Ask a tax advisor on the topic of Other questions to tax advisors

Booking trust accounts

November 16, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

Hello,

we have taken out a loan, which correctly appears in the liabilities as a liability and is booked as such. However, part of the amount has been paid into a trust account with a lawyer, under whose name the account is also held. Is it correct that this trust account must be booked in our accounting as an accounts receivable? And if so, on which account should I book this? If I am wrong, I would appreciate it if you could give me information on how to treat this trust account.
Thank you in advance.

Kind regards

Dipl.BW/SB Ulrich Stiller

Dear inquirer,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your involvement in an initial consultation as follows:

If the loan amount was paid into the trust or escrow account of the lawyer, you must treat this account as a receivable in your accounting.

The booking entry is as follows:

Trust account for loan no. in debit to loan in credit.

I hope I was able to assist you.

Best regards,

Ulrich Stiller
Tax consultant/Diploma in Business Administration