Solicitors Accounts

Question 1

What is on DR/CR of double entry book keeping?

Answer 1

DR:
- expenses
- assets
- liability reduced
- cash gained

CR
- income
- asset disposed
- liability incurred
-cash paid

Question 2

What must you add VAT on?

Answer 2

Any supply made in course of business eg selling old furniture

Question 3

Do you charge VAT on disbursement?

Answer 3

No

Question 4

What is output/input tax?

Answer 4

Output- charged by business to customers

Input- charged to business by supplier

Question 5

What are 5% rate VAT supplies?

Answer 5

Mobility aid
Energy saving
Fuel
Smoke cessation
Renovation
Kids car seat

Question 6

Whats zero % supply?

Answer 6

Books
Food/water
International services
Transport

Question 7

Whats VAT exempt?

Answer 7

Land (not new commercial)
Insurance
Postal service
Finance
Health
Burial and cremation

Question 8

What can you do if receive cheque for mixed receipt?

Answer 8

Pay into business account and allocate accordingly

Question 9

What requirement to obtain annual accountant report?

Answer 9

Proportionate

Question 10

What is “on account of costs”

Answer 10

Money received for fees/ disbursements is client money until billed

Question 11

What do you do if cant return client money?

Answer 11

Less than £500 can be withdrawn and given to charity

If its more - apply to SRA