Bookkeeping guide for lawyers - The Law Society of Upper Canada - rc lsuc on 2025

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(1) A record called an escrow or trust account journal or an equivalent accounting system which records in chronological sequence all money belonging to others which is received or disbursed by the broker.
This is a chronological list of every transaction in the trust account. The journal shows activity in the account for all clients. Like a checkbook register for a personal checking account, the journal shows the date, source/payee, amount of the transaction and balance for the entire account.
As set out in subsection 57(1) of the Law Society Act, a mixed trust account is one in which a licensee holds money in trust for or on account of more than one client in one fund.
You often have to provide a retainer (payment in advance) when you hire a lawyer. The lawyer must deposit that money in a bank account called a trust account. The lawyer will then withdraw from the account as work is done for you and billed to you. Any unused funds will be returned to you when the work is complete.
A client can authorise journal transfers to transfer trust money from one trust ledger account to another. The transfer must be authorised by the licensee or an authorised employee.
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Every time you record a trust receipt or payment in the trust receipts journal or trust disbursements journal, you must also record the receipt or payment for the specific client in the clients trust ledger, and calculate the unexpended balance for that client.
Columnar Record of All Trust Funds Received and Paid Out - Trust Fund Bank Account (DRE form RE 4522); 2.

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