Solicitors Accounts Rules 1998
Test Paper 1 - Intermediate
Please print out this test paper and circle the answers that you think are correct. Once completed go to the customer details form, fill it out and then print it off and return to Key Legal Accounting Services Ltd to claim your CPD points..
1. According to Rule 2 how are the rules to be interpreted?
(a) in accordance with section 32 of the Solicitors Act 1974
(b) according to the literal rule of statutory interpretation
(c) in the light of the notes to the rules
(d) in favour of the client
2. What is the definition of “costs”?
(a) the solicitor’s own charges or profit costs (including any VAT element)
(b) monies comprised in a mixed payment
(c) the solicitor’s charges and professional disbursements
(d) a solicitor’s fees and disbursements
3. What is the definition of “without delay”?
(a) in normal circumstances either on the day of receipt or the next working day
(b) in normal circumstances either on the day of receipt or the firm’s next working day
(c) in normal circumstances either on the day of receipt or the bank’s next working day
(d) within three working days
4. Which of the following are governed by the rules?
(a) solicitors employed “in house”
(b) registered foreign lawyers who are directors of recognised bodies
(c) both of the above
(d) neither of the above
5. Which of the following are not governed by the rules?
(a) locums in private practice
(b) a solicitor employed by a local authority
(c) directors of recognised bodies
(d) recognised bodies
6. Whose responsibility is it to ensure compliance with the rules?
(a) the senior partner
(b) the financial partner
(c) all the principals in the practice
(d) the firm’s reporting accountant
7. If a solicitor who is a controlled trustee handles controlled trust money the solicitor must handle the money
(a) as if it were client money unless the rules provide to the contrary
(b) through a separate designated client account
(c) through a designated deposit account
(d) with reference to trust law because the solicitors accounts rules will not apply
8. A solicitor who acts as a trustee in bankruptcy must
(a) comply with the principles set out in Rule 1
(b) comply with the Insolvency Regulations 1986
(c) neither of the above
(d) both of the above
9. If a solicitor shares the operation of a joint account with another third party the solicitor
(a) is not dealing with client money and the rules do not apply
(b) must ensure that statements are received from the bank or photocopies obtained if they are sent to the other party
(c) is entitled to retain interest on the account
(d) none of the above
10. Which of the following is client money?
(a) money received as VAT on the firms costs before payment is made over to HM Customs and Excise
(b) payment received for or towards an agreed fee
(c) money held as agent
(d) interest on general client account
11. In addition to client money which of the following may be held in client account?
(a) an amount of the solicitors own money required to open or maintain the account
(b) money to replace any sum which for any reason has been drawn from the account in breach of Rule 22
(c) both of the above
(d) neither of the above
12. which of the following may be withheld from client account?
(a) unpaid professional disbursements included in a payment of costs dealt with under rule 19(1)(b)
(b) money for payment of Counsels fees
(c) money for payment of stamp duty and Land Registry fees
(d) (b) and (c)
13. Which of the following is/are true
(a) the client account of a sole practitioner must be in the solicitor’s name
(b) the word “client” must appear in the name of the account
(c) the client account of a partnership must be in the surnames of the equity partners
(d) the client account of in-house solicitors must be in the name of the company
14. A payment of costs from the Legal Aid Board must be
(a) paid into office account
(b) paid into client account
(c) dealt with as a payment under Rule 21
(d) posted to the legally aided clients ledger
15. What is recommended when sending cheques payable to banks and building societies?
(a) to add the name and number of the account after the payee’s name
(b) to use recorded deliver post
(c) not to use cheques but to consider a CHAPS payment
(d) none of the above
16. In what circumstances may a solicitor not be required to pay interest on money held in client account?
(a) if the amount calculated is less than £50.00
(b) on money held for Counsel’s fees
(c) on money held for the Legal Aid Board after costs have been paid by a third party
(d) on stakeholder money
17. Where will a client apply for an interest certificate?
(a) the Office for the Supervision of Solicitors
(b) the Legal Services Ombudsman
(c) the bank where the firm’s client account is held
(d) to the firm’s senior partner
18. Which of the following are requirements of the guidelines for accounting procedures and systems?
(a) to keep books on the double entry principle
(b) to keep a master list of all files dealing with Court of Protection receivership work
(c) both of the above
(d) neither of the above
19. Does a registered foreign lawyer need to file an accounts report?
(a) no
(b) only if the lawyer has held or received client money in the relevant period
(c) yes
(d) only if fees are billed in sterling currency
20. How long must the reporting accountant’s letter of engagement be kept?
(a) two years after termination of the retainer
(b) three years after termination of the retainer
(c) six years after termination of the retainer
(d) twelve years after termination of the retainer
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