To exercise attorney competence in the management of client trust accounting, a basic understanding of the double entry accounting system is helpful. In a double entry accounting system, every transaction is entered into the company’s books twice: once as a credit in one account, and once as a debit in another account. If the debits and credits are entered correctly, they will equal one another, or balance out, at the end of each accounting period; if the debits and credits do not balance out, then there is an error somewhere in the accounting.
Continue reading