Balances to identify breaches of CLC accounts code

Question 1

Client account reconciliation statement

Answer 1

to show that amount owed to clients equals amount held for clients

Question 2

Client account bank reconciliation statement

Answer 2

to show that balance on client account cash ledger equals amount on client account bank statements

Question 3

Cash Ledger, Client Account - DR or CR balance?

Answer 3

. Always DR - debit balance
. If CR, then client account is overdrawn - breach of 12.4 - must not withdraw more money than held
. Must immediately pay into client account to ensure sufficient funds to cover all money owed to clients in accordance with 9.1.6 and 12.5

Question 4

Client ledger, Office column - DR or CR balance?

Answer 4

. Always DR - debit balance 9.1.5
. If CR, then firm owes client money in office account- breach of 9.1.5
. Must immediately pay into client account

Question 5

Client ledger, Client column - DR or CR balance?

Answer 5

Always CR - credit balance - 9.1.5
If DR, then client is a debtor and more money has been spent for this client than held for this client - breach of 12.4
Must pay into client account in accordance with 9.1.6 and 12.5