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11. Solicitor’s Accounts

Registered attorneys in Sri Lanka prepare these Solicitor’s Accounts and this is a process

somewhat outside the realm of accounting. But accounting rules and regulations are also used

here. Of particular note is that these accounts are most commonly used in legal settings.

Mainly two types of clients come along with lawyers.

1. Regular Clients - These are the ones who necessarily receive services from the law firm on a

regular basis for their needs at the same time. They pay at once.

2. Casual Clients - These are the clients who are not necessarily regular users of the services but

come to avail the services on occasion. They only pay a fee to the lawyer to represent their case

According to the Attorney Accounts Code, Solicitor’s Accounts must be maintained for regular

clients and casual clients.

1.Current Accounts
Lawyers Associations use two Current Accounts for regular clients and casual clients.

1. Client Current Account – For Regular Clients

2. Office Current Account – For casual clients

2. Allocations
Grant allocations are of two types.

1. Allocation of Fees of Regular Clients

2. Allocation of Fees of Casual Servants

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3. Use of stamps
1. Using stamps for regular clients

2. Using stamps for casual clients

Let's find out what are the basic things we need to know in the question

1.In any case, the previous year's balance sheet is given to us to get the opening balances of this

year's accounts.

The following accounts will be prepared while preparing the lawyer's Accounts.

In any case, the previous year's balance sheet is given to us to get the opening balances of this

year's accounts.

A. Receipts and Payments Accounts (This is the Cash Book)

Office Client Office Client

B/F XXX XXX Accounts Payable XXX
Water XXX
Regular XXX Donations XXX
Casual XXX Drawings XXX
Fees Salaries XXX
AAA PVT LTD XXX Postage XXX
BBB PVT LTD XXX Telephone XXX
CCC PVT LTD XXX Office Rent XXX
Motor vehicle Running
Expenses XXX
Receipts Bank Loan Interest XXX
AAA PVT LTD XXX Purchase of Stamps XXX
BBB PVT LTD XXX Bank Charges XXX
CCC PVT LTD XXX Subscription Paid for the BAR XXX
Electricity XXX
Stamps Staff Insurance XXX
AAA PVT LTD XXX Consultancy Fee paid XXX

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BBB PVT LTD XXX Stationary XXX

CCC PVT LTD XXX Travelling Expenses

Payment
AAA PVT LTD XXX
BBB PVT LTD XXX
CCC PVT LTD XXX

Balance C/D XXXX XXXX

XXXX XXXX XXXX XXXX

B. Stamp Account

Stamp
A/C

B/F xxx
Purchases of
Stamps xxx Stamps for Casual xxx
Clients

Regular Clients
(Stamps)
AAA PVT LTD xxx
BBB PVT LTD xxx
CCC PVT LTD xxx
B/C/D xxxx
xxxx xxxx

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C.Regular Client’s Individual Accounts (Ledger Accounts)

Client ledger accounts are maintained separately for each regular client.

- These accounts are liability accounts (creditors accounts).

- Finding the number of regular clients (this is given under current liabilities in last year's balance

sheet)

AAA Ltd

Office Client Office Client

Fee xxx B/F xxx
Fee xxx
Payment xxx Receipt xxx
Stamp xxx Stamp xxx

B/C/D xxxx
xxxx xxxx xxxx xxxx

D. Income Statement

Income Statement
Payment Income

Salaries XXX Fee – Casual XXX

Office Rent XXX Fee – Regular Clients
Vehicle running Cost XXX AAA PVT LTD XXX
Postage XXX BBB PVT LTD XXX
Telephone XXX CCC PVT LTD XXX
Electricity XXX
Bank Charges XXX
Depreciation – Motor vehicle XXX

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Depreciation – building XXX

Depreciation – Machines XXX
Travelling Expenses XXX
Casual Clients – Stamps XXX
Bank Loan Interest XXX
Consultancy Fee Paid XXX
Stationary XXX
Staff Insurance XXX

B/C/D XXXX
XXXX XXXX

E. Balance Sheet (Financial Position Statement)

Balance Sheet
Net
Capital and Liability Assets Cost Value
Capital xxx Non-Current Assets

Profit XXX PPE XXX

Office Equipment XXX
Drawing (xxx) Computers XXX
Motor Vehicles XXX

Current Assets
Non-Current Liability
Cash XXX
Bank Loan XXX Receivable from Debtors XXX
Other Long-term Loans XXX Prepaid Expenses XXX
Other Receivables XXX

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Current Liability Stock of Stamps xxx

Creditors xxx Bank Balance
Electricity Payable XXX Office xxx
Insurance Payable XXX Clients xxx
Water Payable XXX
Regular Clients
AAA pvt ltd xxx
BBB pvt ltd xxx
CCC pvt ltd xxx

Total Equity and Liability xxxx Total Assets xxxx

If you have the adjustments as below you have to write down the double entries as follows

1. Balance caried Forward

Receipts and payment A/C – Bank Balance (Office balance should be put to the office column
and client balance should be put to the client column)
Stamps A/C – balance of stock of stamps in the balance sheet

Client ledger A/C – balances should be put into the client’s ledger A/Cs In credit side from the
balance sheet. In the balance sheet the balances of clients have been put under Current
Liabilities.

2. Fees - regular Clients

This has 4 entries.
1. Receipts and Payment AC dr
2. Client Ledger AC s dr
3. Income statement cr
4. Client Ledger AC s cr

3. Fees – Casual Clients

Receipts and payment Ac dr

Income statement cr

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4. Receipts – Casual Client

Receipts and Payment AC dr
Client Ledger AC s cr

5. Stamps – regular clients

This has 4 entries.

Receipts and Payment AC dr

Client Ledger AC s dr

Client Ledger AC s cr
Stamp Ac cr

6. Payments – regular clients

Client Ledger AC s dr

Receipts and Payment AC cr

Please refer the above structures of the Accounts.

Accounting And Ethics – Final KT Prabhashwara 0711336692