TRUST ACCOUNTS
(a) Object of trust accounts:
- To demonstrate that the trust funds have been applied in accordance with the trust instrument;
- To give details of transactions to trustees, beneficiaries and other interested parties.
(b) Accountability:
The accounts of a trust should include all the property of the trust whether or not in the hands of the trustees. For example, interests in expectancy and foreign property may not be under the trustees' control but should still be shown.
(c) Income and capital:
In many trusts different persons are entitled to the income and the capital and this necessitates a careful distinction between the two.
(d) Form of the accounts:
The accounts should be as simple as possible for the benefit of trustees and beneficiaries who are not trained in accounting. Trust accounts and supporting books and vouchers should be kept for a longer period than would be the case with commercial documents.