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Auditor’s Corner – Rental Trust Account Disbursement Cycle

1. Prepare the trust account check. If the check is for one property ledger, record the applicable ledger on the memo line.

2. If the check pertains to more than one property/owner ledger, prepare a Supplemental Disbursement (check) Worksheet to detail the property, purpose and amount of the check.  This is the basis for an audit trail to the journal and property legders.

3. Record the check on the journal. Calculate and record the running journal balance.

4. Post the information on the supplemental disbursement (check) worksheet onto the individual property ledger sheets. Calculate and record the running balance on each property ledger sheet.

5. Reconcile all the individual property ledgers to the journal (i.e., add up the ending running balances on the ledgers and compare to the ending journal balance for agreement).

This article came from the March 2007-Vol37-3 edition of the bulletin.