Executors accounts-executor laws and accounts, Financial Accounting

EXECUTORS' ACCOUNTS

(a) Stewardship:
The main object or preparing Estate Accounts is to record the assets which have been entrusted to the "stewards" — the executors — and the manner in which they have been applied.

(b) Distinction between income and capital:
Where the estate has both a life tenant and a remainderman, it is necessary to segregate so as to distinguish between the interest of the life tenant in the income and that of the remainderman in the capital. Segregation is achieved either by the use of columns separating income from capital or separate accounts. Where there is no life interest, this apportionment is not necessary.

(c) Apportionment:
Apportionment may be according to statutory rules or those established in equity. With the majority of items, it is relatively easy to decide whether they are capital or income, but in a few cases it is not possible to allocate them completely to either section.

In these cases it is necessary to apportion the item between income and capital. The Apportionment Act sets out a number of situations in which an apportionment is to be made and such division between income and capital is termed a statutory apportionment.There are also a number of situations where the statutory apportionments do not apply.

In these cases, the courts have laid down rules as to how the division is to be made and these are termed equitable apportionments.

(d) Accounts required:
The basic accounts required for an estate or trust are as follows:—

  • Estate capital account;
  • Estate income account;
  • Estate cashbook;
  • Various accounts for the assets and liabilities, income and expenditure of the estate or trust.

 

(e) Executors' accounts and trustees' accounts:
Executors' and trustees' accounts are in many respects similar.  Both distinguish between income and capital but may do so for different reasons. Estate accounts arise because of the death of a person.

Trustees' accounts may arise simply as an extension of estate accounts, where part of the deceased's property is held in trust.  Alternatively, trust accounts may arise as a result of a settlement inter vivos.

Posted Date: 12/13/2012 5:12:04 AM | Location : United States







Related Discussions:- Executors accounts-executor laws and accounts, Assignment Help, Ask Question on Executors accounts-executor laws and accounts, Get Answer, Expert's Help, Executors accounts-executor laws and accounts Discussions

Write discussion on Executors accounts-executor laws and accounts
Your posts are moderated
Related Questions
inventory ratio of 4 compared to 7.1

Long-term Debt   10% notes payable $1,000,000 7% convertible bonds payable 5,000,000    Discount

Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) in

INTRA COMPANY ADJUSTMENTS In preparing the consolidated balance sheet, the following items may require adjustments:. 1    Goodwill 2    Unrealized profit on closing inventory 3

Q. Retained earnings is increased by each of the following except a. some disposals of treasury stock. b. net income. c. prior period adjustments. d. All of these increase retained

Cashflows from operating activities  operating activities are the principle revenue generating activities of the business and examples of such cashflows include: Cash re

Courts application for grant A court may: 1) Wherein a deceased person is proved whether by production of a will or authenticated copy of the will or by oral evidence of its

During FY 2014, the voters of Surprise County approved construction of a $21 million police facility and an $11 million fire station to accommodate the county's population growth.


Illustrations of Changes in accounting estimates B Ltd., bought an item of plant at a total cost of £100,000. The estimated useful life commencing from 1st January 2000 was 10