Which statement about client money is correct?

• A. Client funds may be mixed with the solicitor's personal funds if kept separate
• B. Client funds must be held in designated client accounts with proper accounting and safeguarding
• C. All client funds should be deposited in the firm's general account
• D. No formal accounting is required

Answer: (B)

Client money must be held on trust and kept completely separate from the solicitor’s own funds. To ensure protection and accountability, it should be kept in designated client accounts, with proper accounting records, regular reconciliations, and safeguarding measures. This is why that statement is correct: it captures the requirement to segregate client funds from the firm’s money and to maintain clear, auditable controls over them. Mixing client funds with the solicitor’s personal funds, depositing all client money into the firm’s general account, or doing away with formal accounting would breach trust and regulatory obligations designed to protect clients.