Executors accounts-executor laws and accounts, Financial Accounting

Assignment Help:

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.


Related Discussions:- Executors accounts-executor laws and accounts

Effective vs nominal rates, In the above illustration we have consider how ...

In the above illustration we have consider how the future value modify along with the modification in frequency of compounding. So as to understand the relationship among effectual

The opening entries-executorship laws and accounts, The opening entries 1...

The opening entries 1. Assets of the estate or trust In both cases the various assets of the estate or trust are debited to appropriate accounts and credited to the Estate Ca

Main factors establishing a pricing policy, What are main factors that Nor'...

What are main factors that Nor'easters should take into account in establishing a pricing policy? The minor revenue generators of Nor'easters include corporate sponsorships and

Illustration: holding company with direct share holding, Illustration: Hold...

Illustration: Holding company with direct share holding Rain Ltd., Storm Ltd. and Thunder Ltd. are in the business of manufacturing tents. Their balance sheets as at 30 September

Annulment of order-adjudication of debtor, Annulment of order The order...

Annulment of order The order may be annulled if In the opinion of the court the debtor ought not to have been adjudicated bankrupt; All the debts have been paid in fu

Excel., prepare an balance sheet

prepare an balance sheet

Example of abc analysis, Illustration: Dinesh Limited is looking selective...

Illustration: Dinesh Limited is looking selective control for its inventories. By using the subsequent datas, prepare the ABC plan. Items                 A           B

Basic interest rate and maximum interest rate, Suppose a risk neutral agent...

Suppose a risk neutral agent has $100,000 today that he wants to save for one year. Compare the following two savings plans. Bank A offers a standard savings account with 4% p.a

Prepare the partners'' present account , Need: a.    Prepare an Income ...

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

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd