SQE1 sample questions

Question 72

A firm of solicitors is acting on behalf of the purchaser of a property. The firm is holding £1,500 for the client on account of costs in its general client bank account. The firm receives an invoice of £400 plus £80 VAT in respect of a surveyor’s fee which is addressed to the firm. The client asks the firm to pay the invoice.

Which of the following best explains how the firm should pay the invoice?

A. The firm should pay £480 from its business bank account using the principal method.

B. The firm should pay £480 from its general client bank account using the principal method.

C. The firm should pay £480 from its business bank account using the agency method.

D. The firm should pay £480 from its general client bank account using the agency method.

E. The firm should pay £400 from its general client bank account using the agency method and £80 from its business bank account using the principal method.


A - The firm should pay £480 from its business bank account using the principal method.


 

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