seas S^^sas,;: -7?^ » P A W^ A— ^ — 1 s fe_ 1 % w — g 1 "=,- if 8 -^-S 8—1 4 ^ ^ 1 7^S 2—" ^jy v .-.. " las3ification of accounts for electrical utilities , :.. ... ._-.„, -A tiori of railroad and utilities conimissioners ■7;'*si:-s» i«j;-i ^jSP^ THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES NATIONAL ASSOCIATION OF RAILWAY AND UTILITIES COMMISSIONERS Uniform Classification of Accounts for Electrical Utilities Prepared by Committee on Statistics and Acconnts of Public Utilities and Recommended for Adoption by State Commissions at the Annual Meeting of the National Association of Railway and Utilities Commissioners lield in Detroit, Mich., November, 1922. NATIONAL ASSOCIATION OF RAILWAY AND UTILITIES COMMISSIONERS Uniform Classification of Accounts for Electrical Utilities ■^2J1 Prepared by Committee on Statistics and Accounts of Public Utilities and Recommended for Adoption by State Commissions at the Annual Meeting of the National Association of Railway and Utilities Commissioners held in Detroit, Mich., November, 1922 Published by THE STATE LAW REPORTING COMPANY New York Revision of 1922 Reprint J9J3 COPYRIGHT, 1922 IIY THE NATIONAL ASSOCIATION OF RAILWAY AND UTILITIES COMMISSIONERS .-ill Rights Reserved CONTENTS PAGE General Instructions 1 Balance Sheet Accounts 2 General Instructions and Definitions 4 Text Pertaining to Balance Sheet Accounts 9 Fixed Capital Accounts (List) 28 General Instructions and Definitions 30 Text Pertaining to Fixed Gapital Accounts 35 Income Accounts (List) 54 General Instructions and Definitions 56 Text Pertaining to Income Accounts 59 Profit and Loss Accounts (List) "66 General Instructions and Definitions 67 Text Pertaining to Profit and Loss Accounts 68 Operating Revenue Accounts (List) 70 General Instructions and Definitions 71 Text Pertaining to Operating Revenue Accounts 7^ Operating Expense Accounts (List) 76 General Instructions and Definitions 82 Text Pertaining to Operating Expense Accounts 86 560S00 ^*'Mli^999 Idminlstratlon UNIFORM CLASSIFICATION OF ACCOUNTS FOR ELECTRICAL UTILITIES GENERAL INSTRUCTIONS 1. Accounts to be Kept by Double Entry Method. All the accounts (other than purely statistical accounts) defined in this classification must be kept by the double entry method. 2. Account Numbers Not a Paxt of Title. The numbers prefixed to account titles in this classification are solely for convenience of reference and are not part of the titles or definitions. 3. Accounting Period. It is recommended that each electrical corporation select the month as its accounting period and that it make its bookkeeping entries on a monthly basis. It may, however, select a quarterly or other basis if that will better meet the conditions under which it conducts its business. Each corporation will be required to close its books at the end of the fiscal year for which it makes its annual report. 4. Records. Each electrical corporation shall so keep its general accounting books and all other books and records which support in any way the entries to such accounting books that it can furnish at any time full infor- mation as to any account kept by it. Moreover, it shall support each entry to each account with such detailed information as will enable a ready identification and verification of the facts recorded therein. The books referred to herein include not only books of account in a limited technical sense but all other records such as minute books, stock books, etc., which will be useful in developing the history of any of the accounting company's transactions. BALANCE SHEET ACCOUNTS STANDARD FORM OF BALANCE SHEET Assets and Other Debits 101. Fixed capital Current Assets: 111. Cash 112. Notes receivable 113. Accounts receivable 114. Interest and dividends receivable 115. Marketable securities 116. Materials and supplies 117. Prepayments 118. Subscribers to capital stock 119. Miscellaneous current assets Miscellaneous Assets: 121. Investments in affiliated companies 122. Miscellaneous investments 123. Sinking funds 124. Replacement fund 125. Miscellaneous special funds 126. Special deposits Suspense : 131. Unamortized debt discount and expense 132. Property abandoned 133. Jobbing accounts 134. Clearing or apportionment accounts 135. Work in progress 136. Miscellaneous suspense Adjustment Accounts: 141. Discount on capital stock 142. Reacquired securities 143. Treasury securities 150. Profit and loss — deficit BALANCE SHEET ACCOUNTS STANDARD FORM OF BALANCE SHEET Liabilities and Other Credits 201. Capital stock 202. Premium on capital stock 203. Capital stock subscribed 211. Long term debt 212. Receiver's certificates Current Liabilities: 221. Notes payable 222. Accounts payable 223. Consumers' deposits 224. Alatured interest unpaid 225. Dividends declared 226. Matured long term debt unpaid 227. Miscellaneous current liabilities Accrued Liabilities: 231. Taxes accrued 232. Interest accrued 233. Miscellaneous accrued liabilities 241. Advances from affiliated companies Reserves : 251. Retirement reserve 252. Casualty and insurance reserve 253. Unamortized premium on debt 254. Sinking fund reserves 255. Contributions for extensions 256. Contingency reserve 257. Miscellaneous reserves 261. Miscellaneous unadjusted credits 270. Profit and loss — surplus 4 BALANCE SHEET ACCOUNTS BALANCE SHEET ACCOUNTS General Instnictions and Definitions 1. Balance Sheet Accounts Defined. By balance sheet accounts are meant those titles under which the ledger accounts are combined and summarized to show the assets, liabilities and surplus or deficit of an enterprise at a given time. Where the title and definition of a balance sheet account clearly indicate that it is a summary of other accounts, it is not required that a special ledger account shall be raised under such title to include the balances from the accounts usually carried on the ledger. 2. Form of Balance Sheet. The standard form of balance sheet is shown on pages 2 and 3. Certain of the terms there used are defined, for the sake of greater clearness, in the following paragraphs. 3. Current Assets. Current assets are those assets that are readily converted into money or capable (in the case of materials and supplies) of being used in operation or construction. 4. Investments. Investment represents the relatively permanent employment of property for the purpose of directly or indirectly producing revenue. Investment in permanent assets devoted to the undertakings for which the accounting company is primarily organized is called fixed capital investment or simply fixed capital. Property in the form of assets necessary to the conduct of the accounting company's opera- tions of which the individual items are subject to frequent change is sometimes said to represent an investment in workincj capital. Investments may also be of property segregated in special funds; of property devoted to the use of affiliated corporations; or of property not devoted to the undertakings for which the accounting company is primarily organized, as more specifically defined in accoimt No. 122, " Miscellaneous Investments," which see. Encumbered investments are those held subject to a lien or other encumbrance of some character. Unencumbered investments are those held free of all encumbrances. BALANCE SHEET ACCOUNTS D 5. Funds. Funds are assets, usually those capable of ready conversion into cash, set aside in the hands of trustees or otherwise restricted to specific uses. 6. Suspense Accounts. Suspense accounts are accounts in which may be carried any ex- penditure the appropriate disposition of which is not yet determined, or any loss which may properly be spread over a period of time, or any other debit which may be amortized through charges made to expense or other income accounts at intervals over a period of time; credit items, the final disposition of which is not yet determined, may also be carried in suspense under account No. 261, " Miscellaneous Unadjusted Credits." 7. Adjustment Accounts. Adjustment accounts are accounts in which may be carried debits that ofifset certain liabilities but which it is not desirable, as a matter of bookkeeping convenience, to charge against the liability accounts concerned. 8. Current Liabilities. Current liabilities are those which are definitely determined in amount and are either matured at the date of the balance sheet or become due within a year from date or upon demand of the creditor. 9. Accrued Liabilities. Accrued liabilities are those not yet due, but which are to become due in the near future and which accrue or grow from day to dav. such as unmatured interest, rents, taxes, etc. Credits to accounts representing accrued liabilities whose amounts are not definitely known, as in the case of many taxes, are made on the basis of esti- mates which are adjusted when the proper amounts become known. 10. Reserves. Reserves are credit accounts created through arbitrary or estimated charges made to provide wholly or in part for matters to be later determined. 11. Discount and Premium on Capital 3tock. Ledger accounts shall be provided to cover the discounts and premiums on each class of capital stock issued or assumed by the accounting company. The total of the net debit balances remaining 6 BALANCE SHEET ACCOUNTS in these several accounts shall be included in account No. 141, "Dis- count on Capital Stock," and the total of the net credit balances in account No. 202, " Premium on Capital Stock." By the term discount is meant the excess of the par value of stocks actually issued or assumed (and accrued dividends, if any, expressed in the contract of sale) over the actual cash value of the consideration received for such stocks. By the term premium is meant the excess of the actual cash value of the consideration received for stock issued or assumed over the par value of such stock (and accrued dividends, if any). Entries in these accounts representing discounts shall be carried therein until offset (1) by premiums realized on subsequent sales of the same class ofv stock, (2) by assessments levied on the stockholders, (3) by appropriations from surplus for that purpose, or (4) by charges to Profit and Loss upon reacquirement of the stock. Entries in these accounts representing premiums realized shall be carried therein until ofifset (1) by discount suffered on sales of the same class of stock, or (2) by credits to Profit and Loss upon reacquirement of the stock. In case the accounting company is permitted and elects to distribute all or any part of the net premium on its capital stock to its stockholders, the amount thus distributed shall be charged to the premium account. For the purpose of this classification the premium realized at the sale of capital stock shall not be considered a profit and loss item except upon reacquirement of the stock sold. In no case shall discount on capital stock be charged to or included in any account as a part of the cost of acquiring any property, tangible or intangible, or as a part of the cost of operation. When stock which has been issued or assumed by the accounting company is reacquired, the difference between the price paid and the par value of the stock shall be charged or credited to Profit and Loss as may be appropriate. Concurrently the premium or discount account for the particular issue of stock reacquired shall be adjusted through Profit and Loss to the extent of the premium or discount applicable to the shares reacquired. This does not apply to the purchase of securities solely for special funds in which the accounting company carries at cost instead of par value securities issued or assumed by itself. In case the premium or discount realized at the prior sale of the stock reacquired has been included in an asset account other than the premium and discount account, such asset account shall be concur- rently adjusted through Profit and Loss to the extent of the premium BALANCE SHEET ACCOUNTS / or discount previously included therein with respect to the shares reacquired. 12. Discount, Expense and Premium on Long- Term Debt. Ledger accounts shall be provided to cover discounts, expense and premiums at the sale of each class of long-term debt (including re- ceiver's certificates) issued or assumed by the accounting company. The total of the net debit balances remaining in these several accounts shall be included in account Xo. 131, " Unamortized Debt Discount and Expense," and the total of the net credit balances in account No. 253, " Unamortized Premium on Debt." By the term discount is meant the excess of the par value of the securities issued or assumed and the accrued interest thereon, over the actual cash value of the consideration received for such securities. By the term premium is meant the excess of the actual cash value of the consideration received for securities issued or assumed over the par value of such securities and the accrued interest thereon. By the term expense are meant all expenses in connection with the issue and initial sale of evidences of debt, such as fees for drafting mortgages and trust deeds; fees and taxes for issuing or recording mortgages and trust deeds; cost of printing bonds, certificates of in- debtedness, and other commercial paper having life of more than one year ; fees paid trustees acting under mortgages and trust deeds ; fees paid for legal services to trustees relative to mortgage securities ; fees and commissions paid underwriters and brokers for marketing such evidences of debt ; and other like expense. Each month (or other accounting period) there shall be charged to income account "Amortization of Debt Discount and Expense " a proportion (based upon the ratio of such fiscal period to the remaining life of the respective securities) of each of the debit balances in these accounts, and correspondingly there shall be credited to income ac- count "Amortization of Premium on Debt " a similar proportion of each of the credit balances in these accounts. When any long term debt which has been actually issued to bo>ia fide holders for value is reacquired by the accounting company, a pro- portion of the balance remaining in the accounts covering discount, expense, and premium on long term debt of the class of security re- acquired shall be credited or charged, as may be appropriate, to Profit and Loss. Such proportion shall be based upon the ratio of the par value of the security reacquired to the par value of all the securities of the same class actually outstanding immediately before such re- acquirement. This does not apply to the purchase of securities solely 8 BALANCE SHEET ACCOUNTS for special funds in which the accounting company carries at cost in- stead of par value securities issued or assumed by itself. In case, however, the premium or discount realized at the prior sale of the securities reacquired has been included (in excess of the propor- tion authorized in the text of fixed capital account No. 355, " Interest during Construction ") in an asset account other than the premium account, such asset account shall be concurrently adjusted through Profit and Loss to the extent of such excess of the premium or discount previously included therein with respect to the securities reacquired. Except as provided in account No. 355, " Interest during Construc- tion," no discount on long term debt shall be charged to or included in any account as a part of the cost of acquiring any property, tangible or intangible, or as a part of the cost of operation. 13. Contingent Assets and Liabilities. Contingent assets and liabilities shall not be included in the body of the balance sheet statement. Whenever the balance sheet is stated, however, contingent assets and liabilities, if any, should be shown in detail in a supplementary statement. Contingent assets represent possible sources of value contingent upon the fulfilment of conditions regarded as uncertain. Contingent liabilities include items which may, under certain conditions, become obligations of the company, but are neither direct nor assumed obligations at the date of the balance sheet. BALANCE SHEET ACCOUNTS TEXT PERTAINING TO BALANCE SHEET ACCOUNTS 101. Fixed Capital. This account shall include the cost of property having an expecta- tion of life in service of more than one year which is devoted to the operations conducted by the accounting company, less deductions for property abandoned, sold, or otherwise retired. Separate subdivisions shall be used for each distinct class of opera- tions conducted by the accounting company, as, for example, " Fixed Capital — electric," '" Fixed Capital — gas." If, however, the account- ing company conducts two or more separate and distinct classes of operations, as in the case of a company having both an electric and gas department, expenditures chargeable to such fixed capital accounts as " Land," " Organization," " General Structures," " Engineering and Superintendence," etc., which are not assignable to a particular de- partment or kind of operations, may be shown in a subdivision having the title " Fixed Capital — general." The foregoing shall not be con- strued to prohibit the apportionment of such exiDenditures between departments on a more or less arbitrary basis provided this basis is clearly stated in the accounting company's public reports. 111. Cash. This account shall include all money coming into the possession of the accounting company in which it has a beneficial interest. This covers coin of the United States, United States treasury notes, gold and silver certificates and greenbacks, and bank bills payable to bearer on demand; also all bank credits, checks and drafts receivable subject to satisfaction or transfer upon demand (whether payable to bearer or to order). 112. Notes Receivable. This account shall include the ledger value of all notes and bills receivable which are the projjcrty of the accounting company and upon which solvent concerns or individuals are liable. This covers demand notes, drafts, etc., issued by others than banks, and time notes, drafts, etc.. bv whomever issued. This account does not include notes coming within the definition of " Investments in Affiliated Companies " or "Miscellaneous Investments" (for which see page 13). 10 BALANCE SHEET ACCOUNTS 113. Accounts Receivable. This account shall include all amounts (other than deposits in banks) owing to the accounting company upon o[)en book accounts with sol- vent concerns and individuals; also the ledger value of all accounts and claims upon which responsibility is acknowledged by solvent con- cerns and individuals or which are sufficiently secured to be considered good and of all judgments against such concerns where the judgment is not appealable or suspended through appeal. This account does not include negotiables. Note A. — The record of accounts receivable shall be kept in such manner as to permit the ready segregation of the three groups, consumers' accounts, accounts with affiliated companies, and miscellaneous accounts receivable. Note B. — It is suggested that, when practicable, consumers' accounts be further classified into current month accounts, accounts more than one month but less than one year old, and accounts over one year old. 114. Interest and Dividends Receivable. This account shall include the amount of interest accrued to the date of the balance sheet on funded and unfunded securities, loans, open accounts, mortgages and deposits held by or for the accounting company; dividends declared on stocks similarly held, and dividends, accrued on stocks when contracts require that the dividend be paid at stated times. Note. — No amount representing interest or dividends receivable shall be in- cluded in this account unless its payment is reasonably assured by past experience, anticipated provision, or otherwise. But the definition of this account should not be construed to prevent the carrying of interest and dividends receivable in a suspense account until collection has actually been made, even though the debtor be considered to be solvent. 115. Marketable Securities. This account shall include the cost or book value of marketable securities (other than those issued or assumed by the accounting com- pany) held in its treasury unpledged and free for sale and not neces- sary or desirable for it to hold for the purpose of maintaining the integrity of its business or operations. Securities which may not readily be sold at their fair value should be classed as " miscellaneous investments " and included in Account No. 122, " Miscellaneous In- vestments." Records shall be kept which will ])ermit ready analysis of the balance in this account as between : (a) Stocks. (b) Bonds. (c) Long term notes (not classifiable as " Notes Receivable " prop- erly includible iti Account No. 112, "Notes Receivable"). (d) Miscellaneous. BALANCE SHEET ACCOUNTS 11 116. Materials and Supplies. This account shall include the balances representing the cost (in- cluding transportation, insurance and inspection charges, customs duties, etc.) of all materials and supplies not charged out in the accounting company's accounts, regardless of whether the same are in- tended to be consumed in construction or in operation or later to be sold. Trade or cash discounts allowed in connection with the purchase or the payments for materials and supplies shall be credited to the particular bills on which such discounts are allowed or to clearing ac- count " Stores Department " when not practicable to credit the par- ticular bills. The cost of materials and supplies includes all specifically assign- able transportation charges incurred in obtaining the delivery of such materials and supplies upon the premises of the purchaser and the cost of any special tests made thereon prior to their acceptance. When any materials or supplies the cost of which has been charged to this account are issued for use, the amount at which they stand charged herein should be credited to this account and charged to the proper construction, operating expense or other account. The scrap or salvage value of things retired from service shall be charged to appropriate sub-accounts in this account while such things remain the property of the accounting company; if such salvage value is not known and cannot be determined it shall be estimated. Inventories of supplies and materials shall be taken at least an- nually, and any shortage or overage disclosed by such inventories shall be credited or debited to this account and concurrently debited or credited to operating expense, fixed capital or other appropriate accounts. Note A. — It is not required that the transportation and other elements of cost shall be assigned with a greater degree of accuracy than to the nearest cent per unit of materials and supplies. Where a single transportation item covers a multi- tude of things the portion of the expense not assigned to specific things should be charged to the clearing account " Stores Department." Note B. — If an appliance sold is for any reason returned to the accounting com- pany it should be charged to the appropriate sub-account at its appraised value. Cost of repairing or renovating it should be charged to the same sub-account. Appro- priate adjustments should be made in accounts credited with the original sale. 117. Prepayments. This account shall include the debit balances described under the following sub-heads : a. Prepaid Taxes. The excess of taxes paid over the amount properly chargeable to current income or other similar account, as 12 BALANCE SHEET ACCOUNTS shown by a debit balance in the liabiHty account. (See account No. 231, " Taxes Accrued," page 22.) b. Prepaid Rents, The amount of rents paid in advance of the enjoyment of the term. As the term is consumed, this account shall be credited at regular accounting intervals and the appropriate rent account debited with the amount applicable to the i>eriod, C. Prepaid Insurance. The amount of premiums on insurance policies paid in advance of their accrual. As such premiums accrue they should be credited at regular accounting intervals to this account and charged to the appropriate oj^erating expense or other account. d. Miscellaneous Prepayments. Prepayments made for any purpose other than as provided for in the three preceding heads. Note. — By the accrual of insurance, rents, etc., is meant their accumulation when considered as spread uniformly over the period to which they apply. Thus, if the rent fixed by contract of lease for a certain property is $600 for a calendar year, this accrues at the rate of $50 each month (unless it is desired to base the accruals on days, when the varying lengths of the months would require to be con- sidered), regardless of the actual times when the rent matures; $50 should thus (if the rent has been prepaid) be credited each month to the sub-account "Prepaid Rents " and concurrently charged to the appropriate account in the " Income " account. Similarly in the case of other prepayments. 118. Subscribers to Capital Stock. This account shall be charged with subscriptions received for capital stock. The amount expressed in the entry charging this account shall be determined in accordance with the subscription agreement. Con- currently, there shall be credited to account No. 203, " Capital Stock Subscribed," an amount representing the stock subscribed as stipu- lated in the subscription agreement. Payments received from sub- scribers shall be credited to this account. 119. Miscellaneous Current Assets. This account shall include the cost of all current assets which are not includible under any of the foregoing accounts. (See "Balance Sheet Accounts — General Instructions and Definitions," Section 3, page 4.) 121. Investments in Affiliated Companies. This account shall include the ledger value of the accounting com- pany's investment in securities or non-negotiable notes issued or as- simned by affiliated companies; also of its investment advances to such companies. Two companies are affiliated if either one controls the policy of the other or if both arc subject to, the same control. P>y " Investment advances " are meant debit balances in open accounts BALANCE SHEET ACCOUNTS 13 with affiliated companies not subject to current settlement and inter- est accrued on such o^^en accounts when such interest is not subject to current settlement. This account shall be subdivided as follows : a. Stocks. b. Bonds. c. Notes. d. Advances. Note A. — Accounts with affiliated companies wliich are subject to current settlement such as charges for materials and supplies currently furnished, charges for repairs to equipment, etc., shall be classed as current assets or current liabilities as may be appropriate. Note B. — Securities borrowed by the accounting company and pledged should not be included in this account. Note C. — Securities pledged for purposes other than that of security for long or short term debt of the accounting company should be included in account No. 123, "Sinking Funds"; account No. 124, "Replacement Fund"; account No. 125, " Miscellaneous Special Funds " ; or account No. 126, " Special Deposits " as may be appropriate. 122. Miscellaneous Investments. This account shall include the balances in accoimts representing mis- cellaneous investments such as those in securities of non-affiliated cor- porations, in tangible property of a i>ermanent nature not coming within the definition of fixed capital, as, for example, real estate leased to others or held for a rise in value, etc., provided such investments are not included in any special fund account. The accounting company's records shall be kept in such manner as to permit the ready analysis of this account to show separately in the company's annual reports full particulars concerning its investments of any given class, including the ledger value of those which are held subject to a mortgage, pledge, or other lien. 123. Sinking- Funds. This account shall include the amount of cash, the ledger value of securities of other companies, and other assets which are held by trustees of sinking funds for the purpose of redeeming outstanding obligations, including such assets so held by the accounting company when they are segregated in a distinct fund; also amounts deposited with such trustees on account of mortgaged property sold, when the proceeds of such sale are to be held for the redemption of securities ; and the cost of live securities issued or assumed by the accounting company and held in such funds. A separate account shall be kept for each fund and the title of each fund should designate the obliga- tion in support of which the fund is created. Note. — Should the constituents of a sinking fund change substantially in value, and such change seem likely to be permanent, it may be reflected by suitable entries 14 BALANCE SHEET ACCOUNTS in this account and in the corresponding reserve account or in " Profit and Loss " as may be appropriate. 124. Replacement Fund. If the accounting company desires, or is required, to segregate in a special fund the assets or any part of the assets represented by the retirement reserve, the ledger value of such assets shall be included on the balance sheet in this account. 125. Miscellaneous Special Funds. This account shall include the amount of cash and the ledger value of securities of other companies and other assets in insurance, em- ployees' pension, savings, relief, hospital and other funds which have been raised and specifically set aside or invested "for purposes not pro- vided for elsewhere; also the cost of securities issued or assumed by the accounting company and held in such funds. A separate account shall be provided for each fund. 126. Specia-l Deposits. This account shall include the debit balances described under the following sub-heads : a. Coupon Special Deposits. All moneys and bank credits spe- cially deposited in the hands of fiscal or other agents of the accounting company for the payment of interest coupons when presented. Such coupons when paid from such deposits shall be credited to this account and charged to the appropriate matured interest account. Payments to trustees (or other agents of the holders of bonds or other securities) of the interest accrued thereon which operate under the terms of the securities (or of mortgages supporting such securities) as a release of the paving corporation from further liability for such interest shall not be charged to this account but to the appropriate " Interest Ac- crued " account. b. Dividend Special Deposits. All moneys and bank credits specially deposited in the hands of the fiscal or other agent of the accounting company for the payment of dividends upon its stocks. Such dividends when paid from such de^xisit shall be credited to this account and charged to the appropriate dividend account. c. Miscellaneous Special Deposits. All moneys and bank credits deix)sited in the hands of fiscal or other agents of the account- ing company for other special jjurposes than the payment of interest coupons and dividends. Charges to this account shall specify the pur^jose for which deposit is made. When such purposes are satisfied, BALANCE SHEET ACCOUNTS 15 this account shall be credited with the amount specially deposited to provide such satisfaction. Note. — This account shall not include any assets available for general corporate purposes. 131. Unamortized Debt Discount and Expense. This accoimt shall include the total of the net debit balances repre- senting the discount and expense in connection with the issuance of each class of the accounting company's long term debt. (See " Balance Sheet Accounts — General Instructions and Definitions," Section 12, Page 7.) 132. . Property Abandoned. This account is intended as a suspense account which shall include the retirement loss (i. e., the original cost, estimated if not known, plus cost of dismantling, less salvage) on property destroyed or abandoned because of replacement, of obsolescence, of an extraordinary casualty, or for any other reason, when such loss has not been provided for in advance through a reserve. Amounts thus charged should be amor- tized through annual or more frequent charges over a definitely de- termined period to such accounts as shall be proper. 133. Jobbing Accounts. This account shall include the balances in accounts with customers or others for jobbing work not completed at the date as of which the balance sheet is stated. Such accounts, when work is completed and charges made, shall be cleared by charges to accounts receivable. 134. Clearing- or Apportionment Accounts. This account shall include the balances in accounts maintained to carry temporarily the cost of operating such facilities as garages, stables, storehouses, etc., and also overhead or burden costs such as i\ is desirable shall be apix)rtioned over the construction and operating accounts involved. The charges to operating accounts and the credits to these accounts should, unless there is some good reason to the contrarv, be so dis- tributed that the costs for any one year will be absorbed by the trans- actions occurring diu"ing that year. 135. Work in Progress. This account shall include the total of the balances in open " work order " or " job order " accounts for work in progress, or in suspense accourits to which the cost of construction or maintenance work is 16 BALANCE SHEET ACCOUNTS temporarily charged pending its final distribution to the appropriate fixed capital or ojx'rating expense accounts. Note. — Charges for additions to fixed capital not involving replacements, or for improvements which necessitate retirements or reconstruction of existing prop- erty when full credits have been made in advance to fixed capital accounts to cover the ledger cost of property retired, may be carried in fixed capital account No. 359. " Unfinished Construction," which see. 136. Miscellaneous Suspense. This account shall include all debits not elsewhere provided for, the proper final disjxjsition of which is uncertain. This will include the cost of tentative or preliminary surveys, designs, and investigations made for determining the feasibility of projects under contemplation. If the project is thereafter definitely undertaken, such amount shall be credited to this account and charged to the proper work order, fixed capital, or other account. If the project is abandoned, the cost of the preliminary investigation shall be charged to the appropriate operat- ing expense or other account. Whenever the proper disposition or any matter charged to this account is determined, it shall be credited to this account and charged to the appropriate account. 141. Discount on Capital Stock. This account shall include the total of the net debit balances repre- senting the discount on capital stock issued or assumed by the account- ing company. (See "Balance Sheet Accounts — General Instructions and Definitions," Section 11, Page 5.) 142. Reacquired Securities. When securities, whether debt or stocks, have been actually issued by the accounting company to bona fide holders for value (or after such issue by another corporation have been assumed by the account- ing company) and after such issue (or assumption) have been, acquired by the accounting company under circumstances which require that they shall not be treated as paid or retired, they shall be charged at face value to this account. If the price at which such securities have been reacquired is greater or less than the par or face value, the dif- ference shall be adjusted through Profit and Loss or through the appropriate discount or premium account. Note A. — This account shall not include securities that are merely guaranteed. Note B. — This account shall not include any securities held in sinking and other reserve funds. 143. Treasury Securities. This account shall include the par value of securities which have been nominally but not actually issued by the accounting company. BALANCE SHEET ACCOUNTS 17 For definition of the term " Nominal issue " see Note A under account No. 201, " Capital Stock " and Note B under account No. 211, " Long Term Debt." 150. Profit and Loss — Deficit. Under this head shall be shown the debit balance, if any, in the Profit and Loss account. (See " Profit and Loss Account — General Instructions and Definitions." Section 1, Page 67.) 201. Capital Stock. This account shall include the items described under the following sub-heads : a. Full Paid Stock. This covers the total par value, of stocks or receipts issued to represent permanent full-paid interests in the ac- counting company, or interests which, if terminable, are so only at the option of the company. By " Full paid interest " is meant an interest in which the full amount of the subscription has been paid in. b. Instalments Paid on Stock Subscriptions. This covers the amount of instalments paid on subscriptions for capital stocks. When the full amount of the subscription has been paid and certificates of stock are issued therefor this account shall be cleared and the par value of the stock so issued shall be credited to the account appropriate for such stock. c. Stock Liability for Conversion. This covers the accounting company's liability under eigreements to exchange its capital stock for the outstanding securities of companies whose physical proi)erty has been acquired under such agreements, but whose securities have not yet been surrendered for exchange. The records shall be so kept that stocks of dififerent classes may be separately shown. The following is the most important classification of stock : (a) Common stock : Stock which has no preference in the distri- bution of dividends. (b) Preferred Stock: Stock having preference in the distribution of dividends. (c) Debenture Stock: Stock issued under a contract to pav a specified return at specified intervals. Preferred stock may be further classified as first preferred, second preferred, etc.; or as ciinndative or non-cumulative ; or as participating or non-participating. First preferred stocks are those which have the first claim upon such dividends as may be distributed; a claim upon 18 BALANCE SHEET ACCOUNTS dividends taking precedence over the claim of common stock but in- ferior to the first preferred stock may be represented by second pre- ferred stock, and so on. Stock is cumulative if the amount by which the dividend at any dividend period fails to reach a stipulated divi- dend rate is carried forward to continue as a claim upon the dividend fund until satisfied. Stock is non-cumulative if such amount lapses. Stock is participating if it is not limited to a stipulated rate in the amount of dividends which it may receive but is entitled to partici- pate, in accordance with the terms of the contract under which it is issued, in further dividends. It is non-pariicipating if it is limited to a stipulated rate. Stocks may differ also with respect to voting provisions and con- ditions under which they may be retired. A separate ledger account should be maintained for each class of stock issued, and no two stocks shall be considered of the same class unless they are equal in their interest or dividend rights, their voting rights, and the conditions under which they may be retired. The characteristics of any class of stocks in these three regards shall be designated in the title of the account raised to cover such stocks and shall be clearly expressed in the first entry of such account. To the account for any class of stock shall be credited, when issued, the par value of the amount of stock of that class issued. If such issue is for money, that fact shall be stated; and if for any other consideration than money, the person to whom issued shall be designated and the consideration for which issued shall be de- scribed with sufficient particularity to identify it; if such issue is to the treasurer or other agent of the corporation to be by him disposed of .for the benefit of the cor|X)ration, that fact, and the name of such agent, shall be shown ; and such agent shall, in his account of the disposition thereof, show the like details concerning the consideration realized thereon, which account, when accepted by the corporation, shall be preserved as a corporate record. If the fair cash value of the consideration realized upon the issue of any amount of stock is greater than the par value of such stock and accrued dividends, if any, ex- pressed in the contract of issue, the excess shall be credited to account No. 202, " Premium on Capital Stock," and corresiX)nding reference thereto shall be contained in the entry relating to such stock in the stock account. For each class of stock the records shall also show plainly the par value of (1) certificates issued and actually outstanding, being those not held by the company, its agents or trustees, or subject to its con- trol ; and (2) certificates pledged and unpledged held in the company's treasury, by its agents or trustees, or otherwise subject to its control, BALANCE SHEET ACCOUNTS 19 including" both those reacquired after actual issue and those nominally but never actually issued. Note A. — Capital stock is considered nominally issued when certificates are signed and sealed and placed with the proper ofiicer for sale and delivery, or pledged, or otherwise placed in some special fund of the accounting compan}'. It is con- sidered to be actually issued when it has been sold to a bona fide purchaser for a valuable consideration, and such purchaser holds it free from all control by the accounting company. All capital stock actually issued and not reacquired by or for the accounting company is considered to be actually outstanding. If reacquired by or for the accounting company, under such circumstances as require it to be held alive and not canceled or retired, it is considered to be nominally outstanding. Note B. — When stock without par value is issued the actual money value of the consideration realized from the issue should be credited to the account repre- senting that particular class of stock. 202. Premium on Capital Stock. This account shall include the excess of the actual money value (at the time of issue of the stock) of the consideration received for such issue over the par value of the amount of stock issued and accrued dividends, if any, expressed in the contract of issue. If the stock is issued by the corporation to its treasurer or other agent, the excess of the actual money value of the consideration obtained by such agent in exchange for such stock over the par value and accrued dividends thereof shall be considered the premium realized. A separate ledger account shall be maintained for each class of stock as distinguished according to the text of account No. 201 preceding. Entries in these accounts shall be carried therein until ofifset by credits to Profit and Loss upon reacquisition of the stock or by credits to " Cash " or similar account if the corporation distributes to its stockholders all or any part of the premium realized on its stock. 203. Capital Stock Subscribed. Subscriptions to capital stock shall be credited to this account. This account shall be charged when the subscriber has paid his sub- scription in full and is entitled to receive certificates representing the shares subscribed. Concurrently, credits shall be made to account No. 142, " Reacquired Securities," or account No. 143, " Treasury Securities," if deliveries are made from capital stock so held. Otherwise, credit the appropriate subdivision of account No. 201, " Capital Stock." 211. Long Term Debt. This account shall include the total par value of all debt except receiver's certificates and advances from affiliated companies (for which see below) which by the terms of its creation does not mature until more than one year after date of creation. This covers bonds, 20 BALANCE SHEET ACCOUNTS notes, mortgage certificates, and all other forms of acknowledgment of indebtedness. The records shall be so kept that long term debt of different classes may be separately shown. The most important classification is that based upon the nature of the lien or security as follows : (a) Mortgage Bonds : Bonds secured by a lien on physical prop- erty and not includible in the other, subdivisions of this account. (b) Collateral Trust Bonds: Bonds and notes having a date of maturity of more than one year after date of issue secured by a lien on securities or other commercial paj^er; also stock trust certificates that are similar in character to collateral trust bonds. (c) Income Bonds: Bonds which are a lien on the accounting company's revenue alone, or bonds which, while being a lien on its property and franchises, can claim payment of interest only in case interest is earned. (d) Equipment Obligations: Equipment bonds, equipment notes, or other obligations secured by lien on specific equipment. (e) Miscellaneous Obligations : All long term obligations not pro- vided for in the four preceding classes, including notes, unsecured certificates of indebtedness, debenture bonds, plain bonds, real estate mortgages executed or assumed, and other similar obligations maturing more than one year after date of issue. (f) Receipts Outstanding for Long Term Debt: Receipts for pay- ment on account of long term debt securities. When the securities are issued for amounts so paid, the face value shall be included in the account covering the class of funded debt for which the securities are issued. Long term debt tnay differ also with respect to rates of interest, interest dates, and date of maturity. Separate ledger accounts shall be maintained for each class of long term debt, and no two amounts of debt not agreeing in respect of all four of the characteristics above named shall be included in the same ledger account, except that parts of any long term debt issue agreeing in other characteristics but ma- turing serially may be treated as of the same class. The title of each ledger account for long term debt shall express the four characteristics above stated, that is to say, mortgage or other lien or security, rate of interest, dates of maturity of interest, and date of maturity of principal : as, e. g., " First Mortgage 5 per cent. Q. F. 10, August 10, 1928," which means a debt secured by the company's first mortgage, bearing interest at the rate of 5 per cent, per annum, interest matur- ing quarterly on February 10. May 10, August 10, and November 10 of each year, principal maturing August 10, 1928. BALANCE SHEET ACCOUNTS 21 For each class of long term debt the records shall also show plainly (1) the par value of certificates or other evidences of debt issued and actually outstanding, being those not held by the company, its agents or trustees, or subject to its control; and (2) the par value of certifi- cates or other evidences of debt pledged or unpledged held in the com- pany's treasury, held by its agents or trustees, or otherwise subject to its control ; including both those reacquired after actual issue and those nominally but never actually issued. Note A. — Securities maturing one year or less from date of issue shall be included in account No. 221, " Notes Payable." Matured long term debt shall be included in account No. 226, " Matured Long Term Debt Unpaid." Note B. — Long term debt securities are considered to be nominally issued when certified by trustees and placed with the proper officer for sale and delivery, or pledged or otherwise placed in some special fund of the accounting company. They are considered to be actually issued when they have been sold to a bona fide pur- chaser for a valuable consideration and such purchaser holds them free from all control by the accounting company. All securities actually issued and not re- acquired and held by or for the accounting company under such circumstances as require them to be considered as held alive and not cancelled or retired are con- sidered to be actually outstanding. If reacquired by or for the accounting company, under such circumstances as require them to be considered as held alive and not cancelled or retired, they are considered to be nominally outstanding. 212. Receiver's Certificates. When any receiver, acting under the orders of a competent court, is in possession of the property of a corporation, and under the orders of such court issues certificates of indebtedness chargeable upon such property, the par value of such certificates shall be included in this account. Note. — Separate sub-accounts shall be maintained for receiver's certificates which mature in more than one year and those which mature in one year or less from date of issue. 221. Notes Payable. This account shall include the balances representing outstanding obligations in the form of notes, drafts, acceptances, or other similar evidences of indebtedness payable on demand or within a time not exceeding one year from date of issue. Note. — Secured notes and time loans payable more than one year from date of issue shall be included in account No. 211, "Long Term Debt." 222. Accounts Payable. This account shall include the amount of audited vouchers or accounts and audited pay rolls unpaid on the date of the balance sheet ; also balances representing unclaimed wages and outstanding pay and time or discharge checks issued in payment of wages, open ac- counts with other companies, except such as are includible under 22 BALANCE SHEET ACCOUNTS account No. 241. "Advances From Affiliated Companies," and similar items. 223. Consumers' Deposits. This account shall include the amounts deposited with the account- ing company by consumers as security for the payment of bills. Deposits refunded shall be charged to this account and credited to "Cash"; or to account No. 125, "Miscellaneous Special Funds," if a special fund for such deposits is maintained. Deposits applicable to uncollectible or worthless bills shall, at the close of the fiscal year (or earlier at the option of the accounting company), be credited to the account of the consumer involved and debited to this account. 224. Matured Interest Unpaid. This account shall include the amount of matured and unpaid inter- est on debt of the accounting company except where such interest is added to the face of the principal as is the usual case with judgments and sometimes with advances from affiliated companies. 225. Dividends Declared. This account shall include the amount of any dividends which have been declared, but not paid. Dividends shall be credited to this ac- count as of the day upon which they become a liability of the account- ing company (which is generally the date upon which they are de- clared) and when paid shall be charged to this account and credited to " Cash " or other suitable account. 226. Matured Long- Term Debt Unpaid. This account shall include the amount of long term debt matured and unpaid without specific agreement for extension as to time of pay- ment, including unpresented bonds drawn for redemption through the operation of sinking and redemption fund agreements. Note. — Real estate mortgages whose nominal maturity has been reached but which, by mutual agreement between mortgagee and mortgagor, are continued indefinitely as obligations of the accounting company need not be transferred to this account, but may continue to be carried in account No. 211, " Long Term I^ebt." 227. Miscellaneous Current Liabilities. This account shall include the balances in all open accounts repre- senting current liabilities not specifically provided for in the foregoing accounts. 231. Taxes Accrued. This account shall include the amount of taxes accrued and prop- erly charged against income or other accounts in excess of the amount BALAN'CE SHEET ACCOUNTS 23 of taxes paid as shown by the credit balance in the tax Habihty account. An open account entitled " Tax Liability Account " shall be raised, and to it shall be credited at the close of each accounting period taxes accrued during the period, corresponding debits being made to the appropriate accounts for tax charges. Such credits will necessarily be based upon estimate, but from time to time during the year as the actual tax levies become known, the amount of the periodic credits shall be adjusted so as to include as nearly as may be possible in each year the taxes applicable thereto. When any tax is paid, it shall be charged to the " Tax Liability Account " and credited to " Cash " or other suitable account. A debit balance in the " Tax Liability Ac- count " due to the prepayment of taxes applicable to the period subse- quent to the date of the balance sheet shall be shown under account No. 117, "Prepayments," while a credit balance shall be shown under account No. 23L "Taxes Accrued." 232. Interest Accrued. This account shall include the amount of interest accrued to the date of the balance sheet, but not payable until after that date, on all indebtedness of the accounting company except where such interest is added to the face of the principal, as is the usual case with judg- ments, and sometimes with advances from affiliated companies. When such interest is paid, it shall be charged to this account and credited to " Cash " or other suitable account. Separate sub-accounts shall be maintained for each item of indebtedness. When interest matures without being paid, it shall be charged to this account and credited to account No. 224, " Matured Interest Un- paid." Payments to trustees (or other agents) of the holders of bonds or other securities of the interest accrued thereon which operate under the terms of the securities (or of mortgages supporting such securi- ties) as a release of the paying company from further liability for such interest shall be considered equivalent to payments of interest made directly to bondholders and such interest shall not be credited to " Matured Interest Unpaid." The interest accrued u\K)\\ any judgment against the accounting company shall not be credited to this account, but to the account to which such judgment stands credited. 233. Miscellaneous Accrued Liabilities. This account shall include the balances in all accounts representing accrued liabilities other than interest or taxes. 24 BALANCE SHEET ACCOUNTS 241. Advances From Affiliated Companies. This account shall include the par value of non-negotiable notes due to affiliated companies, credit balances in open accounts with such companies other than credit balances in credit accounts classable as current liabilities, and interest accrued on notes and o^^en accounts included in this account when such interest is not subject to current settlement. Two companies are affiliated if either one controls the policy of the other, or if both are subject to the same control. This account shall be sub-divided as follows : a. Notes, including both time and demand notes; b. Open accounts not subject to current settlement; c. Interest accrued on amounts included in this account when not subject to current settlement. Accounts with affiliated companies which are subject to current settlement, such as charges for materials and supplies currently fur- nished, charges for repairs to equipment, etc., shall be classed as cur- rent assets or current liabilities as may be appropriate. Negotiable notes due to affiliated companies shall not be included in this account but in account No. 221, " Notes Payable." 251. Retirement Reserve. To this account shall be credited such amounts as are charged to operating expense account " Retirement Expense," appropriated from surplus, or both, to cover the retirement loss represented by the excess of the original cost, plus cost of dismantling, over the salvage value of fixed capital retired from service. When any fixed capital is retired from service, the original cost thereof (estimated if not known, and where estimated, the facts on which the estimate is based should be stated in the entry) should be credited to the proper fixed capital account and charged, plus the cost of retirement, less salvage, to this account. If the credit balance in this account is insufficient to cover the retirement loss, the excess over the balance contained in the re- serve should be charged to account No. 132, " Property Abandoned," which see, or other appropriate account. The loss which this account is intended to cover are those incident to important retirements of buildings, of large sections of continuous structures, like electric line, or of definitely identifiable units of plant or equipment, and the purpose of the account is that the burden of such losses may be as nearly as is practicable efjualized from year to year, but with due regard for amount of t'arnings available for this purpose in each year. Note A. — When property is retired whose ledger value has been below original cost, only the remaining ledger value shall be written off as retirement loss. BALANCE SHEET ACCOUNTS 25 Note B. — When any property is retired whose ledger value is greater than the known or estimated cost, such excess shall be charged to Profit and Loss. XoTE C. — If any property is sold for more than its original cost, the excess of its selling price over the cost of the property plus the cost of dismantling and selling, shall be credited to this account. Note D. — If the accounting company has, previous to the effective date of this uniform classification of accounts, maintained a reserve under some other title, such as " Depreciation Reserve," for the purpose of equalizing retirement losses, the balance in such reserve, as at the effective date of this classification, shall be trans- ferred to this account. 252. Casualty and Insurance Reserve. When any admitted liability arises because of loss or damage to the property of others, or of injuries to employees or other i^ersons, the amount of liability may (if not previously provided for by insurance or self -insurance) be charged to the appropriate operating expense or other accounts and credited to this account against which (in such case) the actual cost of satisfaction of the liability shall be charged when the matter is determined. If the extent of the liability can not be ascertained promptly after the liability arises, it may be estimated as accurately as practicable for the purpose of determining the imme- diate charge to the expense or other appropriate account, in which case the matter shall be adjusted when the extent of the liability is definitely ascertained. If the loss is of such character that it is in whole or in part indemnifiable under any contract of insurance carried by the accounting company, the indemnifiable portion of the loss shall be charged to the insurer and credited to " Casualty and Insurance Reserve." This account shall also include the amounts charged to the operating expense account " Insurance " to cover self -carried ri.sks. 253. Unamortized Premium on Debt. When long term debt securities or other evidences of indebtedness are disposed of for a consideration whose cash value (exclusive of accrued interest) is greater than the par value of such securities or other evidences of indebtedness, the excess of such cash value of the consideration received over the par value of the securities or other evidences of indebtedness shall be credited to this account. At regular accounting intervals thereafter a proper portion of such premium, based upon the life of the security or other evidence of indebtedness to maturity, shall be charged to this account and credited to account No. 434, "Amortization of Premium on Debt," in the income account. 254. Sinking" Fund Reserves. This account shall include the net balances in accounts to which are credited, in accordance with the requirements of mortgages and other 26 BALANCE SHEET ACCOUNTS contracts, or by action of the company's directors, definite appropria- tions of income and surplus whether held in general funds or specifi- cally set aside in the hands of trustees, for the purpose of retiring or redeeming bonds or other obligations of the accounting company. It shall also include such accretions from the investment of funds specifi- cally set aside for the above described purpose as are required to be added to the reserve. When the debt vi^hich the sinking fund is created to redeem matures and the fund has accomplished its purpose, the balance in the reserve shall be charged to this account and credited to Profit and Loss. If the mortgage or other obligation permits, the par value of bonds or other evidences of indebtedness issued or assumed by the accounting company which are reacquired through the operations of a sinking fund may be charged to this account and credited to Profit and Loss when and as such bonds or other evidences of indebtedness are reacquired. 255. Contributions for Extensions. To this account shall be credited contributions in money or property made to .the accounting company for the purpose of assuming the burden or any part of the burden represented by the investment neces- sary for the establishment or extension of services rendered by the company. This covers such items as contributions toward the cost of line extensions in sparsely settled territory made by consumers, either voluntarily or when reasonably required by the company as a condi- tion of giving the desired service, and the cost of services to which the company has title, in so far as such cost is borne by the consumer ; it also covers grants from municipal or other governmental bodies or contributions from chambers of commerce and similar organizations made with the object of establishing a new service in the community by assuming part of the investment cost of the enterprise. Note. — This does not include advances for the construction of extensions which are ukimately to be repaid wholly or in part to the consumer ; such advances should be credited to account No. 261, "Miscellaneous Unadjusted Credits." When final de- termination has been made as to the amount of the advances to be returned to the consumer the balance, if any, shall be credited to this account. 256. Conting-ency Reserve. This account shall include such amounts as the accounting company sets aside to provide against unforeseen contingencies. 257. Miscellaneous Reserves. This account shall include the balances in all reserves other than those provided for in the six preceding accounts. Note. — If the accounting company maintains operating reserves for the pur- pose of equalizing expenses from month to month, such reserves shall be cleared BALANCE SHEET ACCOUNTS 27 annually unless there remains a credit balance due to the non-completion of main- tenance work because of adverse labor conditions, non-receipt of material, or other similar reasons, in which case such part of the balance as is applicable to unfinished work may be carried over to the following vear. Under no circumstances shall a debit balance be carried over the year. 261. Miscellaneous Unadjusted Credits. This account shall include the amount of credit balances in sus- pense accounts that can not be entirely cleared and disposed of until additional information is received. 270. Profit and Loss — Surplus. Under this head shall be shown the credit balance if any, in the Profit and Loss account. (See " Profit and Loss Account — General Instructions ana Definitions," Section 1, Page 67.) 28 FIXED CAPITAL ACCOUNTS FIXED CAPITAL ACCOUNTS Intangible Fixed Capital: 301. Organization 302. Franchises 303. Miscellaneous intangible capital Tangible Fixed Capital: Specific Accounts : 311. Land (a) Steam power plant land (b) Hydro-electric power plant land (c) Gas power plant land (d) Transmission system land (e) Distribution system land (f) General office land (g) Miscellaneous land devoted to electric operations (g-1) Stores department land (g-2) General shops land (g-3) Transportation department land (g-4) Communication system land (g-5) Miscellaneous land 312. Structures (a) Steam power plant structures (b) Hydro-electric power plant structures (c) Gas power plant structures (d) Transmission system structures (e) Distribution system structures (f) General office structures (g) Miscellaneous structures devoted to electric operations (g-1) Stores department structures (g-2) General shop structures (g-3) Transportation department structures (g-4) Communication system structures (g-5) Miscellaneous structures Generating Plant — Steam 313. Boiler plant equipment 314. Prime movers and auxiliaries — steam 315. Turbo-generator units — steam 316. Electric plant — steam 317. Miscellaneous power plant equipment — steam Generating Plant — Hydro-Electric 318. Reservoirs, dams, and waterways (a) Reservoirs, dams and intakes (b) Navigation facilities (c) Waterways (d) Forcbays. penstocks and tailraces 319. Roads, trails, and bridges 320. Water turbines and water-wheels FIXED CAPITAL ACCOUNTS 29 Generating Plant — Hjdro-EIectric — Continued Turbo-generator units — hydro Electric plant — hydro Miscellaneous power plant equipment — hydro Generating Plant — Gas Fuel holders, producers and accessories Internal combustion engines Electric plant — gas Miscellaneous power plant equipment — gas Transmission and Distribution Sub-station equipment Storage" battery equipment Underground conduits Poles, towers, and fixtures Overhead conductors Underground conductors Transmission roads and traii:i Services Line transformers and devices Line transformer installation Consumers' meters Meter installation Consumers' Installations Installations on consumers' premises Commercial lamps Street lighting equipment Electric appliances G-eneral Equipment: General equipment (a) Office equipment (b) Stores equipment (c) Shop equipment (d) Transportation equipment (e) Telephone, telegraph and wireless system (f) Laboratory equipment (g) Miscellaneous equipment Miscellaneous tangible capital Overhead Costs and Other Undistributed Items i Engineering and superintendence Law expenditures during construction Injuries and damages during construction Taxes during construction Interest during construction Miscellaneous construction expenditures Fixed capital not classified by prescribed account" Cost of plant and equipment purchased Unfinished construction 30 FIXED CAPITAL ACCOUNTS FIXED CAPITAL ACCOUNTS General Instructions and Definitions 1. Fixed Capital Defined. By the fixed capital of a corixjration is meant the property, both tangible and intangible, which is devoted to the accomplishment of the principal purposes of its business and which has an expectation of life in service of more than one year from date of installation in service. 2. Tangible and Intangible Capital and Overhead Costs. Tangible capital covers all physical pro^xjrty classed as fixed capital. Charges to specific accounts for tangible property cover direct labor and material costs up to and including the time of the foreman super- vising the job ; also sudi overhead expenditures for engineering, taxes during construction, etc., as can be allocated to definite items of prop- erty. Charges to overhead cost accounts should cover only expendi- tures of this nature which .pertain to the enterprise as a whole and cannot be allocated to definite items of property. Intangible capital covers organization expenditures, and rights, privileges, and other property not physical, such as franchises or patent rights. So far as possible overhead costs should be assigned or apportioned to particular jobs or items to the end that each item shall bear its proper share of such cost, and that the entire cost of the item, both direct and overhead, shall be deducted from the fixed capital accounts at the time of its retirement. Certain overhead costs, however, which clearly pertain to the entire enterprise, such as in some cases engineer- ing, interest, etc., should not be apportioned, but retained in the appropriate fixed capital accounts as part of the investment cost so long as the enterprise continues under the form in which it started. These instructions should not be interpreted as permitting the addi- tion to fixed capital accounts of arbitrary percentages to cover as- sumed overhead costs, but only as requiring the assignment or ai)por- tionment to particular accounts for tangible property of actual and necessary overhead expenditures. 3. Fixed Capital to be Entered and Retained on Books at Cost. All charges to fixea capital acctnnits shall be at the actual cost of the property acquired, at the time of its acquisition. A bona fide FIXED CAPITAL ACCOUNTS 31 contract or agreement of purchase and sale between entirely separate parties shall be prima facie evidence of actual cost. Each item of property shall be carried in the fixed capital accounts at no more, and no less, than its actual cost unless, or until, such property is abandoned, replaced, reconstructed, or converted, when the account- ing shall be as hereinafter set forth. The foregoing shall not, how- ever, be interpreted to forbid the inclusion in account No. 357 "Fixed Capital Not Classified by Prescribed Accounts" of undistributed book values which have been carried prior to the effective date of a pre- scribed uniform system of accounts, and which may or may not repre- sent the actual cost of property in service; but the inclusion of such undistributed book values in fixed capital accounts shall be without prejudice to any future determination of the actual cost of the prop- erty. The term "cost" includes not only the cost of labor, material, and supplies directly employed or consumed in the construction and installation of fixed capital, but also the cost of preliminary plans and surveys and such portion of the expenses for engineering and plant supervision and of general expenses as may be chargeable to the fixed capital accounts under an equitable plan for apportionment of such expenses. 4. First Entries Must Enable Identification. Every debit or credit to a fixed capital or other investment account must be made in such wise as to be readily identified with the particu- lar item of property to which it relates. For each item (or project) of fixed capital or other investment the records shall show the date of the entry, the date of acquisition or installation, the date when placed in service, the actual money cost, and the description thereof with such particularity as to make possible the location and identifi- cation thereof (including in case the item is movable, the name of the manufacturer and the identifying mark or number, if any, imprinted thereon, and such other particulars as may be necessary for identifi- cation). Where two or more items are acquired under a single un- divided contract, the entry in respect of each shall refer to the others and shall state the entire consideration, and shall also state the por- tion thereof fairly applicable to the particular item covered by the entry. When any item of capital is withdrawn from service, the date of withdrawal shall be included in the withdrawal entry relating to such item. Note A. — In the case of continuous structures like electric lines, gas mains, etc., the record shall be itemized to the extent that no item shall contain more than one operating division or section or more than one type of construction. The entry for any item shall so specify the location and the principal physical characteristics 32 FIXED CAPITAL ACCOUNTS (such as size, weight, type, etc.) of the chief constituent parts of the item that iden- tification ma}- be assured. Note B. — The date when an item of fixed capital is placed in service may, if preferred, be kept in the engineering records. 5. Application of Classification. The accounts in this classification shall include all expenditures for fixed capital regardless of the way in which the funds for the construc- tion or acquisition have been provided. Such expenditures shall not be charged to Operating Expense. Income, Surplus, or to special funds in such manner as to exclude from the proi^erty accounts any expenditure for fixed capital. These accounts shall also include the necessary credits to represent the cost originally charged to them of property or equipment aban- doned, destroyed, sold, or otherwise retired from service. Wherever the term original cost is referred to in this classification, and such cost can not be ascertained, an estimate of the original cost shall be u.sed. 6. Salvage and Insurance. Salvage, as the term is employed in this classification, means the value to the accounting company, based upon a fair market price, of equipment or other material recovered in the process of repairing, re- placing, or abandoning plant and equipment ; or the net amount received from its sale if the material is not retained by the accounting company. Salvage recovered in connection with a replacement or abandonment involving a deduction from fixed capital accounts shall be credited against the account to which the retirement loss is charge- able. Salvage recovered in connection with maintenance expenses not involving deductions from fixed capital accounts shall, so far as prac- ticable, be credited to the appropriate maintenance accounts. Insur- ance recovered on property damaged or destroyed shall be treated in the same manner as salvage. 7. Withdrawals or Retirements. To the end that the capital accounts shall at all times disclose the cost of all projjcrty in service, the cost of retired capital, whether re- placed or not, must be deducted from (i. e., credited to) the account or accounts in this classification to which such cost is chargeable. Every electrical corporation should therefore take such measures and e.stablish such procedure as will insure strict compliance with these requirements.' When anything is worn out, lost, sold, destroyed, abandoned, surrendered upon lapse of title, becomes permanently un- serviceable or is withdrawn or retired from service for any other reason, the amount at which such thing stood charged in the capital FIXED CAPITAL ACCOUNTS 33 account shall be credited to the appropriate capital account, and the entry of such credit shall cite by name and page of book or other record the original entry of cost of the thing retired. If there is no such original entry, that fact shall be stated in connection with the credit entry. If the amount originally charged (i.e., the ledger value) is not separately recorded, it shall be taken to be the proportionate share of said property in the value of the entire group in which the property is included. The entry shall state the fact of such estima- tion. Credits for original cost of property retired should include such part of the overhead cost as is equitably assignable to the item retired. When the cost of retired property is credited to the appropriate fixed capital accounts, it shall be concurrently charged (less any sal- vage or insurance that there may be on the retired property) to account No. 251, "Retirement Reserve," to the extent that the total balance in the reserve is sufficient to cover such loss; the remainder, if any, representing such part of the loss due to the retirement as has not been provided for in advance by the accumulation of a retirement re- serve, shall be charged to suspense account No. 132, "Property Abandoned," to be amortized in such manner as may be determined. The cost of dismantling, tearing down, or removing any discarded plant or equipment shall be considered a part of the retirement loss and charged to the "Retirement Reserve" or to "Property Aban- doned" in accordance with the provisions of the foregoing paragraph. When any replacement takes the form of reconstructing or converting existing property in such a way that the cost of the entire project can- not be accurately assigned as between the cost of putting in the new property, and the co.st of taking out the old, no greater proiX)rtion of the cost of the project shall be charged to fixed capital accounts than would equal the cost of new plant or equipment having equivalent capacity and expectation of serviceable life. Such part of the cost of a reconstruction project as is not chargeable to fixed capital shall be considered a retirement loss and charged to the " Retirement Reserve" or to " Property Abandoned " as already provided. The foregoing instructions do not apply to the retirement of those minor parts, tne charges for replacing which are made directly to maintenance expense accounts. Note A. — The foregoing rule shall not be applied to capital temporarily out of service. Note B. — If a receiver or other person temporarily in charge of a corporation's property is not in possession of the corporate records, he should open on his books two accounts, one of which should be credited with the original cost (estimated if not known) of fixed capital retired or permanently withdrawn from service from whatever cause, and the other of which should be charged with such cost, plus cost 34 FIXED CAPITAL ACCOUNTS of dismantling, less salvage. The first account may be entitled " Cost of Fixed Capital Retired During the Period to ," and the second may be entitled " Loss on Fixed Capital Retired During the Period .'to " 8. Improvements on Leased Property. The cost of additions to and betterments of leased property should be charged to a sub-account under the appropriate fixed capital ac- count, and retirement losses in connection therewith treated in the same manner as on company-owned property. In case the full benefit of improvements will not be obtained by the lessee because of rever- sion to the lessor at the expiration of the lease, the cost of improve- ments may be charged to suspense and cleared by uniform charges to rent deductions within the period of the lease. Ordinary current re- pairs, including minor rearrangements and changes in connection with leased buildings, should be charged to the appropriate maintenance account. Expenditures charged to lessors or for which lessors are re- quired under the leasehold agreement to reimburse the lessee prior to the termination of the lease should not be charged to the fixed capital accounts of the lessee. 9. Salvage from Equipment, Tools, Etc. When the cost of any work equipment, machinery, tools, or ma- terials and supplies obtained for use in construction work has been charged to accounts in this classification and the entire value thereof has not been consuined in the work, the residual value of such work equipment, machinery, tools, or materials and supplies shall be credited upon the completion of the work to the accounts to which originally charged, and concurrently charged to the material and sup- ply account or other appropriate accounts. 10. Sub-accounts for Departmental Capital. The fixed capital accounts should be so subdivided as to distinguish clearly between general capital and departmental capital. Sub- accounts for departmental capital .should be so entitled and con- .structed as to enable the corjxiration to report in the detail indicated in the following classification the fixed capital devoted to each par- ticular department or jointly to any specific group of departments. FIXED CAPITAL ACCOUNTS 35 TEXT PERTAINING TO FIXED CAPITAL ACCOUNTS Note. — If the accounting company operates two or more generating stations, separate sub-accounts should be maintained for the land, structures, and equip- ment pertaining to each such station. So far as practicable, similar sub-accounts should be maintained for each sub-station. 301. Organization. This account shall include all fees paid to governments for the privilege of incorporation and all office and other expenditure incident to organizing the corporation or other enterprise and putting it into readiness to do business. This covers cost of preparing and distribut- ing prospectuses, cost of soliciting subscriptions for stock (but not for loans or for the purchase of bonds or other evidence of indebtedness), cash fees paid to promoters and the actual cash value at the time of organization of securities paid to promoters for their services in organizing the enterprise, counsel fees, cost of preparing and issuing certificates of stock and cost of procuring certificates of necessity from state authorities and other like costs; also costs incident to preparing and filing certificates of authorization of increase of capital stock and to the negotiation and issue of stock thereunder, and of preparing and filing certificates of amendment of articles of incorporation. This ac- count should not include any discount on stocks or other securities issued, nor should it include any costs incident to negotiating loans or selling bonds or other evidences of indebtedness. Note. — Cost of preparing and filing papers in connection with the extension of the term of incorporation or with reincorporation consequent upon reorganization should be charged to account No. 781.26, "Law Expenses," or, by companies in "Class C" or "Class D," to the account of which "Law Expenses " is a sub-division. 302. Franchises. This account shall include amounts actually paid to a state or to a political subdivision thereof in consideration of franchises running in peri>etuity or for a specified tenn of more than one year and necessary to the conduct of the accounting company's operations. If any such franchise is acquired by a mesne assignment, the charge to this ac- count in respect thereof should not exceed the amount actually paid therefor by the corporation to its assignor, nor should it exceed the amount sj>ecified above. Any excess of the amount actually paid by the corporation over the amount above specified should be charged to account No. 303, " Miscellaneous Intangible Capital." 303. Miscellaneous Intangible Capital. This account shall include the cost of patent rights, licenses, privi- leges, and other intangible property not elsewhere provided for; and 36 FIXED CAPITAL ACCOUNTS all Other fixed capital charges which are not specifically assignable to some other account in this classification. Note. — When any corporation desires to reclassify, according to the Uniform Classification of Accounts, the book accounts representing its investment in plant and equipment prior to the effective date of this classification, any remainder of the original total book value over the amount determined as properly chargeable to other prescribed accounts (including profit and loss or reserve accounts in cases where it is found that part of the original total book value is properly chargeable to such accounts) may be charged to " Miscellaneous Intangible Capital." 311. Land. This account shall include the cost of all land devoted to electric operations. This covers land for generating stations, substations, office buildings, service buildings, warehouses, garages, for storage purposes, or for any other purpose in connection with electric opera- tions, rights-of-way for transmission or distribution lines and for canals and pipe lines, water rights and rights of pondage, flowage, and sub- mersion, and land for wharves and docks and the cost of riparian or water rights necessary therefor, where such rights have lives in excess of one year from the date when placed in service. Such cost includes, when assumed or paid by the purchaser in its own behalf, cost of registration of title, cost of examination of title, conveyancer's and notary's fees, purchasing agent's commission or fees, or proportion of purchasing agent's salary, taxes accrued to date of transfer of title, and all liens upon the title acquired ; cost of obtaining consent and payments for abutting damages ; also the first cost of acquiring lease- holds of land for rights-of-way with a life of more than one year, btit not including the rents paid periodically in consideration of rights obtained under such leases. This account also includes special assessments levied by public authorities on the basis of benefits for street and other public improve- ments, such as new roads, new bridges, new sewers, new pavements, new curbing, etc., but not any taxes levied to provide for maintenance of such improvements. The cost of building and other improvements should not be included in this account. If at the time of acquisition of an interest in lands it extends to buildings or other improvements thereon, which improve- ments are devoted by the accounting company to its electric opera- tions, and the contract of acquisition does not determine the price of such improvements, they should be apjM'aised at their fair cash value for use in such operations, and such appraised value should be charged to the appropriate structures account, and excluded from this account. If such improvements are not devoted to electric operations but are devoted to other operations or held as investments, the cost (or ap- FIXED CAPITAL ACCOUNTS 37 praised value if the cost is not determined in the contract of acquisi- tion) should be charged to the appropriate investment account or capital account for other operations. If the improvements are re- moved or wrecked, the cost of removing or wrecking them should be charged and the salvage credited to the land account. Net proceeds from the sale of timber, cordwood, or other property purchased with rights-of-way or other lands should be credited to this account. This account may be subdivided as follows, and, so far as practi- cable, records of the cost of land devoted to electric operations should be kept in the detail indicated. Where pole lines carry both trans- mission and distribution conductors, right-of-way may be classed as "Transmission and distribution system land." Land used both for general offices and departmental purposes may be classed as "Miscel- laneous." When the general office is in the power plant, the land shall be considered power plant land. Riparian or water rights shall be considered hydro-electric power plant land. (a) Steam jwwer plant land. (b) Hydro-electric power plant land. (c) Gas power plant land. (d) Transmission system land. (e) Distribution system land. (f) General office land. (g) Miscellaneous land devoted to electric operations. (g-1) Stores department land. (g-2) General shops land. (g-3) Transportation department land. (g-4) Communication system land. (g-5) Miscellaneous land. 312. Structures. This account shall include the cost of all permanent buildings and structures to house, support, or safeguard property or persons, with all appurtenant fixtures, improvements to land, and other construc- tions. Buildings include all fixtures attached to and forming a permanent part thereof, such as water pipes and fixtures, steam pipes and fixtures for heating and ventilating, gas pipes and fixtures for lighting, etc., electric wiring and fixtures for lighting, signaling, etc., elevators, cranes and hoists and the motive power for operating them, building re- frigerating systems, and furnaces, boilers, etc., specially provided for such systems, storage batteries and electric generators with their 38 FIXED CAPITAL ACCOUNTS prime movers specially provided for building service, conduits, in- cluding cable conduits which form a part of the building, but not includ- ing conduits which would be removed with their contents ; and subways or area ways directly connected to and forming a part of the building. This account includes cost of excavations, brick or concrete chimneys, and such piers and foundations for machinery and appa- ratus as are designed to be as permanent as the buildings and independ- ent of their use in connection with any particular units of equipment. Charge also the cost of architect's plans and of sui^erintendence of construction. Improvements to land include roadways, fences, sidewalks, sewer systems, water systems, yard lighting systems, grading and landscape gardening, docks and water front improvements, railroad tracks, tram- ways and trestles, canals, bench marks, monuments, and any other permanent structures which are an improvement to the property. Roadways, trails, bridges, tramways and other construction used in hydro-electric production of electricity which are not adjacent to the generating plant proper should be charged to account No. 319, "Roads, trails and bridges." Note A. — When furnaces and boilers are used primarily for furnishing steam for some particular department and only incidentally for furnishing steam for heat- ing a building and operating the equipment therein, the entire cost of such furnaces and boilers should be charged to the appropriate departmental capital account, and no part to this account. Note B. — The cost of specially provided foundations, not expected to outlast the machinery or apparatus mounted thereon, should be charged to the same ac- count as is the cost of the machinery or apparatus for which they are provided. Note C. — This account should not include any charges for lighting, heating, or other fixtures temporarily attached for purposes of display or demonstration. Note D. — Where the structure of a dam forms also the foundation of the power plant buildings, this structure should be considered a part of the dam. This account may be subdivided as follows and so far as practicable records of the cost of structures devoted to electric operations should be kept in the detail indicated. Structures used both for general ofifices and departmental purposes may be classed as "Miscellaneous." When the general office is in the power plant, the building shall be considered a power plant structure. When the system for supplying boiler or condenser water is elaborate, as when it includes a dam, reservoir, canal, and pijx: line, the cost should be charged to a special sub-account entitled "Water Supply Structures — Steam." (a) Steam power plant structures. (b) Hydro-electric power plant structures. (c) Gas power plant structures. FIXED CAPITAL ACCOUNTS ' 39 (cl) Transmission system structures. (e) Distribution system structures. ( f ) General office structures. (g) Miscellaneous structures devoted to electric operations. (g-1) Stores department structures. (g-2) General shop structures. (g-3) Transportation department structures. (g-4) Communication system structures. (g-5) Miscellaneous structures. 313. Boiler Plant Equipment. This account shall include the cost installed of all furnaces, boilers, and boiler apparatus and accessories devoted to the production of steam for use in generating electric energy. This covers boilers and valves thereto attached, appurtenant furnaces and grates, and flues leading to smokestacks and chimneys, and the specially provided foundations and settings of such boilers and appurtenances; also metal smokestacks. It also covers mechanical stokers and other like apparatus for regulating the supply of fuel, etc., feed and hot water heaters and economizers, injectors, filters, feed pumps, blower engines, coal conveyors, ash conveyors, reservoirs for boiler or condenser water and intake and discharge water pipes and pipe lines and tunnels, air pipes and general service pipes, steam traps, drains and separators, and pipes for conducting steam from the boiler to the engine or to the gas producers, exhaust pipes, etc. This account shall not include steam pipes whose primary purpose is the heating of buildings. Note. — When the system for supplying boiler or condenser water is elaborate, as when it includes a dam, reservoir, canal, and pipe line, the cost should not be charged to this account but to a special sub-account under account No. 312, " Struc- tures," entitled " Water Supply Structures — Steam." 314. Prime Movers and Auxiliaries — Steam. This account shall include the cost of all steam engines, whether reciprocating or rotary. This covers the specially provided founda- tions and settings of such engines. The engine includes the throttle or inlet valve and the governor; also condensers, cooling towers, air and circulating pumps and lubricating systems, but not the steam pipe leading from the boiler, nor the exhaust pipe. Note A. — Where the electric rotor is mounted on the engine shaft, the shaft is a part of the steam engine and the electric rotor a part of the electrical equip- ment. Note B. — This account does not include steam turbo-generator units, the cost of which shall be chargeable ta the next following account. 40 FIXED CAPITAL ACCOUNTS 315. Turbo-Generator Units — Steam. This account shall include the cost installed of steam turbine-driven generator units when the generator and prime mover are purchased as a unit and not separately. This covers specially provided foundations and settings of such units; also condensers, air and circulating sys- tems, etc., but not the steam pipe leading from the boiler nor the ex- haust pipe. 316. Electric Plant^Steam. This account shall include the cost of all electric generating appa- ratus, motor driven exciter sets, rotaries, transformers, etc., used primarily in connection vv^ith the generation of electric energy by steam ix)wer and not for changing it in voltage or frequency for the purpose of transmitting or distributing it more efficiently. This covers the specially provided foundations and the installation of such equip- ment ; switchboards, circuit breakers, switches, instruments, conductors and other electrical apparatus connected thereto ; and generator cool- ing and air washing apparatus, including blowers and ducts. Note A. — When the electric rotor of such apparatus is mounted on the shaft of the prime mover the rotor is to be inckided herein, but not the shaft. Belts, countershafts, and other Hke apphances intermediary between such prime movers and the generators are to be excluded herefrom and charged to account No. 317, " Miscellaneous Power Plant Equipment — Steam." Note B. — This account does not include steam turbo-generator units, the cost of which shall be chargeable to the next preceding account. 317. Miscellaneous Power Plant Equipment — Steam. This account shall include the cost of all miscellaneous steam plant equipment not includible in any of the foregoing accounts, such as belts, pulleys, hangers, countershafts, and other apparatus inter- mediary between the prime mover and the electric generator, machine tools, cars, locomotives, and locomotive cranes for general plant pur- poses, etc. 318. Reservoirs, Dams and Waterways. This account shall include the cost of all dams and appurtenant structures for reservoirs and forebays devoted to the collection, storage and regulation of water primarily for hydro-electric production. This covers the cost of clearing and preparing the land ; also of all gates, raising and lowering apparatus, wasteways, spillways, fish-ladders, and all buildings and structures required in the operation and maintenance of dams, reservoirs and forebays; locks and e(|nipmcnt for handling navigation; the cost of constrtiction. inchidiiig the clearing and prepa- ration of land, of all diversion dams, ditches, flumes and tunnels with FIXED CAPITAL ACCOUNTS 41 their gates, operating mechanisms, spillways, fish-ladders and other appurtenances and the cost of all buildings and structures used in their operation and maintenance ; also the cost of acquisition or con- struction of all penstocks or pipe-lines in place, with their appur- tenant structures and accessories for delivering water from the fore- bays to water-wheels, and from draft-tubes to tail race, including con- nections at forebays. Nozzles and valves at water-wheels should be charged to account No. 320, "Water turbines and water-wheels." Note A. — Where the structure of a dam forms also the foundation of tlie power plant buildings, this structure should be considered a part of the dam. Note B. — In case the accounting company wishes to subdivide this account the following sub-accounts are suggested. (a) Reservoirs, dams and intakes. (b) Navigation facilities. (c) Waterways. (d) Forebays, penstocks and tailraces 319. Roads, Trails and Bridges. This account shall include the cost of permanent roads, trails, bridges, tramways, and railways used primarily in the hydraulic pro- duction of electricity which are not immediately adjacent to the generating plant proper, but which are connected with the operation of distant reservoirs, flumes, etc. Note. — It is intended that this account shall include the cost of only such private roads, etc. as it is necessary to maintain and use in the operation and main- tenance of the hydraulic power plant. The cost of roads, railways, bridges, etc. necessary for construction, but abandoned upon completion of the plant, as also the cost of such facilities dedicated to public use and maintained at public expense, should be distributed among other proper fixed capital accounts. 320. Water Turbines and Water- Wheels. This account shall include the cost of all turbines and water-wheels devoted to the generation of electric energy, their special foundations, settings, governors and all apparatus appurtenant thereto, from the head-gates and governors to wasteways. Note A. — When the e.ectric rotor is mounted on the shaft of the prime mover, the shaft is a part of the prime mover and the electric rotor a part of the electrical equipment. Note B. — This account does not include hydraulic turbo-generator units, the cost of which shall be chargeable to the next succeeding account. 321. Turbo-Generator Units — Hydro. This account shall include the cost installed of hydraulic turbine- driven generator units when the generator and prime mover are pur- chased as a unit and not separately. This covers six?cially provided foundations and settings of such units; also air and circulating pumps, lubricating systems, valves, governors and draft tubes. 42 FIXED CAPITAL ACCOUNTS 322. Electric Plant— Hydro. This account shall include the cost of all electric generating appa- ratus, motor driven exciter sets, rotaries, transformers, etc., used pri- marily in connection with the generation of electric energy by water power and not for changing it in voltage or frequency for the purpose of transmitting or distributing it more efficiently. This covers the specially provided foundations and the installation of such equipment ; switchboards, circuit breakers, switches, instruments, conductors and other electrical apparatus connected thereto ; and gen- erator cooling and air washing apparatus, including blowers and ducts. Note A. — When the electric rotor of such apparatus is mounted on the shaft of the prime mover the rotor is to be included herein but not the shaft. Belts, countershafts, and other like appliances intermediary between such prime movers and the generators are to be excluded herefrom and charged to account No. 323, " Miscellaneous Power Plant Equipment — Hydro." Note B. — This account does not include turbo-generator units the cost of which shall be chargeable to the next preceding account. 323. Miscellaneous Power Plant Equipment — Hydro. This account shall include the cost of all miscellaneous hydro- electric power plant equipment not includible in any of the foregoing accounts, such as belts, pulleys, hangers, countershafts, and other appa- ratus intermediary between the prime mover and the electric generator, machine tools, etc. 324. Fuel Holders, Producers and Accessories. This account shall include the cost of producers and accessories de- voted to the production of gas for the purpose of operating electric generators, including the cost of specially provided foundations and installation of such producers and accessories. This account includes producers, economizers, regenerators, vaporizers, steam injectors, scrubbers, exhauster outfits, seals, si>ecially provided boiler and pumps, flues and piping, blower engines, pipes for the conduction of gas from such producers to holders and to gas engines, holders for producer gas, exhaust pipes from gas engines, etc. It does not include pii>es whose primary purpose is the heating of buildings, nor does it include power transmission apparatus, or water pipes, steam pipes, water pumps, or inspirators. Include also in this account the cost of storage tanks for oil, gasoline, etc., used as fuel for internal combustion engines and the cost of facilities and apparatus similar to that designated above which is necessary in the delivery of the fuel to the engines. • FIXED CAPITAL ACCOUNTS 43 325. Internal Combustion Engines. This account shall include the cost of all gas engines, Diesel engines, oil engines, and other internal combustion engines devoted to the pro- duction of electric energy, including the specially provided founda- tions and installation of such engines. The engine includes the inlet valve, governor, and ignition and starting apparatus, and also such devices as anti-fluctuators or gas bags, and mufflers. It does not include the pipe leading from the fuel container, nor the exhaust pipe in the case of producer gas engines. Such pipe is chargeable to the next preceding account. Note. — Where the electric rotor is mounted on the shaft of the prime mover, the shaft is a part of the prime mover "knci the electric rotor a part of the electric equipment. 326. Electric Plant— Gas. This account shall include the cost of all electric generating appara- tus, motor driven exciter sets, rotaries, transformers, etc., used pri- marily in connection with the generation of electric energy by gas or other internal combustion engines and not for changing it in voltage or frequency for the purpose of transmitting or distributing it more effi- ciently. This covers the specially provided foundations and the instal- lation of such equipment; switchboards, circuit breakers, switches, instruments, conductors, and other electrical apparatus connected thereto ; and generator cooling and air washing apparatus, including blowers and ducts. Note A. — When the electric rotor of such apparatus is mounted on the shaft of the prime mover the rotor is to be included herein but not the shaft. Belts, countershafts, and other like appliances intermediary between such prime movers and the generators are to be excluded herefrom and charged to account No. 327. " Miscellaneous Power Plant Equipment — Gas." 327. Miscellaneous Power Plant Equipment — Gas. This account shall include the cost of all miscellaneous gas power plant equipment not includible in any of the foregoing accounts, such as belts, pulleys, hangers, countershafts, and other apparatus inter- mediary between the prime mover and the electric generator, machine tools, etc. 328. Sub-Station Equipment. This account shall include the cost installed, whether in a gener- ating station or sub-station, of transformers, rotary converters, inotor generators, regulators, switchboards and connecting equipment, etc., used primarily for changing electric energy in voltage or fre- 44 FIXED CAPITAL ACCOUNTS quency for the purpose of transmitting or distributing it more effi- ciently. This also covers outdoor sub-stations complete, including foundations, fences, supporting framework, etc. ; sub-station equipment installed on consumer's premises ; and other conversion equipment. So far as practicable, separate sub-accounts shall be maintained for each station. This account does not include line transfonners installed for step- ping down current from transmission or distribution voltages to the voltage at which it is used by the consumer. This account does not include storage batteries nor laboratory in- struments and apparatus and other equipment coming within the scope of account No. 344, "General Equipment." Office equipment and furniture permanently assigned to sub-stations should be included in "G"eneral Equipment," but in a sj)ecial sub-account for each sub-station. Note A. — This account may be subdivided by the accounting company under the following captions : a. Transmission sub-station equipment. b. Distribution sub-station equipment. Note B. — Separate sub-accounts may be set up to cover the cost of conversion equipment installed solely in connection with transmission lines, that is, high voltage lines used for transmitting power between stations or between points of generation or purchase and points of transformation and distribution, but not used to any considerable extent for carrying power to points of consumption. Note C. — If the accounting company has installed one or more transformers at a point wliere current is taken off its transmission or distribution line by a large power consumer, and such transformers are used to step down the current from the voltage at which it is carried on the accounting company's line to a voltage at w'hich it is delivered to such consumer to be by him in turn trans- formed or converted for distribution within his own plant, the cost of such trans- formers is chargeable to this account. 329. Storag^e Battery Equipment. This account shall include the cost of storage battery installations complete, including elements, tanks, tank insulators, battery room connections and copper work, and cell switches, motor generator sets used primarily for battery charging, miscellaneous small pumps, ventilating fans, water stills, battery room instruments, and other storage battery accessories. This account also includes the battery room flooring if specially constructed and separable from the main structure with respect to costs. It does not include switchboard panels for batteries unless such panels are separate from the main switch- board and used exclusively for battery control. 330. Underground Conduits. This account shall include the cost of all conduits and tunnels required for underground wires and cables, including manholes, ducts FIXED CAPITAL ACCOUNTS 45 and pipe, sewer connections, sewer traps, and all material necessary for the completion of the underground conduit system devoted to the protection of the transmission and distribution systems. Note. — This account may be subdivided by the accounting company under the following captions : a. Transmission underground conduits. b. Distribution underground conduits. 331. Poles, Towers, and Fixtures. This account shall include the cost of towers, transformer plat- forms and structures for supporting other line devices, poles, cross- arms, and insulator pins ; braces, brackets, and other pole fixtures ; guys and other supports for holding the towers, structures, and poles in position ; and all labor expended in connection with the construction pf pole lines or tower lines for carrying the transmission and distribu- tion systems. Note A. — Separate sub-accounts may be set up to cover the cost of towers. poles, and fixtures carrying transmission lines, that is, high voltage hues used for transmitting power between stations or between points of generation or purchase and ' points of transformation and distribution, but not used to any considerable extent for carrying power to points of consumption. Such sub- accounts may be entitled : a. Transmission poles, towers, and fixtures. b. Distribution poles, towers, and fixtures. Note B. — The cost of ornamental street lighting poles and fixtures should not be charged to this account but to account No. 342, " Street Lighting Equipment." 332. Overhead Conductors. This account shall include the cost installed of all overhead con- ductors and feeders (except services). This covers all cables, wires, insulators, and insulating material used in overhead systems ; also ground wires, lightning arresters, pole top switches, and other line devices. Note. — Separate sub-accounts may be set up to cover the cost of conductors used in transmission lines, that is, high voltage lines used for transmitting power between stations or between points of generation or purchase and points of transformation and distribution, but not used to any considerable extent for carrying power to points of consumption. Sub-accounts may be entitled : a. Transmission overhead conductors. /'. Distribution overhead conductors. 333. Underground Conductors. This account shall include the cost installed of all underground conductors, and feeders (except services). This covers the cost of all cables, wires, insulators and insulating material used in under- ground systeins. Note, — Separate sub-accounts may be set up to cover the cost of conductors used in transmission lines, that is. high voltage lines used for transmitting power between stations or between points of generation or purchase and points of 46 FIXED CAPITAL ACCOUNTS transformation and distribution, but not used to any considerable extent for carrying power to points of consumption. Sub-accounts may be entitled : a. Transmission underground conductors. b. Distribution underground conductors. 334. Transmission Roads and Trails. This account shall include the cost of j>ermanent roads, trails, and bridges used primarily in connection with the operation and main- tenance of the transmission system, whether located on the trans- mission line right of way or elsewhere. Note. — It is the intention that this account shall include the cost of only such private roads, etc., as it is necessary to maintain and use in the operation and maintenance of the transmission system. The cost of roads, railways, bridges, etc., necessary for construction but abandoned upon completion of the plant, as also the cost of such facilities dedicated to public use and maintained at public expense, should be distributed among other appropriate fixed capital accounts. 335. , Services. This account shall include the cost installed of all conductors, insulators, ducts, supports, etc., leading from last pole of overhead system or from point where wires leave underground system to point of connection with house wiring. It shall also include the cost of meter protection devices, such as enclosing meter boxes designed to prevent tampering with the meter or the meter connections. Note. — All conduits, poles, wires, etc., from distributing mains to the initial points described above will be considered a part of the distribution system and their cost shall be charged to the appropriate accounts preceding. 336. Line Transformers and Devices. This account shall include the cost of all line transformers (both overhead and underground), jx)le line lightning arresters, transformer cut-out boxes, line cut-out switches, etc. It may be subdivided to show separately the investment in transformers and in other devices. Note A. — This account does not include the labor cost of installing trans- formers which is provided for in the following account. Note B. — This account may, if desired, include the cost of all transformers whether carried in stock or actually in service, provided designation of the account on the ledger indicates the practice of the accounting company, as, for example, by the addition of the phrase "(includes line transformers in stock)." 337. Line Transformer Installation. This account shall include the cost of labor and incidental expenses required for the original installation of line transformers. When any line transformer service is permanently discontinued, this account .shall be credited with an amount representing the average installation cost of a line transformer. FIXED CAPITAL ACCOUNTS 47 338. Consumers' Meters. This account shall include the cost of all meters, current limiting devices, and appurtenances used or to be used in measuring or deter- mining electric energy delivered to consumers. This covers in addition to cost of meters to point of delivery on the accounting company's premises such incidentals as the cost of meter badges and their attach- ment to the meters, testing and storing new meters, and the first set of meter fittings, connections, and shelves. Note A. — This account does not include the cost of the corporation's meters which record the output of the station. Such cost shall be charged to the appropriate power plant electrical equipment account. Note B. — The cost of setting, removing, or resetting consumers' meters shall not be charged to this account. Note C. — This account may, if desired, include the cost of all meters whether carried in stock or actually in service, provided the designation of the account on the ledger indicates the practice of the accounting company, as, for example, by the addition of the phrase "(includes meters in stock)." 339. Meter Installation. This account shall include the cost of the first setting of meters for determining the amount of electric energy delivered upon the premises of consumers. When any meter service is permanently discontinued, this account shall be credited with an amount representing the average installation cost of a consut-er's meter. Note. — Cost of removing consumers' meters and of setting other meters sub- stituted for them shall not be charged to this account, but to account No. 731. " Distribution operation and maintenance," or the appropriate subdivision thereof. 340. Installations on Consumers' Premises. This account shall include the cost installed of all equipment on consumers' premises, such as motor generator sets, motors, and switch panels which are installed upon consumers' premises imder con- tract. This shall not include property of the kinds designated herein ordinarily designated as sub-station equipment. (See account No. 328, " Sub-station Equipment," or account No. 343, " Electric Appliances.") 341. Commercial Lamps. This account shall include the cost to the accounting company of all commercial lamps loaned or rented to consumers, and the cost of the first installation thereof, in case it is the ixjlicy of the company to capitalize such costs ; otherwise the cost should be charged to the appropriate operating expense account. 48 FIXED CAPITAL ACCOUNTS 342. Street Lig-hting Equipment. This account shall include the (*ost to the accounting company of all lighting equipment operated and maintained under the contract for public lighting entered into with the municipality. This will include public arc and incandescent lamps and their suspension devices ; also ornamental lamp posts and fixtures for public incandescent lamps including the lamps. This account does not include the circuits, nor poles and fixtures supporting the circuits. If the company has an investment in street lighting equipment operated and maintained under a contract with a public body or organization other than a municipality, such equipment shall be in- cluded in this account under a subhead. 343. Electric Appliances. This account shall include the cost to the accounting company of electric motors, heaters, etc., leased or held for lease to consumers (including municipal corporations), but not of those held for sale. Note. — The cost of setting and connecting such appHances on the premises of consumers, and the cost of resetting or remov?.! should not be charged to this account. 344. General Equipment. This account shall include the cost installed oi: all equipment coming under the following heads : a. Office Equipment. — This includes the cost of all office and service equipment not permanently attached to buildings, such as desks, chairs, tables, movable safes, filing cabinets, drafting room equipment, typewriters, adding machines, addressographs, portable lamps, lockers, clocks, fans, chronograph systems, pneumatic tube systems, lunch room equipment, doctor's equipment, pulmotors, mechanical office ap- pliances, floor coverings, and other like office appliances and equipinent. Small articles of slight value or of short life should not be charged to this account, but to the appropriate operating account. b. Stores Equipment. — This includes the cost of all equipment for the receiving, shipping, handling and storage of materials and sup- plies. This includes loading and unloading equipment (except cranes when they are of such a nature as to be charged to buildings), derricks, portable cranes, hoists, chain falls, scales, trucks, counters, shelving, wheelbarrows, and the like. c. Shop Equipment. — This includes the cost of all equipment specially provided for shops (but not so permanently attached as to be FIXED CAPITAL ACCOUNTS 49 properly chargeable to account No. 312, "Structures"), such as fur- naces, boilers, gas producers, engines, electric generators, and other |)ower apparatus oix'rating machinery in such shops; machine tools, frames, hoists, shafting, belts, and the like shop equipment ; also such smithing equipment in shops as -is used principally for other general purjxises than shoeing horses and repairing vehicles; and all specially provided foundations not expected to outlast the machinery or appa- ratus mounted thereon. d. Transportation Equipment. — This includes the cost of equip- ment for general transportation purposes, such as automobiles, motor trucks, trailers, tractors, motorcycles, and other vehicles ; battery charging outfits, gasoline and oil storage tanks and pumps, and other garage equipment ; horses, harness, drays and wagons ; equipment for shoeing horses, and equipment for harness repair shops, vehicle repair shop and automobile repair shop, if this equipment is devoted exclu- sively to these purposes. e. Telephone, Telegraph and Wireless System. — This includes the cost of all telephone, telegraph and wireless lines and equipment for general use in connection with electric operations, such as poles and fixtures used exclusively for telephone and telegraph wires; wires, cables, insulators, booths, instruments, switchboards, gongs, dyna- motors, towers, antennae, etc. f. Laboratory Equipment. — This includes the cost of all meter and other testing apparatus and laboratory equipment not elsewhere l>rovided for. g. Miscellaneous Equipment. — This includes any other miscel- laneous equipment not elsewhere provided for, such as construction ecjuipment, including boilers, engines, motors, hoists, concrete mixers, and distributing apparatus, pumps, air compressors, riveters, lathes, power saws, pipe machines, forges, steam hammers, pile drivers, steam shovels, lighters, industrial track and cars, etc.; and any equipment of a permanent nature which cannot be properly charged to any of the foregoing accounts. Note A. — The cost of small portable tools and implements, such as hammers, saws, wrenches, files, jacks, wire cutters, climbing irons, etc., shall not be charged to this account. .Such items shall be carried in account No. 116, " Materials and Supplies," until issued for use when " Alaterials and Supplies " shall be credited and the appropriate work order or other account charged with the cost of the tools or implements so issued. The cost of maintaining tools and implements shall be charged to the expenses of the department to which they are assigned. Note B. — So far as practicable, separate sub-accounts shall be maintained for the equipment of each individual office building, shop, garage, etc. 50 - FIXED CAPITAL ACCOUNTS 345. Miscellaneous Tangible Capital. This account shall include the cost of all tangible electric capital not elsewhere provided for. 351. Engineering and Superintendence. This account shall include all expenditures for services of engineers, draftsmen, and superintendents employed on preliminary and construc- tion work, and all expenses incident to the work when such disburse- ments can not be assigned to a particular tangible capital account. Note A. — When any of the expenses designated can be charged directly to the primary account for which incurred, they shall be so charged. But no charges shall be made to permanent investment accounts for incidental services or engineering performed by the regular employees and officers of the accounting company unless they have been specially assigned to such work. Note B. — Expenditures for tentative or preliminary designs or experiments shall be carried in a suspense account until it is determined whether or not to undertake the construction. If the project is continued, such expenditures shall then be transferred to the appropriate fixed capital account; and if it is aban- doned, they shall be charged to operating expense, income, or profit and loss accounts as may be appropriate. 352. Law Expenditures During Construction. This account shall include general expenditures of the following nature incurred in connection with the construction of an electrical plant, namely, the pay and expenses of all counsel, solicitors, and at- torneys, their clerks and attendants, and expenses of their offices; print- ing briefs, legal forms, testimony, reports, etc. ; payments to arbitrators >for the settlement of disputed questions; costs of suit and payments of special fees, notarial fees, and witness fees and exi)enses connected with taking depositions; also all legal and court expenses. Wlien any of the' expenditures above enumerated can be charged directly to the account for which incurred, they should be so charged and not to this account. Expenditures in connection with the acquisi- tion of right of way or other land should be charged to account No. 311, "Land." Law expenditures in connection with the organization of the corporation should be charged to account No. 301, " Organiza- tions." (See "Fixed Capital Accounts — General Instructions and Defi- nitions," Section 2, page 30.) 353. Injuries and Damages During Construction. This account shall include all exi^enditures incident to injuries to persons or damages to property of others when caused directly in con- nection with construction of electric plant and equipment. This covers fees and proportion of salaries and expenses of physicians and sur- geons ; compensation insurance ; nursing and hospital attendance ; medi- FIXED CAPITAL ACCOUNTS 51 cal and surgical supplies, artificial limbs, railroad and carriage fares for conveying injured persons and attendants; funeral exf^enses (in- cluding payments to undertakers), proportion of pay and exj^enses of claim adjusters and their clerks, and pay and expenses of employees and others called in consultation in relation to the adjustment of claims coming under this head; also witness fees, court costs and amount of final judgments. When any of the expenditures above enumerated can be charged directly to the account for which incurred, they should be so charged, and not to this account. (See " Fixed Capital Accounts — General In- structions and Definitions," Section 2, page 30.) 354. Taxes During- Construction. This account shall include all taxes and assessments levied and paid or chargeable on property belonging to the accounting company while such property is under construction, and before the plant is opened for commercial operation, except special taxes assessed for street and other improvements, such as grading, sewering, curbing, guttering, paving sidewalks, etc., which should be charged to the account to which the property benefited is charged. Whenever any of the expenditures above enumerated can be charged directly to the account for which incurred, they should be so charged, and not to this account. (See "Fixed Capital Accounts — General Instructions and Definitions," Section 2, page 30.) 355. Interest During Construction. When any bonds, notes, or other evidences of indebtedness are sold, or any interest bearing debt is incurred, for acquisition or construction of plant and equipment, the interest accruing on the part of the debt representing cost of property chargeable to fixed capital accounts (less interest, if any, allowed on unexpended balances) after such fund becomes available for use and before the receipt or the completion or coming into service of the property so acquired shall be included in this account. When such securities are sold at a premium, the proportion of such premium assignable to the time between date of the actual issuance of the securities and the time when the property acquired or the improve- ment made becomes available for service shall be credited to this account. This account shall include also such proportion of the discount and expense on long term debt issued for construction purposes as is equi- tably assignable to the period between the date of the actual issuance of 52 FIXED CAPITAL ACCOUNTS the securities and the time when the property acquired or the improve- ment made becomes available for the service for which it is intended. The proportion of discount and expense thus chargeable shall be de- termined by the ratio between the period prior to the completion or coming into service of the facilities or improvements acquired or con- structed and the period of the entire life of the securities issued. This account shall also include reasonable charges for interest during the construction {period on the accounting company's own funds used temporarily during such period for construction purposes. When any of the expenditures above enumerated can be charged directly to the account for which incurred, they should be so charged, and not to this account. ( See " Fixed Capital Accounts — General Instructions and Definitions," Section 2, page 30.) Note. — If any securities issued or assumed by the accounting company are sold or exchanged by or for that company for a consideration the actual money vaUie of which at the time of such sale or exchange is less than the value of the securities at par and the accrued interest thereon, if any, the difference between the money value of the consideration received and the par value of the securities, plus the accrued interest, shall be deemed discount, and in no case (except as provided in the third paragraph of this account) shall discount be included as part of the cost of anything charged in any fixed capital or investment account prescribed in this classification. 356. Miscellaneous Construction Expenditures. This account shall include the salaries and exi>enses of the general officers of an electric plant under construction, clerks in general offices engaged on construction accounts or work; rent and repair of general offices when rented, with the office expenses ; insurance during con- struction (except workmen's comi>ensation, the cost of which is chargeable to account No. 353, " Injuries and Damages During Con- struction"); also all construction and equipment items of a special and incidental nature which can not properly be charged to any other account in this classification. To this account shall be credited discounts realized through prompt payment of bills for materials and supplies used in construction, unless such discounts are credited to the particular bills. When any of the expenditures above enumerated can be charged directly to the account for which incurred, they shall be so charged, and not to this account. ( See " Fixed Capital Accounts — General In- structions and Definitions," Section 2, page 30.) Note A. — This account may include a suitable proportion of store expenses when such expenses are not assignable to specific materials. Note B. — This account should not include any cost of organization or any costs or discounts connected with the issue and disposal of stocks, long term debt, or other securities and commercial paper. FIXED CAPITAL ACCOUNTS 53 357. Fixed Capital not Classified by Prescribed Accounts. Under this head shall be groiq^ed the balances in accounts represent- ing the accounting company's investment in fixed capital prior to the time when it began to follow the classification of fixed capital accounts herein prescribed. 358. Cost of Plant and Equipment Purchased. This account shall include the cost to the accounting company of any plant purchased as a whole when such cost is not immediately assignable to primary fixed capital accounts. Where the contract of purchase includes not only plant and equipment, but also securities and other assets, the appraised value of such securities and other assets shall be deducted from the total cash cost and the remainder of the cash cost shall be charged to this account. Where the consideration given for the property purchased is other than cash, such consideration shall be valued on a current cash basis. If the consideration includes the assumption of liabilities, such liabilities shall be included in the determination of the cost at their cash value at the time the contract is made. This account shall be used only as clearing account in which temporarily to carry the cost of plant and equipment purchased for a lump sum until such time as a plan for distributing such cost to the primary accounts appropriate to the property is approved by the regu- latory commission. Note A. — The value at the time of purchase of any securities or other assets acquired shall be included in the accounts appropriate for such assets. The par value of any liability assumed shall be included in the appropriate liability accounts and any necessary adjustment between the cash cost charged to the property accounts and par value shall be made in the appropriate premium or discount account. Note B. — The accounting company should procure in connection with the acquisition of any plant and equipment all existing records, memoranda and accounts in possession or control of the grantor relating to the construction and improvement of such plant and equipment, and preserve such records, memoranda and accounts. Where the records, memoranda and accounts are so intimately involved with other records, memoranda and accounts of the grantor as to make their transfer impracticable or inadvisable, certified copies of them should be procured by the grantee. 359. Unfinished Construction. This account shall include the balances in open work orders rep- resenting additions to plant and equipment when the charges to such work orders have not been distributed to the foregoing fixed capital accounts. Note. — This account is intended to include only charges for new construc- tion not involving any replacement. If, however, at the beginning of a job involving the replacement or retirement of any fixed capital the accounting company shall make full credits therefor to the appropriate fixed capital accounts, the cost of installing new property in substitution or replacement may be carried in the fixed capital account " Unfinished Construction." 54 ■ INCOME ACCOUNTS STANDARD FORM OF INCOME ACCOUNT Ac- Item count Income from Operating Properties: 1 401 Operating revenues *** $ 2 402 Operating expenses $ *** 3 403 Uncollectible bills *** 4 404 Taxes *** 5 Total revenue deductions * ** 6 Operating income applicable to corporate and leased properties *** $ 7 411 Rent for lease of other electric plant $ *** 8 412 Amortization of limited term land rights *** 9 Total (items 7 and 8) $ *** 10 413 Rent accrued from lease of electric plant — Cr. . . *** 11 Net rent deduction (credit balance in red) *** 12 Balance of income applicable to corporate prop- erty *** $ Income from Non-operating Properties: 13 421 Miscellaneous rent revenues $ *** 14 422 Interest on long term debt owned *** 15 423 Miscellaneous interest revenues *** 16 424 Dividend revenues *** 17 425 Income from special funds *** IS 426 Miscellaneous n()n-c)i>erating revenues *** 19 Total (items 13 U) 18, inclusive) $ *** 20 427 Non-oix-'rating revenue deductions *** 21 Total miscellaneous income *** . 22 Gross corporate income (items 12 and 21) *** $ INCOME ACCOUNTS 55 Ac- Itein count Deductions from Gross .Corporate Income: 23 431 Interest on long term debt $ *** 24 432 Miscellaneous interest deductions *** 25 433 Amortization of debt discount and expense *** 26 434 Amortization of premium on debt — Cr *** 27 435 Miscellaneous amortization chargeable to income. *** 2S 436 Miscellaneous deductions from gross corporate income *** 29 Total deductions from gross corporate in- come *** 30 Net income (loss in red) *** $ Disposition of Net Income: 31 441 Sinking fund appropriations $ =*■** 32 442 Dividend appropriations of income *** 33 443 Miscellaneous appropriations of net income *** 34 Total appropriations of net income *** 35 Balance transferred to surplus *** $ 56 INCOME ACCOUNTS INCOME ACCOUNTS General Instructions and Definitions. 1. Income Accounts Defined. The income accounts are those that show the sources and dis- position of income during a given period. Any change in the items shown on a balance sheet at the end of such a period as compared with a balance sheet at the beginning of the period, which is not merely a transfer from one balance sheet account to another, that is to say, any transaction which affects the profit and loss balance, must be explained by the income accounts or by the profit and loss accounts. A summary statement of income accounts arranged in convenient form to show the accounting history of a given period is usually called collectively the " Income Account." Income accounts whose title and definition plainly indicate that they are summaries of other ac- counts are not required to be set up as special ledger accounts, though it may often be a matter of bookkeeping convenience to do so. 2. Form of Income Account. The form in which the income account is stated is determined by considerations of convenience and clarity. The standard form adopted for the purpose of this classification is shown on pages 54 and 55. In this form of statement there are certain terms used to indicate divisions of the income account which require si)ecial definition, given in the following paragraphs. 3. Revenues. The word revenues as used herein means all amounts of money which the accounting company receives or becomes lawfully entitled to recover for services rendered, for products sold, as profits on merchandise sold, or as a return upon its property (or interest in property). Revenues are classified as operating revenues and non- operating revenues. 4. Operating Revenues. Operating revenues are those derived from the sale of products and merchandise, from services rendered, from return on property used by the person or corporation in its own operations, and from interest on current funds. INCOME ACCOUNTS 57 5. Non-operating- Revenues. Non-operating revenues are those derived as a return upon the property of the accounting company in the hands of others or from its interest in property in the hands of others. They may be sub-classified as rents, interest, dividends, and miscellaneous. 6. Revenue Deductions. Revenue deductions include expenses, taxes, and uncollectible bills. 7. Expenses. Expenses are those outgoes (including losses due to the retirement of capital) necessary to the production and distribution of the com- modities sold and the services rendered, and to the collection of the revenues. They are divided into o^jerating expenses, and non-operating expenses. 8. Taxes. Taxes are those ainiual or other payments exacted by governments for the purpose of raising funds for public uses. 9. Uncollectible Bills. When a corporation is engaged regularly in rendering to general consumers a service, or in supplying to such consumers a com- modity, current accounts or claims against such consumers for such services rendered or commodity supplied which are incapable of col- lection by the exercise of reasonable diligence are included under the name Uncollectible Bills. 10. Income. Income is what is left after subtracting revenue deductions from revenue. Income from operating properties is income derived from the operation, or as a comi)ensation for the use, of properties devoted to the undertakings for which the accounting company is organized. Income from non-operating properties is income derived from prop- erties not devoted to the undertakings for which the accounting com- pany is organized ; also from properties not belonging to the account- ing company, but in which it has an interest through ownership of stocks, bonds, or otherwise. Operating income applicable to corporate and leased properties is that income arising from any class of opera- tions which is available to ]>ay a return in one form or another u[x)n capital employed in tliat class of operations. Income applicable to corporate property is that income which is available to pay a re- 58 INCOME ACCOUNTS turn in one form or another on capital owned by the accounting company. It is the operating income applicable to corporate and leased properties less rentals for the use of capital not owned. Gross income is income from all sources whatsoever. It might also be called total net revenue. Gross corporate income is that income ap- plicable to corporate properties, that is, gross income less rentals for capital not owned. Net income is that amount left after all con- tractual or compulsory deductions have been made from gross income, except such sinking fund accruals as are required to be tem^xDrarily reserved. 11. Rents. Rents are payments for the use of property employed in the busi- ness, but not owned by the accounting company. The standard form of income statement established by this system of accounts provides, therefore, for deducting from gross income rentals paid for the use of property not owned, in order that the income available for a return ujxDn that part of the capital invested in the enterprise by the accounting company may clearly appear. Minor rents, how- ever, such as rents for land, buildings and comparatively small por- tions of plant and equipment, not constituting a distinct operating unit, used for departmental pur^xjses are more suitably, for adminis- trative pur^Mses, charged directly to one of the divisions of the operating expense schedules and suitable treatment of such expendi- tures is provided for in the operating expense accounts. 12. Delayed Income Items. Delayed items are those representing transactions which occurred prior to the period covered by the income account, but which were not recorded currently. Such items may be charged or credited to the appropriate income account for the fiscal period in which the transactions are actually recorded. If, however, the amount of such items is relatively so large that its inclusion in the income account for a single year would result in a seriously abnormal income state- ment, and no provision has been made through accruals to reserves or susj)cnse accounts for anticipating such transactions, the account- ing company may distribute the amount, or any part thereof, to Profit and Loss. INCOME ACCOUNTS 59 TEXT PERTAINING TO INCOME ACCOUNTS. 401. Operating- Revenues. Under this head shall be shown the total revenues of the accounting company from electric operations during the ],>eriod covered by the income account. (For the primary operating revenue accounts see pages 7Z to 75.) 402. Operating Expenses. Under this head shall be shown the total expenses of the accounting company for electric operations during the period covered bv the in- come account. (For the primary operating expense accounts see pages 86 to 117.) 403. Uncollectible Bills. This account shall include charges for accounts due from consumers or customers which, after a reasonably diligent effort to collect, have proved impracticable of collection. If accounts which have been so written off are afterwards collected, the amount received should be credited to this account. Note. — Charges to this account may be made on the basis of the estimated average loss due to uncollectible accounts in which case the concurrent credit shall be to a special account under balance sheet account No. 257, " Miscellaneous Reserves." To the reserve thus established shall be charged such accounts as are determined to be uncollectible. When charges for uncollectible accounts are thus made by estimate, the estimate shall be adjusted at the end of each fiscal year to conform to the experience of the accounting company as deter- mined by analysis of its accounts receivable. 404. Taxes. This account shall include the amount of taxes applicable to the electric operations of the accounting company during the period for which the income account is stated. Separate account shall be kept of the taxes applicable to electric operations and to operations other than electric, as well as to non-oper- ating revenues, if the accounting company has such other operations or non-operating revenues. When taxes are levied on property used in two or more different classes of operations in such a way that the amount applicable to each class is not definitely stated, the total amount of the levy shall be apportioned by the accounting company on some fair basis between the two or more classes of operations. The tax accounts shall be charged at regular accounting intervals and the "Tax Liability Account" (see account No. 231, " Ta.xes 60 INCOME ACCOUNTS Accrued ") concurrently credited with the period's proportion of taxes appHcable to the operations covered by each account. If the exact amounts of the annual taxes are not known, they shall be estimated and a due share of the estimated amounts shall be charged for each account- ing period. From time to time during the year as the actual tax levies become known, the periodic charges shall be adjusted so as to include as nearly as possible the total amount of the taxes in the period to which they apply. Note A. — Taxes on property leased should be charged to the appropriate tax account hy the party which under the terms of the lease contract actually pays such taxes. If, under the provisions of the lease, the party actually paying the taxes is reimbursed by the other party to the lease, the amount of such reimburse- ment shall, when the taxes are paid in the first instance by the lessor, be credited to the appropriate rent revenue account of the lessor and charged by the lessee to the appropriate rent deduction account ; when the taxes are paid in the first instance by the lessee, the amount of the reimbursement shall be credited to the appropriate rent deduction account of the lessee and charged by the lessor to the appropriate revenue account. Note B. — The tax accounts must not include any fees or charges sometimes called taxes, such as water taxes, drainage taxes, or fire taxes, which are payments for some specific service rendered by the government. 411. Rent for Lease of Other Electric Plant. This account shall include all amounts accrued against' the accounting company for rent of any electric plant constituting a distinct operating unit, such as a production plant or distribution system, under a lease giving exclusive possession to the lessee. 412. Amortization of Limited Term Land Rights. When the right to use land for a limited term has been acquired under a contract by which the consideration is a single immediate payment instead of a series of periodic rentals during the term for which the land is transferred, this account shall include an amount sufficient to cover such portion of the life of such limited interest in land as has expired during the accounting j)eriod. The amount charged to this account shall be concurrently credited to the fixed capital account to which the cost of acquiring such an interest in land was originally charged. 413. Rent Accrued from Lease of Electric Plant — Or. This account shall include all amounts accruing to the accounting company as rental for its electric plant or any j)art thereof constitut- ing a distinct operating unit, such as a production plant or distribu- tion system, under a lease giving exclusive possession to the lessee. Note.— Rentals received for the use of comparatively small portions of plant or equipment, not constituting a distinct operating unit, the cost of which is carried in electric fixed capital accounts, and the cost of maintaining which is INCOME ACCOUNTS 61 ordinarily borne by the owner, shall not be credited to this account but to operating revenue account No. 613, " Rent from Property Used in Operation," even though the lessee has exclusive possession. 421. Miscellaneous Rent Revenues. This account shall include all rent revenues accruing to the account- ing company from properties not devoted to the undertakings for which it is organized. This covers such revenues as rentals from real estate not used in operations. 422. Interest on Long Term Debt Owned. This account shall include interest accruing to the accounting com- pany upon securities of other companies and national, state, or munici- pal governments. Interest accrued shall not be credited to this account unless its payment is reasonably assured ; in other cases credits to this account shall be based upon the interest actually collected. Note A. — No interest upon reacquired securities issued or assumed by the accounting company shall be credited to this account. Note B. — Interest accrued on securities of other companies held in sinking or other special funds shall not be credited to this account, but to account No. 425, " Income from Special Funds." 423. Miscellaneous Interest Revenues. This account shall include interest accrued to the accounting company on loans, notes, and advances, special deposits, and all other interest bearing assets except funded securities and current funds employed primarily in the conduct of the business for which the accounting com- pany is organized. Interest accrued shall not be credited to this ac- count unless its payment is reasonably assured ; in other cases credits to this account shall be based upon the interest actually collected. 424. Dividend Revenues. This account shall include revenues derived by the accoimting com- pany from dividends on stocks of other companies held by it. Accruals of guaranteed dividends may be included in this account if their pay- ment is reasonably assured. Note A. — No dividends on reacquired securities issued or assumed by the accounting company shall be credited to tliis account. Note B. — Dividend revenues from securities of other companies held in sink- ing or other special funds shall not be credited to this account, but to account No. 425, " Income from Special Funds." 425. Income from Special Funds. This account shall include income (whether interest or dividends), accrued on cash, securities (not issued or assumed by the accounting company), and other assets held in sinking and other special funds. Note. — This account covers all income from investments of special funds, whether required to be retained in the fund or not. If such income is required 62 INCOME ACCOUNTS to be retained in the fund and the fund required to be represented by a reserve, the amount of such accretions to the fund shall be concurrently credited to the appropriate reserve account and charged to account No. 441, " Sinking Fund Appropriations," or account No. 443, " Miscellaneous Appropriations of Net Income," as may be appropriate. 426. Miscellaneous Non- operating- Revenues. This account shall include all revenues accruing to the accounting company in accordance with the terms of any contract by which the company is entitled to participate in the profits resulting from the operations of others and all other non-operating revenues not provided for in any of the foregoing accounts. Note. — " Profits from the operations of others " does not include any divi- dends on stock. Revenues from dividends should be credited to account No. 424, " Dividend Revenues." 427. Non-operating" Revenue Deductions. This account shall include all expenditures necessary to receiving or collecting non-operating revenues as listed under the following sub- heads. If desired, each sub-head may be made a separate ledger ac- count. a. Rent Expense. — This covers all expenses arising in connection with the procuring of revenues from rented properties which are prop- erly credited to account No. 421, " Miscellaneous Rent Revenues," such as the cost of negotiating contracts, advertising for tenants, fees paid conveyancers, collectors' commissions, cost of enforcing payment of rent, cost of ousting tenants, etc. This includes expense while the property is idle awaiting occupant; also cost of maintenance of property when such cost is borne by the owner. Such maintenance does not include taxes. b. Interest Expense. — This covers all expenses in connection with the collection of interest upon investments. It does not include taxes on such investments. c. Dividend Expense. — This covers all expenses in connection with the collection of dividends on stocks of other corporations; also all expenses incurred, as in the investigation of the affairs of the corjxjra- tions whose stocks are held, whether for the purix)se of detecting mismanagement, or for the purix)se of inducing the declaration of dividends; and all expenses connected with enforcing payments of divi- dends when declared. d. Miscellaneous Non-Opekating Expense. — This covers the cost of negotiating contracts by which the accounting company is entitled to share in profits from the operations of others, and all ex- INCOME ACCOUNTS 63 penses of collecting the accounting company's proportion of such profits and all expenses of procuring the modification or dissolution of any such contract; also all other non-operating expenses (as ex- penses are defined under " Income Accounts — General Instructions and Definitions," Section 7, page 57) which are not provided for under the foregoing sub-heads, e. Non-Operating Taxes. — This covers all taxes accruing upon non-operating property, revenue from which is properly credited to accounts Nos, 421 to 426, inclusive, and all other taxes not upon prop- erty, but assignable to non-operating revenues. f. Uncollectible Non-Operating Revenues. — This covers any non-operating revenues judged by the accounting company to be un- collectible. 431. Interest on Long Term Debt. This account shall include all interest accrued on outstanding long term debt issued or assumed by the accounting company, the liability for which is included under balance sheet account No. 211, "Long Term Debt " ; also interest accrued on debenture stocks and on receiver's certificates which mature more than one year after date of issue. This account does not include interest on securities held by the accounting company in its treasury, in sinking or other special funds, or pledged as collateral. Note A. — The amount charged to this account shall be concurrently credited to account No. 232, "Interest Accrued," to which account shall be deljited pay- ments made on account of interest. Note B. — If any securities issued or assumed by the accounting company are held in a sinking or other special fund, the interest on such securities shall not be charged to this account. 432. Miscellaneous Interest Deductions. This account shall include interest on all short-term obligations of the accounting company, such as notes or loans for terms of less than one year, unpaid taxes, consumers' deposits, or other accounts payable, etc. It shall also include interest on advances from affiliated companies (see balance sheet account No. 241, "Advances from Affiliated Com- panies ") ; and interest on receiver's certificates which mature in one year or less after date of issue. 433. Amortization of Debt Discount and Expense. This account shall include for any fiscal i^eriod that proportion of the unamortized discount and expense on outstanding debt which is applicable to the period. This proportion shall be determined accord- 64 INCOME ACCOUNTS ing to a rule the uniform application of which during the interval be- tween the issue and the maturity of any debt will completely amortize or wipe out the discount at which such debt was issued and the debt expense connected therewith. 434. Amortization of Premium on Debt — Cr. This account shall include for any fiscal period the proportion of the premium at which outstanding debt was issued which is applicable to the period. This proportion shall be determined according to a rule the uniform application of which during the interval between the issue and the maturity of any debt will completely amortize or wipe out the premium at which such debt was issued. 435. Miscellaneous Amortization Chargeable to Income. This account shall include such amounts as the accounting company may be required to charge to income in amortization of intangible book value or other items carried among its assets. 436. Miscellaneous Deductions from Gross Corporate Income. This account shall include all contractual deductions from gross cor- porate income not provided for in any of the foregoing accounts. This covers unsecured accruals of obligations arising" under contracts where- by the accounting company has guaranteed the annual or more frequent periodic payment of money or performance of other obligation on the part of another corporation or person and because of the default of such other corporation or j>erson the liability of the accounting com- pany has become actual ; losses resulting from the operations of others whenever in accordance with the terms of any contract the accounting company is bound to contribute toward reimbursement of such losses ; and income taxes levied upon bondholders and assumed by the accounting company. 441. Sinking- Fund Appropriations. This account shall include such amounts as are required by mortgage provision or otherwise to be charged to income for the purpose of retiring or reducing the bonded or other obligations of the account- ing company. It shall also include such accretions from the invest- ments of funds specifically set aside for the above described pur- pose as are required to be added to a sinking fund reserve. (.See also account No. 425, " Income from .S]X'cial Funds.") 442. Dividend Appropriations of Income. This account shall inchule .amounts declared ])ayable as dividends out of the income for the i:)eriod for which the income account is stated INCOME ACCOUNTS 65 on actually outstanding capital stock issued or assumed by the ac- counting company. This account shall be subdivided so as to show separately the divi- dends on the various classes of capital stock. If the dividend is not payable in cash, the consideration shall be described in the entry with sufficient particularity to identify it. Note. — This account shall not include charges for dividends on capital stock issued or assumed by the accounting company and owned by it whether held in the treasury, in special deposits, in sinking or other reserve funds, or pledged as collateral. 443. Miscellaneous Appropriations of Net Income. This account shall include all appropriations of net income not pro- vided for in the three preceding accounts. This covers appropriations of income to special fund reserves. (See account No. 425, " Income from Special Funds.") 66 PROFIT AND LOSS ACCOUNTS STANDARD FORM OF PROFIT AND LOSS ACCOUNT Dr. Cr. Balance at the beginning of the fiscal i>eriod Balance transferred from income account 501. Dividend appropriations of surplus *** 502. Appropriations to reserves *** 503. Miscellaneous credits to Profit and Loss *** 504. Miscellaneous debits to Profit and Loss *** Balance at the end of the fiscal period PROFIT AND LOSS ACCOUNTS 67 PROFIT AND LOSS ACCOUNTS General Instructions and Definitions 1. Profit and Loss Account Defined. The Profit and Loss account is the collective title for a small group of accounts which form the connecting link between the in- come account and the balance sheet. Its principal function is to explain changes in the corporate surplus or deficit during a given fiscal period as effected, first, by the net result of all the transactions reported in the income account; second, by appropriations of surplus for s{>ecific purposes made at the option of the accounting company; and, third, by special and unusual transactions or adjustments such as are not regularly recorded in the income account. 2. Delayed Income Items. Delayed items are those representing transactions which occurred prior to the period covered by the income account, but which were not recorded currently. Such items may be charged or credited to the appropriate income account for the fiscal period in which the trans- actions are actually recorded. If, however, the amount of such items is relatively so large that its inclusion in the income account for a single year would result in a seriously abnormal income statement, and no provision has been made through accruals to reserves or sus- pense for anticipating such transactions, the accovmting company may distribute the amount, or any part thereof, to Profit and Loss. 68 PROFIT AND LOSS ACCOUNTS TEXT PERTAINING TO PROFIT AND LOSS ACCOUNTS 501. Dividend Appropriations of Surplus. This account shall include amounts declared payable out of accu- mulated surplus as dividends on actually outstanding capital stock issued or assumed by the accounting company. This account shall be divided so as to show separately the dividends on the various classes of capital stock. If a dividend is not payable in cash, the consideration shall be described in the entry with sufficient particularity to identify it. Note. — This account shall not include charges for dividends on capital stock issued or assumed by the accounting company and owned by it, whether held in the treasury, in special deposits, in sinking or other funds, or pledged as col- lateral. 502. Appropriations to Reserves. This account shall include appropriations from surplus for sink- ing fund and other reserves and allotments of surplus or payment of definite amounts from surplus into sinking fund and other reserves under the terms of mortgages, deeds of trust, or other contracts; and such other appropriations of surplus to be set aside in special reserve accounts as the accounting company may make. Note. — It is the intent of the classification that a reserve shall be provided either through retirement expense, appropriations from surplus, or both, sufficient to cover all retirement losses that may reasonably be expected. 503. Miscellaneous Credits to Profit and Loss. This account shall include all credits affecting the accounting com- pany's surplus or deficit and not elsewhere provided for, such as : Adjustments or cancellation of balance sheet accounts. Cancellation of balance sheet accounts representing unclaimed wages and vouchered accounts written ofif because of the accounting com- pany's inability to locate the creditor. Profit derived from the sale of miscellaneous investments. Credits resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost less than par value. Premiums on capital stock at the time of its reacquircment. (See " Balance Sheet Accounts — General Instructions and Definitions," Sec- tion 11, page 5.) PROFIT AND LOSS ACCOUNTS 69 Unreleased premiums on funded debt reacquired before maturity. (See " Balance Sheet Accounts — General Instructions and Definitions," Section 12, page 7.) Note. — If old accounts are collected which have been previously written ofif as uncollectible, the amount received should be credited to the account which was originally charged when the amount in question was written off, and not to " Profit and Loss." 504. Miscellaneous Debits to Profit and Loss. This account shall include all debits afifecting the accounting com- pany's surplus or deficit and not elsewhere provided for, such as : Adjustments or cancellation of balance sheet accounts. Losses or deficits not properly chargeable to income and for which no reserve has been provided. Losses resulting from the sale of miscellaneous investments, and debits resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost exceeding the par value. Unextinguished discounts on funded debt reacquired before maturity. Donations to charitable institutions and organizations for promoting social welfare. Penalties and fines for violations of law. 70 OPERATING REVENUE ACCOUNTS OPERATING REVENUE ACCOUNTS Sales of Current: 601. Metered sales to general consumers. 602. Flat-rate sales to general consumers. '603. Railroad corporations. 604. Other electrical corporations. 605. Municipal street lighting. 606. Miscellaneous municipal sales. Miscellaneous Revenue: 611. Commissions on others' electric energy. 612. Rent from electric appliances. 613. Rent from property used in operation. 614. Merchandise and jobbing. 615. Miscellaneous operating revenues. OPERATING REVENUE ACCOUNTS 71 OPERATING REVENUE ACCOUNTS General Instructions and Definitions 1 Operating- Revenue Accounts Defined. Operating revenue accounts are those in which are recorded the amounts which the accounting company receives or becomes lawfully entitled to recover for services rendered, for products or merchan- dise sold, as a return on property used in the company's own opera- tions, and as interest on current funds, such as daily bank balances. 2. Basis of Credits to Operating Revenue Accounts. Credits to the various revenue accounts shall be made uprn the basis of bills rendered or of gross prices. Discounts for prompt payment, corrections of overcharges, over-collections theretofore cred- ited and afterward corrected, authorized abatements and allowances and other corrections and deductions shall be charged to the revenue account to which they relate. Note A. — If an electric corporation desires to credit its revenue accounts upon the basis of net price charged to consumers, all discounts forfeited or penalties charged for delayed payments shall be credited to the revenue accounts involved and kept in such form as to permit their being separately reported. Note B. — If the accounting company sells all or part of its electric energy through an agent under contract by which the agent pays distribution and other expenses and turns over to the accounting company the amount collected from sales of current less his agent's commission, the accounting company should credit its revenue accounts with the full amount collected by its agent and charge the amount of the agent's commission to operating expense account No. 762, "Agents' Commissions." The agent should credit the amount of the commission received to operating revenue account No. 611, "Commissions on Others' Electric Energy," and credit the remainder of the revenue from electric energy sold on commission to the account of the company supplying such energy. 3. Delayed Items. Delayed items are those representing transactions which occurred prior to the period for which a revenue account is stated, but which were not recorded currently. Such items may be charged or credited to the appropriate revenue account for the fiscal period in which the trans- actions are actually recorded. If, however, the amount of such items is relatively so large that its inclusion in the revenue accounts for a single year would result in a seriouslv abnormal income statement and no provision has been made through accruals to reserves or susi>ense accotuits for anticipating such transactions, the accounting company may distribute the amount or any part thereof to Profit and Loss. 72 OPERATING REVENUE ACCOUNTS 4. No Revenue from Electric Energy Used in Operations or Supplied Without Direct Charge. If the accounting" company desires to charge its various departmental accounts with the current used in such departments for light or heat which it has itself generated or purchased for resale, the value of such current shall not be credited to revenue, but to the appropriate oper- ating expense account for "Duplicate Charges," Similarly, if current is supplied without direct charge in accordance with the terms of a municipal or other contract calling for limited "free" service, in accord- ance with franchise requirements, as compensation for the services of employees, etc., and it is desired to charge the value of the current so furnished to appropriate operating expense accounts, the concurrent credit shall be, not to a revenue account, but to "Duplicate Charges." OPERATING EXPENSE ACCOUNTS 73 TEXT PERTAINING TO OPERATING REVENUE ACCOUNTS 601. Metered Sales to General Consumers. This account shall include all revenues received for measured electric energy supplied for residential, commercial, and industrial purposes where the total receipt is dependent upon quantity of energy supplied, except revenues from the sale of electric energy to municipal corpora- tions and other governmental agencies at rates not available to non- municipal users. Note. — This account may be subdivided to show the sales of electric energy for residential, commercial, and industrial purposes, by tarifif schedules, or other- wise, as local conditions may require. 602. Flat-Rate Sales to General Consumers. This account shall include all revenues received for electric energy supplied at flat rates per year, per night, per hour, or other time unit, or on any basis independent of the quantity of current supplied, except revenues from the sale of electric energy to municipal corporations and other governmental agencies at rates not available to non-municipal users. Note. — This account may be subdivided to show the sales of electric energy for residential, commercial, and industrial purposes, by tariff schedules, or other- wise, as local conditions may require. 603. Railroad Corporations. This account shall include all revenues derived from sales of electric energy to railroad corporations for the propulsion of their cars. If such energy is incidentally used for other purposes, but the portion so tised is not separately measured, the revenue therefrom shall be in- cluded in this account. Reventie from the sales of current to railroad corporations at established tariff rates for lighting or heating stations, offices, etc., or for power in shops shall not be credited to this account but to the appropriate commercial lighting or power account. 604. Other Electrical Corporations. This account shall include all revenues derived from electric energy sold to other electrical corporations to be by them distributed over their own lines to consumers. If any portion of such energy is incidentally consumed by such corporations for their own benefit, whether for light, beat or power, it shall be included herein if not separately measured or if included under the same contract with that which is distrilntted bv them to consumers. 74 OPERATING EXPENSE ACCOUNTS 605. Municipal Street Lighting. This account shall include all revenues derived from lighting streets for municipal coriX)rations by means of electric energy, or from sup- plying electric energy therefor at special rates not available to non- municipal consumers. Note. — In the foregoing account the word " streets " is to be interpreted to inckide parks, plazas, and all other public places not classified as buildings. 606. Miscellaneous Municipal Sales. This account shall include all revenues derived from energy supplied to municipal corporations for purposes other than street lighting at si)ecial rates not available to non-municipal consumers ; also all revenues from energy supi)lied under special contract with federal, state or county governments. 611. Commissions on Others' Electric Energy. This account shall include all revenues accruing to the accounting company for transmitting or distributing current of other companies over its transmission or distribution lines and selling the same, and for all other services performed in connection therewith, (See "Operating Revenue Accounts — General Instructions and Definitions," Section 2, Note B, page 71.) 612. Rent from Electric Appliances. This account shall include all revenues derived from the leasing of electric motors, fans, heating appliances, batteries, lamps, meters and other electric apparatus and appliances. Where the contract of lease names only a single consideration for both the leasing and the main- tenance of the appliances so let, the entire revenue shall be included in this account. 613. Rent from Property Used in Operation. This account shall include rents received for the use by others of buildings, land, and other property devoted to electric o^X'rations by the accounting company. This covers such matters as rent from jxdIc attachments, rent from joint use of office buildings or sub-stations, rent from land included with water rights, etc. When any corporation engages in electric operations for the pro- duction of some of its product for the benefit of another or others under an arrangement for apportioning the expense among the several participants in the arrangement, if such arrangement ]>r()vides for the receipt by tin- accounting company of any profit or return upon its property', such profit or return upon property shall, as it accrues, be OPERATING EXPENSE ACCOUNTS 75 credited to this account. Such profit or return must be over and above any provision for wear and tear and retirement expense on plant in- volved in said production, and the amount thereof must be as provided in the arrangement under which the joint production occurs. 614. Merchandise and Jobbing-. To this account shall be credited all revenues derived from the sale of electric merchandise and from electric jobbing. To this account shall be charged the cost to the accounting company of such merchan- dise sold, including transportation costs, and the cost of labor em- ployed in merchandise and jobbing work so far as it is the practice of the accounting company to segregate such labor costs ; also discounts and allowances made in connection with settlement of bills for mer- chandise and jobbing. To this account shall also be credited the profit or commission accru- ing to the accounting company on all wiring and jobbing work per- formed by it as agent under agency contracts whereunder it undertakes to do jobbing work for another for a stipulated profit or commission. NoTs; A. — The accounting company should keep this account in such detail as to enable it to analyze the credits and debits in its annual reports. Note B. — This account does not include receipts from the sale of superseded equipment or of junk or other scrap or salvage. Such receipts should be credited to the account to which the cost of the superseded equipment is charged or (in the case of the sale of junk, etc.) to account No. 781, "Undistributed General Expenses," or the appropriate subdivision thereof. Note C. — If the accounting company sells merchandise or does jobbing work at or below cost for the purpose of inducing greater use of electric energy, a debit balance in this account due to such a practice shall be charged to operating expense account No. 771, "New Business Expenses," or the appropriate sub- division thereof. Note D. — If the accounting company is engaged in merchandising or jobbing primarily for direct profit rather than for stimulating the consumption of electric energy, such merchandising and jobbing may be organized and accounted for as a distinct department of the accounting company co-ordinate with the electric department. 615. Miscellaneous Operating- Revenues. This account shall include all revenues derived from electric opera- tions not includible in any of the foregoing accounts. This covers such items as profit on the sale of materials and supplies not ordinarily pur- chased for resale, sale of exhaust steam, sale of water or hydraulic power, interest on daily bank balances, etc. Note. — The foregoing account is intended to be restricted to revenues inci- dental to electric operations. If the sale of water or steam for steam heating or the sale of power is of considerable magnitude, it should be accounted for under separate departmental accounts. 76 OPIiKATING EXPENSE ACCOUNTS OPERATING EXPENSE ACCOUNTS 700 Production Expenses Steam Power Generation Superintendence and labor Superintendence Boiler labor Engine labor Electrical labor Miscellaneous labor Power plant supplies and expenses Fuel Water Miscellaneous supplies and expenses Lubricants Production supplies Station expense Maintenance of power plant Maintenance of station buildings Maintenance of steam equipment Maintenance of furnaces and boilers Maintenance of boiler apparatus Maintenance of steam accessories Maintenance of steam engines Maintenance of turbo-gener luiits Maintenance of electrical equipment Maintenance of main generators Maintenance of exciting apparatus Maintenance of control and protective equipment Maintenance of transformers and converting apparatus Maintenance of miscellaneous power plant equip- ment Steam generated — ApiX)rtionment account Steam from other sources Hydro-Electric Generation Superintendence and lal)or A 706.1 Superintendence Operation: D C B 701 A 701. 1 . A 701. 2 A 701. 3 A 701. 4 A 701. 5 D 702 CBA702. 1 CBA702.2 CB 702. 3 A 702. 31 A 702. ,32 A 702. ,33 Maintenance: D 703 CBA703, .1 CB 703. ,2 A 703, .21 A 703. 22 A 703, .23 A 703, .24 A 703, ,25 C B 703 . 3 A 703, .31 A 703, .32 A 703, .33 A 703, ,34 CBA703.4 D C B A 704 D C T^. A 705 Operation: D C B 706 OPERATING EXPENSE ACCOUNTS 77 A 706.2 A 706.3 A 706.4 D 707 CBA707.1 CB 707.2 A 707.21 A 707.22 A 707. 23 Maintenance: D 708 C B A 708.1 C B 708.2 A 708.21 A 708.22 A 708.23 A 708.24 A 708.25 A 708.26 A 708.27 CB 708.3 A 708.31 A 708.32 A 708.33 A 708.34 A 708.35 A 708.36 C B A 708.4 Hydro-electric labor Station labor Miscellaneous labor Power plant supplies and expenses Water for power Miscellaneous supplies and expenses Lubricants Production supplies Station expense Maintenance of power plant Maintenance of station buildings Maintenance of reservoirs, dams and waterways Maintenance of reservoirs, dams and intakes Maintenance of navigation facilities Maintenance of waterways Maintenance of forebays, penstocks and tail-races Maintenance of way and cars Maintenance of telephone system Maintenance of production roads and trails Maintenance of hydro-electric equipment JMaintenance of water turbines and water wheels Maintenance of turbo-generator units Maintenance of main generators ]\Iaintenance of exciting apparatus Maintenance of control and protective equip- ment Maintenance of transformers and converting apparatus Maintenance of miscellaneous power plant equip- ment Operation: D C B 709 A 709.1 A 709.2 A 709.3 A 709.4 A 709.5 D 710 Gas Generation Superintendence and labor Superintendence Fuel labor Engine labor Electrical labor Miscellaneous labor Power plant supplies and expenses 78 OPEKATliNG EXPENSE ACCOUNTS Engine fuel Miscellaneous supplies and exj^enses Water Lubricants Production supplies Station exj>ense Maintenance of power plant Maintenance of station buildings Maintenance of gas equipment Maintenance of fuel holders, producers and accessories Maintenance of engines and turbines Maintenance of electric equipment Maintenance of main generators Maintenance of exciting apparatus Maintenance of control and protective apparatus Maintenance of transformers and converting apparatus Maintenance of miscellaneous power plant equip- ment Power gas from other sources Miscellaneous Production Accounts Electric energy from other sources Duplicate production charges — Cr. Production expenses transferred — Cr. Transmission Expenses Transmission operation and maintenance Superintendence Substation labor Substation supplies and expenses Operation of transmission lines Eabor and expense — underground conduits Labor and expense — ^xjles, towers and fixtures Labor and expense — overhead conductors Labor and expense — underground conductors Miscellaneous supplies and expenses Maintenance of structures Maintenance of substation equipment CBA710 .1 CB 710, ,2 A 710 .21 A 710 .22 A 710.23 A 710.24 Maintenance: D 711 CBA711 .1 CB 711, .2 A711 .21 A 711 .22 CB 711, ,3 A711 .31 A711 .32 A711 .33 A711 .34 CBA711 .4 DCBA712 DCBA713 DCB A714 DCBA715 720 D 721 CBA721. .1 CBA721 2 C B A 721 , .3 CB 721. 4 A 721, .41 A 721 .42 A 721 .43 A 721 .44 A 721 .45 C B A 721 .5 C B A 721 .6 OPERATING EXPENSE ACCOUNTS 79 C B A 721 .7 Maintenance of underground conduits CB 721. is Maintenance of transmission lines A 721.81 Maintenance of poles, towers, and fixtures A 721.82 Maintenance of overhead conductors A 721. 83 Maintenance of underground conductors CB A 721.9 Maintenance of roads and trails 730 Distribution Expenses 731 Distribution operation and maintenance CBA731.1 Superintendence CB 731.2 Substation expenses A 731,21 Substation labor A 73 1.22 Substation supplies and expenses CB 731.3 Storage battery expenses A 731 .31 Storage battery labor A 731.32 Storage battery supplies and expenses CB 731.4 Operation of distribution lines A 731 .41 Labor and expense — underground conduits A 731 .42 Labor and expense — ix)les, towers, and fixtures A 73 1.43 Labor and expense — overhead conductors A 731.44 Labor and expense — underground conductors A 731 .45 Miscellaneous supplies and expenses CB 731.5 Meter and transformer operation A 731.51 Salaries and expenses — meter department A 731.52 Testing meters A 731.53 Miscellaneous expenses — meter department A 731 .54 Removing and resetting meters A 731 .55 Removing and resetting transformers C B A 732. 1 Maintenance of structures C B A 732.2 Maintenance of substation eciuipment C B A 732.3 Maintenance of storage battery equipment C B A 732.4 Maintenance of underground conduits CB 732.5 Maintenance of distribution lines A 732. 51 Maintenance of poles, towers, and fixtures A 732,52 Maintenance of overhead conductors A 732,53 Maintenance of underground conductors C B A 732 . 6 Maintenance of services CB 732.7 Maintenance of transformers and meters A 732.71 Maintenance of line transformers A 732.72 Maintenance of consumers' meters 80 OPERATING EXPENSE ACCOUNTS 750 D 751 CB 751. 1 A 751. 11 A 751. 12 A 751. 13 CB 751. 2 A 751. ,21 A 751, ,22 CB 751. 3 A 751 ,31 A 751, ,32 A 751, .33 CBA751, A CB 751. ,5 A 751, .51 A 751, .52 760 DC 761 B A 761 , .1 B 761. 2 A 761 .21 A 761 .22 B 761. ,3 A 761 .31 A 761 .32 B A 761 , .4 D C B A 762 770 DC 771 B 771, ,1 A 771 .11 A 771 .12 B 771 .2 A 771 .21 A 771 .22 A 771 .23 A 771 .24 A 771 .25 Utilization Utilization operation and maintenance Commercial lamps — operation Commercial arc lamps Incandescent lamps — installation Incandescent lamps — renewals Consumers' installation and inspection work Inspection — consumers' premises Consumers' installations Municipal street lamps — operation Municipal street arc lamps Municipal street incandescent installation Municipal street incandescent renewals Maintenance of commercial lamps Maintenance of municipal street lighting equipment Maintenance of municipal street arc lamps Maintenance of municipal street incandescent lamps Commercial Expenses Commercial administration Commercial general labor Commercial books and contracts Commercial bookkeeping Commercial contracts Commercial meter reading and collecting Commercial collecting Meter reading Commercial supplies and expenses Agents' commissions New Business Expenses New business expenses New business salaries New business management salaries New business advertising salaries New business supplies and expenses Demonstrations Wiring and appliances Advertising supplies and expenses Canvassing and soliciting Miscellaneous new business supplies and expenses 780 D 781 C B 781 , .1 A 781 .11 A 781 .12 C 781 .2 B A 781 , .21 B A 781 , ,22 B A 781 . .23 B A 781 . ,24 B A 781 . .25 B A 781 , .26 B A 781 . 27 B A 781 . .28 B A 781 . 29 BA781. .30 BA781. 31 B A 781 . 32 D C B A 782 D C B 783 A 783, ,1 A 783, .2 A 783, .3 A 783.4 A 783, .5 D C B A 784 D C B 785 A 785. .1 A 785. .2 D C B A 786 D C B A 787 D C B A 788 D C B A 789 D C B A 790 OPERATING EXPENSE ACCOUNTS 81 General Miscellaneous Expenses Undistributed general expenses General office salaries Administrative salaries Other general office salaries Miscellaneous general expenses General office supplies and expenses General stationery and printing Maintenance of general structures Operation of communication system Maintenance of communication system Law expenses Insurance Store expenses Transportation expenses Undistributed adjustments Rentals Other miscellaneous general expenses Retirement expense Injuries and damages Claim department expenses Medical expenses Injuries to employees Other personal injuries and property damage Miscellaneous accident expenses Regulatory commission expenses Relief and welfare work Employees' welfare department Pensions Franchise requirements Amortization of franchises Electric expenses transferred — Cr. Joint operating expenses — Cr. Duplicate miscellaneous charges — Cr. 82 OPERATING EXPENSE ACCOUNTS OPERATING EXPENSE ACCOUNTS General Instructions and Definitions 1. Operating Expenses Defined. The term operating expenses as used in this classification means such expenses as are necessary to the maintenance of the corporate organiza- tion, the rendering of service required or authorized by law, the sale of merchandise, the production (including herein the cost of capital con- sumed) and disposition of commodities produced, and the collection of the revenues therefor. Expenses directly incident to the collection of non-operating revenues and the maintenance of property from which non-operating revenues are derived are . excluded from operating expenses. 2. Definitions of Certain Terms Used in Connection witH Expense Accounts. Except where some other meaning is clearly specified in the defini- tions of the accounts, the following words, wherever used hereunder have the meanings below stated. Cost means cash or money cost, and not price based on a term of credit. Labor means human services of whatever character. Cost of labor includes wages, salaries, and fees paid to persons for their services. Cost of materials and supplies includes all specifically assignable transportation charges incurred in obtaining the delivery of such mate- rials and supplies upon the premises of the purchaser, such as packing, drayage, freight, insurance, customs duties, commissions, etc., and cost of any special tests made thereon prior to their acceptance; and in case the accounting person or corporation desires, it may include a suitable proportion of store expenses (when the materials and supplies are passed through stores) and the cost of further transportation to the place of consumption, and a suitable proportion of the expenses of the purchasing department, in which case a corresponding credit shall be made to the suitable expense account as hereinafter provided. Cost of repairs, when made by the accounting person or corporation, includes cost of labor expended and material consumed, and incidental expenses such as carfare, permits, inspection, etc., less salvage, if any. OPERATING EXPENSE ACCOUNTS 83 Cnrrent niaintcuancc includes such expenses necessary to maintain the tangible proi>erty in a state of operating efficiency as do not result in a substantial change of identity in any particular unit of proi>erty. It includes the cost of minor replacements of small parts commonly called the cost of repairs, but it does not include the cost of replacing individual structures, facilities or units of equipment or important sections of continuous structures such as electric line. Current main- tenance costs are chargeable to operating expenses and wherever the word " maintenance " is used in the definition of an operating expense account current maintenance is to be understood. The cost of replacing the larger units is chargeable to fixed capital from which the cost of the property replaced must be deducted. Note. — It is not required that the transportation element of cost shall be assigned with a greater degree of accuracy than to the nearest cent per unit of material or supply. Where a single transportation item covers a multitude of things the portion of the expense not assigned to specific things should be charged to the same account that store expenses are charged to. 3. Unaudited Bills and Vouchers. When bills covering operating expense items are not received in time for audit, and when vouchers are not made in time for inclusion in the operating accounts for the month in which the transactions occur, the items may be estimated and in such form charged or credited to oper- ating accounts, and credited or charged to operating reserves, the neces- sary adjustments being made later when the bills and vouchers are taken into the accounts. 4. Delayed Items. Delayed items are those representing transactions which occurred prior to the period covered by the income account, but which were not recorded currently. Such items may be charged or credited to the appropriate expense account for the fiscal period in which the transac- tions are actually recorded. If, however, the amount of such items is relatively so large that its inclusion in the expense accounts for a single year would result in a seriously abnormal income statement, and no provision has been made through accruals to reserves or suspense ac- counts for anticipating such transactions, the accounting company may distribute the amount or any part thereof to Profit and Loss. 5. Salvage and Insurance. Salvage and insurance received in connection with maintenance jobs not involving deductions from fixed capital shall be credited to the 84 OPERATING EXPENSE ACCOUNTS appropriate maintenance account. (See "Fixed Capital Accounts — General Instructions and Definitions," Section 6, Page 32.) If the insurance on damaged property is relatively large, and is received before the repairs have been completed, a disproportionate credit to operating expenses may be avoided by crediting the amount of the insurance recovered to a suspense account to w^hich the cost of the repair shall then be charged to the extent that it is covered by insurance. Insurance recovered in connection witlT personal injuries shall be credited to account No. 783, " Injuries and Damages " or the appro- priate sub-division thereof. Dividends distributed by mutual insurance companies shall be credited to the account to which the insurance pre- mium is charged. Recoveries under fidelity bonds shall be credited to the account charged with the loss. 6. Retirement Expense. An account is provided in which to include charges made in order that corporations may, through the creation of adequate reserves, equal- ize from year to year, as nearly as is practicable, the losses incident to important retirements of buildings, dams, etc., or of large sections of continuous structures like electric line, or of definitely identifiable units of plant or equipment. " Losses " used above means in each case the excess of the original cost to the accounting company of the property retired plus the cost of dismantling or removing, over its salvage value at the time of its retirement. The cost of replacing minor parts, which is not recorded by any entries in the fixed capital accounts, and which is commonly called the cost of " repairs " or " maintenance " as dis- tinguished from the cost of " replacements " of large units, need not be provided for through a retirement reserve. The amounts charged to retirement expense plus amounts appropriated from surplus should be upon a basis determined to be equitable according to the accounting company's experience and best sources of information, and should in all cases be sufficient to provide during a period of years a reserve against which can be written ofif all losses sustained upon the retire- ment of property for any cause whatsoever. 7. Classification of Corporations by Revenue. For the purpose of this classification of accounts electrical corpora- tions are divided into four classes as follows : Class A. — Cor|X)rations having average annual operating revenues exceeding $250,000. OPERATING EXPENSE ACCOUNTS 85 Class B. — Corporations having average annual operating revenues exceeding $50,000, but not over $250,000. Class C. — Corixjrations having average annual operating revenues exceeding $10,000, but not over $50,000. Class D. — Corporations having average annual operating revenues of $10,000 or less. In order that frequent changes in the classification may be avoided, the class to which an electrical corporation belongs may be determined by the average of its annual revenues for the three years next preced- ing the date as of which its classification is to be determined. If at the close of any fiscal year following, the average of its annual revenues for the three next preceding years is greater than the maximum for the class in which the corporation has been groui>ed, it shall automati- cally be grouped with the higher class in which it falls by virtue of such increased annual revenues. Corporations engaged in new enter- prises the annual revenue from which is not known in advance shall be classed in accordance with a reasonable estimate of their prospective revenue. The classification of operating expenses which follows is adapted to corporations in all four classes. The primary accounts are expanded and subdivided as will be indicated to meet the needs of each class. No separate definitions are stated for accounts which are thus divided, but the content of such accounts is to be found in the definitions of the final subdivisions. When such subdivisions are kept as primary ledger accounts it will not be necessary to keep also the account which has been subdivided. Each corporation should keep, so far as they are applicable to its business, at least the accounts provided for the class to which it belongs. Any corporation may, however, keep any or all of the accounts of the more extended schemes provided for those corporations which are in higher revenue classes. If desired, further refinements or extensions of the scheme of accounts to meet the needs of individual coriX)rations may be made by subdividing the accounts herein established, provided that the integrity of the recjuired accounts is not impaired. Each title in a condensed classification is to be understood to com- prise the titles following it for a more expanded classification. The letter D preceding the title denotes that at least the accounts so indi- cated must be kept by corporations in Class D so far as they are applic- able to its business. The letter C indicates the accounts that must be kept by Class C corporations, and so on. Accounts that are to be kept as primary accounts by more than one class of corporations are indi- cated by prefixing the letters of all the classes which are required to keep such accounts. 86 OPERATING EXPENSE ACCOUNTS TEXT PERTAINING TO OPERATING EXPENSE ACCOUNTS GENERAL ACCOUNTS 700. Production Expenses 720. Transmission Expenses 730. Distribution Expenses 750. Utilization Expenses 760. Commercial Expenses 770. New Business Expenses 780. General and Miscellaneous Expenses 700 PRODUCTION EXPENSES T\ToTE. — If the accounting company operates two or more generating stations or if it generates energy by two or more different methods, such as by a steam power plant and a hydrauHc power plant, it should keep (with the detail herein prescribed) separate accounts covering production at the several plants and so far as practicable for each process or method. Where two or more methods or processes are used, separate sub-accounts should be kept for expenses com- mon to two or more methods. Electric energy obtained from another company should be separately accounted for as in the case of that produced by a separate process or method. Steam Power Generation Operation D C B 701 Superintendence and Labor. A 701 . 1 Superintendence. This account shall include the salaries of superintendents and assist- ants, chemists, day and night foremen, and station clerks ; and also that portion of the salaries of the engineering staff chargeable to steam generating plant operations. A 701 . 2 Boiler Labor. 1'his account shall include labor in boiler room and elsewhere in and about the premises having to do with making steam. Principal items : Fire room engineer and assistants, water tenders, firemen, coal handlers, boiler cleaners, and feed pumpmen. A 701.3 Engine Labor. This account shall include labor on prime movers. Principal items : Chief engineer and assistants, engineers, oilers, wipers and machinists. OPEKATING EXPENSE ACCOUNTS 87 A 701.4 Electrical Labor. This account shall include all labor in connection with the electrical apparatus and devices, beginning with the dynamos direct connected or belted to the prime movers and including the switchboard, feeder ter- minal board, and to the point where the electric current leaves the station for the transmission or distribution system. Principal items : System operators or load dispatchers, foremen regulators, regulators and assistants, switchboard men, brushmeUj wipers, wiremen. A 701 . 5 Miscellaneous Labor. This account shall include salaries and wages of all employees in and about the steam power generating plant engaged in operating the plant, whose time is not chargeable to any of the foregoing steam power plant labor accounts. This covers such labor as that of watchmen, janitors, elevator men, and messengers, employees engaged in cleaning buildings and yards, and other general labor, excluding maintenance labor. D 702 Power Plant Supplies and Expenses. CBA702.1 Fuel. This account shall include the cost of all fuel used for steam, whether coal, oil, gas or other fuel, f. o. b. station or storage pile. This will include the invoice cost of fuel, freight, switching, rent of railroad sidings, demurrage, cost of unloading from cars or boats to wagons, and cartage to point of delivery at plant for storage, or unloading from scows or cars and conveying to place of storage. In case coal is trans- ferred from one. place to another, this cost should also be included, and any discrepancy between the actual amount of coal on hand and that recorded on the books of the company should likewise be taken care of in this account. CBA702.2 Water. This account shall include the cost of water for boilers, for conden- sers, and for cooling engines ; also boiler compound. Water used for general station pur|X)ses should not be included. If water is purchased, charge at the contract price or the meter rate. If water is pumped by the company, charge here the cost of pumping. This account should include all labor cost in connection with the handling of water, such as operating the pumping station, and expense such as cost of chemicals used in purification and filtration. 88 OPERATING EXPENSE ACCOUNTS C B 702 . 3 Miscellaneous Supplies and Expenses. A 702 . 31 Lubricants. This account shall include the cost of lubricants for machinery in the steam generating plant. This does not include oil for transformers, grease for wagons, or oil for lanterns, etc. Oil used in pumping station should be charged against account No. 702.2, " Water." A 702.32 Production Supplies. This account shall include the cost of all supplies, tools, etc., used in the steam generating plant which are consumed in the oi>erating proc- ess, the replacement of which does not constitute a repair or renewal. Principal items : Waste, packing, wipers, gauge glasses, gauge washers, manhole gaskets, handhole gaskets, fire room tools, steam and air hose, boilers, screws, nails, tools, dynamo brushes. A 702 . 33 Station Expense. This account shall include the general and miscellaneous expenses in the steam generating plant not specifically chargeable to other ac- counts. Principal items : Lighting, heating and cleaning system, fire protec- tion system, janitors' supplies, ice water, meals and car fares, station- ery, telephone and toilet service, care of streets, yards and sidings. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") This does not include miscellaneous labor, which is cared for under account No. 701.5, " Miscellaneous Labor." Maintenance. D 703 Maintenance of Power Plant. C B A 703 . 1 Maintenance of Station Buildings. This account shall include the cost of maintaining steam power plant buildings and permanent fixtures therein, including furniture, as follows : a. Sundries. — Repairs to furniture, fixtures, and other such prop- erty in and about the steam generating plant not specifically provided for elsewhere. Alterations, if not provided for by a reserve, should be charged under this classification. b. Station .Structures.- — Repairs to buildings and permanent fix- tures therein. OPERATING EXPENSE ACCOUNTS 89 Principal items: Plumbing, windows, sashes, roof, doors and walls; heating and lighting systems ; grounds and streets, vaults, sheds, pits, sidewalks, elevators ; lockers, fire protection system, painting. C B 703 . 2 Maintenajice of Steam Equipment. A 703.21 Maintenance of Furnaces and Boilers. This account shall include the cost of maintaining boilers and fur- naces and their specially provided foundations and settings. Principal items : Brick work, metal smoke-stacks, bridge wall arches, jambs, grate bars, stoker bars and webbs, furnaces, valves, super- heaters, damper regulators, tubes. A 703 . 22 Maintenance of Boiler Apparatus. This account shall include the cost of maintaining feed water, coal, and ash handling systems, and auxiliary apparatus in the fireroom. Principal items : Feed pumps, blower engines, coal conveyors, dig- gers, trolley and cable towers, crusher and belt lines, brackets, wheels, chutes and gates ; ash conveyor cars, winches, motors, buckets, shaft, chain and wheels; filters, boiler compound injector and pump; heaters, primary and secondary; economizers and water meters. A 703 . 23 Maintenance of Steam Accessories. This account shall include the cost of maintaining the piping system in connection with the making of steam and delivery thereof to the prime movers. This covers those steam accessories included in fixed capital account No. 313, " Boiler Plant Equipment," i. e., those not considered a part of the steam engine. Principal items : Water feed piping, cold main, hot main, water suction, valves, joints, jackets, ash pit drains and ash pocket siphons, oil drains from engine crank pits, receiving tanks, filter pumps to engine valve, steam and exhaust line systems, sewer connections and air line. Note. — When the system for supplying boiler or condenser water is elaborate, as when it includes a dam. reservoir, canal and pipe line, the cost of maintaining it shall be charged to a special sub-account under account No. 703.1, " Mainte- nance of Station Buildings," with the title, " Maintenance of Water Supply Structures — Steam." A 703 . 24 Maintenance of Steam Engines. This account shall include the cost of maintaining steam engines, whether reciprocating or rotary, used in the power jjlant. This covers the cost of maintaining apparatus auxiliary to the prime mover, such as condensers, tubes, heads, doors, etc., pumps, air and circulating, 90 OPERATING EXPENSE ACCOUNTS wet vacuum, dry vacuum, and oil systems but not the power conveying api)aratus. Note. — This account may be sub-divided between the expense of maintaining the prime mover and the expense of maintaining the auxihary apparatus. A 703 . 25 Maintenance of Turbo-generator Units. This account shall include the cost of maintaining steam turbine- driven generating units. This covers the cost of maintaining condensers, air and circulating pumps, lubricating systems and similar appurtenant apparatus, but not the cost of maintaining the steam pipe leading from the boiler nor the exhaust pipe. Note. — This account may be sub-divided to show separately the cost of main- taining the prime mover and the appurtenant apparatus. C B 703.3 Maintenance of Electrical Equipment. A 703 . 31 Maintenance of Main Generators. This account shall include the cost of maintaining dynamos, alter- nators and other electric generating apparatus driven by steam. A 703.32 Maintenance of Exciting Apparatus. This account shall include the cost of maintaining exciters, motors, motor generators, boosters, regulators and exciting batteries used in the steam generating plant. A 703.33 Maintenance of Control and Protective Equipment. This account shall include the cost of maintaining switches, circuit breakers, busses, current and potential transformers, relays, indicating and recording instruments and switchboard panels, lightning arresters, reactances and ground resistances used in the steam generating plant, and wires and cables used in conjunction with the foregoing. A 703 . 34 Maintenance of Transformers and Con- verting Apparatus. This account shall include the cost of maintaining transformers and converting a])paratus in the steam generating plant other than that used primarily for transmission and distribution purposes. C B A 703 . 4 Maintenance of Miscellaneous Power Plant Equipment. This account shall include tlie cost of maintaining miscellaneous e([uipnK'nt, such as belts, jmlleys, hangers, countershafts, machine tools, cars, locomotives, locomotive cranes for ])ower plant purposes, and all OPERATING EXPENSE ACCOUNTS 91 other equipment properly includible in fixed capital account No. 317, " Miscellaneous Power Plant Equipment — Steam." This account shall also include the cost of maintaining tools and implements assigned to the steam power plant, such as blacksmiths', machinists' and pipe fitters' tools, pump room tools, engine tools and cutting tools. D C B A 704 Steam Generated — Apportionment Account. This account will be raised only by companies operating, in connec- tion with electric utilities, other utilities or departments which make demand upon the same boiler plant. Where a demand of this character is made upon a boiler plant, the expenses incident to generating steam shall be transferred from the foregoing accounts to this account at the close of the period. The total cost of generating steam as then shown shall be apportioned to the utilities or departments using the steam, by credits to this account. The balance remaining in this account will represent the cost of steam for generating electric energy. The details of the cost of generating steam, and the amounts appor- tioned to the dififerent utilities or departments using the steam, and the basis used for the api>ortionment may be called for in the annual report to the regulatory commission. D C B A 705 Steam from Other Sources. This account shall include the cost of all purchased or jointly pro- duced steam consumed in the generating plant. Hydro-electric Generation Operation DOB 706 Superintendence and Labor. A 706 . 1 Superintendence. This account shall include the salaries of superintendents and assist- ants, chemists, day and night foremen, and station clerks; and also that portion of the salaries of the engineering stafif chargeable to hydro-electric generating plant operations. A 706 . 2 Hydro-electric Labor. This account shall include the wages of all employees operating the hydraulic works, including foremen, intake operators, flume patrolmen, cleaners at reservoirs and screens and all other employees whose duties 92 OPERATING EXPENSE ACCOUNTS concern the operation of the hydro-electric development outside of the generating station. A 706 . 3 Station Labor. This account shall include the wages of station operators, helpers and oilers engaged in operating the station equipment, beginning at end of penstock and ending where the electric current leaves the gen- erating station. The wages of employees engaged in operating conversion equipment used primarily for transforming electric energy in voltage or frequency for the purpose of transmitting or distributing it more efficiently shall not be charged to this account but to the appropriate account under transmission or distribution expenses. A 706.4 Miscellaneous Labor. This account shall include salaries and wages of all miscellaneous employees in and about the hydro-electric generating plant engaged in operating the plant. This covers such labor as that of watchmen, janitors, elevator men, and messengers; employees engaged in clean- ing buildings and yards; and general labor not chargeable to any of the foregoing hydro-electric power plant labor accounts, excluding main- tenance labor. D 707 Power Plant Supplies and Expenses. C B A 707 . 1 Water for Power. This account shall include the cost of water purchased for water power generation. C B 707 . 2 Miscellaneous Supplies and Expenses. A 707.21 Lubricants. This account shall include the cost of lubricants for hydro-electric prime movers, machinery connected therewith and auxiliary pumping and exciting machinery. This does not include transformer oil, wagon grease, or oil for lanterns. This account also includes the cost of recovering oil from waste and the cost oJ filtering and handling. A 707.22 Production Supplies. This account shall include the cost of ail supplies, tools, etc., used in the water power generating plant which are consumed in the operat- ing pro:ess, the replacement of which does not constitute a repair or renewa OPEKATIXG EXPENSE ACCOUNTS 93 Principal items : Waste, packing, wipers, gauge glasses. * gaskets, bolts, screws, nails, dynamo and motor brushes, cans for containing rags and waste, transformer oil and hand oil cans. A 707.23 Station Expense. This account shall include the general and miscellaneous expendi- tures in water power generating plant not specifically chargeable to other accounts. Principal items: Lighting, heating, and cleaning systems, fire pro- tection systems, janitors' supplies, ice water, meals and carfares, sta- tionery, telephone and toilet service, care of streets, yards and sidings. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") This does not include miscellaneous labor, which is provided for under account No. 706.4, " Miscellaneous Labor." Maintenance D 708 Maintenance of Power Plant. C B A 708 . 1 Maintenance of Station Buildings. This account shall include the cost of maintaining hydro-electric power plant buildings and permanent fixtures therein, including fur- niture as follows : a. Sundries. — Repairs to furniture, fixtures and other such prop- erty in and about the generating plant not specifically provided for elsewhere. Alterations, if not provided for by a reserve, should be charged under this classification. b. Station Structures. — Repairs to Ixiildings and permanent fix- tures therein. Principal items : Plumbing, windows, sashes, roof, doors and walls ; heating and lighting systems ; grounds and streets, vaults, sheds, pits, sidewalks, elevators ; lockers, fire protection system and painting. CB 708.2 Maintenance of Reservoirs, Dams and Waterways. A 708.21 Maintenance of Reservoirs, Dams and Intakes. This account shall include the cost of maintaining reservoirs, dams and intakes with their appurtenant structures and facilities such as gates, raising and lowering apparatus, wasteways, spillways, fish lad- ders, etc. 94 OPEKATING EXPENSE ACCOUNTS A 708 . 22 Maintenance of Navig^ation Facilities. This account shall include the cost of maintaining locks, booms, sluices, regulating gates and other appurtenant structures and facilities for navigation purposes. A 708 . 23 Maintenance of Waterways. This account shall include the cost of maintaining canals, ditches, flumes, tunnels, pipe lines, and other appurtenant structures and facilities. A 708 . 24 Maintenance of Forebays, Penstocks and Tailraces. This account shall include the cost of maintaining forebays, |)en- stocks, tailraces, and other appurtenant structures and facilities. A 708 . 25 Maintenance of Way and Cars. This account shall include the cost of maintaining rolling stock, roadbed and steel in connection with spur tracks, tramways, inclines, freight cars, barges, etc., which are a part of the hydro-electric de- velopment. A 708 . 26 Maintenance of Telephone System. This account shall include the cost of maintaining telephone lines, telephone apparatus and switchboards of the telephone systeiu in the water |X)wer generating station and between the station and the head- works. A 708.27 Maintenance of Production Roads and Trails. This account shall include the cost of maintaining roads, trails, bridges, tramways, and railways used primarily in connection with h\-dro-electric production of electricity; also the cost to the accounting company of maintaining roads dedicated to public use. C B 708 . 3 Maintenance of Hydro-electric Equipment. A 708 . 31 Maintenance of Water Turbines and Water Wheels. This account shall include the cost of maintaining water wheels and governors and their accessories. This covers all equipment from pen- I OPERATING EXPENSE ACCOUNTS 95 Stocks to tailraces, such as gates, valves, pumps, piping, etc., used in connection with water wheels and governors. Principal item : Water wheels and housing, needle valves, nozzles, deflecting hoods, relief valves, air compressors for surge tanks, pumps for governors and necessary piping in connection therewith, A 708 . 32 Maintenance of Turbo-generator Units. This account shall include the cost of maintaining hydraulic turbine- driven generator units and all appurtenant apparatus. This covers the cost of maintaining air and circulating pumps, lubricating systems, valves, governors, draft tubes, etc. Note. — This account may be sub-divided to show separately the cost of main- taining the prime mover and the cost of maintaining the electric generator. A 708 . 33 Maintenance of Main Generators. This account shall include the cost of maintaining dynamos, alterna- tors and other electric generating apparatus driven by hydraulic power. A 708 . 34 Maintenance of Exciting Apparatus. This account shall include the cost of maintaining exciters, motors, motor generators, boosters, regulators and exciting batteries used in the water power generating plant. A 708.35 Maintenance of Control and Protective Equipment. This account shall include the cost of maintaining switches, circuit breakers, busses, current and potential transformers, relays, indicating and recording instruments and switchboard panels, lightning arresters, reactances and ground resistances used in the water power generating plant, and wires and cables used in conjunction with the foregoing. A 708.36 Maintenance of Transformers and Convert- ing Apparatus. This account shall include the cost of maintaining transformers and converting apparatus in the water power generating plant other than that used primarily for transmission and distribution purposes. C B A 708 . 4 Maintenance of Miscellaneous Power Plant Equipment. This account shall include the cost of maintaining iniscellaneous equipment, such as belts, pulleys, hangers, countershafts, machine tools, cars, locomotives, locomotive cranes for power plant purposes, and all other equipment properly includible in fixed capital account No. 323, " Miscellaneous Power Plant Equipment — Hydro." 96 OPERATING EXPENSE ACCOUNTS This account shall also include the cost of maintaining tools and implements assigned to the hydro-electric plant, such as blacksmiths', machinists', and pipe-fitters' tools, cutting tools, etc. Gas Generation Operation DOB 709 Superintendence and Labor. * A 709 . 1 Superintendence. This account shall include the salaries of superintendents and assist- ants, chemists, day and night foremen, and station clerks ; and also that portion of the salaries of the engineering staff chargeable to gas power generating plant operations. A 709.2 Fuel Labor. This account shall include the cost of all labor engaged in the han- dling of fuel from storage to the point of use whether such fuel is to be used in a producer gas process or directly in internal combustion engines. It shall include also all other operating labor in the production of producer gas and the handling of residuals from the building to the point where such residuals are placed when removed from the building. It does not include maintenance labor. A 709 . 3 Engine Labor. This account shall include the cost of all labor on prime movers. Principal items : Chief engineer and assistants, engineers, oilers, wipers, and machinists. A 709 . 4 Electrical Labor. This account shall include the cost of all labor in connection with electrical apparatus and devices beginning with the dynamos direct connected or belted to the prime movers and including the switchboard, feeder terminal board and to where the electric current leaves the station for the transmission or distribution system. Principal items : System operators or load dispatchers, foremen regulators, regulators and assistants, switchboard men, brushmen, wipers and wiremen. A 709 . 5 Miscellaneous Labor. This account shall include salaries and wages of all employees in and about the gas power generating plant engaged in operating the plant, wVose time is not chargeable to any of the foregoing gas power plant OPERATING EXPENSE ACCOUNTS 97 labor accounts. This covers such labor as that of watchmen, janitors, elevator men and messengers ; employees engaged in cleaning buildings and yards ; and all other general labor, excluding maintenance labor. D 710 Power Plant Supplies and Expenses. C B A 710 . 1 En^ne Fuel. This account shall include the cost of all fuel such as kerosene, gasoline, and oil used in internal combustion engines. Where the producer gas process is used it should include the cost of fuel used for producing gas. The cost should be f . o. b. power station and should cover the invoice cost of fuel, freight, switching, demurrage, cost of transfer from cars or boats to wagons, cartage to point of delivery at plant for storage and cost of transfer to storage. In case fuel is transferred from one place of storage to another, such cost should also be included. Any discrepancy between the actual amount of fuel on hand and that recorded in the books of the accounting company should likewise be taken care of in this account. C B 710 . 2 Miscellaneous Supplies and Expenses. A 710.21 Water. This account should include the cost of water used in the production of gas for power purposes and water used for cooling gas prime movers or other internal combustion engines. If water is purchased, charge at the contract price or the meter rate. If water is pumped by the company, charge here the cost of pumping. This account should include all labor cost and expenses in connection with the handling of water, such as operating the pumping station, and chemicals used in purification and filtration. A 710.22 Lubricants. This account shall include the cost of lubricants for machinery in the gas power generating plant. This does not include oil for trans- formers, grease for wagons, or oil for lanterns, etc. Oil used in pumping station should be charged against account No. 710.21, " Water." A 710 . 23 Production Supplies. This account shall include the cost of all supplies, tools, etc., used in the gas power generating plant which are consumed in the operating process, the replacement of which does not constitute a repair Qt renewal. 98 OPERATING EXPENSE ACCOUNTS Principal items : Waste, packing, wipers, gauge glasses, gauge washers, manhole gaskets, handhole gaskets, fuel room tools, steam and air hose, boilers, screws, nails, tools, dynamo brushes. A 710.24 Station Expense. This account shall include the general and miscellaneous expenditures in the gas power generating plant not specifically chargeable to other accounts. Principal items : Lighting, heating and cleaning system, fire pro- tection system, janitors' supplies, ice water, meals and carfares, station- ery, telephone and toilet service, care of streets, yards, sidings. Minor rents may be included. (See General Expense Account No. 781.31, " Rentals.") This does not include miscellaneous labor, which is carried under account No. 709.5, " Miscellaneous labor." Maintenance D 711 Maintenance of Power Plant. C B A 711 . 1 Maintenance of Station Building's. This account shall include the cost of maintaining gas power plant buildings and permanent fixtures therein, including furniture, as follows : a. Sundries. — Repairs to furniture, fixtures, and other such prop- erty in and about the gas power generating plant not sj^ecifically pro- vided for elsewhere. Alterations, if not provided for by a reserve, should be charged under this classification. b. Station Structures. — Repairs to buildings and permanent fix- tures therein. Principal items : Plumbing, windows, sashes, roof, doors and walls ; heating and lighting systems ; grounds and streets, walks, sheds, pits, sidewalks, elevators, lockers, fire ])rotection system, painting. C B 711 . 2 Maintenance of Gas Equipment. A 711 . 21 Maintenance of Fuel Holders, Producers and Accessories. This account shall include the cost of maintaining all tanks, facilities and apparatus used for the storage of fuel or the production of gas to be used for power purposes in the generation of electric energy. This covers the cost of repairing gas conductor, exhaust pipe, and other auxiliary gas producing apparatus, and also producers, econo- mizers, regenerators, vaporizers, steam injectors, scrubbers, exhauster OPERATING EXPENSE ACCOUNTS 99 outfit, and other similar ai)paratus, as well as specially provided boilers, pumps, flues, and pipes, coal and ash conveyors and accessory equip- ment, blower engines, holders, and all similar auxiliary equipment. A 711 . 22 Maintenance of Engines and Turbines. This account shall include the cost of maintaining gas engines and turbines devoted to the production of electric energy, including valves, governors, and ignition and starting apparatus. The maintenance of power apparatus, such as shafts, belts, etc., should not be charged to this account. CB 711.3 Maintenance of Electric Equipment. A 711 . 31 Maintenance of Main Generators. This account shall include the cost of maintaining dynamos, alter- nators, and other electric generating apparatus driven by gas power, A 711.32 Maintenance of Exciting Apparatus. This account shall include the cost of maintaining exciters, motors, motor generators, boosters, regulators and exciting batteries used in the gas power generating plant. A 711.33 Maintenance of Control and Protective Apparatus. This account shall include the cost of maintaining switches, circuit breakers, busses, current and potential transformers, relays, indicating and recording instruments and switchboard panels, lightning arresters, reactances and ground resistances used in the gas generation plant, and wires and cables used in conjunction with the foregoing. A 711.34 Maintenance of Transformers and Con- verting Apparatus. This account shall include the cost of maintaining transformers and converting apparatus in the gas power generating plant other than that used primarily for transmission and distribution purposes. C B A 711.4 Maintenance of Miscellaneous Power Plant Equipment. This account shall include the cost of maintaining miscellaneous equipment, such as belts, pulleys, hangers, countershafts, machine tools, cars, locomotives, locomotive cranes for power plant purposes, and all other equipment properly includible in fixed capital account No. 327 " Miscellaneous Power Plant Equipment — Gas." 100 OPERATING EXPENSE ACCOUNTS This account shall include the cost of maintaining tools and imple- ments assigned to the gas power plant, such as blacksmiths', machinists', and pipe fitters' tools, engine tools and cutting tools. D C £ A 712 Power Gas from Other Sources. This account shall include the cost of all purchased or jointly pro- duced power gas consumed in the gas power generating plant. Miscellaneous Production Accounts D C B A 713 Electric Energy from Other Sources. This account shall include the cost at the point of delivery to the accounting company of all electric energy purchased for re-sale or jointly produced. Note A. — If the accounting company actually exchanges power with another company, i. e., if the agreement between them provides that the receiving com- pany shall pay the producing company a price barely sufficient to cover the average production expense per unit of energy delivered, then the accounting company shall charge to this account the amount that it pays the other company which is a party to such agreement and credit this account with the amount which it receives. If the agreement provides for the payment by the receiving company of more than the bare production expense per unit, the amount received shall be credited by the producing company, not to this account, but to the appropriate operating revenue account. Note B. — Current purchased at established tariff rates from -other companies for lighting offices, stations, etc., or other similar purposes connected with the operations of the accounting company shall not be charged to this account but to the appropriate departmental expense account. D C B A 714 Duplicate Production Charges — Or. This account shall be credited with all charges made to produc- tion accounts for electric energy consumed at works and generating stations and not otherwise provided for. D C B A 715 Production Expenses Transferred — Or. This account shall include such part of the accounting company's expense of producing electric energy as is properly chargeable to another coordinate department, as, for example, an electric railroad or a gas department. 720 TRANSMISSION EXPENSES Note. — Transmission and distribution expense accounts may be combined where the same poles and subway systems carry transmission and distribution lines, and it is impracticable to assign accurately the cost of operation and main- tenance as between the two functions. D 721 Transmission Operation and Maintenance. C B A 721 . 1 Superintendence. This account shall include the pay and traveling and incidental ex- penses of the superintendent, his assistants and clerks employed in OPERATING EXPENSE ACCOUNTS 101 supervising the operation and maintenance of the transmission system; also the cost of making maps and records, the cost of stationery and printing and other miscellaneous office supplies and expenses of the transmission superintendent's office. Note. — The accounting company may set up sub-accounts under this general heading, if it so desires. C B A 721 . 2 Substation Labor. This account shall include the pay of substation operators in sub- stations devoted to transmission purposes, also the cost properly charge- able to operating expenses of the labor expended in changing trans- mission transformers. C B A 721 . 3 Substation Supplies and Expenses. This account shall include the cost of supplies for and expenses incurred in connection with the operation of transmission substations, such as carfares, meals, telephone rentals and tolls, stationery and printing, oil and waste, water, heat, janitors' supplies, etc., which are not specifically provided for elsewhere, also the cost properly charge- able to operating expenses (exclusive of labor) incident to changing transmission transformers. CB 721.4 Operation of Transmission Lines. A 721 . 41 Labor and Expense, Underground Con- duits. This account shall include wages and expenses in connection with the inspection and cleaning of subway ducts, manholes and sewer connections for transmission lines. A 721.42 Labor and Expense, Poles, Towers and Fixtures. This account shall include the pay and expenses of patrolmen, testers, etc., employed on overhead transmission lines, also the cost of trimming trees along and of clearing brush and other refuse from the trans- mission right of way after the transmission line has been placed in operation. A 721.43 Labor and Expense, Overhead Conduc- tors. This account shall include the wages and expenses of patrolmen, testers, etc., employed on overhead transmission lines. A 721.44 Labor and Expense, Underground Con- ductors. This account shall include the wages and expenses of patrolmen, testers, etc., employed on underground transmission lines. 102 OPERATING EXPENSE ACCOUNTS A 721.45 Miscellaneous Supplies and Expenses. This account shall include miscellaneous items of transmission ex- penses not provided for in the foregoing transmission operating accounts. Minor rents may be included. (See General Expense Ac- count No. 781.31, "Rentals.") C B A 721 . 5 Maintenance of Structures. This account shall include the cost of maintaining transmission sub- station buildings and other structures. The principal items to be in- cluded in this account are repairs to buildings and all permanent fix- tures therein and appurtenant thereto and the cost of maintaining grounds, streets, drives, sidewalks, vaults, pits, sheds and permanent foundations of apparatus, which are included as a part of the cost of the structures in which located. C B A 721.6 Maintenance of Substation Equipment. This account shall include the cost of maintaining transformers, transmission switches, switchboards and connected equipment, cooling systems, etc. Include also in this account the cost of maintaining out- door transmission substation equipment and appurtenances. CBA721,7 Maintenance of Underground Conduits. This account shall include the cost of maintaining subways and underground conduits carrying transmission conductors. This includes the cost of repairs of ducts, manholes, sewer connections and traps and of paving over such subways, but not the cost of repairing conductors or the insulation thereof. CB 721.8 Maintenance of Transmission Lines. A 721.81 Maintenance of Poles, Towers and Fix- tures. This account shall include the cost of maintaining jxtles and cross- arms, braces, guys and other pole supports, fixtures and towers used in the transmission system. This account also covers such matters as painting poles, repairing streets and repairing sidewalks after pole renewals, etc. A 721.82 Maintenance of Overhead Conductors. This account shall include the cost of maintaining all conductors, feeders, cable, wire, insulators, and insulating material used in over- head transmission systems. OPERATING EXPENSE ACCOUNTS • 103 A 721 . 83 Maintenance of Underground Conductors. This account shall include the cost of maintaining all conductors, cables, insulators, and insulating material used in the underground transmission system. C B A 721.9 Maintenance of Roads and Trails. This account shall include the cost of maintaining permanent roads, trails and bridges used in connection with the transmission system. 730 DISTRIBUTION EXPENSES Note. — Transmission and distribution expense accounts may be combined where the same poles and subway systems carry transmission and distribution lines, and it is impracticable to assign accurately the cost of operation and maintenance as between the two functions. D 731 Distribution Operation and Maintenance. C B A 731 . 1 Superintendence. This account shall include the pay, traveling and incidental expenses of the superintendent, his assistants and clerks employed in suj^ervising the operation and maintenance of the distribution system, also the cost of making maps and records, the cost of stationery and printing and other miscellaneous office supplies, telephone rental and tolls, janitor service, v^^ater, heat and other expenses of the distribution superin- tendent's office. Note. — The accounting company may set up sub-accounts under this general heading, if it so desires. C B 731 . 2 Substation Expenses. A 731. 21 Substation Labor. This account shall include the pay of substation operators and of clerks, janitors and w^atchmen and of other employees in substations devoted to distribution purposes. A 731.22 Substation Supplies and Expenses. This account shall include the cost of supplies for and expenses incurred in connection with the operation of distribution substations, such as carfares, meals, telephone rentals and tolls, stationery and printing, oil and waste water, heat, janitors' supplies, etc., which are not specifically provided for elsewhere. CB 731.3 Storage Battery Expenses. A 731.31 Storage Battery Labor. This account shall include the wages of battery men, including inspectors and testers. 104 OPERATING EXPENSE ACCOUNTS A 731 . 32 Storage Battery Supplies and Expenses. This account shall include the cost of acid and distilled water in cells, soda, sponges, brooms, mops, waste, rags, hydrometers, ther- mometers, automatic cell fillers, rubber hose, gloves, shoes, paint, etc., and brushes for boosters and compensators. C B 731 . 4 Operation of Distribution Lines. A 731.41 Labor and Expenses, Underground Con- duits. This account shall include wages and expenses in connection with the inspection and cleaning of subway ducts, manholes and sewer con- nections for distribution lines. A 731 . 42 Labor and Expenses, Poles, Towers and Fixtures. This account shall include the pay and expenses of patrolmen, testers, etc., employed on overhead distribution lines, and the cost of trimming trees along and of clearing brush and other refuse from the distribution right of way after distribution line has been placed in operation. A 731.43 Labor and Expenses, Overhead Con- ductors. This account shall include the wages and expenses of patrolmen, testers, etc., employed on overhead distribution lines. A 731.44 Labor and Expenses, Underground Con- ductors. This account shall include the wages and expenses of patrolmen, testers, etc., employed on underground distribution lines. A 731 . 45 Miscellaneous Supplies and Expenses. This account shall include all expenses incurred in connection with the op>eration of the distribution system not specifically chargeable to other accounts. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") C B 731 . 5 Meter and Transformer Operation. A 731.51 Salaries and Expenses, Meter Depart- ment. This account shall include the salaries and ex|>enses of superinten- dents and clerks in meter department, and also that i>ortion of the salaries of the engineering staff chargeable to that department. A 731 . 52 Testing Meters. This account shall include the cost of testing and insi)ecting meters on consumers' premises or in meter shops. OPERATING EXPENSE ACCOUNTS 105 A 731.53 Miscellaneous Expenses, Meter Depart- ment. This account shall include such expenses as stationery, postage, telephone service, light, fuel, testers' tools and supplies. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") A 731 . 54 Removing" and Resetting- Meters. This account shall include the cost of resetting, changing and remov- ing meters on consumers' premises, also the cost of connecting and dis- connecting services. A 731 . 55 Removing- and Resetting Transformers. This account shall include the cost of resetting, changing, inspecting, testing and removing transformers on consumers' premises or on poles or in manholes adjacent thereto, when such transformers are mstalled for the purpose of stepping down current from transmission or distribu- tion voltages to the voltage at which it is used by the consumer. C B A 732 . 1 Maintenance of Structures. This account shall include the cost of maintaining distribution sub- station buildings and other structures. The principal items to be in- cluded in this account are repairs to buildings and all permanent fixtures therein and appurtenant thereto, and the cost of maintaining grounds, streets, drives, sidewalks, vaults, pits, sheds and permanent foundations and apparatus which are included as a part of the cost of the structure in which located. C B A 732 . 2 Maintenance of Substation Equipment. This account shall include the cost of maintaining distribution sub- station transformers, bus-bar structures, switchboards, switches and connected equipment and other distribution equipment, whether located in distribution substation buildings, in generating stations, on con- sumers' premises or outdoors. C B A 732 . 3 Maintenance of Storage Battery Equipment. This account shall include the cost of maintaining storage battery equijMnent, such as storage battery tanks, switches, regulating ap- paratus, boosters, and compensators, renewal of worn out cells, includ- ing diaphragms, negative and positive plates, lead in strip, spelter, dry boards, tin bands, lamp black, and items of a similar nature. 106 OPERATING EXPENSE ACCOUNTS C B A 732 . 4 Maintenance of Underground Conduits. This account shall include the cost of maintaining subways and underground conduits carrying distribution conductors. This covers repairs of conduits, manholes, sewer connections and traps, and paving over such subways and all ducts and conduits but not any repairs of conductors or the insulation thereof. C B 732 . 5 Maintenance of Distribution Lines. A 732 . 51 Maintenance of Poles, Towers and Fixtures. This account shall include the cost of maintaining poles and cross- arms, braces, guys and other pole supix)rts, fixtures and towers used in the distribution system. This account also covers such matters as painting poles, repairing streets and repairing sidewalks after pole renewals, etc. A 732 . 52 Maintenance of Overhead Conductors. This account shall include the cost of maintaining all conductors, feeders, cable, wire, insulators and insulating materials used in the overhead distribution system. A 732.53 Maintenance of Underground Conductors. This account shall include the cost of maintaining all conductors, feeders, cable, wire, insulators and insulating materials used in the underground distribution system. C B A 732 . 6 Maintenance of Services. This account shall include the cost of maintaining services, both underground and overhead, leading from the mains to the consumers' premises. C B 732 . 7 Maintenance of Transformers and Meters. A 732.71 Maintenance of Line Transformers. This account shall include the cost of maintaining line transformers, i. e. transformers installed for stepping down current from transmis- sion or distribution voltages to the voltage at which it is used by the consumers. This covers renewing oil, repainting, rewinding, removing and replacing and repairs to such switches and cutouts on consumers' ]>remises as are the property of the accounting company. A 732 . 72 Maintenance of Consumers-' Meters. This account shall include the cost of maintaining consumers' meters, such as replacing parts, putting in new jewels, cleaning and painting. OPERATING EXPENSE ACCOUNTS 107 750 UTILIZATION D 751 Utilization Operation and Maintenance. OB 751.1 Commercial Lamps — Operation. A 751 . 11 Commercial Arc Lamps. This account shall include the cost of trimming and inspecting arc lamps on consumers' premises. Principal items : Trimming, inspecting, installing and removing lamps. A 751 . 12 Incandescent Lamps — Installation. This account shall include the cost of the first installation of lamps on consumers' premises unless such cost is charged to the consumer or it is the policy of the company to capitalize such cost through charges to fixed capital account No. 341, "Commercial Lamps." A 751,13 Incandescent Lamps — Renewals. This account shall include the cost of renewing incandescent lamps on consumers' premises. This covers cartage and delivery expense, and cost of photometering lamps. This account should be credited with any rebate received for the return of stubs or allowances relating thereto. CB 751.2 Consumers' Installation and Inspection Work. A 751 . 21 Inspection — Consumers' Premises. This account shall include the cost of inspection of consumers' premises. This covers such matters as the charge for municipal cer- tificates, charge for Board of Fire Underwriters' inspection certificates, and that portion of the salaries and expenses of the engineering staflf, or of any other department than distribution department, engaged in technical work properly assignable to this account. A 751 . 22 Consumers ' Installations. This account shall include the cost of all labor and material fur- nished without charge to consumers for inside work. Principal items : Attention to complaints or to improving the char- acter of service, replacing or repairing wiring of fixtures or electrical appliances, moving appliances from place to place in house, reconnect- ing appliances. 108 OPERATING EXPENSE ACCOUNTS C B 751 . 3 Municipal Street Lamps — Operation. A 751.31 Municipal Street Arc Lamps. This account shall include the cost of trimming, inspecting and operating municipal street arc lamps. A 751.32 Municipal Street Incandescent Installa- tion. This account shall include the cost of the first installation of muni- cipal street incandescent lamps, unless such cost is charged to the municipality or it is the policy of the accounting company to capitalize such cost through charges to fixed capital account No. 342, "Street Lighting Equipment." A 751 . 33 Municipal Street Incandescent Renewals. This account shall include the cost of renewing incandescent lamps. This covers cartage and delivery expense, and cost of photometering incandescent lamps. This account shall be credited w^ith any rebate received for the return of stubs or allowances relating thereto. CBA751.4 Maintenance of Commercial Lamps. This account shall include the cost of maintaining commercial lamps on consumers' premises. This covers such matters as setting and removing lamps for repairs and adjustment, repair parts, testing dur- ing the adjustment and after repairs; also that portion of the arc lamp shop expense chargeable thereto. CB 751.5 Maintenance of Municipal Street- Lighting Equipment. A 751.51 Maintenance of Municipal Street Arc Lamps. This account shall include the cost of changing municipal street arc lamps for repairs and adjustments, renewals, repairs of mast arms, hangers, poles, ropes, etc., and painting poles; also that proportion of arc lamp shop expense chargeable thereto. A 751 . 52 Maintenance of Municipal Street Incan- descent Lamps. This account shall include the cost of maintaining municipal incan- descent street lamps and fixtures, including specially provided poles if such poles are proi)erly chargeal)le to fixed capital account No. 342, "Street Lighting Equipment," which see. It does not include the cost of maintaining subways or conductors. OPERATING EXPENSE ACCOUNTS 109 760 COMMERCIAL EXPENSES D 761 Commercial Administration. B A 761 . 1 Commercial General Labor. This account shall include the cost of labor of superintendents and assistants, chief clerks, cashiers and assistants, stenographers, general clerks, high bill clerks, switchboard operators, messengers, janitors, and watchmen employed in the commercial department. B 761.2 Commercial Books and Contracts. A 761 . 21 Commercial Bookkeeping. This account shall include the cost of labor of bookkeepers and clerks employed on consumers' accounts. A 761 . 22 Commercial Contracts. This account shall include the cost of labor of clerks and other employees in the application or contract bureau. B 761 . 3 Commercial Meter Reading and Collecting. A 761 . 31 Commercial Collecting. This account shall include the cost of labor of regular and prepay- ment collectors. This covers cost of delivering bills and proportion of time of meter readers collecting from prepayment meters. A 761 . 32 Meter Reading. This account shall include the cost of labor of meter readers. B A 761 . 4 Commercial Supplies and Expenses. This account shall include the cost of supplies and the incidental expenses of the commercial office. This covers meter readers' lamps and carfare of employees in the commercial department. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") DCBA762 Agents' Commissions. This account shall include the amount paid by the accounting com- pany to agents as commissions for distributing its electric energy over the agents' distribution lines and selling the same, and for all services performed in connection therewith. (See Operating Revenue Account No. 611, "Commissions on Others' Electric Energy," also "Operating Revenue Accounts — General Instructions and Definitions," Section 2, Note B, page 71.) 110 OPERATING EXPENSE ACCOUNTS 770 NEW BUSINESS EXPENSES ■NJoTE. — General Account 770, " New Business Expenses," is not intended to include any expense connected with merchandising and jobbing carried on as a separate department of the accounting company's business and not primarily for the purpose of obtaining new business for the electric department. If the ac- counting company sells merchandise or does jobbing work at or below cost for the purpose of inducing greater use of electric energy, a debit balance in the jobbing account due to such practice may be charged to " New Business Expenses," or sub-account 771.25, " Miscellaneous New Business Supplies and Expenses." D C 771 New Business Expenses. B 771.1 New Business Salaries. A 771 . 11 New Business Management Salaries. This account shall include the cost of administration of the depart- ment maintained for the promotion or development of consumption of electric energy including that portion of the salaries of management and clerks in agencies and contract departments assignable to new business. A 771 . 12 New Business Advertisings Salaries. ace and clerks. This account shall include the salaries of the advertising manager B 771.2 New Business Supplies and Expenses. A 771 . 21 Demonstrations. This account shall include the cost of labor and the expense incurred in demonstrating the use of electric appliances for the purixjse of obtaining new business. A 771 . 22 Wiring and Appliances. Tliis account shall include the cost of wiring consumers' premises, and of electric appliances, including delivery and connection charges and expense in connection therewith, supplied to consumers without charge in order to induce new business. A 771 . 23 Advertising Supplies and Expenses. This account shall include the cost of supplies, stationery, and the incidental expenses of the advertising department. This covers such items as booklets, dodgers, newspaper advertising, posters, bulletins, and all related expenses. A 771.24 Canvassing and Soliciting. This account shall inckide all expenses incurred in soliciting new business, such as wages, commissions, and personal expenses of can- OPERATING EXPENSE ACCOUNTS 111 vassers, cost of preparing estimates, engineering advice on electric installation, etc., and office sundries in connection therewith. A 771 . 25 Miscellaneous New Business Supplies and Expenses. This account shall include office and personal and incidental expenses of the promotion or new business department, such as stationery, and other office supplies, etc. Minor rents may be included. (See General Expense Account No. 781.31, "Rentals.") 780 GENERAL AND MISCELLANEOUS EXPENSES D 781 Undistributed General Expenses. CB 781.1 General Office Salaries. A 781 . 11 Administrative Salaries. This account shall include the salaries of the chairman of the board, president, vice-president, treasurer, secretary, comptroller, general auditor, general manager, assistant general manager, chief engineer, general suj^erintendent, purchasing agent, and all other employees whose* jurisdiction extends to the entire system and whose services can not be allocated to the several departments. A 781 . 12 Other General Office Salaries. This account shall include the salaries of auditors, bookkeepers, cashiers, paymasters, stenographers, clerks employed in counting cash, janitors, porters, messengers, and other clerks and employees whose time is devoted to the work of the general office. Note. — The cost of labor of clerks and other employees in the commercial department shall not be inclnded in this account, but in account No. 761, "Com- mercial Administration," or the appropriate sub-division thereof. C 781 . 2 Miscellaneous General Expenses. B A 781.21 General Office Supplies and Expenses. This account shall include the cost of office supplies, stationery, telegrams, telephone service, and the maintenance of office furniture, rental of office equipment, such as statistical machines, and all other miscellaneous expenses of general offices. Minor rents may be in- cluded. (See General Expense Account No. 781.31, "Rentals.") Expenses of departmental employees should be charged to the ap- propriate departmental accounts. 112 OPERATING EXPENSE ACCOUNTS B A 781 . 22 General Stationery and Printing-. This account shall include the cost of stationery, stationery supplies and postage not elsewhere provided for. Note A. — The cost of printing briefs and other legal papers should be charged to account No. 781.26, "Law Expenses." Note B. — The cost of printing signs, posters and other advertising matter should be charged to account No. 771.23, "Advertising Supplies and Expenses." Note C. — The cost of such mechanical calculators, typewriters, duplicating machines, and other office appliances as are not properly capitalized, should, if for use in general office, be charged to account No. 781.21, "General Office Sup- plies and Expenses," or, if for the use of department offices, to the proper departmental accounts. B A 781 . 23 Maintenance of General Structures. This account shall include the cost of maintaining general office buildings or other structures used for general purposes. This covers maintenance of walks, driveways, and grounds connected therewith, and all incidental expenses connected with the maintenance of such buildings or structures. B A 781 . 24 Operation of Communication System. This account shall include the pay and expenses of superintendent and assistants, and of clerks, patrolmen, testers and inspectors, the cost of all supplies for and other expenses incurred in connection with the operation of the accounting company's communication system. This will include salaries and wages of employees at the main ex- change, also the salaries and wages of employees in general offices operating switchboards on main line telephone systems not owned by the accounting company. Note. — Salaries and wages of telephone and telegraph operators in power plants, sub-stations, stores, commercial offices and at other points in the account- ing company's system shall be charged to the appropriate operating account at the location involved and not to this account. B A 781 . 25 Maintenance of Communication System. This account shall include the cost of maintaining all telephone, telegraph and wireless buildings and other structures and equipment, the investment in which is carried in or classified under fixed capital accounts Nos. 312g-4, "Communication System Structures," and 344e, "Telephone, Telegraph and Wireless System." Note. — Include in this account only such charges in connection with hydro- electric production as are not included in account No. 708.26, " Maintenance of Telephone System." B A 781 . 26 Law Expenses. This account shall include all law expenses such as salaries and expenses of counsel, solicitors and attorneys, their clerks and attendants OPERATING EXPENSE ACCOUNTS 113 and expenses of their offices ; cost of law books, printing briefs, legal forms, testimony, re^x^rts, etc. ; fees and retainers for services of attorneys not regular employees ; court costs and payments of special notarial and witness fees not provided for elsewhere, expenses con- nected with taking depositions and all law and court expenses not pro- vided for elsewhere. B A 781.27 Insurance. This account shall include premiums paid for fire, fidelity, boiler, casualty, burglary, lightning, and all other insurance ; also charges by which self -insurance is provided. This account shall be credited with dividends paid or surplus returned to the accounting company in any other form by mutual insurance companies. Note. — That portion of the premium for liabiHty insurance based on the pay- roll expended on construction accounts may be charged to the construction accounts affected. B A 781 . 28 Store Expenses. This account shall include all salaries and expenses in connection with storerooms. This covers the cost of sending materials and sup- plies from general storerooms to branch storerooms and the collection of scrap material. To this account shall be credited all discounts recovered through the prompt payment of bills for materials and supplies consumed in opera- tion, unless such discounts are applied to the particular bills. Note. — Expenses charged to this account may be distribufed over materials passed through the stores department on the basis of a percentage of invoice cost of such materials, or other bases deemed appropriate by the management of the accounting company. Amounts so distributed should be credited to this account and charged to the accounts to which the cost of such materials is charged as they are issued or used. Credits should be made in such detail as to permit the accounting company to analyze them. B A 781 . 29 Transportation Expenses. This account shall include the cost of feed, keep and shoeing of horses, wages of stablemen, hostlers, veterinary expenses, and all other expenses of stabling horses ; also wages of garage men, cost of gasoline, lubricants, and other garage supplies, and the cost of repairing harness and vehicles. Note A. — The cost of horses purchased to replace others should be charged to account No. 344, " General Equipment." Note B. — Charges to this account may be distributed to the work done by the stable and garage equipment on the basis of hourly rates, rates per ton per mile hauled, or other bases deemed appropriate by the management of the accounting company. Amounts so distributed should be credited to this account and charged 114 OPERATING EXPENSE ACCOUNTS to the account representing the construction or operation benefited. Credits should be made in such detail as to permit the accounting company to analyze them. B A 781 . 30 Undistributed Adjustments. At least once a year an inventory of materials and supplies should be taken and the difference in respect of any particular class of materials and supplies between the ledger and inventory balances should be debited or credited to this account in case it cannot be assigned to a specific account. This account shall also be charged or credited with miscellaneous minor operating items of such a nature that an exact distribution among the accounts to which they are applicable cannot be determined. This covers such transactions as receipts from sale of junk. Note. — Where materials and supplies have been used in construction as well as in operation a suitable proportion of the shortages or overages disclosed by the inventory may be debited or credited to account No. 356, " Miscellaneous Construction Expenditures." B A 781.31 Rentals. Charge to this account all rentals paid and expenses incurred for buildings or space used for the purposes of the business, unless the premises are used solely for construction purposes or in connection with a clearing or apportionment account, in which latter events the rentals should be charged accordingly. Note. — If the accounting company so desires, these rentals may be charged to the departmental account interested, such as production, transmission, distribu- tion, commercial, nev^ business, or miscellaneous general expenses. B A 781 .32 Other Miscellaneous General Expenses. This account shall include the cost of publishing and distributing annual reports to stockholders, advertising notices of stockholders' meetings, dividend notices and other corporate and financial notices of a general character, association dues, contributions for conventions and meetings of the industry, cost of experimental work conducted for the benefit of the industry or the improvement of service, traveling and incidental expenses of general officers and other general office em- ployees, fees of transfer agents, registrars of stock, and fiscal agents, directors' fees, compensation to management corporations, and other miscellaneous expenses connected with the general management not otherwise provided for. D C B A 782 Retirement Expense. This account shall include such amounts, in addition to appropria- tions from surplus to retirement reserve, as the accounting company OPEKATING EXPENSE ACCOUNTS 115 may determine to be necessary to provide a reserve against which may be charged the original cost of all property retired from service plus the cost of dismantHng, less salvage. The amounts charged to this account, or appropriated from surplus, and credited to the "Retirement Reserve" shall be in addition to the necessary costs of keeping the plant and equipment in a high state of efficiency through charges to the regular maintenance accounts. Note. — It is the intent of the classification that a reserve shall be provided, either through retirement expense or by appropriations from surplus or both, sufficient to cover all retirement losses that may reasonably be expected. D C B 783 Injuries and Damag^es. A 783 . 1 Claim Department Expenses. This account shall include salaries and expenses of claim agents, investigators, adjusters, and others engaged in the investigation of accidents and adjustment of claims. A 783.2 Medical Expenses. This account shall include salaries, fees, and expenses of surgeons and doctors, hospital attendants, nursing, medical and surgical supplies, fees and expenses of coroners and undertakers; and contributions to hospitals. A 783.3 Injuries to Employees. This account shall include amounts paid in settlement of claims of employees for injuries arising in their employment; also wages paid to disabled employees while ofif duty. A 783 . 4 Other Personal Injuries and Property Dam- age. This account shall include amounts paid in settlement of claims of persons other than employees for personal injuries sustained in connec- tion with the operation of the plant and amounts paid in settlement of claims for damage to property not owned by the accounting company. A 783 . 5 Miscellaneous Accident Expenses. This account shall include all expenses in connection with accidents and damages not provided for in the foregoing accounts. Note. — If it so desires, the accounting company may charge each month to "Injuries and Damages" (or to the appropriate sub-accounts) and credit to account No. 252. " Casualty and Insurance Reserve," a proportion of the total amount estimated to be necessary to expend during the year for injury and dam- age claims, and the actual disbursements above designated shall then be charged against said reserve account. The charges to this account shall be adjusted at the close of the fiscal year to actual expenses unless a balance remains representing liability for unsettled claims. 116 OPERATING EXPENSE ACCOUNTS D C B A 784 Regulatory Commission Expenses. This account shall include the expenses incurred hy the accounting company in its transactions with governmental regulative commissions. This covers fees and retainers and expenses of counsel, solicitors, attorneys, clerks, attendants, witnesses, and others whose services are secured especially for the defense or prosecution of those petitions presented to a regulatory commission that afifect the accounting com- pany; the pay, traveling, and other expenses of those specially em- ployed or assigned to ascertain the value of property owned or used by the accounting company ; the cost of stationery and printing and engi- neering supplies consumed ; and other necessary expenses of a similar character. This account does not include expenses for improvement of service, for additional inspection, etc., which are made necessary by the rules, regulations, or orders of a regulatory commission. Such expenses should be charged to the appropriate specific operating expense account. Note. — Expenses incident to the sale or issue of securities should not be charged to this account but to the appropriate discount account. (See " Balance Sheet Accounts — General Instructions and Definitions," Section 12, page 7.) D C B 785 Relief and Welfare Work. A 785.1 Employees' Welfare Department. This account shall include all salaries and expenses incurred in con- ducting accident prevention, relief, and welfare departments; also contributions made to such departments. A 785.2 Pensions. This account shall include all pensions paid to retired employees and all expenses in connection therewith. D C B A 786 Franchise Requirements. This account shall include the value at the normal selling price of all current and materials and supplies furnished municipal corixjra- tions in compliance with franchise requirements and for which no pay- ment is received by the accounting company ; also all direct exi>enses incurred in compliance with such requirements for which no reim- bursement is received by the accounting company. Amounts charged to this account for which there is no direct money outlay shall be credited to account No. 790, "Duplicate Miscellaneous Charges — Cr," D C B A 787 Amortization of Franchises. This account shall include for each accounting period the amount OPERATING EXPENSE ACCOUNTS 117 charged to distribute the cost of limited franchises equitably over their lives. Amounts charged to this account shall be concurrently credited to fixed capital account No. 302, "Franchises." DCBA788 Electric Expenses Transferred— Cr. This account shall include such part of the operating costs (other than production expenses, for which see Production Account No. 715, "Production Expenses Transferred — Cr.") borne in the first instance by the accounting company's electric department as are properlv chargeable to another coordinate department, such as an electric rail- way or gas department. This is not intended to prohibit the apportioning of primary accounts between departments, and so far as practicable departmental costs should be determined in that way. There may, however, be cases where it is desirable to assign to other operations a flat percentage of total electric operating expenses or of some group of electric operating expenses or some similar arbitrary amount, and in such cases the credit should be made to this account. D C B A 789 Joint Operating Expenses — Cr. When any plant or equipment is maintained or operated by the accounting company for the joint benefit of itself and others under an arrangement for apportioning the operating expenses, the portion of such expenses chargeable to others under the arrangement may be credited to this account if it is based on a percentage of the total operating expenses or a percentage of the total of some group of primary operating expense accounts or determined in some similar fashion. So far as practicable, joint operating costs should be appor- tioned by primary accounts and that part of such cost borne in the first instance by the accounting company, but chargeable to the other party or parties to the joint agreement, should be credited directly to the primary accounts involved. D C B A 790 Duplicate Miscellaneous Charges — Cr. This account shall include the concurrent credits for all charges which may be made to any operating expense account, except as pro- vided for in account No. 714, "Duplicate Production Charges — Cr.," in respect of the consumption of electric energy produced or purchased primarily for resale by the accounting company ; also all similar charges in respect of any services rendered for which there is no direct money outlay. This covers such items as current supplied to a municipality 118 OPERATING EXPENSE ACCOUNTS without charge in accordance with franchise requirements ; current furnished to employees in lieu of wages; housing of employees as part comi^ensation for their services, etc. This account is optional to the extent that charges of the sort de- scribed, not involving any direct money outlay, are not required to he made. If the accounting company desires to make such charges, how- ever, the concurrent credit must be to this account. Uniform Classification of Accounts for Electrical Utilities. (Paper, $1.00 per copy, plus postage) Uniform Classification of Accounts for Gas Utilities. (Paper, $1.00 per copy, plus postage) Uniform Classification of Accounts for Water Utilities. (Paper, $1.00 per copy, plus postage) (Recommended by the National Association of Railway and Utilities Commissioners for adoption by State Commissions.) 1932 Convention Proceedings of the N. A. R. U. C. (Cloth, $5.00 per copy, plus postage) 1933 Convention Proceedings of the N. A. R. U. C. (Cloth, $6.00 per copy, plus postage) published by THE STATE LAW REPORTING COMPANY 30 Vesey Street New York City UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles This book is DUE on the last date stamped below. FormL9-10m-3,'48(A7920)444 THE LIBHAMY UNiVERSn Y OF CAUfCMSUk 10& ArHiULLMS ■ «.' National assoc- 386 iation of rail- — ^>~^ — road and util - IC22 ities commiss- l oners « Ini f orin o1 n ,s .? i f 1 en ti on l n OC SOUTHERN REGIONAL « lllllifl , HF 5686 E3iJ2 1922 >;•■"!"'■ .■-■'■^■ r'