A firm delivers a bill for £1,200 for work completed. The client pays the £1,200 by transfer. How should the firm treat the payment?
Answer and explanation
Correct answer: A. As office money in settlement of the bill
- Step 1: Money paid in settlement of a properly delivered bill is the firm's money.
- Step 2: It does not need to be held in the client account.
Answer
As office money in settlement of the bill.
Why not the others: It is not client money because the work has been billed; it is not a loan; it is lawful.
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