Formative Assessment Qs 21 - 30 Flashcards
True or False: The process for paying funds from the trust account is different to depositing funds into this account. Agency staff must verify written instructions by using authorisation records before making payments from the trust account.
True.
Payment advices display all the details associated with a transaction. This can include:
Date, Invoice, Type And Method, Amount, Bank Statement Reference, Deposit Amount
Which of the below form important parts of the trust accounting process?
Source docs, cashbooks, ledgers, trial balance, bank reconciliation, reporting to clients, end of month reports
What is a source document in relation to a trust account?
The basic documents required to make entries in books of account are the source documents. A source document is created at the time of a transaction and provides evidence corroborating the respective transaction.
What is a source document in relation to a trust account?
The basic documents required to make entries in books of account are the source documents. A source document is created at the time of a transaction and provides evidence corroborating the respective transaction.
List the appropriate examples of trust account source documents.
Bank statement, receipt, invoice, cheque
What is a trust cash receipt journal?
A record of all deposit transactions in chronological order received into the Trust Account.
What are two reasons it is imperative that the daily banking procedures are monitored, supervised and reviewed on a regular basis?
a) So, any discrepancy is picked up and to stop fraud.
b) So debited money is a seperate transaction from the incorrect ledger and credit to the correct ledger.
How would you maintain records of trust transactions?
- A register of trust account receipt forms
- Consecutively numbered trust account receipt forms in duplicate
- A trust account cash journals
- A trust account ledger
- Full and accurate accounts of all money paid or received for a sale or transaction
What is a “Bank Reconciliation” in relation to a trust account?
It is the process of reconciling the business accounting records to accurately reflect the money held by the bank – i.e. the total of all the ledgers or cashbook, as compared with the balance held by the bank as per the Bank Statement.
