SQE1 Solicitors Accounts (FLK2): the SRA Accounts Rules and how they are tested

How is Solicitors Accounts tested in SQE1?

Solicitors Accounts is an FLK2 subject tested through single best answer questions in the context of Property Law and Practice and Wills and the Administration of Estates. You apply the SRA Accounts Rules and accounting principles to client matters: identify whose money is held, decide whether it can move and recognise the required accounting entries. (SRA, SQE1 Assessment Specification) (SRA, FLK2 specification)

The blueprint includes accounts within property and wills, rather than assigning it a separate percentage.(SRA, SQE1 Annex 4) Revise it alongside our guides to Property Practice and Wills and Estates so the accounting follows the transaction.

What does the SRA specification cover?

The syllabus covers both handling money correctly and recording what happens. Use this paraphrased checklist to organise revision. (SRA, FLK2 specification)

Accounting entries recur throughout the specification. Practise receipts, withdrawals, interest, corrections and transfers as well as recognising the regulatory rule. (SRA, FLK2 specification)

Start by identifying client money

Rule 2 covers money connected with regulated services for clients, money held for third parties in that context, and money held as trustee or under specified appointments. Fees and unpaid disbursements received before a bill is delivered also fall within its definition. A payment towards future fees is therefore not automatically the firm’s money. (SRA Accounts Rules)

The general requirement is prompt payment into a client account. For money held under Rule 2.1(c), Rule 2.3 allows an exception where payment would conflict with rules or regulations governing the specified office or appointment. It also allows exceptions for Legal Aid Agency payments for the firm’s costs and an alternative arrangement agreed in writing with the client or third party for the individual circumstances.(SRA Accounts Rules)

Rule 2.2 contains a separate, limited exception where the only client money held or received is for fees or unpaid disbursements before delivery of a bill for them. Any disbursement money must relate to costs or expenses the firm has incurred on the client’s behalf and for which it is liable. The exception is available only if the firm does not maintain a client account for any other reason and has told the client in advance where and how the money will be held. Check every condition before applying this exception. (SRA Accounts Rules)

Check the purpose, authority and balance before moving money

Rule 4.1 requires separation of client money from the firm’s money, except for money held outside a client account under Rule 2.2. Rule 4.2 requires prompt allocation of mixed payments to the correct accounts. Before transferring client money from a client account to pay costs, give the client or paying party a bill or other written notification of costs incurred. The payment must match the specified sum and be covered by funds held for that client or third party. (SRA Accounts Rules)

Rule 5 permits withdrawals of client money from a client account only for the purpose for which funds are held, on the relevant client’s or third party’s instructions, or with prior written SRA authorisation or in prescribed circumstances. Withdrawals must be appropriately authorised and supervised, with sufficient money held for that specific client or third party. A positive balance across the whole account is insufficient. (SRA Accounts Rules)

Client instructions do not remove Rule 3’s prohibition on providing banking facilities. Account movements must relate to the firm’s regulated services. Under Rule 2.5, return money promptly once there is no proper reason to retain it. (SRA Accounts Rules)

Connect records and controls to their purpose

Rule 8 requires accurate records made contemporaneously and in chronological order, identifying the client and matter. Client money transactions belong on the client side of the ledger; non-client money transactions and bills belong on the business side. Keep a central, accessible record of bills and written costs notifications.(SRA Accounts Rules)

Reconcile client accounts at least every five weeks, comparing the bank or building society statement balance, cash book balance and client ledger total. The compliance officer for finance and administration (COFA) or a manager must sign off the record; investigate and resolve differences promptly. Rule 13 requires secure storage and retention of accounting records for at least six years. (SRA Accounts Rules)

Under Rule 6, correct breaches promptly on discovery and immediately pay in or replace money improperly withheld or withdrawn from a client account. Rule 7 requires a fair sum of interest on client money, subject to a different written arrangement with the client or third party supported by sufficient information for informed consent. Rule 7 does not apply to money held outside a client account under Rule 2.2.(SRA Accounts Rules)

Subject to exemptions, Rule 12 requires an accountant’s report within six months after the accounting period ends where, during that period, the firm has held or received client money or operated a joint account or a client’s own account as signatory. Delivery to the SRA within that deadline is required where the report is qualified for breaches that put client or third-party money at risk, have done so or are likely to do so. The SRA also has power to require a report. (SRA Accounts Rules)

What does the question format require?

SQE1 is closed book. Each single best answer question offers five options, with one correct answer. It tests application to realistic client and ethical situations at newly qualified solicitor level, and may combine subjects within FLK2. (SRA, SQE1 Assessment Specification) Compare each option against the transaction stage, the person entitled to the money and the proposed action.

From January 2027, Solicitors Accounts questions in the wills context appear in FLK2 Session 1 and those in the property context in Session 2. Questions remain mixed within each session’s subjects. (SRA announcement, 10 September 2026) Our single best answer guide explains how to compare options.

Revision pitfalls and a practice routine

Avoid treating money’s location as proof of its ownership, assuming a bill permits any withdrawal, or checking only the overall bank balance. The classification, costs-transfer and individual-funds requirements still apply.(SRA Accounts Rules) Another revision trap is recognising a rule without being able to record the corresponding entries, which the syllabus expressly includes. (SRA, FLK2 specification)

As a study method, work through each practice transaction in order: classify the money, identify the account, check authority and available funds, then record the entries. Explain both the movement and its justification before checking the answer. For bills and disbursements, identify the accounting method and VAT treatment before calculating. Keep the rule and the arithmetic separate in your error notes.

Revisit missed distinctions in later sessions, then mix accounts with conveyancing and estate administration. Try the free SQE1 quick test for mixed-subject practice and use the SQE1 course page to check subject coverage. The quick test is a starting point for revision, not a complete accounts assessment. This guide is study material, not legal advice.

High Performer Certs is an independent study platform. It is not affiliated with or endorsed by the Solicitors Regulation Authority (SRA), and it is not authorised or accredited by the SRA or the SQE assessment provider. The SQE and SOLICITORS QUALIFYING EXAMINATION trade marks are the property of and are used under licence from the Solicitors Regulation Authority.