Executors accounts-executor laws and accounts, Financial Accounting


(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
On January 1, 2011, Doty Co. redeemed its 15-year bonds of $2,500,000 par value for 102. They were originally issued on January 1, 1999 at 98 with a maturity date of January 1, 201

Q. Define Return on capital employed? Return on capital employed (ROCE) is as well called accounting rate of return. Distinctly IRR ROCE uses average annual accounting profit b

Errors in Financial Statements The following financial statements are available for Sherwood Real Estate Company: Balance Sheet Assets Liabilities Cash . . . . . . . . . . . . . .

Assume you hold a diversified portfolio having of a $7,500 investment in every of 20 different common stocks. The portfolio's beta is 2.15. Now, assume you sell one of the stocks w

Complete the table and use the information to determine profit maximization or loss minimization. 1. Complete the table Normal 0 false false false EN-I

I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta

Alta Velocidad Esperanza de L'Argentina, Sociedad Anónima (AVE), a high-speed railway operator domiciled in Rio Norte, Argentina, is a Foreign Private Issuer as defined by the U.S.

Q. Report to stockholders of a company? Annual Report - Report to stockholders of a company that includes company's annual,audited BALANCE SHEET and related statements of earni

Two items are omitted from each of the following summaries of balance sheet and income statement data for two corporations for the year 2014, Steven Craig and Georgia Enterprises.

Need: a.    Prepare an Income Statement by with appropriation account for the financial year ended 31.12.2010                            b.    Prepare the partners' present a