GIFT OF 
 
GENERAL INFORMATION 
 
 ON THE' 
 
 GEORGIA C. P. A. EXAMINATIONS 
 and TYPICAL QUESTIONS 
 
 EDITED BY 
 JOEL HUNTER, C. P. A. 
 
 PRICE ONE DOLLAR 
 
 ATLANTA, GA. 
 
 PRESS OF APPEAL PUBLISHING COMPANY 
 January* 1913 
 
I 
 
GENERAL INFORMATION ON 
 
 THE GEORGIA C. P. A. 
 
 LAW. 
 
 EDITED BY JOEL HUNTER, C. P. A. 
 
 Certificates are granted under the au- 
 thority of a law enacted by the Legislature 
 and approved by the Governor, August 
 17, 1908. 
 
 The examinations are conducted by a 
 board of three examiners, consisting of 
 two Certified Public Accountants and one 
 Attorney. The examinations are held on 
 the third Wednesday of May and Novem- 
 ber of each year. The present Board (1912) 
 is made up of Messrs. R. W. Jemison, C. P. 
 A., of Macon, Joel Hunter, C. P. A., of At- 
 lanta, and Hudson Moore, Esq., Attorney at 
 Law, also of Atlanta. Upon the recommen- 
 dation of this board, certificates are issued 
 by the Governor to candidates who pass 
 the examinations. Certificates may be re- 
 voked by the Governor, for sufficient cause 
 upon the recommendation of the Board of 
 Examiners. 
 
 Applicants must be citizens of the 
 United States, residing and having an of- 
 fice for the regular transaction of busi- 
 
6 General Information on the 
 
 ness in the State of Georgia and must be 
 over the age of twenty-one years, and of 
 good moral character. 
 
 Any person unlawfully using the title 
 "Certified Public Accountant'' or the ini- 
 tials "C. P. A." is guilty of a misdemeanor 
 and liable, upon conviction, to a fine, not 
 exceeding five hundred dollars and not less 
 than two hundred dollars. 
 
 All applications must be filed with the 
 Board, at least ten days before the date 
 fixed for any examination. 
 
 A grade in each subject of at least sev- 
 enty-five points, out of a possible hundred 
 points will be necessary to pass any exam- 
 ination. 
 
Georgia C. P. A. Examinations 
 
 AN ACT 
 
 Passed by the Senate and House of Represen- 
 tatives and Approved by the Governor, 
 August 17, 1908. 
 
 To ESTABLISH A BOARD FOR THE EXAMINATION 
 OF ACCOUNTANTS, TO PROVIDE FOR THE 
 GRANTING OF CERTIFICATES TO ACCOUNTANTS 
 AND TO PROVIDE A PUNISHMENT FOR THE VIO- 
 LATION OF THIS ACT. 
 
 Section 1. Be it enacted by the Senate and 
 House of Representatives of the Common- 
 wealth of Georgia in General Assembly met 
 and it is hereby enacted by the authority of the 
 same, That any citizen of the United States re- 
 siding and having an office for the regular 
 transaction of business in the State of Georgia 
 being over the age of twenty-one years and of 
 good moral character and who shall have re- 
 ceived from the Governor of the State of Geor- 
 gia a certificate of his qualification to practice 
 as a Public Expert Accountant as hereinafter 
 provided, shall be designated and known as a 
 Certified Public Accountant, and no other per- 
 son shall assume such title or use the abbrevia- 
 tion C. P. A., or any other words, letters or fig- 
 ures to indicate that the person using the same 
 is such Certified Public Accountant. Every 
 
8 General Information on the 
 
 person holding such certificate, and every co- 
 partnership of accountants, every member of 
 which shall hold such certificate may assume 
 and use the title of Certified Public Account- 
 ants or the abbreviation thereof C. P. A., pro- 
 vided that no other person or co-partnership 
 shall use such title or abbreviation, or other 
 words, letters or figures to indicate that the per- 
 son or co-partnership using the same is such 
 Certified Public Accountant. 
 
 Section 2. The Governor of the State of 
 Georgia shall appoint a board of three exam- 
 iners for the examination of persons applying 
 for certification under this Act. Two of said 
 examiners shall be Public Accountants who 
 shall have been in practice for at least five 
 years, one of whom shall be appointed for the 
 term of two years, and one for the term of 
 three years, and upon the expiration of each of 
 said terms an examiner shall be appointed for 
 the term of three years, and after the year One 
 Thousand Nine Hundred and Eight, these two 
 examiners shall be Certified Public Accountants. 
 The other examiner shall be a practicing attor- 
 ney in good standing in any of the Courts in 
 the State of Georgia, who shall be appointed 
 for the term of two years, and upon the expira- 
 tion of said term a successor shall be appointed 
 for the term of three years. The examination 
 
Georgia C. P. A. Examinations 9 
 
 for certificates shall be based upon an examina- 
 tion in Theory of Accounts, Practical Account- 
 ing, Auditing, Commercial Arithmetic and 
 Commercial Law. Said Examinations shall 
 take place twice a year in the City of Atlanta, 
 during the months of May and November of 
 each year under such rules and regulations as 
 may be adopted by the board. The fees pro- 
 vided by this Act shall be twenty-five dollars 
 for each applicant, from which shall be paid 
 the expenses incident to each examination, in- 
 cluding stationery, clerk hire, and traveling ex- 
 penses of the Examining Board. The results 
 of such examinations shall be certified to the 
 Governor, and filed in the office of the Secretary 
 of State, and kept for reference and inspection 
 for a period of not less than five years, and the 
 Governor to issue the certificate. 
 
 Section 3. The Governor of the State of 
 Georgia may revoke any such certificate for suf- 
 ficient cause upon the recommendation of the 
 board of examiners, who shall give written no- 
 tice to the holder thereof, and after he has had 
 a hearing thereon. 
 
 Section 4. The board of examiners may in 
 its discretion waive the examination of any per- 
 son who shall have been for three years imme- 
 diately preceding the passage of this Act prac- 
 ticing in the State of Georgia or a sister State 
 
10 General Information on the 
 
 as a Public Accountant, and who shall apply in 
 writing for such certificate within three months 
 after the passage of this Act. 
 
 Section 5. If any person shall hold himself 
 out as having received the certificate provided 
 for in this Act or shall assume to practice there- 
 under as a Certified Public Accountant or use 
 the initials C. P. A. without having received 
 such certificate, or after the same shall have 
 been revoked, he shall be deemed guilty of mis- 
 demeanor, and upon conviction thereof shall be 
 sentenced to pay a fine not exceeding Five Hun- 
 dred Dollars nor less than Two Hundred Dol- 
 lars. 
 
Georgia C. P. A. Examinations 11 
 
 STATE OF GEORGIA 
 
 RULES 
 
 OF 
 
 EXAMINATION FOR C. P. A. CERTIFICATE 
 UNDER THE LAWS OF GEORGIA 
 
 Approved August 17th. 1908 
 
 1. Examinations shall include questions on: 
 Commercial Arithmetic, (a) 
 Theoretical Accounting, (b) 
 Practical Accounting. (c) 
 Auditing. (d) 
 
 Commercial Law. (e) 
 
 2. The examination will take approximately 
 
 two days and will be written. 
 3. The answers to the questions in all subjects 
 must be completed within the time allotted 
 and mentioned on the paper for each ex- 
 amination. 
 
 4. All answers must be written on blanks fur- 
 nished by the examining board at each ex- 
 amination. 
 
 5. The writing must be in ink and legible. 
 6. The board will not be responsible for mis- 
 construing any writing which may be diffi- 
 cult to decipher. 
 
 7. All examination papers must be written in 
 accordance with the instructions given prior 
 to each examination. 
 
12 General Information on the 
 
 8. The examination question papers cannot 
 be taken away, and shall remain the prop- 
 erty of the board. 
 
 9. When applicant enters the examination 
 room he will be handed an unsealed en- 
 velope containing a blank card. Upon this 
 card applicant writes his name, and the ex- 
 aminer in charge puts a number. Appli- 
 cant is notified of his number, after which 
 the envelope is sealed and filed. 
 
 10. The applicant is then handed another en- 
 velope unsealed, containing the examination 
 questions. These he will answer and sign 
 by the number which he has been given. At 
 the expiration of the time limit he will en- 
 close in the original envelope, the printed 
 questions and written answers, and all 
 memoranda he may have made, seal the en- 
 velope, and hand it to the examiner in 
 charge. 
 
 11. Applicants are strictly enjoined from 
 bringing into the examination room any 
 printed or written matter, blank books, 
 blank paper or any material which might 
 be referred to or used in the examination. 
 Except a fountain pen or its equivalent 
 (steel pen and holder). No notes, papers 
 or memoranda of any kind to be taken out 
 of the room. 
 
Georgia C. P. A. Examinations 18 
 
 12. A candidate to pass an examination must 
 receive seventy-five points in each subject. 
 
 13. The marking of papers shall be mainly 
 governed by the correctness of the answers ; 
 general appearance and expression will, 
 however, be considered. 
 
 14 All applications shall be made on blanks 
 provided by the board, accompanied by a 
 fee of Twenty-five Dollars, and filed in ac- 
 cordance with the rules and regulations 
 stated herein, and at least ten days prior to 
 the taking of an examination. 
 
 15. Applicants must be over the age of twenty- 
 one years and of good moral character. Per- 
 sons convicted of a felony, misdemeanor, or 
 declared by any Court as having committed 
 fraud or other crimes, shall not be consider- 
 ed as of good moral character. 
 
 16. Certificates will only be issued to those ap- 
 plicants who furnish positive evidence of 
 good moral character, and the Board will 
 judge as to such character and cannot be 
 compelled to divulge the reason for its de- 
 cision. 
 
 17. Ample notice will be given to each appli- 
 cant of the time and location selected for 
 holding the examination, and each one must 
 be present and prepared to engage in his 
 task promptly at the appointed hour. 
 
14 General Information on the 
 
 18. Failure to do so will be considered as suffi- 
 cient cause for exclusion from attendance 
 at any session of the examination when once 
 begun. 
 
 1 9. Any applicant failing to attend at the open- 
 ing of any subsequent session or who may 
 be excluded for tardiness or misconduct will 
 forfeit the amount of his fee. 
 
 20. Applicants must appear when so required 
 before the Board in person to answer any 
 question, or produce additional evidence re- 
 quired by the Board to sustain such facts as 
 are necessary to determine the qualifications 
 prescribed by the law. 
 
 21. The Chairman will communicate to each ap- 
 plicant in writing the decisions reached by 
 the Board in his case, but in no event will 
 any information be given as to reasons 
 leading to an adverse decision to anyone, 
 nor will any of the papers be accessible 
 for inspection at any time. 
 
 22. The act of filing an application for exami- 
 nation shall be deemed to be and shall con- 
 stitute an agreement upon the part of the 
 applicant that he will observe and conform 
 to the requirements expressed in these rules, 
 or such as may be promulgated hereafter. 
 
Georgia C. P. A. Examinations 15 
 
 PRE-EXAMINATION PAPERS 
 
 For the purpose of carrying out the C. 
 P. A. law, the Georgia Board has found it 
 necessary to provide certain blanks for the 
 applicant to sign. These are: 
 
 1 Application for a C. P. A. Certificate. 
 
 2 Evidence as to Age, etc. 
 
 3 Certificates of Moral Character 
 (three blanks) . 
 
 On the pages following, copies are given 
 of each of these blanks. 
 
Georgia C. P. A. Examinations 17 
 
 STATE OF GEORGIA 
 APPLICATION 
 
 FOR A 
 
 CERTIFIED PUBLIC ACCOUNTANT'S 
 CERTIFICATE 
 
 To the Georgia State Board, Examiners of Public 
 Accountants, Atlanta. 
 
 Gentlemen: I desire to become an applicant for a 
 C. P. A. Certificate, which will entitle me to practice, 
 and be styled and known as a Certified Public Ac- 
 countant under the rules adopted by the Board in 
 conformity with the C. P. A. Law of Georgia. 
 
 I enclose you herewith, 
 
 1. Required evidence as to age, citizenship, pre- 
 liminary and professional education. 
 
 2. Three Certificates of Moral Character. 
 
 8. A certified check for $25.00 made payable to 
 the order of the Georgia State Board of 
 Examiners of Public Accountants. 
 
 I will appear before your Board whenever so re- 
 quested by you in writing, to take such examination 
 or submit such additional evidence respecting my 
 qualifications as may be required, or answer such 
 questions as may be propounded by your Board. 
 
 Signature of Applicant 
 
 P. O. Address 
 
 Telephone No. 
 Date 
 
18 General Information on the 
 
 STATE OF GEORGIA 
 
 Evidence as to Age, Citizenship, Qualifi- 
 cations, Etc. 
 
 To the Georgia State Board, Examiners of Public 
 Accountants, Atlanta. 
 
 I submit for your consideration the following evi- 
 dence : 
 
 1. Full name? ~ 
 
 2. Date and place of birth? 
 
 3. A citizen of the United States? 
 
 4. Residence this date? 
 
 5. How long a resident of Georgia? 
 
 6. Office or place of business? 
 
 7. Present business or occupation? 
 
 8. How many years have you practiced as a Pub- 
 lic Accountant on your own account? 
 
 9. Have you ever opened and closed a full set of 
 
 books of an extensive business? If so, in 
 
 what lines of business ? 
 
 10. Have you ever conducted an independent 
 audit? If so, in what lines of busi- 
 ness? 
 
 11. How many years as an assistant to a Pub- 
 lic Accountant? 
 
 12. If so, give names of Public Accountants you 
 have assisted? 
 
 13. Experience in the study or practice of ac- 
 counting (give here by years your experience in the 
 study or practice of accounting, stating how, along 
 
Georgia C. P. A. Examinations 19 
 
 what lines, and where employed during the periods 
 indicated). 
 
 Prior to January 1st, 190 
 
 During 190 , .... 
 
 During 190....... . 
 
 During 190 , . 
 
 During 190. , . 
 
 14. Have you read the full text of the law and are 
 you familiar with its provisions ? 
 
 15. Have you completed any of the courses given 
 by Schools or Institutes of Commerce, Accounts and 
 Finance ? If so, name them - 
 
 16. Are you a graduate of any bookkeeping or 
 commercial college? If so, name them 
 
 17. Give any other general information which may 
 aid the Board in passing on your qualifications. 
 
 I have never been convicted of a felony or misde- 
 meanor or declared by any Court of competent juris- 
 diction to have committed any fraud. I am not ad- 
 
20 General Information on the 
 
 dieted to the excessive use of intoxicating liquors and 
 am of good moral character. 
 
 Signature of applicant 
 
 STATE OF GEORGIA, \ 
 
 \ ss. 
 
 County of . I 
 
 * J 
 
 Undersigned, being duly sworn, says that the state- 
 ments contained in the foregoing seventeen questions 
 and answers are true. 
 
 Subscribed and sworn to before me this 
 
 day of A. D. 190... 
 
 My commission expires 
 
 Notary Public. 
 
Georgia C. P. A. Examinations 21 
 
 STATE OF GEORGIA 
 
 CERTIFICATE OF MORAL CHAR- 
 ACTER 
 
 To the Georgia State Board, Examiners of Public 
 Accountants, Atlanta. 
 
 This is to certify that I, the undersigned, am per- 
 sonally acouainted with ~.~. 
 
 and that to my knowledge 
 
 he has never been convicted of a felony or misde- 
 meanor, or declared by any Court of competent juris- 
 diction to have committed any fraud. I know him to 
 be of good moral character, and also to be a good 
 citizen, recommending him as entirely worthy to be- 
 come a Certified Public Accountant should he meet 
 the requirements as to knowledge and experience pre- 
 scribed by your board. 
 
 I am willing to answer any questions you may ask 
 in regard to the applicant hereinabove mentioned, 
 and will treat the same as strictly confidential. 
 
 I have known the above applicant for the C. P. A. 
 degree for years. 
 
 Signature ~ 
 
 Business _ 
 
 P. O. Address 
 
 NOTE: 
 
 Three of these certificates should be signed by sub- 
 stantial and representative commercial men, well 
 known in the State of Georgia and residents of the 
 State. None of these parties should be a relative of 
 the applicant, or should maintain any financial or 
 business relations with the applicant, except that of 
 a client or employer. 
 
SCOPE OF THE EXAMINATION 
 IN EACH SUBJECT 
 
Georgia C. P. A. Examinations 25 
 
 COMMERCIAL ARITHMETIC. 
 
 This subject has been selected to serve 
 as an index to the candidate's preliminary 
 business education. Questions are given 
 in Percentage, Interest and Discount, Ra- 
 tio and Proportion, Equation of Payments, 
 Complex Problems, Standard Short Meth- 
 ods and Bookkeeping. 
 
 BOOKS RECOMMENDED. 
 
 New Higher Arithmetic, Robinson. 
 New Commercial Arithmetic. Moore. 
 Practical Arithmetic, Williams & Rogers. 
 High School Arithmetic, Wentworth & Hill. 
 Commercial Arithmetic, Bryant & Stratton. 
 Commercial Arithmetic, Cornell & Holt. 
 
26 General Information on the 
 
 THEORETICAL ACCOUNTING. 
 
 The Theory of Accounting is that knowl- 
 edge of the correct underlying principles 
 of accounting, which will enable one to ap- 
 ply it practically. The accountant is called 
 upon at times to append a certificate to a 
 balance sheet of a corporation. Among the 
 best forms of certificates may be consid- 
 ered the following : 
 
 This statement is prepared so as to pre- 
 sent an accurate view of the Company's 
 affairs, is in agreement with the books and 
 sets forth its true financial condition. 
 
 Thus it may be seen, that a Balance 
 Sheet may be drawn up so as to disclose 
 the truth in totals, but not be prepared in 
 such style as to present an accurate view 
 of the Company's affairs. 
 
 BOOKS RECOMMENDED ARE: 
 
 Improved Bookkeeping, Goodwin. 
 
 Bookkeeping and Accountancy, Rowe. 
 
 Factory Accounting, Garcke & Fells. 
 
 Modern Accounting, Hatfield. 
 
 Science of Accounts, Bentley. 
 
 Philosophy of Accounts, Sprague. 
 
 Accounting in Theory and Practice, Lisle. 
 
 Accounts of Executors, Hardcastle. 
 
PRACTICAL ACCOUNTING 
 
Georgia C. P. A. Examinations 29 
 
 PRACTICAL ACCOUNTING 
 
 The applicant is expected to have a thor- 
 ough knowledge of the theory and appli- 
 cation of accounts, the various forms of 
 business organization and the methods of 
 administration under which they are con- 
 ducted, and to be prepared to examine and 
 report upon all matters relating to ac- 
 counts and accounting practice. 
 
 Under this head, questions may be asked 
 upon the following subjects: 
 
 BANKING AND FINANCIAL. 
 
 (a) National banking System. 
 
 (b) State Banks in Georgia. 
 
 (c) Savings Banks and Building and Loan Asso- 
 ciations in Georgia. 
 
 (d) Trust Companies in Georgia. 
 
 (e) Private Bankers and Brokers. 
 
 (f) Foreign Exchange. 
 
 (g) Clearing Houses. 
 
 (h) Loan and Investment Companies. 
 
 INSURANCE LIFE,, FIRE, MARINE,, ACCIDENT, FIDELITY 
 AND OTHER FORMS OF INSURANCE. 
 
 Principles of Insurance. 
 
 Organization of (1) Stock Companies, (2) Mutual 
 Companies. 
 
 Accounting Organization and Administration. 
 
 Reserves, Income Accounts, Balance Sheets, 
 Audits. 
 
30 General Information on the 
 
 MANUFACTURING. 
 
 (a) Accounting Organization and Administration 
 of factories. 
 
 (b) Financial Accounts. 
 
 (c) Manufacturing Costs. 
 
 (d) Audits. 
 
 TRANSPORTATION. 
 
 (a) Steam Railways. 
 
 (b) Street Railways. 
 
 (c) Water Transportation and Docks. 
 
 (d) Express Companies. 
 
 Accounting organization and administration of 
 Capital accounts. Revenue and Operating accounts. 
 Balance Sheets. Audits. 
 
 PUBLIC UTILITIES. 
 
 (a) Gas and Heating. 
 
 (b) Electric Light and Power. 
 
 (c) Telephone and Telegraph. 
 
 (d) Water Works. 
 
 SELLING. 
 Accounting organization and administration of 
 
 (a) Wholesale. Manufacturing. 
 
 (b) Retail. Distribution. 
 
 (c) Financial Accounts of Selling Organizations. 
 
 (d) Stock and Cost Records. 
 
 (e) Audits. 
 
 MINING. 
 
 (a) Accounting organization and Administration 
 of a Mining Company. 
 
 (b) Financial accounts of mining companies. 
 
 (c) Mining Costs. 
 
 (d) Audits. 
 
Georgia C. P. A. Examinations 31 
 
 GOVERNMENTAL. 
 
 (a) The distinction between public and private 
 Companies. 
 
 (b) Revenue and Expenditure. 
 
 (c) Appropriations. 
 
 (4) Funds, Special and General. 
 
 (e) Balance Sheets. 
 
 (f) Audits. 
 
 LEGAL. 
 
 Correct preparation and presentation of State- 
 ments of Accounts in litigated cases. 
 
32 General Information on the 
 
 BOOKS RECOMMENDED. 
 
 Perhaps the best course of study to pre- 
 pare for an examination in practical ac- 
 counting is to solve the problems submitted 
 by the C. P. A. Boards of other States. 
 These may be had by subscribing to the 
 Journal of Accountancy, 32 Waverly 
 Place, New York City, and Greendlinger's 
 Accountancy Problems, Business Book Bu- 
 reau, 13 Astor Place, New York City. 
 
 (Other books recommended may be 
 found under Auditing.) 
 
Georgia C. P. A. Examinations 33 
 
 AUDITING. 
 
 Webster defines "audit" in the words 
 "to examine and adjust." This limited 
 definition shows that a simple examination 
 of figures recorded does not cover the 
 whole scope of an audit. Even from books 
 not properly kept, the experienced auditor 
 is enabled to discover the omission of en- 
 tries that should have been made. 
 
 After being thoroughly grounded in 
 Commercial Arithmetic, Business Organi- 
 zation and Procedure, with the Theory of 
 Accounts properly applied in Practical Ac- 
 counting, the student is then prepared to 
 take up successfully the great subject of 
 auditing, which, as understood by the 
 modern accountant, is one of great breadth 
 and scope. 
 
 In preparing himself for the examina- 
 tion on this subject, the student should 
 make a careful study of its best literature. 
 Among others, the following books are 
 recommended : 
 
 Accounts, their Construction and interpretation 
 
 Cole 
 
 Advanced Accounting Dicksee 
 
 Auditors, their Duties and Responsibilities Pixley 
 
34 General Information on the 
 
 Auditing (American Edition) Dicksee 
 
 Auditing Montgomery 
 
 Corporation Finance and Accounting Bentley 
 
 Corporation Accounting and Law Rahill 
 
 Depreciation of Factories Matheson 
 
 Depreciation, Reserve and Reserve Funds Dicksee 
 
 Factory Organization and Costs Nicholson 
 
 Funds and their Uses Cleveland 
 
 Goodwill and its Treatment in Accounts Dicksee 
 
 Modern Banking Methods Barrett 
 
 Modern Trust Co Sterrett 
 
 Partnership Accounts Child 
 
 Practical Accounting Wolff 
 
 Practical Auditing Renn 
 
 Practical Cost Accounting Wood 
 
Georgia C. P. A. Examinations 35 
 
 COMMERCIAL LAW. 
 
 The student should be well grounded in 
 those branches of Commercial Law that 
 relate to the work usually undertaken by a 
 public accountant. Thus, he should be fa- 
 miliar with the Georgia Law in its relation 
 to the rights and duties of shareholders in 
 a corporation and of the scope and powers 
 of directors. He should know the legal 
 difference between partnerships and cor- 
 porations. What constitutes partnerships 
 where the rights of creditors are con- 
 cerned. The law of contracts. The laws 
 relating to State banks. The relationship 
 of principal and surety. 
 
 The law on negotiable paper, including 
 Bills of Lading. 
 
 The student is expected to have such a 
 knowledge of the law relating to frauds or 
 other crimes arising out of business rela- 
 tions as can be obtained by careful study 
 of text books on the subject. 
 
 He should have a working knowledge of 
 laws concerning Real Estate and Personal 
 Property, of the law governing Receiver- 
 ship, Bankruptcies and the Administration 
 of Estates. 
 
36 General Information on the 
 
 It is to be borne in mind that the ac- 
 countant is to acquire such knowledge of 
 Commercial Law as affects Accountancy. 
 Keeping this point in view will enable him 
 to determine where his responsibility ends 
 and the advice of a practicing attorney 
 should be sought. 
 
 The practicing accountant will find it 
 much to his advantage to study in the 
 Codes of those States in which he prac- 
 tices, the subjects in which he is inter- 
 ested. The Georgia Code is considered to 
 be particularly valuable in the elucidation 
 of the underlying principles of Common 
 Law. 
 
 The following books are recommended: 
 
 Georgia Bankers' Code Park 
 
 Commercial Law Curtis-Gano 
 
 Commercial Law Huffcut 
 
 Commercial Law Spencer 
 
 American Corporations Sullivan 
 
 American Business Law Sullivan 
 
 Manual of Elementary Law Fishback 
 
 Law of Mortgages Jones 
 
 Law of Contracts Anson 
 
 Law of Agency Mechem 
 
 Sureties and Guarantors Baylies 
 
 Law of Insurance Biddle 
 
 Law of Partnership Parsons 
 
 Public Corporations Beach 
 
 Law of Bankruptcy Collier 
 
 Bills, Notes and Checks Bigelow 
 
QUESTIONS SET BY GEORGIA BOARD 
 
 OF EXAMINERS SELECTED FROM 
 
 VARIOUS EXAMINATIONS. 
 
Georgia C. P. A. Examinations 39 
 
 QUESTIONS SET BY GEORGIA BOARD 
 
 OF EXAMINERS SELECTED FROM 
 
 VARIOUS EXAMINATIONS. 
 
 THEORY OF ACCOUNTS. 
 
 1. What should be done regarding the books 
 on the admission of a new partner into a firm? 
 What entry should be made (a) when Cash is 
 invested for a certain share in the gains and 
 losses (b) when a specified amount is paid to 
 the old members for a certain share in the gains 
 and losses ? 
 
 2. Define the following terms as applied to 
 Accounts: Personal, Real, Nominal, Resource, 
 Liability. Mention two real and three nominal 
 accounts. 
 
 3. State generally how the books of a firm 
 doing a manufacturing business would differ 
 from those kept by a trading concern as to (a) 
 Books of Record, (b) Ledger Accounts. 
 
 4. Suggest one or more plans by which an 
 inventory may be corroborated or impeached. 
 
 5. Describe a method of keeping accounts 
 so that the aggregate sums due from customers 
 and due to creditors can be known without pre- 
 paring a schedule of the accounts of such cus- 
 tomers and creditors, and so that an indepen- 
 
40 General Information on the 
 
 dent balance of the ledger, containing only the 
 real, nominal, special and controlling accounts, 
 exclusive of the individual accounts of custom- 
 ers and of trade creditors, may be taken. 
 
 6. Define the following: (a) stock, (b) 
 capital, (c) surplus, (d) deficiency, (e) capital 
 stock, (f) preferred stock, (g) common stock, 
 (h) share capital, (i) loan capital. 
 
 7. Describe the nature of the following ac- 
 counts: (a) merchandise, (b) construction, (c) 
 consignment, (d) joint, (e) subscription, (f) ex- 
 pense, (g) maintenance, (h) venture, (i) sus- 
 pense, (j) dividend. 
 
 8. Describe the process of changing single 
 entry books to double entry. What additional 
 accounts are required? Is it necessary to dis- 
 turb any accounts already opened in the ledger, 
 or to keep such accounts differently after the 
 change ? 
 
 9. How should executors' and administra- 
 tors' accounts be stated for the. purpose of filing 
 in court? What does the summary of accounts 
 usually include ? What are assets of the estate ? 
 When are dividends, interest and rents to be 
 treated as principal? Define an intermediate 
 account. What is a final account? With what 
 does the executor charge himself? For what 
 does he take credit? 
 
Georgia C. P. A. Examinations 41 
 
 * 10. Formulate and explain a rule for deter- 
 / j mining whether an account should be debited 
 I or credited in any given transaction. Explain 
 the application of the principle. 
 
PRACTICAL ACCOUNTING 
 
Georgia C. P. A. Examinations 45 
 
 PRACTICAL ACCOUNTING. 
 
 PROBLEM No. 1, 
 
 No. 1. The following is the Trial Bal- 
 ance and Inventory of the Georgia Cotton 
 Oil & Manufacturing Co., as at June 9, 
 1909. The books were closed last, June 16, 
 1908. 
 
 TRIAL BALANCE JUNE 9, 1909. 
 
 Dr. Cr. 
 
 Plant $50,552.30 
 
 Real Estate 2,500.00 
 
 Stinson Gin Building 2,653.45 
 
 Office Fixtures 242.73 
 
 Cash on Hand and in Banks 2,324.91 
 
 Accounts Receivable 1,002.18 
 
 Cotton Seed, 4,828,832 Ibs 42,185.68 
 
 Mill Labor 3,050.76 
 
 Salaries 2,069.41 
 
 Fuel 2,282.46 
 
 Interest, Exchange and Disc 1,113.31 
 
 Press Cloth 1,622.94 
 
 Meal Bags 943.83 
 
 Taxes 597.50 
 
 Mill Expenses 519.23 
 
 Hull Sacks 194.26 
 
 Office Expense 97.63 
 
 Telegraph and Telephone 84.70 
 
 Carried Forward $114.037.27 
 
46 
 
 General Information on the 
 
 Brought Forward $114,037.27 
 
 Traveling 68.54 
 
 Insurance _ 150.08 
 
 Lubricating Oil 131.92 
 
 Repairs and Supplies 655.20 
 
 Oil Inventory, 6-15-08, 35,357 
 
 Gals 1,725.00 
 
 Meal Inventory, 6-15-08, 82,000 
 
 Ibs 1,027.00 
 
 Hulls Inventory, 6-15-08, 136,000 
 
 Ibs ~ - 408.00 
 
 Linters Inventory, 6-15-08, 7,418 
 
 Ibs 111.28 
 
 Loss by Burglary 9.82 
 
 Capital Stock $50,000.00 
 
 Accounts Payable 273 24 
 
 Oil Sales, 812,167 Ibs 33,964.19 
 
 Meal Sales, 1,987,600 Ibs 23,475.06 
 
 Hull Sales, 1,665,246 Ibs 4,684.01 
 
 Linter Sales, 183,610 Ibs 1,421.78 
 
 Receipts from Standard Gin 
 
 Co _ 112.88 
 
 Receipts from Farmers' Gin 
 
 Co 734.40 
 
 Receipts from Storage _ 1,203.01 
 
 Profit and Loss 2,455.04 
 
 $118,323.61 $118,323.61 
 INVEXTOMES JUNE 9, 1909. 
 
 Meal, 68,500 Ibs _ $976,12 
 
 Hulls, 73,500 Ibs 220.50 
 
 Linters, 4,343 Ibs - 86.86 
 
 Seed, 3,920 Ibs - 34.22 
 
Georgia C. P. A. Examinations 47 
 
 Hull Sacks 10.70 
 
 Fuel 30.00 
 
 Supplies and Repairs 539.15 
 
 "Warehouse storage accrued to June 9th amounted 
 to $748.22. 
 
 You are requested to extract from this 
 data a Balance Sheet and a Statement of 
 Expenses and Earnings from June 16, 
 1908, to June 9, 1909, showing the average 
 cost per ton of Seed worked for every pur- 
 chase, material and Expense Account, av- 
 erage price per ton, pound or gallon re- 
 ceived for the total Sales of product, cost 
 per ton of Seed worked, working cost, 
 then total prime and working cost and 
 price (per ton of Seed worked) received for 
 Product Sold. Show profits per ton on the 
 crushing operations and Receipts from 
 other Income separately. Show also the 
 yields in pounds (7 1-2 Ibs. Crude Oil to 
 Gallon) for each of the four products, Oil, 
 Meal, Hulls and Linters, and show the av- 
 erage yield in pounds for the four products 
 per ton of Seed crushed. 
 
 You are also requested to make such 
 comment on these Costs as may seem nec- 
 essary. 
 
48 General Information on the 
 
 PRACTICAL ACCOUNTING. 
 
 PROBLEM No. 2. 
 
 No. 2. From the accompanying Trial 
 Balance and Inventories of the Blankville 
 Cotton Mills you are requested to prepare 
 a Balance Sheet and statements of Manu- 
 facturing Cost, Selling Expenses and In- 
 come Account. The books were closed pre- 
 viously at August 31, 1908. In the twelve 
 months ended August 31, 1909, they have 
 produced 1,372,428 Finished Cloth and 
 161,906 Ibs. Visible Waste. In addition to 
 the financial and manufacturing, etc., 
 statements, you are also requested (a) to 
 find the prime cost of cotton consumed per 
 lb., (b) the increase in this pound price by 
 reason of Waste made, less money received 
 from Sales of Waste, (c) the cost of the 
 Cotton in the finished cloth per pound, (d) 
 the cost to manufacture per pound, (e) to- 
 tal raw material and manufacturing cost, 
 
 (f ) Gross selling price per pound of goods 
 made and sold (include Inventory in this), 
 
 (g) Selling Expenses per pound, (h) gross 
 profit on sales, (i) Other Expenses per 
 pound, (j) profit or loss per pound on man- 
 ufactured cloth. 
 
Georgia C. P. A. Examinations 49 
 
 BLANKVILLE COTTON MILLS TRIAL BALANCE AUGUST 
 31sT, 1909. 
 
 Dr. 
 
 Machinery $118,514.99 
 
 Real Estate 48,774.48 
 
 Office Fur. and Fixtures..... 390.89 
 
 Unsold Stock (in Treasury )...... 1,650.00 
 
 Accounts Receivable - 33,498.66 
 
 Cash in Bank and on Hand 7,744.68 
 
 Advances to Hands 307.28 
 
 Starch 1,859.85 
 
 Burlap and Rope 1,198.19 
 
 Insurance and Taxes 3,299.42 
 
 Salaries 5,100.00 
 
 Repairs _ 481.64 
 
 Discounts and Commissions ...... 11,897.62 
 
 Freight 5,623.57 
 
 Tallow 859.55 
 
 Wages 31,767.27 
 
 Supplies 7,846.34 
 
 Expense 1,435.56 
 
 Oil 400.28 
 
 Fuel 5,339.75 
 
 Discount and Interest 8,790.49 
 
 Inventories, 8-31-08: 
 
 Raw Cotton, 92 B-C, 87,149 
 
 Ibs 4,134.68 
 
 Stock in Process, 45,739 
 
 Ibs 6,960.83 
 
 Finished Goods, 123,373 Ibs. 20,114.35 
 
 Waste, 16,134 Ibs 591.36 
 
 Cr. 
 
 Carried Forward 
 
50 General Information on the 
 
 Brought Forward $328,581.73 
 
 Cotton Purchased, 3,161 Bales, 
 
 1,584,318 Ibs ; 148,919.42 
 
 Capital Stock $80,000.00 
 
 Bond Account 40,000.00 
 
 Bills Payable 77,576.73 
 
 Accounts Payable 11,154.66 
 
 Dividend Account 3.50 
 
 Sales, 1,435,376 Ibs 228,992.62 
 
 Waste, 96,597 Ibs 2,618.62 
 
 Outside Warehouse Storage 
 
 Receipts 2,023.70 
 
 Rent Operatives' Houses 1,069.07 
 
 Undivided Profits, August 31, 
 
 1908 34,062.25 
 
 $477,501.15 $477,501.15 
 
 N. B. Inventories September 1, 1909: 
 
 Raw Cotton, 170 Bales 86,700 Ibs $9,970.50 
 
 Cotton in Process, 46,172 Ibs 6,123.70 
 
 Finished Goods, 56,556 Ibs , 9,457.85 
 
 Goods Consigned 2,392.40 
 
 Waste . 1,863.83 
 
 General Supplies _. 2,916.85 
 
 Fuel 265.50 
 
 Starch 678.35 
 
 August 31, 1909, there was an amount of Unearned 
 Insurance, $892.70. Also accrued charges of wages, 
 $550.00, Commissions $1,812.54, interest $315.74 and 
 taxes $700.00. 
 
Georgia C. P. A. Examinations 61 
 
 PRACTICAL ACCOUNTING. 
 PROBLEM No. 3. 
 
 No. 3. The following trial balance is 
 handed you, with the request that you pre- 
 pare a revenue account and a balance 
 sheet : 
 
 A B's Capital $20,000.00 
 
 A B's Personal Account $1,000.00 
 
 Bank of North America 600.00 
 
 Cash in hand 90.00 
 
 Merchandise account 8,600.00 
 
 Repair account 87.50 
 
 Bills Receivable 6,400.00 
 
 Bills Payable 4,000.00 
 
 Real Estate 1,350.00 
 
 Bank Stock 1,566.00 
 
 General Expenses 1,860.00 
 
 Freight 1,000.00 
 
 Accounts Receivable 8,000.00 
 
 Accounts Payable 10,000.00 
 
 Profit and Loss 3,446.50 
 
 $34,000.00 $34,000.00 
 
 If all the information required is not pre- 
 sented in this trial balance, supply what is 
 wanting and submit the statements called for. 
 
52 General Information on the 
 
 PRACTICAL ACCOUNTING. 
 
 PROBLEM No. 4. 
 
 No. 4. The trial balance of a manu- 
 facturing firm taken January 1, 1897, is 
 as follows: 
 
 Capital A $40,000.00 
 
 Capital B 20,000.00 
 
 Plant and Machinery $35,000.00 
 
 Purchases 38,000.00 
 
 Sales 95,000.00 
 
 Stock on hand Jan. 1, 1896 15,000.00 
 
 Labor 24,000.00 
 
 Salaries 6,000.00 k 
 
 Traveling Expenses 2,500.00 ^ 
 
 Interest 600.00 
 
 Stationery and Printing 1,200.00 -. 
 
 Rents and Taxes 3,500.00 - 
 
 Discounts and Allowances 1,250.00 
 
 Fuel 8,000.00 
 
 Insurance (1 year from 7-1-96)... 1,150.00 - 
 
 Freight 1,500.00 " 
 
 General Expenses 600.00 
 
 Bank Overdraft 5,000.00 
 
 Creditors 4,000.00 
 
 Accounts Receivable 25,000.00 
 
 Rent of Steam Power 1,500.00 
 
 Cash on hand 200.00 
 
 Loan account 7,000.00 
 
 $165,500.00 $165,500.00 
 
Georgia C. P. A. Examinations 53 
 
 Stock on hand January 1, 1897, $23,000 ; 
 each partner to be credited 6 per cent, on 
 his capital for one year before profits are 
 ascertained; 3 per cent, to be written off 
 book debts for discount ; 10 per cent, to be 
 written off machinery and plant for depre- 
 ciation; unexpired insurance to be taken 
 into account ; net profit to be divided 2-3 to 
 A and 1-3 to B. Draft journal entries for 
 closing books and prepare final balance 
 sheet and profit and loss account. 
 
COMMERCIAL LAW 
 
Georgia C. P. A. Examinations 57 
 
 COMMERCIAL LAW. 
 
 1. (a) What is a corporation? 
 
 (b) What are the general powers 
 of a board of directors of a corporation and 
 what are its general duties ? 
 
 2. (a) Give briefly the substance of 
 the Federal Corporation Tax Law and its 
 various essential provisions. 
 
 (b) Prepare correct returns of a 
 manufacturing corporation, supplying fig- 
 ures and data in compliance with the Fed- 
 eral Corporation Tax Law. 
 
 3. (a) To what extent is a stockhold- 
 er liable for the debts of an insolvent cor- 
 poration? 
 
 (b) To what extent is a partner lia- 
 ble for the debts of an insolvent partner- 
 ship? 
 
 (c) Assuming that you are one of 
 six shareholders in a corporation where the 
 stock is fully paid up, the capital being 
 $120,000.00, assuming that you are also a 
 partner in a firm where the total invest- 
 ment is $120,000.00, equally divided among 
 six persons ; both concerns fail and can pay 
 only 50 cents on the dollar of their indebt- 
 
58 General Information on the 
 
 edness; two of the stockholders are dead 
 and insolvent, and likewise two of the 
 partners are dead and insolvent, what is 
 your partnership liability and what is your 
 liability as a stockholder? 
 
 4. (a) What is the liability of a stock- 
 holder of a bank to its general creditors, 
 and what is his liability to the bank's de- 
 positors ? 
 
 (b) How much is a State bank 
 permitted to lend any one person, and what 
 is required when a State bank loans money 
 to one of its officers? 
 
 5. (a) For what purposes and how 
 long may National banks acquire and hold 
 real estate? 
 
 (b) What portion of its net profits 
 must be carried to the Surplus fund, and 
 when, by a National Bank? 
 
 6. (a) What are the general duties 
 and liabilities of an executor or adminis- 
 trator of an estate? 
 
 (b) What is a specified legacy, and 
 what constitutes the residuum of an es- 
 tate? 
 
 (c) What compensation are execu- 
 tors and administrators entitled to receive 
 for their services? 
 
Georgia C. P. A. Examinations 59 
 
 7. (a) What are considered words of 
 negotiability ? 
 
 (b) What is understood by the 
 words "without recourse" when accom- 
 panying an endorsement? 
 
 8. (a) What is a bill of lading? What 
 do bills of lading represent ? To what ex- 
 tent are they negotiable ? 
 
 9. (a) Give the various acts and 
 omissions which will prevent a bankrupt 
 from obtaining a discharge in bankruptcy 
 from the payment of his debts. 
 
 (b) What are the various obliga- 
 tions from which a bankrupt is not relieved 
 by a discharge in bankruptcy ? 
 
 10. (a) What is the penalty for using 
 the terms "C. P. A." without having first 
 received the proper certificate? 
 
 (b) What are the elements involved 
 in the crime of having fraudulently ob- 
 tained credit, and what is the punishment 
 therefor ? 
 
 (c) From what funds only can divi- 
 dends be declared by State banks, and 
 what are the consequences of declaring 
 dividends from other sources? 
 
 (d) Define "false entries" when ap- 
 plied to a National Bank ; and what are the 
 consequences of such an act ? 
 
AUDITING 
 
Georgia C. P. A. Examinations 63 
 
 AUDITING. 
 
 1. How would you determine the profits 
 for a given period from a set of books kept 
 on the single entry system, the capital at 
 the beginning of the period being known? 
 
 2. In the construction of a large build- 
 ing the proprietors issue $800,000 20-year 
 
 6 per cent, bonds which are disposed of to 
 the contractors at 85 per cent, of their face 
 value. You find, upon examination, that 
 the discount of 15 per cent, has been 
 charged to Construction Account in the 
 first place, and then into Building Account. 
 State whether you consider the final entry 
 legitimate or not, and give reasons. 
 
 3. You are elected the auditor of a cor- 
 poration by the holders of both common 
 and preferred stock, and it is your duty to 
 safeguard the interest of both classes of 
 stockholders. The preference stock bears 
 
 7 per cent, and is non-cumulative. Mention 
 what precaution you would adopt to safe- 
 guard the interests of the preference 
 shareholders, giving reasons therefor. 
 
 4. Explain the various measures which 
 you would adopt to verify whether or not 
 all cash received has been duly accounted 
 
64t General Information on the 
 
 for on the books of the concern you were 
 auditing. 
 
 5. A corporation has sold its first 
 mortgage bonds at a premium and its sec- 
 ond mortgage bonds at a discount. How 
 should the premium and discount be dealt 
 with on the books ? 
 
 6. After auditing the books of a man- 
 ufacturing company for a period of ten 
 years you are asked to give a certificate as 
 to the net earnings of the business for 
 those ten years for the purpose of a sale 
 based on the earning capacity of the prop- 
 erty. What items of expense heretofore 
 charged annually through the Profit and 
 Loss Account may be properly eliminated 
 in the preparation of your certificate ; and 
 why? 
 
 7. Describe in detail the method that 
 should be used to verify the securities rep- 
 resenting the investments of a company 
 under audit, in the case of (a) Real Estate, 
 (b) Mortgages on Real Estate, (c) Certifi- 
 cates of Stock, (d) Railway bonds. 
 
 8. Under what circumstances, if any, 
 would it be proper to open an account with 
 Good Will? On finding a Good Will Ac- 
 count on the Ledger of a business for 
 which you are to prepare an account state- 
 
Georgia C. P. A. Examinations 65 
 
 ment, how would you treat the account, or 
 what special adjustment would you sug- 
 gest in regard to it? 
 
 9. Acting as an auditor of a manufac- 
 turing company, state briefly the essential 
 points to be considered in ascertaining the 
 correct profits so far as the inventories 
 are concerned. 
 
 10. If a company, duly organized, ac- 
 quires several plants that are found to be 
 in a "run down" condition and to require 
 extensive outlay for repairs and renewals 
 to bring them to the required state of effi- 
 ciency, should such outlay be charged 
 against Capital or against Revenue ? Give 
 reasons. 
 
UNIVERSITY OF CALIFORNIA LIBRARY, 
 BERKELEY 
 
 THIS BOOK IS DUE ON THE LAST DATE 
 STAMPED BELOW 
 
 Books not returned on time are subject to a fine of 
 50c per volume after the third day overdue, increasing 
 to $1.00 per volume after the sixth day. Books not in 
 demand may be renewed if application is made before 
 expiration of loan period. 
 
 3 112* 
 
 JUL 25 
 
 

 288219 
 
 UNIVERSITY OF CALIFORNIA LIBRARY