A court accounting balances. Charges on one side, credits on the other, matching totals. When they do not match, it goes back for correction. The cause is a classification issue: something entered on the wrong side, entered twice, or left off.
What are charges and credits?
Charges are what the fiduciary is responsible for. Property on hand at the start, what came in, gains on sales.
Credits are what happened to it. Disbursements, losses on sales, distributions, property on hand at the end.
Everything that came under the fiduciary’s control either went out, lost value on sale, or is still there. When the sides disagree, something is classified in the wrong place.
What throws it off?
Transfers counted as receipts. Money moved from savings to checking shows as a deposit in the bank download and gets picked up as income. The estate did not grow. The charges side did.
Sale proceeds counted as receipts. The return of carry value is already charged on the property on hand schedule. Only the gain or loss over carry value goes on the accounting. Running the full proceeds through as a receipt double counts.
Carry value updated to market. Non-cash assets carry the inventory value, and it does not move. Updating it partway through breaks the tie between the opening and closing schedules.
Reimbursements netted against expenses. An insurance payment offset against the medical bill it covered removes an item from each side. Both belong on the accounting separately.
Distributions left off. Money paid out to a beneficiary is a credit.
Finding the error
Work backward. Confirm closing balances against the institution statements. Confirm opening balances against the prior accounting or the inventory. If both ends are right, the error is inside the period. Receipts are the first place to look.
Compare the Schedule A total against actual deposits for the period and identify every deposit that was not new money.
Avoiding it
Records kept during the period. The classification decisions get made once, when the transaction happens and the context is available. An accounting assembled afterward from statements means guessing at the same decisions with less information.
Streamline Bookkeeping prepares court accountings and maintains the records behind them. More on the court accounting page.
*Bookkeeping services only. Not legal or tax advice.*
