Accounts Flashcards
1
Q
When should a law firm record an invoice as principal and what will the entries be?
A
When? Law firm instructs 3rd party and 3rd party invoices the firm (invoice is NOT addressed to client)
Entries?
- ALWAYS non client money (so buisness account)
- VAT must be accounted for separately
DR client ledger business account (amount = disbursement)
CR cash sheet business account
DR VAT account (amount = VAT)
CR cash sheet business account
Bill client:
DR client ledger businesss account (amount = VAT)
CR VAT account (amount = VAT)
Accounting entries for issuing bill
