust cashbook, it must be debited
in the corresponding trust ledger account to complete the double entry.
(LEGAL ACCOUNTING)
UNDERSTAND DOUBLE ENTRY SYSTEM AND CAPTURE THESE AS LEDGER
ACCOUNTS
The Double Entry Principle
Do not confuse the recording of the receipt on the left hand or debit side of the
cashbook with the subsequent posting of that entry to the right hand or credit side of the
corresponding ledger T-account.
In the Cashbook, receipts are entered on the debit side and this same amount is then
posted from the debit side of the Cashbook to the credit side of the corresponding T-
ledger account.
This is the Double Entry Principle, for every debit there must be a credit.
KNOW VARIOUS BOOKS OF PRIME ENTRY
The Cashbook is a book of prime entry wherein bank transactions are recorded.
Once the transaction has been recorded in the book of prime entry, it must be posted
to the relevant account in the ledger.
The petty cashbook is a book of prime entry.
, TO KNOW THE DIFFERENCE BETWEEN BUSINESS ACCOUNTS [INCLUDING
BANK ACCOUNTS] AND LEDGER COMPARED TO TRUST ACCOUNTS
[INCLUDING BANK ACCOUNTS] & LEDGERS
A ledger is a book containing all the accounts of a practice.
The accounts in a ledger are also known as ledger accounts.
A ledger would not contain the credit side.
There are different types of ledgers in a practice. The most important ones are:
Trust ledger- it records all trust account transactions.
Business ledger - records all the business account transactions.
General ledger
GENERAL LEDGER
A general ledger may have too many ledger accounts causing it to become too big
and cumbersome. If all client accounts are included in the general ledger, it may
have too many ledger accounts in the one ledger. It has therefore become
common practice to split the general ledger into subsidiary ledgers. These
subsidiary ledgers will be opened to contain all the ledger accounts of a similar
type. It is expected that all practices would have many client accounts and it
would be logical to transfer all the client ledger accounts into such a subsidiary
ledger. The ledger would then be known as a business ledger. If a practice should
open a business ledger, all the business account transactions affecting the clients'
business account will be posted into this ledger. The result would then be that
there are no transactions nor balances of clients in the general ledger (except the
control account balance). Other subsidiary ledgers could also be opened, like a
trust ledger.
, POSTING TO A LEDGER ACCOUNT
The trust cashbook, business cashbook and the petty cashbook are books of prime entry,
but an entry in one of these books is also already the one leg of a double entry.
This means that if a transaction has been debited in the trust cashbook, it must be
credited in the corresponding trust ledger account.
Similarly, if a transaction has been credited in the trust cashbook, it must be debited
in the corresponding trust ledger account to complete the double entry.
