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

Impairment of Long-lived assets, How to calculate fair value of long-lived ...

How to calculate fair value of long-lived asset when the information about fair value is not available?

Dissolution-liquidation of companies, Dissolution If the winding up con...

Dissolution If the winding up continues for more than a year, the liquidator must file progress reports with the registrar at such intervals as the court may prescribe s.333. W

Explain your findings and conclusion, When the stock market is going up ove...

When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock mar

The optimal distribution policy strikes, The optimal distribution policy st...

The optimal distribution policy strikes that balance between current dividends and capital gains that maximizes the firm's stock price

Fair market value, Stepped Up Basis -Usually, the foundation of property ac...

Stepped Up Basis -Usually, the foundation of property acquired by INHERITENCE, BEQUEST or device from a DECENDANT is the FAIR MARKET VALUE of the property on the date of decendant'

Calculate infant mortality rate, Q. Calculate infant mortality rate? Mid...

Q. Calculate infant mortality rate? Mid year population 440000 Late fatal death          29 No. of live birth           5200 No. of infant death      423 No. of mate

determine the hibor , The following are the three-month HIBOR and three-ye...

The following are the three-month HIBOR and three-year EFN futures prices for September 2010 contracts.   a Determine the HIBOR in three-months for settling the futures

Estimate unconditional and conditional default probability, XYZ Inc. whose ...

XYZ Inc. whose stock is currently valued at $125/share with an implied volatility of 40% has debt of $80/share. a. Assuming a global recovery rate of 50% and a standard deviatio

Financial reporting, Describe Following questions:- Q.1 What organizatio...

Describe Following questions:- Q.1 What organizations are responsible for governing financial reporting? What is the role of each organization? How have the roles changed in the

Minority interest-group accounts, Minority interest (MI) When the holding...

Minority interest (MI) When the holding company owns less than 100% of the ordinary share capital of the subsidiary company then the other balance is held by minority interest. T

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