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Additional resources for Client Accounting for the Law Office (Lq-Paralegal)
Control accounts are always balancesheetaccounts. The totals of special journals (such as accounts payable and billing journals) are posted to thegeneral ledger, with an eqzrnl orzd conczrrrerzt (not opposite) entry made tosubsidiary ledgers, so that the control accountbalance always equals the total of all subsidiary ledgers. Accumulation accounts may be balance sheet or income statement accounts. As with control accounts, the entries arise mostly from a TERMS general ledger (G/L) The complete set of ledgers for financial accounts.
However, undervaluing the importance of secondary controls (for example, by allocating inadequate human and computer resources to accounting functions) can undermine the effectiveness of primary controls. The greatest obstacle in properly applying tertiary controls is the temptation to use them to fix blame, rather than tocontrol the incidence andpractical effects of errors. CHAPTER 1 ACCOUNTING FUNDAMENTALS Practical Applicatiol7 1-7 35 Bonny:Some of thesenewprocedureslook like they're intended to makemelook bad!
But the client misunderstood, hunted around for the check, found it, and changed theold check date and cashedit. The bank accepted it because the change was initialed. Then the client cashed the new check we'd sent as well, which made our trust account short by over five hundred dollars. In fact, the account was more or less dormant, held only small old trustbalances, and actually became overdrawn. If our bank personnel hadn't been on their toes, other trust checks would have been returned NSF!