Picture the moment. You are 40 minutes into the FLK2 paper, the clock is bleeding away, and a Single Best Answer question shows a client paying £3,000 into your firm on account of costs. Four of the five options describe where that money should be posted. Three of them are plausible. If your grasp of double-entry bookkeeping is shaky, you will guess — and the SRA writers know exactly which wrong answer feels safest.
Solicitor Accounts frightens candidates who trained in law rather than accountancy. But here is the reassuring truth: the maths is primary-school level. What trips people up is not arithmetic — it is knowing which ledger a figure belongs to and which direction the entry moves. Get that mental model right and this becomes one of the most scoreable areas on the whole SQE1 syllabus.
Why Solicitor Accounts is a quiet FLK2 goldmine
Most SQE1 subjects reward broad reading. Solicitor Accounts rewards drilling a narrow set of rules until they are automatic. The SRA Accounts Rules 2019 are short — a handful of pages — and the exam tests them mechanically. That means a candidate who invests ten focused hours can turn near-blind guessing into near-certain marks.
The core principle sits behind every question: client money is not your firm's money. It is held on trust for the client or a third party. You must keep it separate, record it accurately, and be able to return it on demand. Once you internalise that, most "which is correct" questions answer themselves.
The two accounts you must never confuse: the client account holds money belonging to clients and third parties; the business account holds the firm's own money. A single misposting between them is a breach of the Rules — and a favourite exam trap.
Client money vs business money: the sorting test
Before you touch a ledger, ask one question of every receipt: whose money is this? Money on account of costs, money for disbursements not yet paid, settlement funds, deposit funds on a purchase — all client money, all into the client account. A payment of your firm's own fixed fee that the client already owes, or reimbursement of a disbursement the firm has already paid from its own funds, is business money.
A classic distractor: a client sends £600 to cover a court fee you have not yet paid. That is client money — client account. Contrast it with a client sending £600 to reimburse a court fee you already paid from the business account. That is business money. Same figure, same court fee, opposite destination. The exam loves this symmetry.
Double-entry made simple: two ledgers, two sides
Every transaction hits two places. For SQE1 you work with the client ledger (the record for one specific client, which has a client-account column and a business-account column) and the cash account (the firm's record of money moving in and out of the actual bank accounts).
Hold onto this pairing:
- Money received → DR (debit) the cash account, CR (credit) the client ledger.
- Money paid out → CR (credit) the cash account, DR (debit) the client ledger.
Say your client Mrs Okafor pays £3,000 on account of costs. Client money, so: DR cash account (client column) £3,000; CR client ledger (client column) £3,000. The client account now shows you are holding £3,000 for her. When you later pay a £500 expert's fee from that money, you reverse the direction: CR cash account (client column) £500; DR client ledger (client column) £500. Her held balance drops to £2,500. That is the whole engine.
Billing and transferring costs between accounts
Here is where candidates lose marks. When you bill the client for your professional charges, you raise the invoice on the business side — you are not moving cash yet, just recording that costs are now owed to the firm. VAT is added at the standard rate on your professional fees. Only after billing may you transfer money held in the client account to the business account to settle that bill.
That transfer is two paired postings: money leaves the client account and arrives in the business account. Watch the sequence in questions — you cannot take costs from client money before you have delivered a bill. Taking the money early is a breach, even if the amount is correct. The Rules care about order, not just outcome.
Exam habit worth building: whenever you see costs being taken, check two things before choosing an answer — has a bill been delivered, and has VAT been dealt with correctly? Miss either and the "clean-looking" option is the wrong one.
The breach questions the SRA writers love
A large slice of Solicitor Accounts MCQs test whether a breach has occurred and what must be done about it. Learn these recurring scenarios and you will recognise them instantly under time pressure.
Overdrawn client ledger. You must never pay out more client money for a client than you actually hold for that client. If a payment would push their client ledger balance below zero, you would effectively be spending one client's money on another's matter — a serious breach. When a question shows a held balance of £400 and a proposed payment of £550, the correct answer is almost always that the payment cannot be made from client money as it stands.
Mixed receipts. A single cheque might contain both client money (£2,000 on account) and business money (£300 settling a delivered bill). The tidiest approach the Rules permit is to split it: the client portion to the client account, the business portion to the business account. Watch for options that dump the whole sum into one account.
Prompt correction. Where a breach happens — say client money is accidentally paid into the business account — the Rules require it to be corrected promptly upon discovery. Questions test whether you know the money must be moved to the right account without delay, not left to the next reconciliation.
Interest on client money
Firms must account to clients for a fair sum of interest on client money held, or operate a written policy that achieves fairness. SQE1 rarely asks you to calculate a precise interest figure. It is far more likely to test the principle: the client is entitled to a fair amount, and the firm cannot simply keep the interest earned on money that is not its own. Read the policy facts in the stem carefully.
A worked mini-example to lock it in
Let us run one small matter end to end. Your client, Mr Dalby, instructs you on a contract dispute.
- He pays £1,000 on account of costs. Client money: DR cash (client) £1,000; CR client ledger (client) £1,000. You hold £1,000.
- You pay a £240 court fee that has not yet been billed. Client money: CR cash (client) £240; DR client ledger (client) £240. Held balance £760.
- You deliver a bill for £500 plus £100 VAT. Business side entries record £600 now owed to the firm. No cash has moved yet.
- You transfer £600 from client to business account to settle the bill. Money leaves the client account (client column) and enters the business account (business column). Mr Dalby's held client balance falls to £160.
Notice that the final £160 is still his money, sitting in the client account, ready to return or apply to future work. If a later question tried to pay a £300 disbursement out of that £160 client balance, alarm bells should ring — that would overdraw his ledger.
How to revise Solicitor Accounts for the SQE1 FLK2 paper
Reading the Rules once will not cut it. This is a doing subject. Build a simple two-column ledger template and post the same handful of transaction types — receipt of client money, payment of a disbursement, billing, transfer of costs, refund of a balance — until your hand moves before your brain does.
Then attack MCQs in timed batches. Remember the exam shape: FLK2 is one of two SQE1 papers, each 180 Single Best Answer questions across five hours and twenty minutes, so speed on mechanical topics like this buys you thinking time elsewhere. Every second saved on an Accounts question is a second gifted to a knottier Land Law or Trusts problem.
A quick self-check before you sit the exam: can you, from memory, state which account each type of receipt goes into, name the two paired postings for any transaction, and spot the three breaches above in under thirty seconds each? If yes, you are ready. If not, drill the gaps — they are small and closeable.
If you would like structured practice for this, the CELE SQE (celebar.com) programme covers all 13 FLK subjects with worked ledger examples and exam-style questions. Our SQE1 courses run from £1,750 for the short-term option up to £3,720 for the long-term course, with single-FLK options at half price if you only need FLK2, and a £150 early-bird discount. Reach us any time on WeChat SQE100 or at [email protected] — no pressure, just point us at the topics that still feel wobbly and we will help you close them.