2.1 – Introduction and Objectives

What lawyers refer to as Trust Accounting is not really accounting at all, just bookkeeping – recording the receipt and disbursement of trust money in a journal and posting these transactions to the ledger accounts of the clients or other persons to whom the money belongs.

Trust accounting can be boiled down to one basic, simple rule:

It’s not your money!

You have to be ready at all times to prove who is entitled to the money in your trust account and to give it to the person who is entitled to it. The law society rules for trust accounting are designed to help you create the audit trail you will need if you are ever challenged to prove that you have complied with the basic rule.

Objectives

The objectives of the Trust Accounting and Reporting Essentials module are:

1. To understand the requirements of the Law Society Rules with respect to lawyers’ trust accounting.
2. To appreciate what to consider on choosing where to bank.
3. To learn how to:
   a) manage your trust accounts, including how trust funds may be deposited and withdrawn from your trust accounts;
   b) reconcile trust accounts; and
   c) avoid common trust accounting pitfalls.
4. To learn the requirements for filing Trust Reports with the Law Society.

If you have not already worked through The Accounting System module, please do so now. The Accounting System module must be completed prior to this module.

Time Estimate for this Module (including Quiz): 60 minutes