Deposits held as agent/stakeholder, petty cash, interest

Question 1

If a solicitor holds a deposit for conveyance of property as a stakeholder, the transaction should be recorded in a separate _________ account in the names of ______ _____. On completion, the money can be transferred as any other ____-_____ transfer

Answer 1

stakeholder, both parties, inter-client

Question 2

In a conveyance, if B’s lender sends B’s solicitor funds for the purchase, how should the funds be recorded? (in terms of debit and credit)

Answer 2

Debit in Client cash account
Credit in Lender’s ledger

Question 3

What is petty cash?

Answer 3

Business money in the form of actual cash kept in office

Question 4

How would expenses paid on behalf of a client that are paid out of petty cash be recorded in a petty cash account?

Answer 4

Credit petty cash account
Debit client ledger

Question 5

How much interest must a solicitor pay a client for money the client deposits with the solicitor (unless an alternative arrangement provides otherwise)?

Answer 5

a fair amount