Trust can be deposited through cash receipts. When the batch is posted, Juris debits Trust Asset and credits Trust Liability. Juris also automatically creates a journal entry batch behind the scenes.
Use these tips to understand how trust deposits, trust adjustments, and trust applied in Edit Prebills affect Juris accounting.
Trust adjustments for beginning balances
A trust adjustment may be used to create a beginning trust balance, such as when a firm is moving from another software package and needs to enter an existing trust balance.
When a beginning trust balance is entered this way, Juris creates a journal entry behind the scenes. The entry debits Trust Asset and credits Trust Liability.
Entering a trust balance this way affects the G/L. A reconciling entry must be entered for the trust bank to offset the out-of-balance issue. Do not post to G/L.
Trust adjustments for corrections
A trust adjustment may be used when a trust deposit was entered for the wrong client or matter.
To correct the trust allocation:
- Enter a negative amount for the client or matter where the trust should be removed.
- Enter a positive amount for the correct client or matter.
This credits Trust Asset and debits Trust Liability for the incorrect client or matter. It also credits Trust Liability and debits Trust Asset for the correct client or matter.
If an incorrect deposit was entered through cash receipts, correct it by entering a negative cash receipt.
Applying trust in Edit Prebills
When trust is applied in Edit Prebills, Juris debits the In-Transit account, also called the clearing account, and credits an A/R account selected by the client. This can be seen on a trial balance.
After the bill is posted:
Juris automatically creates a voucher behind the scenes to the Firm Vendor.
The voucher can be viewed from Vendors.
A check must be written for the voucher.
This debits Trust Liability and credits Trust Asset.
A cash receipt must be entered.
Enter the cash receipt on the Other tab and choose the operating account. The Other tab is used because this is a non-client cash receipt.
- The cash receipt debits the operating account and credits the In-Transit account.
Debits and credits reference
| Scenario | Debit | Credit |
|---|---|---|
| Trust is deposited | Trust Asset | Trust Liability |
| Bill with applied trust is posted | Trust In-Transit | A/R Account |
| Check for the Firm voucher is written and posted | Trust Liability | Trust Asset |
| Cash receipt is entered on the Other tab | Regular Operating Account | Trust In-Transit |
After the check for the Firm voucher is written and posted, the debit and credit for the deposit are canceled out.
After the cash receipt is entered on the Other tab, the In-Transit account is canceled out and the firm receives the trust applied as income.