BUSINESS ACCOUNTING 
 
 :Rg^di.ng "Suide and 
 iilGeneral Index 
 
Digitized by the Internet Archive 
 
 in 2007 with funding from 
 
 Microsoft Corporation 
 
 http://www.archive.org/details/constructiveaccoOObennrich 
 
BUSINESS ACCOUNTING 
 
 Harold Dudley Greeley, C.P.A., Editor 
 
 Volume I — Theory of Accounts 
 
 By Harold Dudley Greeley 
 
 II — Constructive Accounting 
 By George E. Bennett 
 
 III — Cost Accounting 
 
 By DeWitt Carl Eggleston 
 
 IV — Advanced and Analytical Accounting 
 By Henry C. Cox 
 
 V — Illustrative Accounting Problems 
 By Charles F, Rittenhouse and 
 Harold Dudley Greeley 
 
Business Accounting 
 
 READING GUIDE 
 
 By 
 ARTHUR H. ROSENKAMPFF, B.C.S. 
 
 Professor of Accounting, New York University 
 
 • And 
 
 GOULD L. HARRIS, M.A. 
 
 Lecturer in Cost Accounting, New York University 
 
 NEW YORK 
 
 THE RONALD PRESS COMPANY 
 
 1920 
 

 Copyright, 1920, by 
 The Ronald Press Company 
 
 All Rights Reserved 
 
 
INTRODUCTION 
 
 The volumes of this set are designed for practical 
 use. For the man who desires to obtain a working 
 knowledge of accountancy but is compelled to pursue 
 his study by himself, the five volumes constitute a 
 graded course of reading. If he will begin with Vol- 
 ume I and work methodically through the series, he 
 will come out with a broad and trustworthy grasp of 
 the principles of the subject, and an acquaintance 
 with a wide variety of the points of current practice. 
 The man who has already a knowledge of accounting 
 will find in these volumes a compact and convenient 
 presentation of the entire subject, eminently worthy 
 of frequent reference. 
 
 In using the set for reference purposes the reader 
 will naturally turn first to the General Index in this 
 volume. He is urged to read over carefully the sug- 
 gestions on pages 135 to 138 regarding ways of 
 using the index. This Reading Guide, moreover, 
 briefly directing attention to outlining the high spots 
 of all the volumes, will prove a useful supplement to 
 the index, by enabling the reader to check his imme- 
 diate recollections as to the importance and the fuU 
 range of points involved in a specific problem. 
 
 Knowledge of accountancy is virtually a necessity 
 for any business man doing important work, not 
 merely because of its immediate information value in 
 handling business details, but as a prerequisite for 
 
 a 
 
 425514 
 
4 INrROpUCTION 
 
 any' reliable command of* organization and manage- 
 ment. It is the only way in which one can tell what a 
 business is really doing. 
 
 Though a man may never have occasion to draw 
 up a consolidated balance sheet, yet he may want to 
 invest in the stock of a corporation which belongs to 
 a consolidation and therefore he will need to under- 
 stand its financial statements. His business may not 
 be a manufacturing one and perhaps he can see little 
 or no use in the study of cost accounting, j^et the 
 theory of the subject is applicable to every type of 
 business, and excess profits taxes and other forms of 
 taxation are making the application of this theory 
 more and more necessary in every mercantile con- 
 cern. He may think the subject of annuities too 
 complicated to worry over, but he cannot intelligently 
 compare the relative merits of sinking fund or other 
 methods of liquidating bonded debt without under- 
 standing the principles on which annuity computa- 
 tions are based. There is hardly a business day in 
 which he will not find use for a knowledge of accounts. 
 
 Another fact comes more plainly to the front as 
 business takes on increasingly the intensity of pro- 
 fessional work, namely: the value of the study of 
 accountancy in developing mental power. The close 
 analysis of business situations and problems which it 
 necessitates develops to an unusual degree the sense 
 of logic — the power both of analyzing facts and of 
 thinking constructively. It is not too much to say 
 that the business man trained to the ready use of 
 
INTRODUCTION g 
 
 accounting methods has an entirely different class of 
 brain power on account of that ability. 
 
 Professional mastery of accounting comes only 
 with practice. But the accountancy attitude of mind 
 can be developed to a very considerable degree 
 through systematic study, even without an instructor, 
 and at home. Accountancy in this respect is unlike 
 the sciences which deal with physical things — medi- 
 cine, engineering, chemistry — and somewhat re- 
 sembles law. Many an obscure law student has 
 gradually acquired, by sticking at it night after night, 
 a grasp of legal principles and a familiarity with 
 important rulings which greatly expedited his mas- 
 tery of the technique of actual practice. The busi- 
 ness man, similarly, can acquire a sound understand- 
 ing of accounting principles and a wide acquaintance 
 with the subject through systematic reading of the 
 volumes of this set. 
 
 The business man has this advantage besides, 
 over the lonely law student : that the circumstances of 
 his own business afford constant occasion to test his 
 grasp of theory by applying it to the changing facts 
 of life. 
 
 A good many persons, when they take up an 
 accounting book, try to do their studying in the 
 wrong way, and as a result think the subject far more 
 difficult than it is. Memory alone will not carry one 
 far with a subject such as accounting, involving mani- 
 fold detail; he must from the first put some of the 
 load upon his powers of analysis and judgment. 
 
5 INTRODUCTION 
 
 When one istudies any subject mechanically, trying 
 merely to learn what is done, without knowing why 
 it is done in this way or that, the effort soon becomes 
 wearisome. Learning accounting item by item, by 
 memory only, would be a difficult and indeed an end- 
 less task. 
 
 But when a student understands reasons, and 
 recognizes the connection between the knowledge thus 
 acquired and the improved operation of his business, 
 the study of accounting becomes interesting. The 
 larger and more firm the grasp of its principles, the 
 more interesting and fascinating its study becomes. 
 The requisite for sustaining an interest in these vol- 
 umes is to try to understand. The Reading Guide, 
 prepared in the light of extensive experience in teach- 
 ing business men, is designed to help the reader to 
 grasp the reason behind accounting procedure. 
 
 In its preparation, the functions of a guide — 
 serviceableness and unobtrusiveness — have been kept 
 in mind throughout. It is to facilitate the reader's 
 journey, not to offer him a quick and easy substitute 
 for his own effort. Effort, active and persistent, is 
 essential if he is to reach his journey's end; the sug- 
 gestions in the Guide, like the comments of a skilled 
 and sympathetic instructor, will aid the reader to 
 apply his effort to best advantage. 
 
 ]yiastery of a subject which deals with an extended 
 and complex field of knowledge can never be acquired 
 quickly. The factor of time is of prime importance. 
 The reader must be prepared to make haste slowly. 
 
INTRODUCTION ^ 
 
 Accounting practice has taken several hundred years 
 to develop. Its principles, with the exception of 
 occasional changes due to legal rulings, remain the 
 same, but year by year its details grow in complexity 
 as business grows in size. No matter what may be 
 the reader's powers of concentration, the information 
 in these volumes cannot be gained by sudden assault. 
 It calls for a long succession of short attacks, each 
 of them followed by digging in and consohdating the 
 position won. Only by really assimilating what has 
 been studied, lesson by lesson, can genuine advance be 
 made. 
 
 From the very first day the reader will find his 
 new knowledge of value, but there is enough informa- 
 tion in these volumes to occupy his attention for two 
 years of quiet and steady work. 
 
 Now the man who must do his work alone finds 
 difficulty always in holding himself down to such 
 gradual procedure. For one thing, it is hard for him 
 to work at an even pace. At times, when the subject 
 becomes especially interesting, he hurries on over 
 many pages. What he reads may seem so clear at 
 the moment that he fails to pause often enough, to 
 test by sober reviewing how much he has actually 
 grasped — so that he could use the procedure in 
 further work. Or, perhaps the going is heavy, deal- 
 ing with many matters that are difficult to grasp. 
 Nevertheless, as he catches a glimpse of something 
 further on that is interesting and appears clearly in- 
 telligible, he pushes along in the hope that when he 
 
g INTRODUCTION 
 
 reaches that hill-top tbe intermediate road will clear 
 itself up for him. In either case he is pretty sure 
 somewhere and unexpectedly to find his progress 
 blocked. Back in those pages he has skimmed are 
 processes which are indispensable for any further 
 advance. 
 
 On the other hand, the conscientious reader who 
 works alone may apply his energy uneconomically. 
 He may go too slowly at first, and waste time in 
 memorizing matter which is merely preliminary to 
 the points of real importance, and which requires only 
 a quick, general reading. After a while he finds that 
 the study pursued in this way involves more time and 
 energy. than he can justifiably take from his other 
 duties, and he feels compelled, however regretfully, 
 to drop it. 
 
 The Reading Guide, like the comments of a 
 trained instructor, can help the reader to distribute 
 his effort wisely. 
 
 1. The reader can learn from the suggestions 
 here given when to spurt and when to go slowly; 
 when to read cursorily and when to get down and 
 grind ; when to work for exact information and when 
 for merely general comprehension of a matter; when 
 to stop and digest what he has been reading, to fix 
 it in mind by means of original observation and ex- 
 periment. 
 
 2. In the study of an extended subject the rela- 
 tionships among items apparently unconnected are 
 of great significance. The parallels and cross-refer- 
 
INTRODUCTION g 
 
 ences in the Guide call the reader's attention to such 
 relationships and enable him thus to build properly 
 together the various divisions of the subject as the 
 successive volumes develop them. 
 
 3. One notable service of an instructor consists 
 in interpreting and reinforcing the matter of the text 
 as occasion requires, presenting it in various lights 
 according to the varying need of the student. Some- 
 thing of what the experienced instructor can do in 
 this way is done by means of the Reading Guide. The 
 text itself must present the subject in logical per- 
 spective, and on a substantially uniform scale. The 
 Guide can single out for special attention passages 
 that offer to the student some special difficulty on 
 first approach, and illuminate them with paraphrase 
 or comment. 
 
 4. The Guide aids the reader to break up his task 
 into divisions that are roughly equivalent in extent 
 and not too large, and that are grouped partly ac- 
 cording to the logical lines of the subject, partly 
 according to convenience of handling under the con- 
 ditions. In this respect it does for him something of 
 what is done for members of a class by the successive 
 lesson-assignments of the teacher. 
 
 5. Similarly, and what is perhaps most important 
 of all, the Reading Guide can furnish to the individual 
 working alone a method of comparing his progress 
 with what is expected of other students by teachers of 
 long experience. It enables him to a degree to meas- 
 ure his own powers and standards of attainment 
 
jQ • INTRODUCTION 
 
 against those of other men. He will be less prone to 
 either discouragement or slackness. 
 
 Here may be added one or two general sugges- 
 tions of very practical nature. Emphasis has been 
 laid upon the need of assimilating each successive 
 point before proceeding further. The best way to 
 insure this is to combine the study of theory with 
 practical work. For the business man, it may be suffi- 
 cient to carry through mentally the practical applica- 
 tion of theory. For the bookkeeper, it will be neces- 
 sary actually to perform the operations in question 
 over and over again until both theory and practice 
 are firmly fixed in mind. Suggestions as to the kind 
 of practical work to be done are given in connection 
 with the individual assignments of the work in each 
 volume. 
 
 The test as to the thoroughness of a reader's grasp 
 of the subject is simple. Can he answer readily the 
 review questions at the end of each chapter? If so, 
 he is ready to pass on. If not, his knowledge is hazy 
 and indefinite; it will lead to mental confusion. Ex- 
 perience in instructing has shown that the difficulties 
 of the student are largely of his own making; they 
 come from his overlooking or forgetting an important 
 iiile of theory or principle. When the transaction 
 turns up to which the theory applies and the need 
 comes for making the correct records on the books, 
 the student is nonplused. 
 
 Therefore, if the reader finds in any instance that 
 he cannot readily answer the review questions, let him 
 
INTRODUCTION jj 
 
 go over the chapter to which they refer and study it 
 carefully until he can answer them. 
 
 Another suggestion is this: Make a practice of 
 checking with a pencil in the margins as you read, 
 those paragraphs or sections which contain important 
 principles or rules of procedure and which for this 
 reason should be memorized. 
 
 It is not sufficient merely to understand a prin- 
 ciple or see through a theory. There is hardly any- 
 thing in Volumes I to IV of this series which cannot 
 be understood at least on the second or third reading. 
 But the rule or principle must be remembered defi- 
 nitely, when needed, together with the method of its 
 application. Unless one's knowledge is ready at 
 hand, he will never be able to handle difficult or com- 
 plicated transactions. If knowledge is to be of prac- 
 tical value, the reader needs so to master the theory 
 of accounts, so to fix the theory of the subject in mind, 
 that he can recognize quickly and surely the transac- 
 tions to which a particular point of theory is appli- 
 cable. 
 
 A good deal of the theory of accounts is simple 
 and self-evident and no one will have much difficulty 
 in mastering it and memorizing it. This will usually 
 be the case when the explanation is easily grasped at 
 the first reading. But if anything is at all difficult to 
 understand, if it requires two or three or four read- 
 ings, the reader should check that paragraph in the 
 margin with his pencil. He should make it a firm 
 rule, before taking up a fresh assignment of work, to 
 
J 2 INTRODUCTION 
 
 go over all the marked paragraphs and formulate ii 
 his own mind their contents, taking his cue from th( 
 section head or the opening sentence. 
 
 If the reader can readily and accurately recall th( 
 first of any marked paragraph, he may safely rub ou 
 the pencil mark in the margin. But if he cannot, th( 
 pencil mark should be left in the book — and th( 
 marked paragraphs should be read again and again 
 until at last their contents have been mastered. Th 
 suggested procedure may sound irksome, but this, o: 
 something like it, is the only condition of sure anc 
 ready command of the subject. 
 
 Having mastered the theory and faithfully 
 worked through the illustrative practice material ii 
 Volimies I to IV> the reader should by all means tes 
 the acuteness and thoroughness of his work by sys 
 tematically applying the theory which he has beer 
 studying to the problems of Volume V. Some of the 
 more simple of these may be taken up concurrentlj 
 with the study of the theory to which they refer, ir 
 Volumes I to IV, as suggested in various assign- 
 ments to those volumes. The greater number, how- 
 ever, are of the nature of general review and tesi 
 material, designed to try the reader's ingenuity and 
 resourcefulness. They are most important labora- 
 tory material. 
 
 No one should be discouraged if he cannot solve 
 these problems at the first attempt. They have been 
 selected not as being easy to solve — nor yet as being 
 difficult — but as illustrating fairly the problems 
 
INTRODUCTION 18 
 
 which actually present themselves in the course of 
 business. Many of these problems have been set for 
 C. P. A. examinations, which test the candidate's 
 power of hard, analytical thinking as well as his prac- 
 tical sense of business values. Without a knowledge 
 of accounting, the business man, when such a prob- 
 lem develops in his own business, can do nothing but 
 blindly guess, or blindly trust the advice of some other 
 person. On the other hand, the business man who has 
 worked through the volumes of this series should 
 possess the knowledge to enable him to face such an 
 emergency with clear understanding. But the more 
 diligently he has ''shaken down" his knowledge of 
 theory by the practical applications in which this vol- 
 ume of problems exercise him, the quicker and prob- 
 ably the more sure will be his diagnosis of actual situa- 
 tions. 
 
 It need hardly be said that the suggestions of this 
 Guide are not offered as in any sense authoritative 
 directions. Many men will strike out for themselves 
 other ways of proceeding, better suiting their own 
 needs. Others perhaps will find in the Guide one or 
 two features only which they desire to apply to their 
 own case. On the other hand, however, a large num- 
 ber of readers will doubtless find it a distinct con- 
 venience to have set down for them a map of the 
 road, worked out to suit the ordinarily intelligent man 
 and taking into account the limitations of time and 
 energy imposed by a business position of average 
 responsibility. 
 
14 INTRODUCTION 
 
 One last admonition. By far the most important 
 factor in mastering any subject — more important even 
 than acuteness of first perception, or vivid realization 
 of background, or orderliness of logical development 
 — ^is frequent and painstaking review. Therefore, 
 after one has worked through the volumes of the set, 
 making use of such aid as this Guide affords, he 
 should by all means come back and read the Gvide 
 again. In this swift review, if here and there a point 
 is still hazy, let him turn back once more to the text 
 and chnch the point. Running over the Guide now 
 and then will do much to keep the whole field of ac- 
 counting procedure clear in recollection. 
 
Reading Guide 
 
 Volume I 
 Theory of Accounts 
 
ASSIGNMENTS FOR VOLUME I 
 
 For the reader who desires to take up the subject 
 carefully, the division of each volume of this series 
 into working sections or ''tasks" of convenient size is 
 most desirable. The man working alone may thus 
 have some indication of the scale by which to measure 
 his own rate of progress. 
 
 To some extent the grouping into parts and chap- 
 ters followed in the text facilitates such a division, 
 but, as has been noted already, that grouping is de- 
 termined primarily by considerations of logic. The 
 fact that a certain chapter actually requires much 
 more time on the part of the student than do others 
 of equal length would hardly be revealed by the table 
 of contents, nor yet that certain chapters are grasped 
 .more easily if taken up in connection with others in 
 a quick preliminary survey. Such information is 
 given in the Guide. The assignments here given not 
 only set up ''red arrows" at points where there is dan- 
 ger of losing the way, but they indicate also the more 
 convenient stopping places where the traveler may 
 break his journey. 
 
 The circumstances of the readers of these volumes 
 are widely various, and no less various is the amount 
 of time which each man can allow day by day for bis 
 reading. The assignments must be adjusted to the 
 actual convenience of the average reader. It is a fair 
 assumption, however, that close and careful readuig 
 
 17 
 
18 READING GUIDE 
 
 of any volume of this series will occupy the man of 
 average position, who has the average number of calls 
 upon his time, from three to five months — hardly less, 
 at any rate, than thirteen or fourteen weeks. 
 
 Allowing for vacation time and the inevitable in- 
 terruptions to which a busy man is subject, he might 
 fairly expect to complete the five volumes in from a 
 year and a half to two years. For each of the first 
 four volumes, accordingly, from twelve to fourteen 
 assignments have been drawn up, each assignment — 
 with the practice work or problems connected with it 
 — calculated to require about a week's work. For 
 the problems in Volume V such grouping into defi- 
 nite assignments is hardly possible, but the volume 
 would require, if the reader works carefully, at least 
 as much time as any of the others. 
 
 Each assignment, therefore, may be taken as rep- 
 resenting on the average a week's work. Many men 
 may find it convenient to work faster, but in plan- 
 ning the whole series of assignments it seemed best to 
 set a pace such as a man actively engaged in business 
 might fairly hope to maintain. 
 
 Assignment 1 
 PRELIMINARY EXPLANATION 
 
 The three chapters with which this book opens 
 contain information of a general character, a knowl- 
 
BUSINESS ACCOUNTING— VOLUME I jg 
 
 edge of which must precede the study of accounting 
 in general and the theory of double entry in par- 
 ticular. 
 
 Modern Accountancy (Chapter I) 
 
 The matter in this chapter is introductory and requires 
 merely careful reading. 
 
 Preliminary Information (Chapter II) 
 
 To the business man or the bookkeeper employed by a busi- 
 ness house, the contents of this chapter will seem elementary. 
 If you know the definitions, that is, if there is no doubt in your 
 mind as to the meaning of the terms used, you can pass to the 
 next chapter after a careful reading. If the study of account- 
 ing is a wholly new subject, master the definitions and pay par- 
 ticular attention to §§9 and 10. 
 
 Capital (Chapter III) 
 
 The same observations apply to this chapter as to Chapter 
 II. Sections 8 and 9 should be studied closely and reread sev- 
 eral times. If you can give the definitions accurately in answer 
 to the review questions, you may assume a knowledge of the 
 contents of this and the preceding chapter. But if you cannot 
 define them readily and accurately, study them until you can. 
 
 Assignment 2 
 THE THEORY OF DOUBLE ENTRY 
 
 The three chapters in this division of work cover 
 the theory on which the principle of double entry is 
 
2Q READING GUIDE 
 
 based. Here the emphasis begins to be placed on 
 practice work as shown by the exercises and prob- 
 lems in the text and at the end of each chapter. 
 
 Double-Entry Bookkeeping (Chapter IV) 
 
 Full command of the theory of double-entry bookkeeping 
 comes witli continued study and practice work. Here the sub- 
 ject is presented only in its simpler aspects. The transactions 
 discussed are the more simple ones, the debiting and crediting 
 of wliich do not present any difficulty when the general theory 
 is grasped. Do not fail to do the practical work called for in 
 Review Questions 2, 6, and 7. 
 
 Determination of Capital (Chapter V) 
 
 The discussion in §§ 1 to 3 is fairly simple; in §§4, 5, and 6 
 it is more difficult to grasp. These three sections are particularly 
 important. The points they present need to be closely studied 
 and memorized. Work out answers to the review questions and 
 compare with tlie text. Rewrite when necessary. 
 
 As noted in the introduction to this book, there is nothing 
 inherently difficult in the study of accounting. Doubts, per- 
 plexities, and difficulties arise only where the theory of the sub- 
 ject has not been understood or has been inadequately mastered. 
 Concerning few other subjects is a "smattering'* of information 
 more dangerous and in the study of few other subjects does 
 thoroughness pay larger dividends than in the study of account- 
 ancy. The student of bookkeeping is sometimes puzzled as to 
 why an expense account should be debited, in view of the fact 
 that an expense is the reverse of an asset and represents either 
 cash paid or to be paid at some future date. It is precisely 
 because the asset cash must be credited when payment is made 
 that an expense account must be debited. If the payment were 
 made to a creditor of the business, that creditor would be 
 
BUSINESS ACCOUNTING— VOLUME I 
 
 21 
 
 debited. If the payment is made for expenses, such as salaries, 
 postage, gas, office supplies, and so on, these impersonal accounts 
 must be debited to show for what purpose the money has been 
 spent, that is, for what purpose the asset cash has been with- 
 drawn from the business. An expense account, therefore, has a 
 debit balance. 
 
 An income account, such as Sales, must always have a credit 
 balance for a similar reason. When a sale is made, cash is re- 
 ceived or the vendee's promise to pay cash to us at a future date 
 is accepted in lieu of cash. If the sale is on credit, the cus- 
 tomer's account is debited and Sales account is credited as below: 
 
 Dr. 
 
 J. Smith 
 
 Cr. 
 
 19- 
 
 Jan. 5 Sales 
 
 Dr. 
 
 $1,000.00 
 
 Sales 
 
 Cr, 
 
 
 19- 
 Jan. 5. J. Smith 
 
 ....$1,000.00 
 
 When the customer pays us and his indebtedness disappears. 
 Cash account is debited and J. Smith's account is credited. 
 Thus, when the sale is finally paid for, J. Smith's account bal- 
 ances, and two entries remain — a credit in Sales account as 
 above and the off-setting debit in Cash account. 
 
 The principle of double entry or the reason why two entries 
 are made for each transaction is usually a difficult matter for 
 the beginner to understand. It is helpful to compare double- 
 entry bookkeeping with a balance scale the two sides of which 
 must be kept in balance at all times. 
 
 Let us assume for the purpose of illustration that O. Bliss 
 begins business with assets amounting to $10,000, consisting of 
 $8,000 in cash and $2,000 in merchandise; that his liabilities, 
 i.e., debts, amount to $2,000 due A. Brown on open account for 
 merchandise purchased; and that his capital amounts to $8,000. 
 
22 
 
 READING GUIDE 
 
 The elements, expressed in the form of an equation, are as 
 follows : 
 
 Assets equals Liabilities plus Capital 
 
 $10,000 = $2,000 + $8,000 
 
 and the debits on the left equal the credits on the right. 
 
 Expressed in account form, we have: 
 
 Cash A. Brown 
 
 $8,000.00 I $2,000.00 
 
 Merchandise O. Bliss, Capital 
 
 $2,000.00 I $8,000.00 
 
 Note that the debits are equal in amount to the credits. 
 
 As a result of business transactions the amounts of these 
 three elements, viz., assets, liabilities, and capital, are con- 
 stantly changing. The assets either increase or decrease, and the 
 liabilities and capital likewise either increase or decrease. These 
 changes should be recorded in the accounts by means of entries 
 made in accordance with the rules for journalizing given on 
 page 176 of Volume I. The reader should have these rules 
 before him when studying the following paragraphs. 
 
 Let us now assume that we purchase $1,000 worth of mer- 
 chandise for cash. The twofold effect of this transaction, ex- 
 pressed in account form, is as follows; 
 
 Merchandise Cash 
 
 $1,000.00 I $1,000.00 
 
 Merchandise must be debited with $1,000 because the asset 
 merchandise is increased by that amount. Cash must be credited 
 with $1,000 because the asset cash is decreased by that amount. 
 
A 
 BUwSINESS ACCOUNTING— VOLUME I 28 
 
 By debiting Merchandise we are recording an increase in assets; 
 by crediting Cash we are recording a decrease in assets. 
 
 Let us further assume that we purchase $2,000 worth of 
 merchandise from H. Jenkins on account. This requires the 
 following entry: 
 
 Merchandise H. Jenkins 
 
 ^,000.00 I $2,000.00 
 
 Merchandise must be debited with $2,000 because the asset 
 merchandise is increased by that amount. H. Jenkins must be 
 credited with $2,000, because we have incurred a liability to that 
 extent. By debiting Merchandise we are recording an increase 
 in assets; by crediting H. Jenkins we are recording an increase 
 in liabilities. 
 
 If we pay H. Jenkins $1,000 on account, the twofold eflfect, 
 expressed in account form, is as follows: 
 
 H. Jenkins Cash 
 
 (1)... $1,000.00 I Bal... $2,000.00 I (1). . .$1,000.00 
 
 Note that the numbers in parentheses in the above illustration 
 indicate the double-entry made. The account of H. Jenkins 
 must be debited to record the decrease in liabilities, and Cash 
 account must be credited to record the decrease in the asset 
 cash. 
 
 If we pay $10 for telephone services we have incurred an 
 expense, and, since all expenses are borne by the proprietor, it 
 follows that his account must be debited. The twofold effect 
 of this transaction may be expressed in account form as follow a: 
 
 O. Bliss, Capital Cash 
 
 $10.00 I I >io-«> 
 
 1 
 
24 READING GUIDE 
 
 As a result of paying $10 for services received by the business, 
 the capital invested by the proprietor has been decreased. This 
 decrease in capital is recorded by debiting the proprietor's 
 account and, since the payment of $10 has decreased the amount 
 of the asset cash, it follows that the Cash account must be 
 credited. 
 
 As explained in the text on page 59, expenses and income of 
 a business, instead of being charged and credited directly to the 
 Capital account, are more conveniently recorded in temporary 
 accounts known as expense and income accounts. Thus, in 
 recording the foregoing transactions in practice, the twofold 
 effect expressed in account form would be as follows: 
 
 Expense Cash 
 
 $10.00 I $10.00 
 
 The Expense account must be debited to record the temporary 
 decrease in capital, and the Cash account must be credited to 
 record the decrease in the asset cash. 
 
 For the purpose of illustrating an item of income, let us 
 assume that the ba::k allows us $20 interest on our bank bal- 
 ance. The twofold effect of this transaction, expressed in terms 
 of assets, liabilities, and capital, is an increase in the asset cash 
 of $20 and a corresponding increase in capital of $20. As 
 explained, the expenses and the income in practice are not 
 debited and credited directly to the Capital account, but instead 
 are debited and credited to temporary accounts known as ex- 
 pense and income accounts. Therefore, the twofold effect of the 
 foregoing transaction expressed in account form, as it would be 
 recorded in practice, is as follows: 
 
 Cash Interest Earned 
 
 $20.00 I I $20.00 
 
BUSINESS ACCOUNTING— VOLUME I 25 
 
 We have now illustrated transactions which result in an in- 
 crease and decrease in each of the three elements, viz., assets, 
 liabilities, and capital. 
 
 The Merchandise account is not a pure asset account as the 
 reader may have been led to believe from the foregoing illus- 
 trations and explanations. The treatment of this account is fully 
 explained, however, on pages 80 and 81 of the text. The ulti- 
 mate disposition of the temporary accounts, i.e., the expense and 
 income accounts, is explained in the text on page 52. 
 
 Classification of Ledger Accounts (Chapter VI) 
 
 Though belonging to Part II, this chapter is included in this 
 assignment of work because it rounds out the theory of debit 
 and credit. Its contents require careful study. Section 7 should 
 be read and reread until the principle involved in classification 
 is thoroughly impressed on the mind. When once the purpose 
 of the asset, liability, and proprietorship or capital accounts 
 which appear on the balance sheet, as well as of the expense and 
 income accounts which appear on the profit and loss statement, is 
 clearly grasped, you will have no further difficulty in solving 
 the problems of "when to debit" and **when to credit." 
 
 From the student's point of view, the correct classification of 
 business transactions under appropriate account titles is the first 
 step in determining the correct debit and credit. From the book- 
 keeper's point of view, the classification of accounts is necessary 
 as a means of reducing the risk of error in posting to the ledger. 
 From the aspect of management and financial control, the classi- 
 fication aids in the preparation of financial statements and in- 
 sures correctness of the groupings of accounts shown tliereon. 
 
 In the study of this chapter the student is advised to look 
 up the chapters referred to in the text and read the matter 
 therein given which bears upon the particular point in Chapter 
 VI. The bookkeeping in connection with recording of deferred 
 and accrued items always presents a difficulty to the beginner. 
 For further information see Volume IV, Chapters H and III. 
 
26 READING GUIDE 
 
 Assignment 3 
 CLOSING THE BOOKS 
 
 MucK the most responsible and intricate work of 
 the accountant is that of closing the books prepara- 
 tory to ascertaining the profit or loss made during a 
 period, and the financial condition at the end of the 
 period. The theory of the subject is covered in the 
 two following chapters in broad outline, leaving for 
 detailed discussion in Volume IV the difficulties and 
 problems which arise when the attempt is made to 
 determine profits. 
 
 The Trial Balance (Chapter VII) 
 
 No accounting theory is involved in the discussion in this 
 chapter. The taking of a trial balance is a convenient method 
 of saving clerical labor. It should, of course, be possible to 
 insure the accuracy of the postings and account totals by 
 checking and rechecking the figures, until positive assurance was 
 obtained that the entries were correct as to both mathematical 
 calculations and position; but to do this would entail more labor 
 than to take a periodical trial balance. Assuming that post- 
 ings and additions are carefully made, a trial balance agrees in 
 nine cases out of ten. Methods of locating errors, when the two 
 totals fail to agree, are discussed in Volume IV, Chapter XXXI. 
 That chapter may well be read in connection with the present 
 discussion. 
 
 Determination of Profit or Loss (Chapter VIII) 
 
 In this chapter is described the method of determining profit 
 and loss under simple business conditions. When you thoroughly 
 grasp the principles in this chapter, and have worked out the 
 problems in Volume V which will serve to impress the theory 
 
BUSINESS ACCOUNTING—VOLUME I 27 
 
 on your mind, you will be beginning to acquire a mastery of the 
 theory of accounts. 
 
 After carefully studying the contents of this chapter, it is 
 suggested that the student read the first three chapters in Vol- 
 ume IV. With the knowledge already acquired, there is little 
 or nothing that the reader cannot readily grasp in the opening 
 chapters of the more advanced book, and this peep into the 
 future will give a better grasp of the problem of closing the 
 books for the purpose of determining the profit or loss for the 
 period — the most important task that a bookkeeper can be called 
 upon to perform. 
 
 The last section in this chapter explains an exceedingly im- 
 portant accounting principle, viz., that the profit or loss for the 
 period, as shown in the profit and loss statement, must be ac- 
 counted for by the difference between the capital at the beginning 
 and at the end of the period, taking into consideration any draw- 
 ings or further contributions of capital. A test of the thorough- 
 ness of the student's work on the preceding chapters will be his 
 ability to grasp why this is so. 
 
 Be sure to work out the problems in the review questions and 
 study the theory persistently until all points that at first are not 
 quite clear, become clear and are firmly fixed in mind. 
 
 Assignment 4 
 PREPARATION OF STATEMENTS 
 
 The information in Chapters IX, X, and XI 
 covers the technique or procedure in preparing state- 
 ments. Further information relating to the closing 
 entries will be found in Volume IV, Part I. The dis- 
 cussion in the above chapters is hmited to broad prin- 
 
28 READING GUIDE 
 
 ciples which should be thoroughly mastered before 
 important details are taken up later. 
 
 Statement of Trading and Profit and Loss (Chapter IX) 
 As an aid in acquiring correct technique, it is suggested that 
 after studying the corrected statement on page 101, the student 
 should attempt to draw up the statement in proper form from 
 the data given in the trial balance on page 90. The practice 
 work should be repeated until the procedure is fixed in mind. 
 Sections 8, 9, and 10 contain explanations of accounting 
 theory which it is important to understand so clearly that no 
 doubt arises as to the method of applying this theory. There- 
 fore, be persistent in the practice work suggested above. The 
 repetition of this work three or four times at this stage will 
 smooth away difficulties which otherwise would be sure to crop 
 up later. In connection with the study of this chapter, a brief 
 study may be made of the contents of Chapters XXII and 
 XXIV, Volume IV, in which more advanced forms of state- 
 ments are presented. 
 
 Statement of Cash Receipts and Payments (Chapter X) 
 
 The limitations of this type of statement should be carefully 
 noted. In a small business the cash statement might furnish 
 the kind of information most frequently required by the pro- 
 prietor. Where the proprietor is in close contact with oper- 
 ations and always **on the job,*' he may have a very shrewd idea 
 of the value of his stock-in-trade at all times and require an 
 inventory to be taken only at long intervals for purposes of 
 verification. Under such conditions a periodical cash state- 
 ment may meet all requirements between the times when the 
 profit and loss statement is drawn up. 
 
 The Balance Sheet (Chapter XI) 
 
 To acquire the art of drawing up a statement, correct as to 
 form aiid clearness of presentation, there is only one way — 
 
BUSINESS ACCOUNTING— VOLUME I 
 
 29 
 
 practice and yet more practice. Rules such as those given in 
 §§3 and 4 of this chapter are useful as a guide but they can- 
 not be remembered unless they are repeatedly utilized in prac- 
 tice. Before taking up the practice work in Volume V which 
 relates to this chapter, the student should draw up the corrected 
 form of balance sheet given on page 126, taking the data from 
 the incorrect form shown on pages 121 and 122. 
 
 In connection with thic chapter and supplementary to the 
 information contained therein, it is well for the reader to turn 
 to Volume IV, Chapters XXI and XXIV, where more elaborate 
 forms of balance sheet statements are presented. 
 
 Assignment 5 
 INSOLVENCY PROCEDURE 
 
 The contents of the two following chapters belong 
 rather to the sphere of advanced accounting than to 
 an elementary discussion of the subject. They are 
 included in this volume for the sake of completeness 
 thus furnishing the student with examples of all the 
 financial statements that may be drawn up to show 
 financial condition. 
 
 Statement of Affairs — Realization and Liquidation State- 
 ment (Chapters XII, XIII) 
 These two chapters cover the procedure for the winding 
 up of an insolvent business or the reorganization of an insolvent 
 concern that requires more working capital. The work in this 
 connection is of such a character that only the accountant of 
 broad experience would be competent to handle it. If the aim 
 of the student is to acquire a rapid working knowledge of book- 
 keeping, he may with advantage limit his study of these chap- 
 ters to a careful reading. 
 
80 READING GUIDE 
 
 To acquire a comprehensive knowledge of accounting prac- 
 tice, the student must, of course, be able to prepare every kind of 
 financial statement. If he submits himself to a state examina- 
 tion for the purpose of testing his accounting knowledge, the 
 examination paper is likely to contain one or more problems 
 covering the procedure of liquidation or reorganization. There- 
 fore, the ambitious student must sooner or later understand the 
 procedure and principles covered in these two chapters. How- 
 ever, more rapid progress will be made in essentials if attention 
 is first concentrated on simpler or more elementary matters. 
 
 In reading Chapter XII, it is suggested that the student 
 assume he has been asked by a committee of unsecured creditors 
 of the Jenkins Company (see page 137), a concern about to dis- 
 solve, to prepare a statement that will show as nearly as possible 
 the percentage of claim that each creditor may expect to receive, 
 and also a statement that will show the loss to be borne by the 
 unsecured creditors on forced dissolution of the business. Let 
 it also be assumed that these statements are to be the basis for 
 a decision, on the part of the creditors, whether or not they will 
 vote for the dissolution of the business of the Jenkins Company. 
 
 This is an example of the usual situation which gives rise 
 to the preparation of a statement of affairs and a deficiency ac- 
 count. The text not only illustrates and explains the technique 
 of preparing these statements but also discussesT the legal phases 
 that must be considered. The legal phases involved in the prepa- 
 ration of a statement of affairs as well as the form of this state- 
 ment should be studied carefully. 
 
 Assignment 6 
 
 SUPPLEMENTARY STATEMENTS 
 
 In this assignment are considered the various 
 kinds of statements which the bookkeeper who is 
 
BUSINESS ACCOUNTING— VOLUME I 3j 
 
 capable of summarizing results might be called upon 
 to prepare at regular intervals. In a large organiza- 
 tion the head accountant would ordinarily prepare 
 the balance sheet and profit and loss statement, call- 
 ing upon the bookkeepers to prepare the necessary ex- 
 hibits, schedules, or statements required to support 
 the major statements. The bookkeeper in charge of 
 the customers ledger would, for instance, prepare the 
 schedule of accounts receivable; the clerk in charge 
 of the sales journal would prepare the analytical in- 
 formation relating to sales, and so on. 
 
 The Use of Supporting Schedules (Chapter XIV) 
 
 The preparation of statements involves a certain amount of 
 statistical work^ and statistics, rightly used, are the basis of all 
 intelligent business direction. Therefore, the compilation of 
 these statistics affords the bookkeeeper a field in which he can 
 reveal enterprise and judgment. In almost every business the 
 accounting department from time to time is asked for informa- 
 tion which can be had from the books only at the cost of much 
 time and clerical labor. Had the same information been com- 
 piled concurrently with the daily routine, in many cases only a 
 fraction of the labor' expended would have been necessary. 
 
 As a general rule it may be said that statistical information 
 is of value only when the figures are presented in & comparative 
 form, and are compiled to indicate the trend or tendency of 
 business activities over a sufficiently long period of time. Such 
 data is always of interest and may often be of great value to 
 the management. Practically every concern which suddenly 
 finds itself in financial difficulty -without having realized the 
 direction in which it was drifting may be said to have neglected 
 the information buried within its books. Or, if this information 
 has been presented to the management in proper statement fonn, 
 
82 READING GUIDE 
 
 the significance of the data must have been wilfully ignored or 
 not properly understood. No competent accountant will ever 
 fail to furnish the management with the full statistical informa- 
 tion required to show not only the financial condition and the 
 profit or loss, but also the source of the profit or the cause of 
 the loss and the reasons for changes in financial condition. To 
 analyze such causes and to show tendencies is the final goal of 
 all accounting viewed from the administration aspect. 
 
 In the study of the chapter under review, particular atten- 
 tion is called to § 3, in which a clear distinction is drawn to the 
 different kinds of statements and the terminology that should be 
 applied in each case. 
 
 Assignment 7 
 THE THEORY OF JOURNALIZING 
 
 The five chapters included under this title discuss 
 the theory and practice underlying the use of the 
 journal in its simplest form. The book known as the 
 ^'journaF' was at one time the only book of original 
 entry used. In it were entered all the business transac- 
 tions, i.e., sales, purchases, cash receipts and pay- 
 ments, as well as notes received and given, classified 
 as to accounts and amounts to be debited or credited 
 in the ledger. (See illustrations on page 171 in the 
 text.) But when business began to be conducted on 
 a large scale and transactions became more numerous 
 and involved, thus making it impossible for one man 
 to record all the transactions, it was found necessary 
 to introduce special journals, such as the cash journal 
 
BUSINESS ACCOUNTING— VOLUME I gg 
 
 illustrated in simple form on page 191, and in a more 
 developed form on pages 216 and 217. The purchase 
 journal is illustrated in simple form on page 200, 
 and in developed form on pages 234 and 235. The 
 sales journal is likewise illustrated in simple form on 
 page 208, and in developed form on pages 250 and 
 251. 
 
 The introduction o:^ special journals such as the 
 cash journal, purchase journal, and sales journal 
 made it possible to distribute the work of recording 
 transactions. Thus, while one man was engaged in 
 recording purchases in the purchase journal, another 
 could be engaged in recording cash receipts or pay- 
 ments in the cash journal. 
 
 Furthermore, with the introduction of special 
 journals the amount of mechanical labor formerly 
 necessary in posting was greatly reduced. For ex- 
 ample, when a separate book is kept for cash receipts 
 and payments, the individual receipts and payments 
 are no longer posted to the Cash account in the ledger 
 as was done when only the journal was used. In- 
 stead, at the end of each month, but one posting is 
 made to the debit side of the Cash account in the 
 ledger of the total cash received, and one posting to 
 the credit side for the total cash paid. The same 
 treatment holds true of postings made from other 
 special journals, such as the purchase journal and 
 the sales journal. 
 
 These advantages of the use of special journals 
 should be kept in mind in reading the sections on the 
 
84 READING GUIDE 
 
 technique of posting from special journals, as ex- 
 plained in the chapters of Part III and in subsequent 
 chapters in the text. 
 
 The Journal (Chapter XV) 
 
 In this chapter the theory of journalizing is discussed with- 
 out regard to its practical business application to cash, purchase, 
 or sales transactions. Bookkeeping begins with the journaliza- 
 tion of every transaction, as illustrated on page 171. When a 
 transaction is correctly journalized, the proper debit and credit 
 postings present no difficulty. As practice work in this chapter, 
 the student should read the transactions listed in § 2 and mentally 
 journalize them as shown in § 4. When the mental work can be 
 done rapidly and correctly, he will begin to get a grip on the 
 theory of the subject. 
 
 Illustrative Problems (Chapter XVI) 
 
 The method of opening the books, as illustrated in §§ 1 
 and 2, should not merely be studied but should be worked out 
 as shown in the text. The transactions itemized in § 3 should 
 be mentally journalized and compared with the solutions given 
 on page 185. This mental work, when practicable, should 
 always be repeated until the faculty is acquired of solving the 
 problems without any hesitancy or doubt as to the correctness 
 of the solutions. This sureness of touch is, of course, the aim 
 and end of all practice work and is the characteristic that dis- 
 tinguishes the man who knows from practical experience, from 
 the man who has acquired a merely halting and therefore inade- 
 quate theoretical knowledge. 
 
 Sections 4, 5, and 6 contain important information as to 
 accounting procedure which it is necessary to memorize. The 
 theory which governs the recording of purchases and sales, and 
 receipts and payments, is covered by the principles of double 
 entry. Returns and allowances constitute transactions which 
 
BUSINESS ACCOUNTING— VOLUME I 35 
 
 Will puzzle the student who is new to the subject unless the 
 information in § 6 is grasped. 
 
 The practice work in the review questions should be care- 
 fully done. 
 
 The Cash Book (Chapter XVII) 
 
 Only the general theory of the keeping of the cash book, 
 with a description of the most essential procedure, is taken up 
 in this chapter. In active procedure the form of the cash book, 
 that is, the number of its columns and the purposes they serve, 
 is determined by the use of controlling accounts. It is suggested 
 that the student, after reading this chapter, give a cursory read- 
 ing to Chapter XXIV which explains controlling accounts. By 
 this means the relation of the one to the other will be more 
 clearly seen. 
 
 It should be borne in mind that the forms of books of orig- 
 inal entry vary to meet individual needs and tastes, so that two 
 cash journals that have exactly the same form are seldom found. 
 The same holds true of all other books of original entry, with 
 possibly one exception — the notes receivable and notes payable 
 book. Most concerns use a standard book, although in many 
 instances a special form is used. 
 
 Purchase Records (Chapter XVIII) 
 
 The same observation applies to the discussion of the pur- 
 chase and sales journals as applies to the discussion of the cash 
 book, viz., that the use of controlling accounts and subordinary 
 ledgers determines the form and ruling of these journals. Here 
 only the simple theory of their operations is taken up so far as 
 this theory covers the relation of tlie journals to the ledger. A 
 business buying or selling only one kind of merchandise would 
 require only the simple forms of journals herein described. But 
 such businesses are rare. In most cases it is desirable to dis- 
 tinguish among different kinds of purchases and sales, and thi* 
 requires a more complicated ruling of the journals. 
 
35 READING GUIDE 
 
 If the student thoroughly understands the operation of a 
 simple cash book which represents the two sides of an account, 
 no difficulty will be experienced in grasping the theory of the 
 sales and purchase journals each of which represents only one 
 side of an account. The cash book records both the inflow and 
 outgo of cash. The purchase journal records the inflow of 
 merchandise, and the sales journal the outgo of merchandise. 
 
 In the study of Chapter XVIII, particular attention needs 
 to be devoted to §§6, 7, and 8. The procedure here described is 
 that of a business which buys merchandise for resale. Practice 
 varies in different lines of business, and the accounts that may 
 be opened on the books of one concern to determine the gross 
 profit may differ from those of another. But in all cases the 
 principle is the same. There are several methods of determining 
 the gross profit, and the student must familiarize himself with 
 them all. For the present it will be sufficient to grasp thor- 
 oughly the procedure most commonly used. 
 
 Sales Records (Chapter XIX) 
 
 The information in this chapter corresponds in many ways 
 to that given in the preceding chapter — with the difference, of 
 course, that sales are credited whereas purchases are debited. 
 Note in particular the information in § 6. The method of deter- 
 mining the turnover of a concern's stock-in-trade is one of those 
 elementary problems which every bookkeeper ought to be able to 
 figure rapidly. Unless he has occasion to make the calcula- 
 tion frequently, he is often at a loss how to do it. 
 
 Assignment 8 
 JOURNALIZING PROCEDURE AND PRACTICE 
 
 The four following chapters carry the discus- 
 sion of the journal and its rulings a stage further. 
 
BUSINESS ACCOUNTING— VOLUME I 37 
 
 The more complicated forms of journals are taken 
 up in Volume II. For an adequate understanding of 
 the complex forms a thorough grounding is required 
 in the theory of the simple journals and the oper- 
 ation of the voucher system and controlling accounts. 
 
 Miscellaneous Cash Matters (Chapter XX) 
 
 Particular attention needs to be given to the illustrative 
 form and entries on pages 216 and 217, and the comment on 
 the nature of those entries. Much of the discussion in this chap- 
 ter covers commercial usage and business practice with which 
 the student must familiarize himself from beginning to end; 
 otherwise he will often be at a loss in recording the kind of 
 transactions to which the discussion refers. Note, for instance, 
 the method of handling exchange as explained at the end of 
 § 2, and the method of handling exchanged checks as explained 
 in §3. 
 
 Sections 4 to 9 contain general information with which every 
 cashier must be familiar if his cash book is to be properly kept. 
 
 Section 11 takes up a matter which under complicated busi- 
 ness conditions where transactions are numerous may present 
 difficulties only second to those of taking a trial balance. 
 
 Work out the method of reconcilement as shown in § 12, and 
 when you feel certain that you have mastered the method, test 
 your knowledge by trying to solve Problems 1 and 2 in Volume 
 V without consulting the solution to these problems. 
 
 After studying §§15 and 16, turn to Problems 1 to 3 in 
 Volume V and try to solve them. Such practice work as this is 
 a thorough test of your knowledge of the correct method of 
 handling these cash details. 
 
 Miscellaneous Purchase Matters (Chapter XXI) 
 
 In studying the contents of this chapter pay particular 
 attention to the relationship between the journal entry on page 
 
38 READING GUIDE 
 
 237 and the totals of the purchase journal on pages 234 and 
 235. Note the difference between an expenditure which is 
 passed through the purchase journal^ and an expenditure the 
 payment of which is immediately credited to cash — such as the 
 expenditures for insurance, rent, and other impersonal items 
 shown on page 217. The review questions in Chapters XX and 
 XXI contain much valuable practice work, which should be com- 
 pleted, before proceeding further. 
 
 The Voucher System (Chapter XXII) 
 
 The theory of this chapter is contained in § 2, and the 
 explanation of the theory is illustrated in the form on pages 
 244 and 245. The student should carefully compare the voucher 
 form with the purchase journal form and note the distinction 
 between the two. Supplementary to the information given in 
 § 7, it may be explained that the voucher record is commonly 
 employed by manufacturing concerns which either pay for their 
 purchases promptly or which, because of the diversity of the 
 sources of supply, prefer the voucher record system as a means 
 of saving clerical labor. The large number of accounts that 
 would have to be opened if the purchase ledger were used are 
 thus eliminated. Further instructions of the voucher system are 
 explained in Volume II of the Reading Guide. For the present 
 the discussion in the chapter under review covers all the stu- 
 dent's requirements. Problem 4 in Volume V will test your 
 knowledge of the theory of the voucher system. 
 
 Miscellaneous Sales Matters (Chapter XXIIJ) 
 
 In many respects the information in this chapter corresponds 
 with the information relating to purchases in Chapter XXI. 
 The contents of the two chapters should be compared for the 
 purpose of noting the points of similarity and divergence. The 
 practice work required by the review questions should not be 
 omitted. 
 
BUSINESS ACCOUNTING—VOLUME I 3^ 
 
 Assignment 9 
 
 CONTROLLING ACCOUNTS 
 
 The operation of controlling accounts, like the 
 principles of debit and credit, is one of those pivotal 
 accounting points on which the student must concen- 
 trate until complete mastery is obtained. 
 
 Controlling Accounts (Chapter XXIV) 
 
 In the study of the chapter under review, it is suggested 
 that the theory of the matter be carefully read (§§ 1 to 7), after 
 which the cash book on pages 288 and 289 be studied in the 
 light of the explanation given in § 8. To impress the theory on 
 the mind, the student should reproduce the cash book rulings 
 from memory several times — as illustrated on pages 288 and 
 289. The illustrative transactions on pages 285 and 286 should 
 be entered in their proper columns without reference to the ex- 
 ample, and the total figures arrived at in this way should be 
 compared with the totals of the example to check the accuracy 
 of the work. 
 
 After the theory and practice in Chapter XXIV are thor- 
 oughly mastered, it is advisable to study Chapters XVII and 
 XVIII in Volume II, where more elaborate rulings of the cash 
 book are shown. It will be found that the operation of con- 
 trolling account cannot be mastered in one or two attempts, inas- 
 much as, however clear the matter may seem for the time being, 
 when the attempt is made to post the controlling totals to the 
 ledger, the mind tends to become confused as to what to debit 
 and what to credit. Practice, and practice alone can overcome 
 the perplexities of the subject. 
 
 One point that sometimes perplexes the beginner, when he 
 first approaches controlling accounts and subsidiary ledgers, is 
 the fact that each transaction seems to require three entries — 
 two in the general ledger and one in the subsidiary ledger. It 
 
40 READING GUIDE 
 
 should be remembered, however, that the subsidiary ledger is 
 merely the detail of the controlling account in the general ledger ; 
 from one point of view the subsidiary ledger may be said to be 
 used only for the purpose of recording important memoranda 
 and is not an integral part of the bookkeeping records. The 
 general ledger contains all information about the transactions of 
 a business; a controlling account gives this information in con- 
 densed form. So long, therefore, as the sum of the general 
 ledger debit postings equals the sum of the credit postings 
 therein, the books remain in balance regardless of the fact that 
 there may be a number of subsidiary ledgers the entries to which 
 are mostly debits or mostly credits. 
 
 It may here be noted that in cost accounting controlling 
 accounts and subsidiary ledgers are frequently used. Without 
 this device it would be impossible to tie up the general ledger 
 with the cost ledgers and records kept in the factory. For 
 example, an account headed Stores, or several accounts headed 
 with the names of the raw materials purchased, might be opened 
 in the ledger and corresponding columns allotted thereto in the 
 purchase journal or voucher record. The detail of the pur- 
 chases is shown in the stores ledger kept in the factory, while 
 only the totals of the purchases of stores or raw materials are 
 shown in the general ledger, such totals being posted to the gen- 
 eral ledger from the purchasing journal or voucher record at 
 the close of each cost period. 
 
 Review Question 5 is intended to test your knowledge of 
 the theory of controlling accounts. 
 
 Assignment 10 
 
 DISCOUNTS AND NOTES 
 
 The four chapters in this division of work furnish 
 much general information about the nature of dis- 
 
BUSINESS ACCOUNTING— VOLUME I 41 
 
 counts and notes and discuss the method of their 
 accounting. The recording of discounts and note 
 transactions on the books is part of the bookkeeping 
 procedure which is confusing to beginners until prac- 
 tice smooths away the difficulties. 
 
 Trade Discount and Cash Discount (Chapter XXV) 
 
 Sections 1 to 10 of this chapter cover ordinary business 
 practice, a knowledge of which the bookkeeper requires but 
 which knowledge has no bearing on accounting theory. The 
 explanation of the method of recording discounts on the books 
 begins at § 11. From here on, the reader should study the text 
 in the light of the illustration given on pages 288 and 289. 
 
 Attention needs to be directed to the study of the illustrative 
 transactions on pages 285 and 286. First practice their jour- 
 nalization mentally until their entry in the cash book can be 
 readily visualized. After this mental work the cash book rulings 
 should be drawn from memory (as previously suggested), and 
 entries in the cash book should be made, using the illustrative 
 transactions as a basis. In studying the list of transactions on 
 pages 285 and 286, the journalization of the items under the 
 dates of September 3, 15, and 30, which items are note trans- 
 actions, will be more clearly understood after the explanatory 
 matter dealing with such notes has been covered in the following 
 chapter. 
 
 Problems 6 and 7 in Volume V furnish valuable practice 
 work covering the information given in this chapter. 
 
 Illustrative Cash Book Entries (Chapter XXVI) 
 
 The practice work in this chapter will already have been 
 covered. To acquire the requisite facility, however, in journaliz- 
 ing transactions, the exercise may with advantage be repeated 
 several times. 
 
42 READING GUIDE 
 
 Notes and Trade Acceptances (Chapter XXVII) 
 
 Sections 1 to 8 of this chapter comprise preliminary in- 
 formation, a knowledge of which is required for the correct 
 recording of notes receivable and payable. The debiting and 
 crediting of these items often appears complicated and much 
 practice is needed before you will acquire the proper facility. 
 The procedure in § § 9 and 1 1 should be carefully impressed on 
 the mind, and the necessary practice may be obtained by men- 
 tally journalizing the transactions given in Chapter XXVIII, 
 page 307. 
 
 Note Transactions Journalized (Chapter XXVIII) 
 
 This chapter affords further practice in the use of control- 
 ling accounts. After studying the columnar journal shown on 
 page 309, try to reproduce the ruling and headings from memory 
 until an accurate reproduction can be made. The illustrative 
 entries on page 307 should then be entered in the skeleton form, 
 and the totals compared with those given on page 309 as a check 
 on the accuracy of the work. Without such practice as this 
 it is impossible to master the theory of controlling accounts or 
 acquire facility and accuracy in the recording of note trans- 
 actions. 
 
 Assignment 11 
 
 MISCELLANEOUS MATTERS 
 
 This assignment of work covers the isolated sub- 
 ject of depreciation and a final chapter on the jour- 
 nals illustrative of posting problems. 
 
 Depreciation (Chapter XXIX) 
 
 The discussion of depreciation in this chapter covers the 
 knowledge required to handle the problem of depreciating or 
 
BUSINESS ACCOUNTING— VOLUME I 43 
 
 writing off the value of the plant and machinery belonging to a 
 small manufacturing concern. Moreover, in every business, 
 whether manufacturing or mercantile, provision must be made 
 for bad debts, and the method of depreciating the accounts re- 
 ceivable described in § 11 is one with which every bookkeeper 
 is required to be familiar. 
 
 A more detailed discussion of the accounting requirements 
 for the handling of depreciation in a large manufacturing con- 
 cern will be found in Volumes III and IV. For the present the 
 student is concerned merely with the general principles of the 
 subject given in this chapter. 
 
 Problems 8 to 10 in Volume V furnish practice work in 
 accounting for depreciation, and Problems 11 and 12 similar 
 work in handling losses from bad debts. 
 
 The Use of Subsidiary Books (Chapter XXX) 
 
 This chapter is important and demands your concentrated 
 attention. It is especially designed to test the thoroughness of 
 the knowledge you have so far acquired. Suggestions as to 
 the method of its study are given in the opening section. It is 
 necessary, therefore, only to emphasize the value of the practice 
 work afforded by this chapter as a test for any weak spots in 
 theory and practice. If any are found, the preceding informa- 
 tion should be reviewed until both theory and practice are so 
 firmly fixed in mind that the transactions given on page 329 
 can be posted and a trial balance drawn up without any mental 
 hesitancy and with absolute accuracy. 
 
 Attention is again drawn to the importance of following the 
 precise form of the journal entries illustrated on pages 330 to 
 333. 
 
 After completing the practice work in this chapter, turn to 
 Problem 13 in Volume V and try to solve it. The requirements 
 of this problem will test the thoroughness of your knowledge of 
 the theory of journalizing. 
 
44 READING GUIDE 
 
 Assignment 12 
 PARTNERSHIP AND CORPORATION FEATURES 
 
 In the three following chapters only those essen- 
 tial points of difference are discussed which arise in 
 the recording of partnership and corporation trans- 
 actions. 
 
 Partnership Accounting (Chapters XXXI and XXXII) 
 
 The method of opening the partnership books, as described 
 in the opening sections of Chapter XXXI, involves no new ac- 
 counting theory. In § 4 an illustration is given of an accounting 
 problem which is of frequent occurrence. Such difficulties crop 
 up to confront every bookkeeper, and a thorough mastery of 
 accounting theory is required to handle them. The routine book- 
 keeper is usually at a loss as to the correct procedure. But any- 
 one who has a clear understanding of the theory of the subject 
 as well as ordinary facility in practice will have no difficulty in 
 working out the correct solution. 
 
 Sections 7 to 1 1 need to be studied with unusual care because 
 their theory is difficult to impress upon the memory. Most of 
 the problems which are peculiar to partnership accounting have 
 to do with the division of the partnership profits, and careful 
 attention should be given to the principles on which this division 
 is based. 
 
 The problems which arise on the dissolution of a partnership 
 are often perplexing. Considerable practice is necessary to 
 acquire the knowledge and experience required to cope with these 
 difficulties. The student will find such practice in working out 
 Problems 14 to 22 in Volume V^ devoted to partnership trans- 
 actions. 
 
 Corporation Accounting (Chapter XXXIII) 
 
 The chief point of this chapter is to show wherein the 
 accounting for a corporation differs from that for a partnership 
 
BUSINESS ACCOUNTING— VOLUMi: I 4U 
 
 or sole proprietorship. The theory of tlie subject is covered in 
 §§ 6 and 7 to which careful study should be devoted. In Volume 
 IV the more complicated phases of corporation accounting arc 
 discussed in detail. 
 
 Problems 23 to 25 iti Volume V furnish practice work in 
 handling entries relating to corporation accounts. 
 
 Assignment 13 
 SINGLE-ENTRY SYSTEM 
 
 The fundamental characteristics of the single- 
 entry system of bookkeeping are taken up in the two 
 chapters of this assignment. 
 
 Single-Entry Bookkeeping (Chapters XXXIV and XXXV) 
 The single-entry method is still commonly employed in the 
 one-man business where the volume of transactions is insufficient 
 to occupy the full time of a competent bookkeeper. As such a 
 business grows^ the accountant is frequently called in to trans- 
 form the single-entry method into a double-entry system. This 
 phase of the work^ which is covered in the problems in Volume 
 V, is one which every accountant should carefully study, and 
 to handle it a knowledge of the theory of single entry is required 
 — as given in these two chapters. 
 
 Assignment 14 
 ACCOUNT CLASSIFICATION 
 
 These two chapters are really a resume of the 
 theory of account keeping and are useful for the pur- 
 
46 READING GUIDE 
 
 pose of checking up the knowledge already acquired. 
 They also serve the equally useful purpose of refer- 
 ence when working out the problems in Volume V 
 which relate to Volume I. 
 
 Analysis of Debit and Credit Accounts (Chapters XXXVI 
 AND XXXVII) 
 If in the study of these two chapters the student finds that 
 his knowledge on certain points is hazy, or that the operation of 
 a particular account is other than he supposes, there is clearly a 
 need of his going back to the earlier subject and obtaining a 
 firmer grasp of its meaning. 
 
Volume II 
 Constructive Accounting 
 
ASSIGNMENTS FOR VOLUME II 
 
 Assignment 1 
 PRELIMINARY EXPLANATION 
 
 Constructive accounting is the application of the 
 principles and methods of procedure, already ex- 
 plained in Volume I, to the requirements of individual 
 businesses. Chapters J to III give a swift, compre- 
 hensive review of matters with which the student of 
 constructive accounting must be familiar before he 
 can profitably begin the special work of the subject. 
 They should be read through attentively but do not 
 call for detailed study. 
 
 Introductory (Chapter I) 
 
 The object here is to present a bird's-eye view of the gen- 
 eral field of accounting in order to locate the special task of the 
 constructive accountant. The tabulation form aids the student 
 in definitely outlining the material. 
 
 The Working Organization (Chapter II) 
 
 From the beginning the student of constructive accounting 
 should cultivate the habit of visualizing in definite form the 
 organization scheme of the business with which he has to work. 
 The facts and relationships sketched in Chapter II are familiar 
 individually to most accountants. The effort to formulate them 
 fully and correctly by means of diagrams is a good foundation 
 for the work of this volume. 
 
 The student will find it beneficial to draw additional dia- 
 grams for himself of other businesses with which he is acquainted. 
 
 49 
 
50 READING GUIDE 
 
 Development of Records (Chapter III) 
 
 The object here is to give a brief description of the various 
 **books/* the tools with which accounting works, and of their 
 development. It affords a useful review of Volume I from a 
 slightly different angle. 
 
 Assignment 2 
 THE SURVEY OF THE FIELD 
 
 The chapters of this assignment present broadly 
 the chief factors involved in the special work of con- 
 structive accounting, showing the practical applica- 
 tion of principles of accounting analysis to a succes- 
 sion of individual cases. In brief form they give the 
 result of much experience with cases of widely vary- 
 ing nature. The student will find it profitable to 
 review them from time to time as he works through 
 the book. 
 
 The student should observe the importance that is 
 attached to tact and to common sense, in the methods 
 of the constructive accountant. To lay out satisfac- 
 torily a system of accounts requires not merely close 
 attention to the special circumstances of the indi- 
 vidual business concerned, but full allowance at all 
 times for the human factors of its personnel. 
 
 These chapters emphasize, in fact, the need of a 
 competent knowledge of management by the account- 
 ant who is to succeed in constructive work. 
 
BUSINESS ACCOUNTING—VOLUME II 51 
 
 The Survey (Chapter IV) 
 
 This chapter and the following should be studied carefully, 
 section by section. The matter presented is more or less familiar 
 to most business men, but it is not always considered in any 
 systematic view which embraces the problem of constructive 
 accounting as a whole. 
 
 The following items should be noted: 
 
 § 1. The three "steps'* of the accountant's investigation. 
 
 3. The points to be considered in the planning of a 
 
 system. These should be definitely memorized. 
 
 8. The suggestion with regard to working papers — an 
 
 instance of the practical character of the volume. 
 
 Planning an Accounting System (Chapter V) 
 
 The student should note that in this chapter a point that is 
 especially stressed is the importance of caution, patience, and 
 tact on the part of the accountant throughout his diagnosis of 
 the business under examination. 
 
 Note in § 1 the reference to chapters in Volume I which 
 bear on the point in hand. One of the features of the present 
 set of volumes is the convenience of such comparison and cross- 
 reference. 
 
 Forms and Records (Chapter VI) 
 
 The important principles of form construction explained in 
 this chapter need thoughtful study. Once these are mastered 
 and applied in a few cases, the task of committing to memory 
 the more or less standard forms and records used in different 
 kinds of business is greatly simplified. A knowledge of the 
 information a specific form is intended to record should bring 
 to mind the kind of record that is used. 
 
 Loose-Leaf and Bound Records (Chapter VII) 
 
 This chapter presents a concise summary of points relating 
 to the physical form of records. In connection with this dis- 
 
52 
 
 READING GUIDE 
 
 cussion it might be well to read Chapter XXIX on mechanical 
 aids. 
 
 Assignment 3 
 PURCHASING RECORDS 
 
 The basis for all definite work in constructive 
 accounting is given here in the five chapters which 
 treat the subject of purchasing. They should receive 
 careful and systematic studJ^ 
 
 The accounting procedure in connection with pur- 
 chases is outlined and discussed in Chapters XI and 
 XII. Before this discussion can be profitably taken 
 up, however, it is indispensable that the student 
 obtain a comprehensive, well-arranged view of the 
 organization of a purchasing department and its 
 activities. This is presented in Chapters VIII, IX, 
 and X. The remark with which the author closes 
 his whole discussion. Chapter XII, § 8, is significant: 
 "The system to be used for handling purchases de- 
 pends entirely on the business under consideration. 
 .... Each separate case must be determined by 
 careful examination of its own distinct problems. 
 Preference for one system over another depends upon 
 such matters as strength of office force, quantity of 
 invoices received, financial status, etc." 
 
 In view of this fact, the description in Chapters 
 VIII, IX, and X calls for careful study. The stu- 
 dent should begin work in this assignment by reading 
 
BUSINESS ACCOUNTING— VOLUME II 53 
 
 through these three chapters, to get a view of the flow 
 of operations. He should then take them up in detail 
 to fix each step in mind before passing on to Chapters 
 XI and XII. 
 
 Purchasing Department Organization (Chapter VIII) 
 
 A brief outline characterization of the function of the pur- 
 chasing department in general is made. One portion of the 
 chapter which should be carefully studied is the orderly, con- 
 venient, and brief enumeration of purchasing department activi- 
 ties in § 5. 
 
 Purchasing Department Routine (Chapter IX) 
 
 This is a long chapter which traces the purchasing procedure 
 through its first stages until the order is placed. It should be 
 not merely read through in connection with Chapters VIII and 
 X, but studied, item by item. 
 
 In this careful second reading note especially: 
 § 3. The steps of the purchasing routine. 
 5, 6, and 7. The description of the purchase requisi: 
 
 tion. 
 9. The description of the purchase order. 
 10. The description of the purchase order register. 
 
 Purchase Department Routine — Continued (Chapter X) 
 This chapter traces the later stages of the purchasing proc- 
 ess — the handling of the invoice for goods bought. In the 
 student's careful second reading he should notice: 
 
 1. The enumeration of the varieties of error, in connection 
 
 with invoices, against which the purchasing depart- 
 ment must continually guard. 
 
 2. The description of the leading methods and devices for 
 
 recording and checking invoices which are used in 
 purchasing departments and with which the account- 
 
54 READING GUIDE 
 
 ant who has to build a system needs to be closely 
 familiar. 
 
 Purchase Records (Chapter XI) 
 
 This chapter, together with Chapter XII, gives the detailed 
 discussion of accounting procedure to which the preceding three 
 chapters are introductory. The text should be worked through 
 slowly, step by step. The object should not be merely to 
 understand the meaning of forms and methods, but to realize 
 plainly under what conditions they are used and how they 
 operate. This requires a clearly differentiated notion of what 
 each of the ten forms of purchase records is and the type of 
 business to which it is suitable. To visualize definitely their 
 various advantages and disadvantages, try to apply these forms 
 for yourself to some business with which you are acquainted. 
 Be sure to grasp the distinction between a purchase journal and 
 a voucher register. In this connection it is well to refresh the 
 memory with the theory of the subject by rereading Chapter 
 XXII, Volume I. Do not fail to master the handy summary of 
 the arguments for and against the voucher system in § 9. 
 
 Purchase Records — Continued (Chapter XII) 
 
 This is a short but important chapter, which discusses de- 
 vices for making the purchase records more convenient and more 
 accurate. Notice especially the methods of handling returned 
 goods and allowances, and of correcting errors of computation, 
 and the like, which are discovered after the regular entries have 
 been made. 
 
 Assignment 4 
 
 STORES 
 
 The subject matter here is closely related to that 
 of the last part of Assignment 3, Once the student 
 
BUSINESS ACCOUNTING— VOLUME II 55 
 
 has an orderly grasp of the flow of operations in the 
 purchasing department, he should be able readily to 
 add on the stores operations as a continuation of the 
 process. 
 
 Stores Systems (Chapter XIII) 
 
 In the study of this chapter the first aim should be to obtain 
 
 a full and orderly view of the operating activities in connection 
 
 with stores, in which the accounting phenomena originate. The 
 
 specific functions of the stores department are set forth in § 6. 
 
 In his detailed study of the chapter the student should note: 
 
 § 1. The two different forms of stores organization. 
 
 2. The definition applied to the term "stores." 
 
 6. The enumeration of the four steps of the stores de- 
 
 partment's activity. 
 
 7. The space given to the discussion of the technique 
 
 of receiving goods and to descriptions of the ma- 
 terials received record. Observe here that the dis- 
 cussion of receiving certain sorts of materials, 
 "goods returned from customers/' is deferred to 
 Chapter XVI, page 175, in connection with sales. 
 8 to 11. The space given to full discussion of the stores 
 ledger and its advantages, and of the process of 
 installing it. Here observe the handling of dupli- 
 cate sheets. Observe also that the stores ledger, 
 aside from other functions, serves as a continuous 
 inventory. 
 
 Assignment 5 
 SALES RECORDS 
 The treatment of sales is, on the whole, like tliat 
 of purchasing. The whole course of procedure rehit- 
 
55 READING GUIDE 
 
 ing to sales is assembled and presented in orderly 
 form as a basis for the study of the accounting work 
 involved. Without a clear grasp of the clerical 
 routine through which sales orders pass in different 
 types of business, the reason for the accounting rec- 
 ords and for the method of their handling is unin- 
 telligible. 
 
 Sales matters relating to organization and oper- 
 ation are less easily differentiated from accounting 
 matters than in the case of purchasing. The student 
 should therefore first read through all three chapters 
 of the discussion before concentrating on study of the 
 details. 
 
 Sales Department Organization (Chapter XIV) 
 
 Careful note should be made of the list of functions of the 
 sales department, in § 2. 
 
 As foundations for all further study, the student should 
 obtain a definite conception of the three methods of retail sell- 
 ing and of the difference in organization of the sales department 
 which each method entails, as explained in § 4. Then he should 
 visualize for himself with equal definiteness the differences in 
 situation and methods between the retail business, the whole- 
 sale — ^jobbing — business, and the mail-order business, as sketched 
 in §§4 to 7. Finally he should study closely the detailed de- 
 scription in § 8 of the highly developed organization that com- 
 bines all three types. 
 
 Sales Order Routine (Chapter XV) 
 
 Chapter XV takes up in detail the first part of the work 
 of recording and accounting for sales. It traces the handling 
 by the sales department of the individual sales orders on which 
 the accounting for sales is based. 
 
BUSINESS ACCOUNTING— VOLUME II 
 
 57 
 
 Note carefully •(§!) that whereas the sales order may 
 originate in three different ways, the routine of handling it is 
 practically the same for all of them. It is important to fix 
 carefully in mind the successive steps of this routine. The stu- 
 dent would do well to follow through the handling of sales 
 orders in various businesses with which he is acquainted, com- 
 paring the process with the description here given. 
 
 Study closely in particular the detailed description in § 6 of 
 the duplicate copies of the sales order and their disposition. 
 
 Sales Records (Chapter XVI) 
 
 This chapter traces the later steps in the handling of sales 
 records. The matter presented is important. 
 
 The student should observe that the chapter falls into three 
 principal divisions, as follows: 
 
 §§ 1 to 12. Methods of assembling the individual sales 
 orders described in Chapter XV. 
 13 and 14. Methods of recapitulations. 
 15 to 24. Special phases of sales transactions and 
 their treatment. 
 
 In studying the first of these groups of sections, the stu- 
 dent should note that the development of the separate sales 
 books from the journal is closely parallel to the development of 
 separate purchase books. He should clearly grasp the various 
 methods of making out the original record (§§ 7 to 10), as well 
 as the differences between the sales book of a wholesale con- 
 cern and that of a retailer. 
 
 In studying the special phases discussed in later sections, 
 close attention should be given to the details of the technique 
 described. The remarks on returned sales in § 15 should be 
 compared with those in Chapter XIII. 
 
 The subject of cash is taken up fully in the next assign- 
 ment ; what is said here should be reviewed at that time. The 
 student should differentiate clearly the treatment involved ia 
 
58 READING GUIDE 
 
 connection with sales on consignment^ sales on approval^ C. O. D. 
 sales, instalment sales, and coupon books. 
 
 After completing the study of the chapter, the student 
 should reproduce from memory the special forms required in 
 each case. A thorough knowledge of the problem involved and 
 of the information which the records must supply will enable the 
 student to reproduce the required records with accuracy and 
 
 Assignment 6 
 CASH RECORDS 
 
 The four chapters here grouped together develop 
 the simple theory and practice which underlie the use 
 of the cash book as explained in Volume I, Chapters 
 XVII, XX, and XXVI. The fundamental infor- 
 mation in both volumes of necessity runs on parallel 
 lines, but the reason for the use of distinct records and 
 for the form which their development takes under 
 varying conditions of business is fully taken up in 
 this volume. The subject may be more profitably 
 studied as a whole if the chapters referred to in Vol- 
 ume I are reread in the light of the more detailed 
 information given in this volume. 
 
 General Cash Records (Chapter XVII) 
 
 This chapter as a whole amplifies the discussion of the 
 theory of the cash journal as presented in Volume I, Chapter 
 XVII. Particular attention should be devoted to §§4 and 9. 
 3rhe essentials of a cash system as explained in § 4 cover certain 
 
BUSINESS ACCOUNTING— VOLUME II 
 
 50 
 
 rules of procedure in handling cash. These rules should in- 
 variably be followed if the clerical work is to be done with 
 accuracy and dispatch; but in the business where trial balances 
 seldom balance, where the bookkeeper spends hours in recon- 
 ciling his bank balance, or where the cashier finds his cash fre- 
 quently "short" or "over/' these essential rules of procedure are 
 more often ignored than observed. Especially is this the case 
 in the small business where to handle cash in the way described 
 seems to many business men mere "red-tape." Everyday ac- 
 counting experience, however, proves that it pays in time, 
 trouble, and money to handle cash transactions in a methodical 
 way such as that described in § 4. 
 
 The differences in procedure caused by the different treat- 
 ment of cash discounts described on page 198 are always a cause 
 of mental confusion to the student especially when the books are 
 to be closed and the cash journal columns are posted to the 
 ledger. No one method is more generally employed than another, 
 and commercial usage requires that the accountant be conversant 
 with all three methods. To acquire equal facility in their use, 
 practice work is necessary such as that furnished by the keep- 
 ing of different sets of books. 
 
 General Cash Records (Chapter XVIII) 
 
 In the study of the practical and constructive side of ac- 
 counting represented by the use of special forms and records 
 designed for special purposes, there is only one way in which 
 the design of a particular form and the method of its use or 
 operation can be remembered. The form should be drawn from 
 memory, and a number of entries should be made on the records 
 sufficient to impress its ruling on the mind. For instance, in the 
 study of this and other chapters where the rulings of the jour- 
 nals and other forms are shown, the illustrative cash book entries 
 on pages 285 and 286 of Volume I should be entered on all 
 records designed for the recording of cash transactions. There- 
 fore, the practice work on this and the preceding chapter should 
 
60 READING GUIDE 
 
 include the drawing of the forms shown on pages 199^ 202^ and 
 208, and the entry of the above transactions on those forms, A 
 comparison of the different forms and headings used for like 
 transactions, for the purpose of noting their differences and the 
 reason for these differences, is a valuable method of study. 
 
 Further rules to insure accuracy in the handling of cash 
 items, as given in § 6, should be noted. In reading the explana- 
 tion of the development of a particular form of ruling, the rea- 
 sons for the variations should be studied in conjunction with 
 the scrutiny of the new type of record, and the reasons for the 
 differences in the arrangement of the columns should be men- 
 tally formulated. This kind of analytical reasoning coupled 
 with the reproduction of the forms from memory will enable you 
 to acquire a valuable mastery of the theory which governs the 
 use of different accounting records. A good explanation of the 
 use of the voucher check is given in § 7. Many bookkeepers and 
 business men receive such checks in ordinary business practice 
 without understanding the reason for their use. 
 
 Petty Cash Records (Chapter XIX) 
 
 This brief chapter is a development of § 15 in Chapter XX, 
 Volume I. As practice work on this chapter, rule the petty 
 cash books shown on page 219, enter a dozen or more fictitious or 
 supposititious items on the form, total the columns and make the 
 necessary journal entry. 
 
 Miscellaneous Cash Records (Chapter XX) 
 
 The cash journal illustrated and described in the opening 
 sections of this chapter is suited to those business conditions 
 where numerous cash payments are made for merchandise pur- 
 chases which are departmentalized. Its advantages are that 
 it gives a more detailed analysis of cash payments than is 
 afforded by the use of any other type of cash book. Section 5 
 should be closely studied in conjunction with Chapter XXII, 
 § 18. The remaining sections call for no special comment other 
 
BUSINESS ACCOUNTING— VOLUME II gj 
 
 than to draw attention to the fact that Forms 63, 64, and 66 arc 
 merely illustrative of the use of special records for special 
 
 needs. 
 
 Assignment 7 
 MAIN BOOKS— JOURNAL AND LEDGER 
 
 The three chapters here grouped together, after 
 summarizing the theory of the journal and the ledger 
 as explained in detail in Volume I, carry the dis- 
 cussion of the development of the journal and ledger 
 entries through to their more compHcated forms. It 
 is impossible, within the pages of a single book, to 
 explain and illustrate all types of journals and 
 ledgers as well as the variations from those types 
 which are used in actual business practice. The ex- 
 amples here given have been selected because they 
 explain the general principles underlying the develop- 
 ment of the more complicated forms, and because they 
 are those most commonly met with in business ac- 
 counting. 
 
 The Journal (Chapter XXI") 
 
 The two opening sections of this chapter recapitulate in 
 condensed form the information in Volume I, Chapter XV. The 
 gist of the matter is contained in the chart of books of original 
 entry (Form 57), which chart is worth study. Special attention 
 should be paid to § 3 which makes clear the present-day func- 
 tion of the general journal and the reason for its very limited 
 use. 
 
 As a business grows in size and its account classification 
 extends, the mistake of posting to the wrong account is one that 
 
Q2 READING GUIDE 
 
 needs to be guarded against, especially when a number of book- 
 keepers are employed who do their work largely in a mechanical 
 fashion. The journal voucher is a simple modern device to facili- 
 tate accurate posting, and a device which is rapidly growing in 
 favor. It serves its purpose by telling the bookkeeper what 
 accounts to debit and what to credit. Anything which does 
 this is a journal voucher, no matter in what form it may appear. 
 The form on page 235 is intended to illustrate general principles 
 rather than the kind of record that is commonly used. 
 
 Study carefully the theory of the use of journals of three 
 or more columns as explained in §§ 6 and 7. The same prin- 
 ciple applies to the use of a journal containing a dozen or more 
 columns as applies to the use of one containing three columnst 
 Every controlling account and subsidiary ledger requires its own 
 column in the journal for the collection and classification of the 
 transactions to be posted therein. 
 
 As practice work on this chapter, it is suggested that the 
 six-column journal shown on page 242 be reproduced from 
 memory, as well as the cash, the purchases, and the sales jour- 
 nals, and that the illustrative entries in Volume I, pages 329 to 
 331, be entered in their respective journals and the totals pre- 
 pared for posting to the ledger. 
 
 The Ledger (Chapter XXII) 
 
 No section of this chapter can be singled out as requiring 
 more detailed study than any other. The contents as a whole 
 should be slowly assimilated. The practice work in Review 
 Questions 4 and 6 will serve to impress on the mind the reason 
 for the particular entry. In studying the different rulings, try 
 to think of types of business transactions which require each 
 kind of ledger ruling for their most convenient handling. 
 
 The discussion of the private ledger in § 18 will thoroughly 
 test your knowledge of the theory of double entry. If you can 
 grasp the explanation and visualize in your mind the method of 
 opening and operating a private ledger, you may be assured 
 
BUSINESS ACCOUNTING— VOLUME II ^3 
 
 that your accounting knowledge is thorougli and that you are 
 building on a sure foundation. If you cannot, then the illustra- 
 tion given below will make the matter clear to you. In studying 
 the illustration, visualize the postings to the different accounts. 
 
 General Ledger Trial Balance (After Closing)* 
 
 Cash $ 3,550.00 
 
 Special Deposits 5,000.00 
 
 Investments 4,000.00 
 
 Customers 17,340.00 
 
 Inventory of Mdse 5,000.00 
 
 Furniture and Fixtures. 1,500.00 
 
 Plant and Equipment.. 10,000.00 
 
 Patents 10,000.00 
 
 Drawings 2,250.00 
 
 $58,640.00 
 
 Notes Payable $ 2,500.00 
 
 Accounts Payable 11,^10.00 
 
 Wages Payable 800.00 
 
 Mortgage Payable 3^^)0.00 
 
 Capital 40,500.00 
 
 $58,640.00 
 
 General Ledger Trial Balance (After Closing) f 
 
 Cash $ 3,550.00 
 
 Customers 17,340.00 
 
 Furniture and Fixtures. 1,500.00 
 Plant and Equipment.. 10,000.00 
 Patents 10,000.00 
 
 $42,390.00 
 
 Notes Payable $ 2,500.00 
 
 Accounts Payable 11,840.00 
 
 Wages Payable 300.00 
 
 Private Ledger Control 
 Account 27,750.00 
 
 ^2,390.00 
 
 Private Ledger Trial Balance (After Closing) 
 
 Special Deposits $ 5,000.00 
 
 Investments 4,000.00 
 
 Inventory of Mdse 5,000.00 
 
 Drawings 2,250.00 
 
 General Ledger Control 
 Account 27,750.00 
 
 $44,000.00 
 
 Mortgage Payable $ 3,500.00 
 
 Capital 40,500.00 
 
 $44,000.00 
 
 * On the assumption that there is no private ledger, 
 t On the assumption that a private ledger is kept. 
 
64 
 
 READING GUIDE 
 
 Classification of Accounts (Chapter XXIII) 
 
 Sections 1 and 2 are introductory to the theory of the sub- 
 ject in § 3. In the study of the examples of classification sys- 
 tems from page 273 to the end of the chapter, you should memo- 
 rize the classification shown on pages 273 to 276. This is much 
 easier than at first appears. The main headings of assets and 
 liabilities suggest the group headings of fixed, current, deferred, 
 and so on; the group headings suggest the subdivisions; and the 
 subdivisions indicate the titles of the accounts that fall within 
 them. Half an hour's study and two or three attempts to re- 
 produce the list should be sufficient to impress on the mind the 
 names of the majority of the accounts and their classification. 
 The more elaborate classifications beginning on page 277 
 are presented for reference purposes, also for detailed study. 
 
 After completing your reading of this chapter, turn to Vol- 
 ume V, Problem 35, and work out the classification of the ac- 
 counts shown in the trial balance in accordance with the prin- 
 ciples laid down in this chapter. Then compare the result with 
 the solution to the problem which presents an alternative method. 
 
 Assignment 8 
 
 STATEMENTS 
 
 As the subject under this heading is completely 
 covered in Volume I, Chapters IX to XIV, and in 
 Volume IV, Part IV, the discussion here is limited 
 to the essential and elementary information required 
 to complete the unity of this volume. 
 
 Statements (Chapter XXIV) 
 
 The important points in this chapter that have not been 
 touched upon in Volume I and to which in consequence special 
 
BUSINESS ACCOUNTING— VOLUME II 55 
 
 attention should be devoted, are those in §§ 6 to 9. As examples 
 of comparative, cumulative, and graphic statements will be found 
 in Volumes III and IV, the present chapter requires little more 
 than a careful reading, and the marking on the margin of the 
 points to be memorized. 
 
 Assignment 9 
 
 EXPENSE EXPENDITURES 
 
 Chapters XXV and XXVI in this assignment of 
 work cover the method of accounting for expenditures 
 under the three designated heads on the books of a 
 concern which buys merchandise for resale. Chapter 
 XXVII discusses a method of controlhng expense, 
 which increases in its importance as a business grows 
 in size. 
 
 Expense (Chapter XXV) 
 
 The accounting theory in this chapter is comparatively 
 simple and summarizes the current practice of commercial houses. 
 A more detailed discussion of various methods of accounting for 
 expense will be found in Volume III. The attention of the 
 student is drawn to one important point in Chapter XXV, 
 namely, that the expenses of the purchasing department are 
 added to the cost of the goods sold, whereas administrative and 
 selling expense are treated as deductions from gross profits. 
 
 Labor and Salaries (Chapter XXVI) 
 
 The information in this chapter is included for the sake of 
 completeness and for the benefit of those students who do not 
 intend to make a special study of cost accounting. As cost 
 
QQ READING GUIDE 
 
 accounting, however, is somewhat related to general accounting, 
 this chapter should be read carefully. 
 
 The Budget (Chapter XXVII) 
 
 The information here relates to financial policy and does 
 not concern the keeping of any special accounting records. The 
 expenditures of preceding periods form the basis of the budget 
 for the current period, due provision being made for changes in 
 policy and operations. To the student or business man it is sug- 
 gestive of means of controlling expenditures rather than de- 
 scriptive of the concrete methods to be employed. The actual 
 methods are, for obvious reasons, a problem which every business 
 must solve in its own way. 
 
 Assignment 10 
 MISCELLANEOUS MATTERS 
 
 The special records and the office devices de- 
 scribed in these two chapters are so frequently met 
 with in ordinary business practice that a knowledge 
 of their scope and use is information with which every 
 accountant should be familiar. 
 
 Special Records (Chapter XXVIII) 
 
 Either a notes register or notes journal in one form or 
 another is a part of the bookkeeping records in practically every 
 business in which note transactions are at all numerous. Part of 
 the practice work on this chapter should include the drawing of 
 Forms 76 and 77 from memory, and the entry thereon of the 
 illustrative transactions given in Volume 1, Chapter XXVIII, 
 §2. 
 
 Study and compare the ruling of Form 78 with that of Form 
 74 (page 258). The difference between the two forms is that 
 
BUSINESS ACCOUNTING— VOLUME II ^^ 
 
 the corporation stock ledger is a subsidiary book controlled by 
 the Capital Stock account in the general ledger, whereas the 
 corporation stock book serves as a journalizing record for the 
 assembling of the totals to be posted to the ledger. Forms 79 
 to 82 are records devised for journalizing purposes and they 
 should be studied from this angle. Compile mentally the journal 
 entry to be made for the posting of the data accumulated on 
 these supplementary records. In studying these records it 
 should never be overlooked that where any form serves as a 
 record of original entry it fulfils the purposes of a journal from 
 which entry may be made on the regular journal or, if postings 
 are numerous, direct to the ledger. Forms 84 and 85 are in- 
 tended to illustrate general principles and it is unnecessary to 
 commit their special rulings to memory. In this connection it 
 may be noted that it is a simple matter to reproduce any special 
 form or devise a new form for a special purpose when the kind 
 of information to be recorded and the purpose it is to fulfil arc 
 known. , 
 
 Mechanical Aids (Chapter XXIX) 
 
 This chapter consists of general information and requires 
 merely a careful reading. 
 
 Assignment 11 
 SPECIAL SYSTEMS 
 
 The three chapters discussed below cover the spe- 
 cial points in retail, wholesale, branch, and mail- 
 order accounting which necessitates the use either of 
 distinctive books of original entry or of distinctive 
 accounting methods. The operation of agency and 
 branch accounting, while simple in theory, becomes 
 
68 READING GUIDE 
 
 complicated in practice because of the necessity of 
 keeping two sets of records which must "tie up" or 
 articulate with each other. 
 
 Retail and Wholesale Accounting (Chapter XXX) 
 
 For practice work on this chapter, construct the cash book 
 sheet described in § 8, and the purchase journal and notes pay- 
 able register in § 9. Enter on these records a number of sup- 
 posititious transactions, total them, and journalize the totals 
 for ledger entry purposes. 
 
 Agencies and Branches (Chapter XXXI) 
 
 This chapter calls for methodical and patient study. For 
 practice work in the operation of agency and branch accounts, 
 it is suggested that the accounts referred to be constructed and 
 a number of imaginary transactions be journalized and posted 
 therein. This will help to impress the procedure on the mind 
 and serve as an introduction to the study of Problems 37 and 41 
 in Volume V. These may be taken up as soon as the theory of 
 the subject is mastered. 
 
 Mail-Order Accounting (Chapter XXXII) 
 
 The general procedure of mail-order accounting does not 
 materially differ from ordinary accounting practice, the chief 
 distinction lying in the ruling of the cash book as shown on page 
 394. This form should be carefully studied and a mental analy- 
 sis should be made of the reasons for the special records used. 
 
 Assignment 12 
 SPECIAL SYSTEMS (Continued) 
 
 The three special systems in this group have dis- 
 tinctive features of their own. One engaged in ordi- 
 
BUSINESS ACCOUNTING-VOLUME II ^ 
 
 nary business may never have occasion to handle this 
 particular kind of accounting, but a knowledge of 
 the methods employed is required by the candidate 
 for a C. P. A. examination. 
 
 Professional Accounts (Chapter XXXIII) 
 
 The distinctive features of most special systems of account- 
 ing are seen in the ruling of the cash book and in the kinds of 
 records kept as books of original entry. The careful study and 
 memorization of these records will usually suffice to give the 
 student a working knowledge of how to handle the particular 
 type of accounting to which the records are applied. 
 
 Estate Accounting (Chapter XXXIV) 
 
 Estate accounting is a highly specialized branch. One pecu- 
 liarity is the form of statement which the executor is required by 
 law to furnish. The study of the form shown on page 411 in 
 conjunction with the text will give the student an insight into 
 the special features of this branch of accounting work. 
 
 Stock Brokers* Accounts (Chapter XXXV) 
 
 The distinctive features of this type of accounting are seen 
 in the use of the blotter (Form 109) and in the operation of 
 Long and Short accounts. This system of account-keeping 
 seems complicated and puzzling until the nature of the trans- 
 actions and the usages which govern them are clearly under- 
 stood. Therefore, the explanation of the principles which govern 
 stock exchange transactions should be studied carefully. 
 
 Assignment 13 
 MISCELLANEOUS SYSTEMS 
 Of the five remaining chapters of this book, the 
 first three take up the distinctive features of certain 
 
70 
 
 READING GUIDE 
 
 special systems, a knowledge of which is requisite to 
 round out the education of the accountant. Chap- 
 ters XXXIX and XL serve as an introduction to, 
 and a review of, the field of cost accounting, and ex- 
 plain the difference between the cost accounting of a 
 manufacturing business and the financial accounting 
 of a trading concern which analyzes the cost of goods 
 sold. The final chapter in the book needs careful 
 study. The principles and methods involved in no 
 way differ in their fundamentals from those explained 
 in Volume III. 
 
Volume III 
 Cost Accounting 
 
ASSIGNMENTS FOR VOLUME III 
 
 Assignment 1 
 GENERAL PRINCIPLES 
 
 This volume requires from the reader a new point 
 of view. The other volumes of the series dealing with 
 general accounting draw their illustrations mainly 
 from mercantile transactions. This volume on cost 
 accounting is concerned more particularly with in- 
 dustrial enterprises. 
 
 Chapters I and II lay down the general principles 
 of cost accounting, and indicate its place in modern 
 business. They do not enter into the technique of 
 the subject. 
 
 Cost Accounting in Modern Business (Chapter I) 
 
 This chapter can be studied section by section, inasmuch 
 as an understanding of one section is not a prerequisite to the 
 understanding of the others. 
 
 Elements and Principles of Cost Accounting (Chaptbr II) 
 Several classifications of costs are discussed in this chapter. 
 Note the threefold classification given in § 1. The most im- 
 portant point to be gained from the chapter is probably the 
 relation between the classification of costs into direct and in- 
 direct, and the accuracy of the cost figures. 
 
 Note that expenses as indicated by the chart on page 21 
 are numerous and are classified into two comprehensive groups. 
 While the author mentions in this chapter the difficulty of dis- 
 tributing expenses, you will not fully appreciate this point until 
 
 73 
 
74 READING GUIDE 
 
 you have concluded the reading of the later chapters which deal 
 with expense distribution. 
 
 Observe the need for prompt presentation and compilation 
 of costs. This calls for a short cost period. 
 
 Before leaving this chapter^ classify costs according to the 
 different methods there discussed and give examples of each 
 type. Do this after studying § 8 but do not refer to it when 
 making your classifications. 
 
 Assignment 2 
 COST ACCOUNTING PROCEDURE IN GENERAL 
 
 The function of this assignment is to present a 
 well-rounded view of the mechanism with which cost 
 accounting operates before taking up the detail of 
 procedure. The student should first examine care- 
 fully the table of contents for Parts I and II in order 
 to get a proper perspective and an idea of the rela- 
 tion of the two groups of chapters. Then Chapters 
 III, IV, and V should be read straight through. 
 After this first general reading, go back and study 
 each chapter, section by section, noting what each 
 successive step in the procedure contributes. These 
 chapters should be read again after finishing Chapter 
 XXIII, to make sure that he understands clearly 
 the relation between the steps of the detail technique. 
 
 Routine of Cost Accounting (Chapter III) 
 
 This is a chapter of details from which emerges the impor- 
 tant point that the detailed accounting practice varies in differ- 
 ent plants, even in the same line of industry. 
 
BUSINESS ACCOUNTING— VOLUME III 75 
 
 Note the function of authorization and numbering of pro- 
 duction and standing orders. Study the contents of the sample 
 production order on page 32. A knowledge of what a form 
 should contain is more important than a knowledge of its arrange- 
 ment, since you will have to devise forms to fit the circumstances 
 in each individual ''engagement" you undertake. 
 
 Note the function and contents of the material requisition 
 and time ticket. Study § 5 very carefully. Remember that costs 
 other than prime costs are distributed first to departments and 
 then to products passing through the departments. The details 
 of such distribution through the medium of ''Expense Distribu- 
 tion Sheets" will be explained in later chapters. Note at this 
 time the contents of these sheets, the sources of entries therein, 
 and who fills them out. Since all costs are entered and sum- 
 marized on cost sheets in a jpb order factory, they should be 
 studied with care. 
 
 Cost Accounting Methods — Simple Products (Chapter IV) 
 Summarize the steps involved in calculating the unit conver- 
 sion cost. The job order and process methods may be used con- 
 currently in a given plant as described in § 5. The foundry is a 
 familiar illustration of the job cost system. 
 
 Cost Accounting Methods — Compound Products (Chap- 
 ter V) 
 
 Chapter IV dealt with the job cost system of accounting a. 
 applied to products which require only one class of raw ma- 
 terial. A more complex procedure which is needed wlien more 
 than one class of material is involved is discussed in Chapter V. 
 
 Production orders not only authorize production but also 
 serve sometimes as a collecting vehicle for costs applicable to 
 the order. (See §§ 2 and 3.) 
 
 Be able to describe the three copies of the combined produc- 
 tion order and cost sheet (Form 8) and to list their maiii con- 
 
76 READING GUIDE 
 
 tents. Study the three purposes of coupon orders. Note also 
 how production can be traced by means of these orders. 
 
 Summarize the steps in scheduling production under the 
 coupon order method of production (see § 5). Note particularly 
 the function of the "Day's Work Sheet.'' 
 
 Study the different reasons for charging leather to shoes 
 at an average j^rice rather than at actual cost. Be sure to get 
 the point that differences between actual and estimated cost 
 must be traced and accounted for. Write out the technique of 
 the "Loss and Gain on Estimate" account. Note also that these 
 differences have a bearing on the problem of fixing a selling 
 price and the problem of waste. 
 
 In connection with § 7 you will find it profitable to set down 
 the advantages and disadvantages of estimating systems in con- 
 nection with various industries. . 
 
 • In § 8 the main point is the reason for keeping separate 
 costs for the component parts of a finished product. 
 
 Assignment 3 
 
 RELATION BETWEEN GENERAL LEDGER AND 
 COST ACCOUNTS 
 
 The chief purpose of this assignment is to em- 
 phasize the point already touched in Chapter I, that 
 any system of cost records must ''tie up" with the 
 general records, and that the tie-up is accomplished 
 by means of controlling accounts. It is absolutely 
 impossible to control costs unless thi^ is done. The 
 student should review in this connection Volume I, 
 Chapter XXIV, and apply the principles there pre- 
 sented to the new task now confronting him. 
 
BUSINESS ACCOUNTING— VOLUME III 77 
 
 The correlation of controlling accounts with sub- 
 sidiary records is more difficult in connection with a 
 cost system than in connection with a system of gen- 
 eral accounts. For example, the tie-up of the Raw 
 Materials controUing account — a cost account — with 
 stock records is more difficult than the tie-up of 
 Accounts Receivable — a commercial account — with 
 the customers ledger. 
 
 Financial and Cost Accounts (Chapter VI) 
 
 Inasmuch as general ledger and cost accounts are operated 
 concurrently, the relation between the two must now be clearly 
 understood. The actual tie-up between general ledger and cost 
 accounts is accomplished by controlling accounts, as here ex- 
 plained. The place of perpetual inventories in tying up cost 
 records with the general accounts is discussed in §§ 4 and 6. 
 
 You should be able to explain in detail the arrangement and 
 functions of the stores ledger, cost ledger, and stock ledger, 
 since these are three of the most important records in any cost 
 system. Since the cost ledger is really a file of current job 
 sheets, a form of it does not appear here because it was dis- 
 cussed in Chapter III. 
 
 For practice work on this chapter, draw up three skeleton 
 ledger accounts with hypothetical figures for the following con- 
 trolling accounts: 
 
 1. Stores 
 
 2. Work in Process 
 
 3. Finished Goods 
 
 You should in no event proceed with your reading until you 
 thoroughly understand the content and operation of the above 
 accounts — and how they control the detailed cost records. 
 Notice also that the amounts in tliese accounts are checked 
 
78 READING GUIDE 
 
 against physical inventories before the inventory figures to be 
 entered in the balance sheet are determined upon. 
 
 Entries to General Ledger Controlling Accounts (Chap- 
 ter VII) 
 
 In this chapter the detailed technique in connection with 
 the operation of the general ledger controlling accounts is ex- 
 plained. In some places the technique of the subsidiary cost 
 records is discussed where such discussion assists in understand- 
 ing the controlling accounts. 
 
 Study particularly in § 1 the method of charging purchase 
 to the Raw Material controlling accounts and stock records 
 (subsidiary records). Notice how the agreement between these 
 two classes of data is maintained, and that inward freight is 
 charged to both of the above classes of records. 
 
 After the Raw Material account the controlling account 
 next opened and operated is that for work in process. The 
 points to be studied in this connection are: 
 
 1. The items that make up the account. 
 
 2. The original sources from which these items come. 
 
 3. How corresponding entries are made in subsidiary 
 
 records. 
 
 Observe that the items in each Work in Process account con- 
 sist of: 
 
 1. Inventories 
 
 2. Materials 
 
 3. Labor 
 
 4. Overhead 
 
 Material and labor can be charged directly to Work in Process 
 accounts, but overhead is distributed to departments, work in 
 process, and cost sheets through department overhead rates. 
 The detailed technique of such distribution is discussed in later 
 chapters. 
 
BUSINESS ACCOUNTING— VOLUME III jg 
 
 The next controlling account to be used is the Finished 
 Goods account. Note how it is built up. Be sure to remember 
 that sales of finished goods are credited to Finished Goods 
 account at cost rather than sales price. 
 
 Indirect Expense Account (Chapter VIII) 
 
 Section I summarizes the steps in recording indirect expense. 
 Since books are usually kept on an accrual basis, all expenses 
 applicable to a current period must be recorded whether or not 
 they have been paid in cash. Examples of such expenses dis- 
 cussed in § 2 are depreciation, rent, insurance, and taxes. Ex- 
 penses may be prepaid. These expenses are of two kinds (see 
 § 3). Study the method of booking such charges. 
 
 Closing the Controlling Cost Accounts (Chapter IX) 
 
 Study the journal entries which affect the controlling ac- 
 counts. Note the points of divergence between the job order 
 and process systems. Without reference to the text, draw up 
 similar journal entries, using hypothetical figures. 
 
 After this is done, balances appear in certain of these 
 accounts. Be able to name these accounts. You should under- 
 stand the reason for the absence of balances in the non-produc- 
 tive department accounts, and the method of adjusting the bal- 
 ances in the productive department accounts. 
 
 Assignment 4 
 
 GENERAL PROCEDURE IN ACCOUNTING FOR 
 MATERIALS 
 
 This assignment discusses with some detail the 
 first principal class of costs, namely, materials. It 
 should be studied very closely. The records here de- 
 
80 READING GUIDE 
 
 scribed — the stock record in particular — constitute a 
 portion of the basic records in a cost system. 
 
 Accounting for stores cannot be done properly 
 unless there is a proper stores organization and a 
 proper lay-out for the stores department. It is an- 
 other instance of the close relation of cost accounting 
 and management of which the student should never 
 lose sight in his work. 
 
 To handle this assignment successfully it will be 
 well to review not merely the discussion of elements 
 of cost in Chapter II, but also the discussion of pur- 
 chasing stores in Volume II, Chapters VIII to XIII. 
 
 It may be said, however, that the accounting for 
 direct materials, here treated, and for direct labor, 
 treated in Assignment 6, will prove much easier to 
 master than the accounting for burden to be dis- 
 cussed further on. 
 
 Stores and the Stores Department (Chapter X) 
 
 This chapter is the beginning of a more detailed discussion 
 of cost accounting. It considers the first big cost of a manu- 
 factured product, namely, materials or stores. 
 
 Stores Accounting and Records (Chapter XI) 
 
 The last chapter emphasized the needs of stores-rooms and 
 adequate stock records for the control of stores. This chapter 
 deals with the accounting and records for stores. 
 
 You should imderstand the reasons (presented in § 2) why 
 close accuracy in stores accounting must be insisted on. The 
 technique of stock-recording also is important. Do not proceed 
 in your study until you have mastered it. Note that stock rec- 
 ords usually show not only quantities but also values of stores 
 
BUSINESS ACCOUNTING— VOLUME III ot 
 
 receipts, issues, and balances (§ 3), although sometimes only 
 quantities are shown. 
 
 After studying § 10, close your book and write out the 
 procedure of handling issued stores. 
 
 The main points to remember in § 11 are: 
 
 1. The technique of recording material returned to vendor. 
 
 2. The two records made for material returned to stores- 
 
 rooms from the factory, namely, stores returned 
 memos and stores returned book. 
 
 Make a list of the reasons for discrepancies between stores 
 controlling accounts and stores records; and perpetual inven- 
 tories and physical inventories. What accounting entries are 
 made to adjust these discrepancies.^ 
 
 Assignment 5 
 
 SPECIAL FEATURES IN ACCOUNTING FOR 
 MATERIALS 
 
 The preceding assignment dealt with accounting 
 for stores which might be apphed to any organization. 
 This assignment treats of special problems which 
 arise in accounting for materials pecuHar to certain 
 types of industries. Almost as perplexing at times 
 as the accounting for burden is the handling of these 
 special problems discussed in Chapter XII. For 
 example, the matter of by-product accounting pre- 
 sents an extremely difficult point. 
 
 The student should allow himself plenty of time 
 to master this assignment, studying and digesting it 
 through patient application to concrete instances. 
 
82 READING GUIDE 
 
 A thorough understanding of the matter pre- 
 sented here will not only give you a ready command 
 of the technicalities of stock-recording, but will also 
 assist you materially in solving problems of a differ- 
 ent sort. 
 
 To get the full benefit of the discussion in Chap- 
 ter XIII, you might well try your hand at working 
 out a classification of stores for one or two industries 
 with which you are familiar. 
 
 Stores Problems (Chapter XII) 
 
 Two points are emphasized by §2: (1) the three ways of 
 pricing requisitions, and (2) the conditions under which each 
 one of the three methods is applicable. Changes in the weight 
 or volume of materials after purchase must be considered before 
 charging material consumed. The methods of charging in such 
 cases, noted in § 3, should be completely understood. 
 
 Wastes of materials must also be recorded, and prevented if 
 possible. In order to check unnecessary waste, standards of 
 material consumption should be set. The importance of stand- 
 ards not only of material consumption but also of labor and 
 burden consumption cannot be exaggerated because the measure 
 of current accomplishments can be determined in no other way. 
 
 In § 5 note the function of the spoilage account, and the 
 replacement order. Although there are various ways of treat- 
 ing defective and spoiled material, such material is usually 
 handled as an overhead item. 
 
 Note that the accounting for scrap "depends on whether or 
 not the scrap is of sufficient value to affect appreciably the cost 
 of the product.'' 
 
 The proper accounting for by-products depends primarily 
 on the nature of the by-product and the proportion of its value 
 to the main product. 
 
BUSINESS ACCOUNTING— VOLUME III gj 
 
 Classification of Stores (Chapter XIII) 
 
 In § 1 note the reason for the cost accountant's interest in 
 the subject of stores classification. Stores must be classified 
 and symbolized in some way, if proper cost records are to be 
 kept. The necessity for this and its advantages are discussed 
 in §§ 2 and 3. 
 
 After reading § 4, see whether you can outline the steps to 
 be followed in constructing a symbol code. Be able to enumerate 
 the main features of special codes, such as the "block" system 
 and the Dewey decimal system, §§5 and 6. 
 
 Assignment 6 
 LABOR COSTS 
 
 This assignment covers the second of the prin- 
 cipal groups of cost items. In considering labor costs 
 the student must give attention to the Ihiuman element 
 involved. Most cost accountants attribute a large 
 part of their success to their understanding of the 
 human element in the problems they have had to work 
 out. 
 
 Any method of accounting for labor depends, to a 
 great extent, on the method of wage payment. 
 While in some cases it may not be the function of the 
 cost accountant to select the method of wage payment 
 to be followed in the organization, he should be fa- 
 mihar with the various methods so as to account prop- 
 erly for the costs involved. 
 
 It is important to have accurate records for labor, 
 not merely in order to determine labor costs, but also 
 
g4 READING GUIDE 
 
 in order to distribute properly the cost of burden, 
 when the method of distribution is by direct labor 
 hours, by direct labor costs, or by machine hours. 
 
 The three chapters of this group are very closely 
 related; one record of the series here described serves 
 as the basis for another. The student should keep this 
 close relationship firmly in mind throughout his 
 study. As already noted, the subject of direct labor 
 costs — like that of direct material costs — is much 
 simpler than the subject of indirect costs to be taken 
 up later. Nevertheless, the subject requires close and 
 patient attention, and the student should allow him- 
 self plenty of time for his work. 
 
 Recording the Cost of Labor (Chapter XIV) 
 
 The first important point for you to note is the dual pur- 
 pose of labor records (see § 2). Note in a general way the 
 method of arriving at labor costs for units of production. 
 
 Notice the function of the time card for "in and out" time, 
 viz., to record the time the worker enters and leaves the factory. 
 Keep in mind that this record does not show any labor costs 
 although under a process system it furnishes the basis (time) 
 for the calculation of wages. 
 
 Since the pay-roll is such an important labor record, it 
 should be prepared in analyzed form, i.e., it should show labor 
 costs classified into direct and indirect labor by departments. 
 
 Study carefully the journal entry which summarizes the 
 labor costs for the period (§7). 
 
 Time and Pay Records (Chapter XV) 
 
 Two chief cost records are discussed in this chapter, viz., 
 time cards and pay-roll records. The illustrative forms should 
 
BUSINESS ACCOUNTING-VOLUME III gg 
 
 be studied with two things in mind: (1) their technical use, and 
 (2) their advantages and disadvantages. 
 
 Wage System (Chapter XVI) 
 
 The following are the chief points that should be grasped in 
 this chapter: 
 
 1. Method of calculating labor costs under the different 
 
 methods of wage payment. 
 
 2. Where each system is applicable; and where non- 
 
 applicable. 
 
 3. The main points of difference among the various 
 
 methods. 
 
 Assignment 7 
 DISTRIBUTION OF INDIRECT EXPENSES 
 
 The next three assignments deal with the most 
 perplexing problem of cost accounting — the record- 
 ing and distribution of indirect expense. 
 
 To master these assignments the chapters should 
 be read again and again. The best plan would be for 
 the student first to review Chapter VIII, and then to 
 read Assignments 7, 8, and 9 straight through. After 
 that he should try to outline rather broadly — with- 
 out consulting the book — the main steps involved in 
 the calculation and application of indirect expense. 
 When this outline is completely mastered, the student 
 should begin with Assignment 7 and study each point 
 slowly and carefully. Great effort must be expended 
 
86 READING GUIDE 
 
 to get a clear understanding of all the records dealing 
 with indirect expense, or burden. 
 
 Assignment 7 discusses the original records for 
 indirect expense. The student will remember that 
 the matter here presented was referred to incidentally 
 in Volumes I and II, but was not fully treated. The 
 work here, therefore, is a distinctly new development 
 in the study. The intrinsic difficulty of the subject 
 requires your utmost alertness and attentiveness of 
 mind. 
 
 Chapter XVII serves as a general introduction 
 which should be studied and digested by itself. After 
 that the items to be entered in the original records are 
 grouped in three main divisions which are covered 
 respectively in Chapters XVIII, XIX, and XX. 
 After finishing his detailed study of Chapter XIX, 
 the student should test his understanding of the sub- 
 ject thus far, by trying to draw up a schedule of fixed 
 charges in connection with a business with which he is 
 familiar. 
 
 General Considerations of Expense (Chapter XVII) 
 
 No feature of cost accounting is more difficult than the 
 handling of indirect expense^ so you will have to read and reread 
 the chapters in this part in order to understand them fully. 
 Chapters XXI to XXIII should be studied with particular care. 
 
 Do not by any means proceed with the reading of Chapter 
 XVII beyond the first paragraph until you clearly understand 
 the meaning of indirect expense (burden or overhead) and how 
 it differs from prime cost. It may be necessary to refresh your 
 memory by reading again Chapter II. 
 
BUSINESS ACCOUNTING— VOLUME III 37 
 
 Note in § 1 the reasons for lack of uniformity in handling 
 expense. 
 
 Study Form 32 — showing the classification of expense ac- 
 counts. 
 
 Before reading § 2, be sure that you can summarize the 
 steps involved in the distribution of expense. You will not 
 completely understand these until you have concluded tlie read- 
 ing of Part VI, but at this point you should at least have in mind 
 the steps referred to above. Keep these in mind as you read 
 this part of the book, particularly the last three chapters. 
 
 Be able to classify expense and to mention the records on 
 which the different classifications are first entered. Make a 
 list of the classes of invoices entered in the purchase journal 
 analysis. Note the analytical function of the subsidiary expense 
 ledger and its importance as an aid to administration. 
 
 Note the examples and treatment of functional expense 
 accounts. Note the function of the plant ledger. What is a 
 controlling account? The subject of depreciation touched on 
 in this chapter is discussed later in Chapter XX and more fully 
 in Volume IV. 
 
 Study § 8 very carefully. Then put aside the book and make 
 a list of the classes of expense, and the original factory docu- 
 ments where expenses are entered. Be sure that you under- 
 stand the significance of the term "departmentalization of ex- 
 pense." Summarize the three aims of expense distribution. 
 
 Indirect Labor and Supplies (Chapter XVIII) 
 
 The chief point to get in § 1 is that indirect factory activities 
 
 cannot be charged direct to goods or orders. Note the medium 
 
 for charging these activities, viz., standing orders. 
 
 The next point to get in this chapter is the function of the 
 
 standing order time ticket (§3) and tlie circumstances under 
 
 which it is used. 
 
 Study the example (Form 34) of the numbering of sUnding 
 
 orders. Note the dual advantage of such numbering. Be sure 
 
88 READING GUIDE 
 
 that you understand how charges are made to standing orders. 
 Make a list of the advantages of a numerical arrangement of 
 orders. 
 
 Fixed Charges — Rent, Taxes, Interest, Etc. (Chapter XIX) 
 Note the reason for terming certain expenses *'fixed charges.** 
 The next point to understand clearly is the reason for using 
 different mechanisms to distribute indirect labor and supplies, 
 and fixed charges. Study the mechanism for the latter as 
 indicated by Form 35. 
 
 Make a sample journal entry illustrating a current charge 
 for a fixed charge. Note that the basis for distributing fixed 
 charges to the different departments usually varies. 
 
 Depreciation (Chapter XX) 
 
 The chief points to be gained from a reading of the first 
 three sections are : ( 1 ) an understanding of the nature of depre- 
 ciation and obsolescence, and the differences between the two; 
 and (2) a realization of the necessity for recording both of 
 these items in the accounts. 
 
 Note that the depreciation depends on a number of variable 
 causes. The problem of depreciation is closely bound up with 
 the problem of valuation. This is the reason for the author's 
 point that the cost accountant, as such, has not had the technical 
 training to enable him to measure depreciation accurately. 
 
 Assignment 8 
 DISTRIBUTION OF INDIRECT EXPENSE 
 
 After the indirect expenses have been entered on 
 the original records, the next few steps involved in 
 handUng them are: 
 
• BUSINESS ACCOUNTING— VOLUME III 
 
 1. To decide what method of distribution 
 
 should be used. 
 
 2. To distribute the indirect expenses in ac- 
 
 cordance with the method chosen. 
 
 In deciding upon the method of distributing indirect 
 expense, the student will need to consider carefully 
 the circumstances under which the different methods 
 apply. 
 
 This requires, of course, a thorough knowledge of 
 the methods in general use, namely: the productive 
 hour method; the percentage of Jabor method; and 
 the machine-rate method. The other methods men- 
 tioned in the chapter are used only to a limited degree. 
 
 The distributing medium for the second step is the 
 expense distribution sheet. The method of adjusting 
 differences between actual indirect expenses incurred 
 and the application of indirect expenses to the prod- 
 uct by means of burden rates should receive special 
 attention. 
 
 This assignment requires even more time to mas- 
 ter than the preceding. It is probably the most diffi- 
 cult one in the whole volume and should recefve most 
 serious and concentrated attention. 
 
 After working through each chapter, the student 
 should look back and try to summarize the steps in 
 each section without referring to the book. 
 
 Expense Distribution (Chapter XXI) 
 
 This and the succeeding two chapters have to do with the 
 most difficult feature of cost accounting — the distribution of 
 
90 READING GUIDE 
 
 indirect expense. Hence they must be studied — not simply- 
 read — with great care. 
 
 Note the four sources of entries for expenses. Observe 
 also: 
 
 1. That expense is departmentalized. 
 
 2. That all expenses are collected ultimately in productive 
 
 department accounts. 
 
 3. That expense is applied to product passing through 
 
 the department by means of a predetermined rate. 
 
 Be sure that you understand how expenses of non-productive 
 departments are prorated over productive departments. Ex- 
 amples of such expense are: (1) general and administrative, 
 (2) stores, and (3) power. Observe that the distribution in- 
 volves (1) the consideration of the most equitable basis under 
 the circumstances, and (2) the technique of distribution. Do not 
 continue your study until you fully grasp the foregoing points. 
 
 Note the basis and technique of distributing stores expense 
 directly to jobs, rather than to productive departments and then 
 to jobs. (For further details, see Chapter XXIV.) 
 
 Observe in §§ 7 and 8 that the treatment of expense under 
 the job order and process methods varies somewhat. 
 
 Note the advantage of opening expense accounts on the 
 ledger for non-productive departments, and the reason for an 
 expense account for each operating department under the job 
 order method. 
 
 The treatment of differences between department expense 
 taken from the distribution sheet and department burden applied 
 to orders is explained in Chapter XXII. 
 
 Expense Distribution Over Product (Chapter XXII) 
 
 The reason for averaging expenses under the process method 
 and the necessity for burden rates under the job order system 
 should be clearly understood before you read the details of this 
 chapter. 
 
BUSINESS ACCOUNTING— VOLUME III g, 
 
 Make a list of the six bases for burden rates. Two of these 
 are of limited application. List also the four general methods of 
 determining and distributing overhead rates. Note the reasons 
 for the prevalency of the percentage of labor metliod. Be sure 
 you understand the principle upon which this method is based. 
 Study the example which illustrates the technique of this 
 method. 
 
 Make a list of the conditions that should exist in a plant 
 where the percentage of labor method is applicable. Study the 
 technique and the conditions under which tlie sold-hour method 
 is applicable. Do the same for material and prime cost methods. 
 Note the reasons for overhead adjustments. Study the tech- 
 nique of the methods of handling overhead adjustments and the 
 reasons. Note the circumstances under which each method is 
 suitable. 
 
 Assignment 9 
 MACHINE-HOUR RATES 
 
 Machine-hour rates, which were briefly mentioned 
 in the preceding assignment, are here given detailed 
 treatment. The use of machine-hour rates is the most 
 highly specialized method of distributing indirect ex- 
 pense. It is chiefly applicable when the large majority 
 of the operations of a business are machine opera- 
 tions, particularly automatic machines. 
 
 Make a list of the steps involved in the use of this 
 method. One special feature of the burden distribu- 
 tion peculiar to this plan is the use of supplementary 
 rates in connection with idle machine time. It is im- 
 portant to grasp the significance of the division of tlie 
 
92 READING GUIDE 
 
 plant into production centers as a prerequisite to the 
 installation of the method. 
 
 The student should allow plenty of time for this 
 assignment. After completing it he should once 
 more read over Assignments 7, 8, and 9. 
 
 Machine-Hour Rates (Chapter XXIII) 
 
 This chapter deals with a highly specialized method of 
 burden distribution, which, however, is the same in broad out- 
 line as the other distributing methods already discussed. 
 
 Three chief points are made in § 1 : 
 
 1. The circumstances suitable to the use of machine rates. 
 
 2. The meaning of production center. 
 
 3. The determination of overhead for each production 
 
 center. 
 
 Make an outline of the steps involved in computing the ma- 
 chine rate. Study the bases and technique of distributing items 
 such as building expense or rent, power, depreciation, insurance, 
 taxes, tools, repairs, administrative, and sundry expenses to pro- 
 duction centers. Study with care the example which shows the 
 calculation of the hourly rate for six machines. 
 
 Three chief points are made in the rest of this chapter: 
 
 1. Account content. 
 
 2. Use of machine expense account. 
 
 3. Reasons for the accuracy of machine rates as a method 
 
 of distributing expenses. 
 
 Assignment 10 
 JOB ORDER COST SYSTEM 
 
 Reference has been made in Chapter I, §§ 10 and 
 11, and in Chapters IV and V, to the three main 
 
BUSINESS ACCOUNTING— VOLUME III 
 
 98 
 
 types of cost systems. The next three assignments 
 take them up in detail. 
 
 The first two systems — the job order system and 
 the process system — are often operated concurrently 
 in the same plant. The student should note the rea- 
 sons for this, as stated in Chapters XXIV and XXV. 
 
 This assignment and the next one require plenty 
 of time for digesting, inasmuch as they constitute an 
 actual working outline by which the cost accountant 
 is to be guided in handling a specific engagement. 
 While the forms and records here described cannot 
 be applied in their entirety to evel*y business, their 
 main features are of general application. Merely 
 reading these assignments will not carry the student 
 very far toward practical command of the informa- 
 tion. He should try to see the concrete application 
 of the forms and records to some plant known to him. 
 
 Of this group of assignments, the first one should 
 receive the fullest consideration, inasmuch as the job 
 order cost system is probably the most widely used. 
 It is the individual job order around which the costs, 
 shown on cost sheets, are assembled, although sum- 
 maries are made of the costs of various jobs. Par- 
 ticular attention should be given to the journal en- 
 tries which build up the ledger accounts necessary in 
 the operation of this system. 
 
 Production-Center Job Order Cost System (Chapter XXIV) 
 
 This volume up to the present part has dealt with general 
 and specific cost accounting technique in job order and procces* 
 
94 READING GUIDE 
 
 systems, with occasional references to special industries. Each 
 chapter in Part VII is a sustained elaboration of some specific 
 system. 
 
 This chapter treats chiefly of the machine-rate method of 
 distributing burden in a job order cost system. The general 
 principles of machines rates were laid down in the preceding 
 chapter. 
 
 In § 2 note the meaning of the term "production center'* 
 and the relation of production centers to the machine-rate 
 method of distributing burden. 
 
 Study particularly Form 41. The function of the stock list 
 should be clearly understood since its use reduces considerably 
 the amount of clerical work.' 
 
 With respect to cost of material, labor, and expense, study 
 the following points: 
 
 1. Records 
 
 2. Number of records made out 
 
 3. Persons who make records 
 
 4. Use and disposition of records 
 
 Study carefully the chart of cost accounts (Form 43). 
 After studying the journal entries and the accounts to which 
 they lead, see whether you can frame similar journal entries in 
 the proper chronological order and can trace the relations be- 
 tween items in the ledger accounts. 
 
 Assignment 11 
 THE PROCESS SYSTEM 
 
 The second main type of cost systems, known as 
 the process system, is discussed here, with particular 
 reference to clay products. 
 
BUSINESS ACCOUNTING— VOLUME III 95 
 
 In reading this assignment the student should not 
 spend too much time in trying to remember the con- 
 tent and uses of the forms and records described, to 
 the neglect of the understanding of the principles and 
 the sahent features of process systems generally. 
 
 The main point of difference between the process 
 system and the job order system, which should be 
 clearly grasped, is that in the job order system the 
 product goes through in well-defined lots, the costs 
 being kept for each lot, while in the process system 
 costs are kept by batches for the different processes 
 and operations. In other words, the unit for the 
 compilation of costs in the two systems is the job and 
 the process respectively. In fact, it is the unit idea 
 that differentiates cost accounting from general or 
 commercial accounting. 
 
 Process Cost System — Clay Products (Chapter XXV) 
 
 The first main point to get in this chapter is the principle of 
 segregating costs under the process system. Then note the 
 function and use of department accounts, time slips, brick-setting 
 report, and other records, especially the cost ledger at the end of 
 the chapter. The foregoing records concern the kinds and quan- 
 tities of brick produced. 
 
 Assignment 12 
 ESTIMATED COSTS 
 
 No student of cost accounting should fail to 
 understand the main features and the technique of an 
 
96 READING GUIDE 
 
 estimated cost system. Such a system has a very 
 wide range of use. Even in the job order and process 
 systems a certain amount of cost estimating is done; 
 for example, in the predetermination of departmental 
 burden rates. Cost estimates of any kind, however, 
 must always be checked against actual costs, so as to 
 bring the books into harmony with the facts, and to 
 aid in making more correct estimates for the future. 
 In this assignment particular attention should be 
 given to the journal entries and the skeleton ledger 
 accounts. 
 
 Estimated Costs (Chapter XXVI) 
 
 Three types of cost systems are discussed in this volume — 
 job order, process, and estimating. The former two have been 
 discussed in connection with the application of cost principles. 
 The estimating system has been touched on in §§6 and 7 of 
 Chapter V, and the estimating of material has been described 
 in parts of Chapter XII, particularly § 8. Read these sections 
 before studying this chapter. 
 
 In §§ 1, 2, 3, 4, and 12, study the nature, merits, limitations, 
 and principles of the estimating system. 
 
 Note in § 5 the importance of standards in controlling 
 costs. 
 
 The technique of calculating and journalizing the following 
 should be clearly understood: 
 
 1. Opening inventory 
 
 2. Current transactions 
 
 3. Closing inventory 
 
 4. Cost of goods sold 
 
 5. Adjustments 
 
 6. General ledger account 
 
BUSINESS ACCOUNTING— VOLUME III ^ 
 
 Assignment 13 
 TEXTILE COSTS 
 
 The student has now traversed the whole field of 
 the theory and technique of cost accounting. These 
 final chapters offer additional material of a more con- 
 crete nature by which he may see the actual working 
 in specific instances of the principles already set 
 forth. 
 
 The study of these chapters will reinforce the 
 point already urged, that the planning and installa- 
 tion of a cost system in any plant must always be pre- 
 ceded by a careful study of the operations of the 
 plant. 
 
 The content of this assignment may appear at 
 first diflScult, but it will be found on close reading to 
 be relatively simple. Two types of systems are in- 
 volved, the job order, and the process system. 
 
 Textile Costs — Manufacture of Yarn (Chapter XXVII) 
 Study §§2 to 5^ which deal with the operations in a textile 
 
 mill, so that you can better understand their accounting technique. 
 Textile costs are explained with slight reference to forma 
 
 but with detailed reference to certain accounts. The content and 
 
 operation of these accounts and tables should be understood: 
 
 1. Materials and Supplies 
 
 2. Waste 
 
 3. Stock in Process in Dye House 
 
 4. Mixes in Process 
 6. Cost of Mixes 
 
 6. Yarn in Process 
 
 7. Conversion Cost 
 
98 READING GUIDE 
 
 Weaving and Knitting (Chapter XXVIII) 
 
 This chapter continues the discussion of textile costs, par- 
 ticularly the cost of weaving cloth and knitting fabrics. The 
 chief points to be gained are a knowledge of the content and 
 disposition of the following accounts: 
 
 1. Weaving 
 
 2. Knitting 
 
 3. Wet and Dry Finishing 
 
 4. Finished Cloth 
 
 In operating the foregoing accounts two chief problems 
 arise, namely, the apportionment over the different styles of: 
 
 1. The cost of weaving during the period. 
 
 2. The cost of production of the wet and dry finishing 
 
 departments. 
 
 Textile Cost — General Expense (Chapter XXIX) 
 
 The preceding chapter discussed the costs of operating de- 
 partments. This chapter deals with expense accounts which are 
 distributed to departments. With respect to these expense ac- 
 counts study the following points : 
 
 1. Content. 
 
 2. Disposition of shipping expense, which you will note 
 
 differs from disposition of other expense accounts. 
 
 3. Schedules of distribution when given, particularly the 
 
 basis of distribution. 
 
 Assignment 14 
 GRAPHIC PRESENTATION OF DATA 
 
 The final chapter differs from most of the others 
 of the volmne, in that it is concerned with the form 
 
BUSINESS ACCOUNTING^-yotl/MKlHr; I'; :• ; ..99^ 
 
 of presentation, whereas the other chapters were con- 
 cerned primarily with the calculation and compilation 
 of cost data. 
 
 Cost data is practically valueless unless so pre- 
 sented that it admits of ready interpretation and com- 
 parison. It must be usable. Inasmuch as the impres- 
 sions which we register most vividly come through 
 the sense of sight, graphic presentation is particularly 
 helpful. By this means executives, without having to 
 wade through huge columns of figures, are able to 
 grasp the significance of the history of their enter- 
 prise as reflected in the cost data, and can thus con- 
 centrate upon the formulation of policies. 
 
 Use of Graphic Charts (Chapter XXX) 
 
 The author fittingly closes his book with a discussion of 
 graphic charts as an aid to executives. The chief point in § 1 
 is the advantage of graphs as a method of succinctly presenting 
 cost data. 
 
 With respect to '^difference'' and ratio charts, note the fol- 
 lowing points: 
 
 1. Function 
 
 2. Content 
 
 3. Deductions to be drawn 
 4}, Limitations 
 
 5. Method of preparation 
 
 6. Use 
 
 7. Illustrations 
 
f 
 
 Volume IV 
 Advanced and Analytical Accounting 
 

ASSIGNMENTS FOR VOLUME IV 
 
 Assignment 1 
 ADJUSTING ENTRIES 
 
 The three chapters in this assignment cover those 
 special problems which are likely to arise when the 
 books are closed. Here the subject is treated in 
 much greater detail than in Volume I, Chapters VII 
 to IX and Chapter XXX. Special consideration 
 is given to the various methods of handling deferred 
 and accrued items. 
 
 The Scope of Advanced Accounting (Chapter I) 
 
 This chapter contains a bird's-eye view of those phases of 
 accounting work which are usually supervised by the head 
 accountant who is in charge of the routine work done by the 
 bookkeepers of a large organization. The chapter as a whole 
 gives the reader some conception of the nature of the problems 
 to be discussed in following chapters. Special attention is 
 called to § 3, which summarizes the difference between ordinary 
 accounting and accurate accounting. 
 
 Deferred Debits and Credits (Chapters II and III) 
 
 The mental confusion that is often caused by the different 
 significations of the terms "deferred" and "accrued," depending 
 upon which side of the balance sheet they refer to, may be 
 cleared up by the careful study of §§ 1, 2, 8, and 9, Chapter II. 
 In general it may be said that these two chapters cover ordinary 
 bookkeeping procedure with which the accountant sliould be 
 familiar. With the exception of the sections noted above, the 
 
 103 
 
104 READING GUIDE 
 
 theory and principles involved have been fully explained in 
 Volume I, Chapter VIII; §§ 5 to 7. 
 
 Assignment 2 
 CLOSING PROBLEMS 
 
 This assignment covers some of the most debata- 
 ble questions and problems that arise in the whole 
 field of accountancy. Most of these problems have a 
 legal aspect to which careful attention should be 
 given. The method of approaching the profits of a 
 corporation is circumscribed by both legal rulings and 
 correct accounting procedure, and the general tenor 
 of the information in this assignment is to acquaint 
 the student with both aspects of the subject. 
 
 Profit Determination (Chapter IV) 
 
 The definitions in this chapter need careful study. The 
 discussion involves much important accounting theory, a knowl- 
 edge of which is fundamental to the drawing up of a profit and 
 loss statement for a manufacturing concern. No particular part 
 of the chapter can be singled out as containing more vital infor- 
 mation than any other. Every section needs close attention, 
 and the summary of the principles at the end of the chapter is 
 well worth memorizing. 
 
 Corporate Dividends (Chapters V and VI) 
 
 Most of the theory in Chapter V is based on legal rulings 
 with which the accountant is expected to be familiar. Section 
 4 discusses a matter which is more or less debated. Further 
 information incidental thereto is given in many of the chapters 
 
BUSINESS ACCOUNTING— VOLUME IV |05 
 
 which follow. Chapter V covers the theoretical aspect of the 
 subject, and Chapter VI the practical accounting work. If the 
 theory in Chapter V is thoroughly mastered, no difficulty will be 
 experienced in applying this theory in practice. Practice work 
 on the problems in Volume V will gradually enable the student 
 to acquire facility in journalizing the entries to be made on the 
 books. 
 
 Surplus (Chapter VII) 
 
 When the theory of profit determination has been mastered, 
 no difficulty will be experienced in grasping the theory of sur- 
 plus and Surplus account. As a means of testing the thorough- 
 ness of the student*s knowledge, attention is again called to 
 the utility of the review questions at the end of each chapter. 
 The answers to these questions should not only be mentally 
 formulated but should be actually written and then compared 
 with the discussion in the text. Especially valuable are the 
 questions calling for a certain amount of practice work such as 
 Review Question 6 (page 94) and Review Question 2 (page 
 103). If the student can set up the Surplus account in the 
 prescribed and correct form as here instructed, he may be as- 
 sumed to possess a thorough working knowledge of the theory 
 in this chapter. 
 
 Reserves and Funds (Chapter VIII) 
 
 In no other respect, perhaps, does accounting practice differ 
 so as it does in the treatment of reserves. It is suggested that 
 the reader study the theory in the present chapter closely, in 
 order to become thoroughly conversant with the thread of uni- 
 formity that runs through these divergences in practice. How- 
 ever practice may differ, the theory remains the same and a 
 thorough grasp of principles will insure correct methods of 
 recording data in the accounts on the books. As an aid to the 
 memorizing of theory, it is suggested that at the second or third 
 reading the student should work out the examples in the text 
 
106 READING GUIDE 
 
 without reference to the solution. Thus, on page 116 two bal- 
 ance sheets are shown, the second being a solution to the problem 
 propounded in the first. The student should work out this solu- 
 tion for himself and then compare with the text. 
 
 Valuable practice work covering the information given in the 
 first part of this volume will be furnished by working through 
 Problems 46 and 47 of Volume V, 
 
 Assignment 3 
 BONDS AND SINKING FUNDS 
 
 This group of chapters covers the procedure in 
 recording deahngs in bonds and the method of com- 
 puting an annuity for the purpose of creating a sink- 
 ing fund. Under compKcated conditions this phase 
 of accounting work is usually handled by a man who 
 is a specialist in his line. The information in the three 
 following chapters is sufficient to give the reader 
 a thorough working knowledge covering ordinary 
 transactions in bonds and sinking funds. 
 
 Bonds and Accounting for Bonds (Chapters IX and X) 
 
 Most business men know something about bonds and are 
 conversant with the ordinary commercial methods of determining 
 their value. The attention of the student who does not possess 
 this knowledge is directed to the study of § 4, Chapter IX. 
 This information is fundamental to the correct recording of 
 bond values on the books. 
 
 Sections 5 to 7, Chapter IX, present some puzzling features 
 of bond interest^ the mastery of which will demand concentrated 
 
BUSINESS ACCOUNTING-VOLUME IV jq^ 
 
 application supplemented by the practice work afforded by the 
 problems in Volume V. Preliminary to this more difficult prac- 
 tice, it is suggested that the table on page 131 be set up from 
 the data given on page 129. The accountancy work in connec- 
 tion with the recording of bond orders and issues on the books 
 calls for no special comment, and a careful study of the text is 
 all that is required to obtain a working knowledge of the sub- 
 ject. 
 
 Sinking Funds and Annuities (Chapter XI) 
 
 To the reader whose mind has not a natural mathematical 
 bent, the mastery of the theory of annuity computations will 
 prove to be the most difficult of arithmetical problems met with 
 in accounting work. Attention in particular is drawn to the 
 difference between the amount of an annuity and the present 
 worth of an annuity. The crux of this difficult subject lies here 
 (see §§5 and 6). To distinguish clearly between the two 
 methods of calculation, it is suggested that the illustrative ex- 
 amples in both sections be worked out several times until the 
 difference between the two methods is clearly fixed in the mind 
 of the student. 
 
 While in actual practice the occasion for computing annui- 
 ties may rarely arise, every student who aspires to be an account- 
 ant should be capable of solving these elementary problems of 
 the mathematics of investment. 
 
 Do not try to master the contents of this chapter rapidly. 
 Be prepared to experience some mental confusion at first. This 
 will gradually vanish after the illustrative examples are repeat- 
 edly worked out and one by one each detail is fixed in mind. 
 Also go over the series of questions and write answers to them, 
 not once, but several times. 
 
 As advanced practice work on the difficult subject of annui- 
 ties and the method of their computation and accounting, the 
 reader should study and work over problems 48 to 53. 
 
108 READING GUIDE 
 
 Assignment 4 
 DEPRECIATION PROBLEMS 
 
 The two chapters in this assignment contain in- 
 formation of a more advanced character than that 
 given in Volumes I and II. They cover the require- 
 ments of a thorough working knowledge of the sub- 
 jects applicable to all ordinary business and account- 
 ing practice. 
 
 Depreciation — Rates and Accounting (Chapters XII and 
 XIII) 
 
 As further practice in the computation of annuities, the 
 readers should work out the problem given in the second para- 
 graph of § 9, Chapter XII, and from the data of the problem 
 construct the table shown on page 176. The other methods of 
 calculating the depreciation charge present no difficulty. 
 
 To acquire facility in the journalization of depreciation 
 charges, it is suggested that after a careful study of the illus- 
 trative problem in § 6, Chapter XIII, the transactions be jour- 
 nalized and posted to their ledger accounts, the student then 
 comparing his work with the ledger entries in § 7. It cannot be 
 emphasized too frequently that this sort of practice work is 
 essential if theory is to be mastered. 
 
 Problems 8, 9, 10, and 54 take up the more difficult entries 
 that arise in handling the depreciation factor and are to be 
 studied after the more simple practice work has been mastered. 
 
 Assignment 5 
 CORPORATION ACCOUNTING 
 
 The special features of corporation accounting 
 which relate to issuing and recording shares of stock 
 
BUSINESS ACCOUNTING— VOLUME IV 1Q9 
 
 are here covered in sufficient detail to furnish a work- 
 ing knowledge of the procedure in opening the books 
 of a corporation. 
 
 Capital Stock Issues (Chapter XIV) 
 
 Before beginning the study of this chapter, turn back to 
 first principles and refresh the memory by rereading Chapter 
 XXXIII of Volume I. 
 
 Practice varies in the recording of stock issues. The jour- 
 nal entries here given to illustrate the procedure are those which 
 conform to the theory of accounts; that is, in every case there 
 is a reason why the entries should be made in the form in which 
 they are made. When this reason is formulated in the student's 
 mind, the particular journal entry will naturally suggest itself 
 to him. 
 
 Where illustrations are given, as in § 2, the student should 
 cover up the journal entries given below the illustration and 
 write them out for himself. This practice, repeated two or 
 three times, will give him a complete mastery of the contents of 
 this chapter. 
 
 Premiums and Discounts (Chapter XV) 
 
 The same observations apply to the study of this chapter as 
 apply to the preceding cne. For example, work out the journal 
 entries in §§ 4 to 7, and 9 in the way previously suggested, and 
 repeat the practice until the required entries can be made with- 
 out hesitancy. Go over the review questions in both chapters 
 and do not take up the next assignment until all questions can be 
 answered fully and correctly. 
 
 Problems 55 to 57 of Volume V cover most phases of the 
 theory of premium and discount taken up in this part of 
 Volume IV and they should be worked out in conjunction with 
 a very careful study of the different phases of the theory 
 embodied in this assignment. 
 
110 READING GUIDE 
 
 Assignment 6 
 
 CAPITAL ASSET VALUATIONS 
 
 The two chapters deahng with the valuation of 
 current and fixed assets cover many important points 
 of theory and procedure, a knowledge of which is 
 necessary for a correct statement of asset values at 
 the close of a fiscal period. 
 
 Current Assets (Chapter XVI) 
 
 The principles which govern the valuation of accounts receiv- 
 able and inventories are fundamental to sound accounting, and 
 particular attention should be paid to the theory of the subject. 
 If this is clearly understood and remembered, the correct book- 
 keeping procedure will suggest itself. The arguments for and 
 against a given method of procedure and the conditions under 
 which one of two possible courses is preferable should be noted. 
 
 Fixed Assets (Chapter XVII) 
 
 The correct valuation of fixed assets depends first upon the 
 principles explained in this chapter, and second upon the ade- 
 quacy and truth of the depreciation policy. When machinery 
 and equipment represent a big investment, the accountant's work 
 will be limited to recording on the books the valuations of the 
 fixed assets as determined by the depreciation ratio in use. 
 
 Assignment 7 
 APPRAISAL PROBLEMS 
 
 The points taken up in this assignment of three 
 chapters cover further phases of the principles and 
 
BUSINESS ACCOUNTING— VOLUME IV m 
 
 problems of valuation, including the subject of fire 
 loss adjustments. 
 
 Liabilities (Chapter XVIII) 
 
 The information in this chapter is of a simple character and 
 no difficulty will be experienced in mastering the points of theory 
 involved. The accounting procedure illustrated in §§ 4 to 7 is 
 self-explanatory, and suggests itself when the theory which 
 governs the recording of liabilities on the books has been nias- 
 tered. 
 
 •Intangible Assets (Chapter XIX) 
 
 Study the theory of this chapter carefully. In the valuation 
 of the intangible assets the point of view of the management of 
 a business is not always that of the accountant. It is the duty 
 of the accountant, so far as he is permitted to do so, to state 
 the values of the assets on the books at a figure which cannot 
 be criticized on the score of exaggeration. To determine this 
 figure he must be thoroughly conversant with the principles 
 which govern the valuation of assets. Therefore, give ample 
 time to the study of Chapters XVI, XVII, and XIX, and do not 
 consider that you have assimilated their contents until answers 
 to the review questions come readily to mind. 
 
 Fire Loss Adjustments (Chapter XX) 
 
 After studying this chapter until its theory is mastered, work 
 out the journal entries from the data given in § 9, and construct 
 the accounts to which these entries are posted. This practice 
 work, repeated two or three times, will fix in mind the general 
 procedure in adjusting fire losses and other types of losses that 
 are found on the books. 
 
 • Problems 54 to 56 of Volume V furnish practice work on 
 the chapters in this assignment. 
 
112 READING GUIDE 
 
 Assignment 8 
 FINANCIAL STATEMENTS 
 
 The four chapters in this group discuss the dif- 
 ferent forms of the financial statements and the rea- 
 sons for variations. 
 
 The Balance Sheet (Chapter XXI) 
 
 The accounting procedure in this chapter, so far as concerns 
 the form of presentation, is that which has the sanction of gen- 
 eral adoption and that which is recommended by the Federal 
 Reserve Board. When opportunity offers, study the balance 
 sheets printed in the financial papers or issued from time to time 
 as part of the prospectuses of corporations. Try to criticize the 
 contents of such a balance sheet; that is, reason out for your- 
 self in what respects it fails to give information which you or 
 an investor would like to know; or in what respects the figures 
 show a sound financial condition or the reverse; and so on. 
 
 The Profit and Loss Statement (Chapter XXII) 
 
 The same observations apply to this chapter as to Chap- 
 ter XXI. In working out those problems in Volume V which 
 involve drawing up the financial statements, construct these 
 statements according to the methods described in these chapters. 
 In this way you will acquire facility in following the correct 
 procedure. The proper method of compiling statements so as 
 to present the information in a professionally correct form is 
 wholly a matter of practice, combined with an understanding 
 of the reasons for the adoption of a particular form. 
 
 Manufacturing and Mercantile Statements (Chapters 
 
 XXIII AND XXIV) 
 To commit to memory the procedure in these two chapters 
 without a certain amount of practice work is impossible. To this 
 
BUSINESS ACCOUNTING— VOLUME IV 113 
 
 end it is suggested that the .trial balances be reconstructed from 
 the financial statements, and then the attempt be made to draw 
 up the statements in the form given. This work will need to be 
 repeated several times before accuracy is attained. 
 
 Assignment 9 
 BANKRUPTCY STATEMENTS 
 
 The following chapter is an elaboration of the 
 practical work connected with the formulation of a 
 statement of affairs and deficiency statement, the 
 theory of which is covered in Volume I, Chapters 
 XII and XIII respectively. 
 
 Statement of Affairs and Deficiency Statement (Chap- 
 ter XXV) 
 
 If, as suggested in the study of Chapters XII and XIII in 
 Volume I, the student has left the detailed study of these two 
 chapters until ready for more advanced work in connection with 
 statement preparation, the time has now arrived when the matter 
 may be taken up. The theory of the subject is simple. To im- 
 press the procedure on the mind is difficult, though well worth 
 the time required. Therefore, from the data given in the state- 
 ments in this chapter, reconstruct the trial balance and with 
 this as a guide try to compile a statement of affairs and a de- 
 ficiency statement in the form illustrated in Volume I and al«0 
 in the form shown in this chapter. 
 
 Problems 26 to 28 deal specifically with the accounting re- 
 quired in drawing up a statement of affairs and deficiency state- 
 ment. They furnish the advanced practice work required for a 
 thorough grasp of the subject. 
 
114 READING GUIDE 
 
 Assignment 10 
 COMBINATIONS AND CONSOLIDATIONS 
 
 These chapters form a composite group covering 
 the subject of consohdations. While relatively sim- 
 ple in theory, the practical application of the theory 
 of consolidations often taxes the analytical power and 
 knowledge of the accountant to the utmost. 
 
 Methods of Combinations (Chapter XXVI) 
 
 Sections 1 to 6 contain preliminary information. The 
 theory begins in § 7. The illustrative examples in the later sec- 
 tions should be carefully studied. 
 
 Holding Company Balance Sheet (Chapter XXVII) 
 
 From the illustrative data given in this chapter, work out 
 the balance sheets showing the effect of different methods of 
 treatment, and then compare your work with the text. You can- 
 not remember the theory of the subject without practice work of 
 this kind. 
 
 Consolidated Balance Sheet (Chapter XXVIII) 
 
 After carefully studying this chapter, work out the com- 
 bined balance sheet of the two subcompanies and the consoli- 
 dated balance sheet of the three companies from the data given 
 at the beginning of § 2. Do the same practice work in connec- 
 tion with §§7 and 10, after studying the theory to be applied. 
 This work is essential as a preliminary practice to the solution 
 of the consolidation problems given in Volume V. 
 
 Problems 79 to 88 cover the preparation of consolidation 
 statements and at the same time furnish many examples of the 
 kind of difficulties which are likely to confront the accountant 
 and the solution of which will test his powers of reasoning and 
 analysis to the utmost. 
 
BUSINESS ACCOUNTING— VOLUME IV H5 
 
 Assignment 11 
 DETECTION OF ERRORS 
 
 The three chapters in this assignment suggest 
 methods of testing the accuracy and completeness of 
 the books of account and of locating errors when 
 known to exist. 
 
 Classification and Detection of Errors (Chapters XXIX 
 
 AND XXX) 
 
 The information in these two chapters is based squarely on 
 the theory of accounts, and its relation to the practical side of 
 the accountant's work is such as to make it of especial interest. 
 Chapter XXIX contains mostly preliminary information which 
 should be thoroughly understood. Chapter XXX contains sev- 
 eral practical expedients which should be worked out with pencil 
 and paper until the method is memorized. 
 
 Location of Errors (Chapter XXXI) 
 
 The information in this chapter has a very practical bearing 
 upon the taking of a trial balance and the work of the book- 
 keeper in general. To memorize the rules and suggestions here 
 given, and to acquire facility in their use, they should be referred 
 to as occasion requires when practical work is being done on a 
 set of books. From the data given in § 6, work out the solution 
 to the problem and compare with the result shown in § 7. 
 
 Assignment 12 
 VERIFICATION OF ASSETS 
 
 The two final chapters in this vohime show how 
 the executive or owner of the business can assist tlie 
 
116 READING GUIDE 
 
 accountant in maintaining correct accounts. In addi- 
 tion, the proper method of rectifying errors on the 
 books is briefly described in this assignment. 
 
 Verification of Assets (Chapter XXXII) 
 
 This chapter covers that part of the work of a professional 
 auditor which the executive or owner of a business may from 
 time to time do for himself, merely as an ordinary business 
 precaution or safeguard. 
 
 Correction of Errors (Chapter XXXIII) 
 
 The theory and examples in this chapter cover a matter 
 which always presents difficulties to the student and which 
 seldom is properly handled in actual business practice. Book- 
 keepers and accountants, however methodical in their work, are 
 liable, like other workers, to make mistakes. How to handle 
 the problems and difficulties which arise when mistakes are made 
 is a matter with which every accountant should be familiar. 
 
 For practice work on Chapters XXIX to XXXIII, take up 
 Problems 90 to 93 of Volume V. 
 
Volume V 
 Illustrative Accounting Problems 
 
SUGGESTIONS FOR THE USE OF 
 VOLUME V 
 
 The grouping of material into assignments fol- 
 lowed in Volumes I to IV, obviously cannot be ap- 
 plied to Volume V, which is made up entirely of 
 problems. It may be noted, further, that the prob- 
 lems have been arranged, so far as possible, to follow 
 the order of the subjects in the preceding volumes, 
 though, as many of the problems cover more than one 
 phase of accounting theory, this arrangement is not 
 always practicable. The selection of the problems 
 has been made with a view to testing the student's 
 mastery of theory, at the same time furnishing him 
 with examples of the kind of difficult accounting 
 problems that might be met with in actual business 
 practice, and the kind of problems he would be re- 
 quired to solve if he presented himself for examina- 
 tion before a board of C. P. A. examiners or before 
 the examiners of the American Institute of Account- 
 ants. 
 
 In studying each problem, the student should 
 read its terms slowly and as many times as necessary 
 until he thoroughly understands what is meant and 
 what is required. Even a trained accountant could 
 not grasp the method of fulfilling the requirements 
 of many of these problems at the first or even the sec- 
 ond reading, so the beginner need not hope to pene- 
 
 119 
 
120 READING GUIDE 
 
 trate their meaning at the first, second, or even third 
 attempt. When the data on which the problem is 
 based are understood and the requirements are 
 grasped, turn to the points illustrated at the end of 
 the problem, after which look up the passages in the 
 text of Volumes I to IV which discuss the theory in- 
 volved in the solution of the problem under consid- 
 eration. 
 
 Having reviewed the theory and practice appli- 
 cable to a given case, try to solve the problem in your 
 own way without reference to the solution. This will 
 require hard thinking, in some cases very hard think- 
 ing, and j^ou will be tempted to shirk the necessary 
 brain cudgelling by turning to the solution. Do not 
 take this easy road out of your perplexities. Study 
 the theory and the terms of the problem again and 
 again until light begins to dawn and then 'make a 
 stab" at the solution. Some of the problems are so 
 complex and difiicult that you are bound to flounder, 
 and on referring to the solution you will have to work 
 back to the terms of the problem to understand the 
 method whereby the problem should be solved. 
 
 Having made the attempt and noted your mis- 
 takes and their cause, leave the problem for a time 
 and return to it again when you have wholly or 
 partly forgotten the method of its solution. At your 
 second attempt follow the same procedure and re- 
 peat until you can solve each problem correctly and 
 readily. By such practice work as this you will 
 gradually develop your analytical and reasoning 
 
BUSINESS ACCOUNTING— VOLUME V 121 
 
 powers and master the theory and practice of ac- 
 counting. 
 
 Often the chief difficulty of a problem lies in one 
 or more transactions which are purposely included 
 because of their complexity or unusual character, or 
 because the terms in which they are stated are am- 
 biguous and may be interpreted in different ways. 
 The complex transactions become simple under an 
 adequate amount of mental perspiration. The data 
 which are capable of different interpretations should 
 be handled in different ways showing all possible 
 solutions. After a thorough grasp of a problem as a 
 whole is obtained and the general lines of its solution 
 have been mentally formulated, you should concen- 
 trate on the transactions which are specially difficult 
 until you reach a decision as to how they ought to be 
 handled. To help you in this work, a number of sug- 
 gestions are given covering the problems which can 
 be solved by the study of Volume I and a few chap- 
 ters in Volume IV as indicated in the 'Toints Illus- 
 trated" found at the end of each problem. After 
 acquiring the ''knack" of attacking a problem in the 
 right way, the student is left to his own resources 
 when solving the problems bearing on Volumes II 
 to IV, 
 
 Problem: 1 
 
 This problem is hardly worthy of the name because its solu- 
 tion should present no difficulty. All that is required is to fol- 
 low exactly the same procedure as indicated in Volume I, Chap- 
 ter XX, § 12, and the correct answer wUl be determined. 
 
122 READING GUIDE 
 
 Problem 2 
 
 The length of this problem makes the solution seem more 
 difficult than it actually is. Length in itself is not necessarily a 
 cause of complexity, as every problem can be attacked piece- 
 meal and be effectually overcome if its difficulties are concen- 
 trated on one by one in methodical fashion. 
 
 The "snag" in this problem is obviously contained in the 
 paragraph preceding the last one of the explanatory matter, 
 where it is stated that fraud is suspected on the part of the 
 cashier. To determine whether or not there has been any fraud, 
 what is the first requirement? Find out how much has actually 
 been deposited in the bank and how much should have been 
 deposited. The amount which should have been deposited is 
 likely to be a larger amount than that actually deposited, so we 
 take this first. This amount consists of collections from cus- 
 tomers plus any cash on hand not yet deposited. We must not, 
 however, take the footing of cash collections as correct. If 
 fraud is suspected, the footings are the first points to verify. 
 Attacking the problem in this way, it is found that there is an 
 actual shortage in deposits of $114.88. 
 
 The next point to determine is whether the disbursements 
 entered on the cash book equal the .checks paid by the bank plus 
 the checks outstanding. If you will figure this out for yourself, 
 you will find that the total bank disbursements (including out- 
 standing checks) are $10.36 in excess of the disbursements 
 entered on the cash book. 
 
 Having determined these two shortages, the next step is to 
 figure the true cash book balance. This is readily done by de- 
 ducting the corrected disbursements from the corrected receipts. 
 If, now, the bank balance plus cash in hand is deducted from 
 the cash book balance, the resulting figure should give the net 
 amount of the shortage as stated above. 
 
 The method of presenting the above data as well as the bank 
 reconciliation statement should be carefully noted when studying 
 the solution, after which you should go over the problem again 
 
BUSINESS ACCOUNTING— VOLl^ME V 
 
 123 
 
 and again until you can reproduce the three sUtements in cor- 
 rect form. 
 
 Problem 3 
 
 Following the procedure explained in Volume I, Chapter 
 XX^ the entries required to record the petty cash disbursemenU 
 are made in the same way as any other cash disbursement. The 
 crux of the problem lies in the method of reducing the fund by 
 $200. Here it is necessary to reason out the simplest and clearest 
 way of recording the reduction. 
 
 It is advisable to draw the check for the total disbursements 
 and then deposit $200, because this simplifies the bookkeeping. 
 If a check for $262.50 were drawn, a journal entry would be 
 required to complete the charges to the expense accounts in- 
 volved. The use of such a journal entry would be somewhat 
 confusing. It would be possible to journalize the total payments, 
 charging the expense accounts and crediting Petty Cash account, 
 and then to draw a check for $262.50, charging it to the Petty 
 Cash account; this would reduce that account by $200. Such 
 procedure is not advisable because it differs from the usual prac- 
 tice of making no entries in the Petty Cash account for disburse- 
 ments. It would also require an explanation in the cash book 
 covering the $262.50 check, which might not be readily under- 
 standable. The simplest way of handling the transaction is to 
 draw a check in the usual way to reimburse the fund for the 
 payments made, and then to deposit to the credit of the fund the 
 $200 by which the fund is reduced. 
 
 Problem 4 
 
 The point with this problem, as with the last, is whether or 
 not to use a journal entry for the purpose of closing the indi- 
 vidual creditors' accounts and entering them on the voucher 
 register. 
 
 A journal entry could be used to open the voucher system, 
 whereby the old accounts would be debited and the total credited 
 
124 READING GUIDE 
 
 to Vouchers Payable. This would not be as convenient as the 
 method suggested in the solution^ because it would require the 
 use of another book, namely, the journal, and because it would 
 involve posting to the Vouchers Payable account from the jour- 
 nal as well as from the voucher register. If by any chance all 
 of these vouchers were not paid before the end of the first 
 month in which the voucher system was installed, the balance of 
 the Vouchers Payable account would not agree with the open or 
 unpaid items listed in the voucher register. 
 
 Problem 5 
 
 A journal .entry is required in this case because a new 
 account (Accounts Receivable) is to be opened in the general 
 ledger and the customers' accounts are to be closed. After 
 posting the journal entry to the general ledger, the accounts with 
 customers would be opened in the new ledger and the balances 
 would be entered on the debit side of the respective accounts. 
 The postings to the debit accounts in the customers or sales 
 ledger can conveniently be made from the journal entry; each 
 customer's balance, therefore, as shown in the journal entry 
 would be posted twice, once as a credit in the general ledger 
 and once as a debit in the sales or customers subsidiary ledger. 
 Both folios should be noted in the journal opposite each item. 
 
 If it were desired to open an adjustment account in the sales 
 ledger, as explained in Volume I, Chapter XXIV, the total, 
 $716.14, should be credited to it from the above journal entry. 
 It is suggested that the reader review the arguments in favor of 
 and against adjustment accounts as given in Chapter XXIV. 
 
 Note the use of the terms "customers'' and "sales" ledger. 
 Another name given this ledger is "accounts receivable" ledger. 
 All three terms are commonly employed. 
 
 Problem 6 
 
 As it is stated in the problem that neither of the items has 
 been entered on the books, the first step is to make the necessary 
 
BUSINESS ACCOUNTING— VOLUME V ,35 
 
 journal entries. The difficulty of making these entries lies in 
 the adjustment to be made by a remittance of stamjis. ThU 
 adjustment is obviously required to maintain the equilibrium of 
 the journal entries. 
 
 Where one person or business is both a debtor and a creditor, 
 as in this solution, it is generally better to have two accounts 
 for him, one in the customers ledger and one in the creditors 
 ledger. A notation on each account referring to the other should 
 prevent any failure to offset one balance against the other. 
 Furthermore, if the debit and credit transactions are combined 
 into one account, the result will be a deduction of asset from 
 liability, or vice versa, which in general is contrary to account- 
 ing principles. 
 
 Problem 7 
 
 At the first and even second reading this problem may seem 
 puzzling, but if split up into its component transactions most of 
 its difficulties vanish. Each paragraph requires its own jour- 
 nal entry. The first entry is a sale; therefore credit Sales 
 account and debit the customer's account. The second trans- 
 action is a note and cash transaction — cash and a note arc 
 received in settlement of the customer's indebtedness. The 
 third transaction involves a receipt of cash, and expense of bank 
 discount, and an offsetting credit to Notes Receivable Discounted. 
 By analyzing the problem in this way, its solution reduces itself 
 to the recording of every-day kind of cash and note transactions. 
 
 Problem 8 
 
 Before taking up this problem, it is necessary to turn to 
 Volume IV, Chapter VII, and study the methods of adjusUng 
 Surplus account. Most of the capital adjustments made on the 
 books of a corporation and applicable to prior periods affect 
 this account. A knowledge of its operations is required to solve 
 other problems, which, apart from this matter, illustrate the 
 principles set forth in Volume I. 
 
126 READING GUIDE 
 
 If the theory of surplus adjustments is mastered^ the solu- 
 tion of the problem reduces itself to the balancing of the journal 
 entries^ with a debit or credit to Surplus as the case requires. 
 
 Problem 9 
 
 This problem will probably perplex you for a while, but its 
 difficulties dissolve under the operation of taking the required 
 entries one by one. The first entry must record the last annual 
 reserve for depreciation. The second entry must show the sale 
 of the old machine. The loss resulting from the sale of the 
 machine must be a charge to the reserve created to cover such 
 losses. As, however, the reserve is in excess of the actual loss 
 due to replacement, the amount of the excess should be restored 
 to Surplus from which it was originally taken. The final entry 
 is to set up on the books the asset value of the new machinery. 
 
 Problem 10 
 
 The first paragraph in the explanation of this problem has 
 no bearing on the solution, as the requirements of the problem do 
 not ask for the setting up of either the Depreciation on Delivery 
 Equipment or the Delivery Equipment account. All that is 
 required are the journal entries making the proper adjustment. 
 
 The first transaction is clearly a loss, and the difference 
 between the reserve and the cost of the deceased animal is a 
 charge to Surplus. 
 
 The second transaction is more preplexing. As the differ- 
 ence between the cost of the horse and the price at which it was 
 sold ($100) has been charged to the Reserve account, while the 
 depreciation provided for the horse has been only 10% for 
 three years on its purchase price, it is evident that more has 
 been charged to the Reserve account than has actually been 
 credited or accumulated therein. This error calls for a charge 
 to Surplus and a credit to the Reserve account in order to bring 
 the reserve to its proper figure. 
 
BUSINESS ACCOUNTING-VOLUME V jg? 
 
 Problem 11 
 
 The entries required to record the facts given in the fir«t 
 two paragraphs are routine entries which you should be able to 
 prepare without any difficulty. The third paragraph requircji an 
 answer to the following question: What is the amount of the 
 loss on this account to be charged to the Reserve account and 
 written off the customer's account? 
 
 The final entry, as your study of the preceding problems 
 will make clear to you, represents a profit, in that the loss 
 already charged to Surplus must be canceled. 
 
 Problems 12 
 
 This problem is one of only moderate difficulty. The first 
 error to be rectified is the inclusion in the inventory of the two 
 lathes charged to the Essex Machine Company. This amount 
 must obviously be deducted from the inventory account; to what 
 account should it be charged? The clerical errors can be 
 corrected by reducing the asset value of the inventory by the 
 net overcharge. 
 
 Regarding the L. P. Fuller transaction, note that the assumed 
 loss was charged to Profit and Loss, not to the Reserve. 
 
 Problem 13 
 
 This problem can readily be solved if it is attacked piece- 
 meal. The first requirement should present no difficulty if care 
 is taken to set up the returns, allowances, discounts, etc., on the 
 correct side of the account. The journal entry to close out the 
 Merchandise account and to set up separate accounts instead 
 requires the journalization of both sides of the old account 
 
 The profit on sales is the gross profit — a simple matter to 
 determine if the explanation in the text is followed. 
 
 In closing the accounts into a Trading account, remember 
 that Sales and Purchases accounts must show their net figures, 
 and so the accounts opened to record the returns and allow- 
 
128 READING GUIDE 
 
 ances must first be closed into Sales and Purchases accounts 
 before these accounts can be closed into Trading account. Care- 
 ful study of the points illustrated by the problem should enable 
 you to solve it correctly without reference to the solution given. 
 
 Peoblem 14 
 
 Note carefully the requirements here. They do not ask for 
 journal entries or the setting up of an account. Therefore^ the 
 solution may be presented in the form of a brief explanation. 
 
 The interest charged to B and C is clearly a profit to be 
 divided among the three partners in the way designated. One 
 solution is worked on the basis on which the partners ought to 
 have contributed. An alternative method is to base the solution 
 on the actual total capital contributed, viz., $185,000, instead of 
 $200,000. Try to solve the problem both ways. 
 
 Problem 15 
 
 The difficulties of this problem are simplified by careful 
 consideration of its terms and requirements. The net profit to 
 be divided refers to the division of the net income resulting from 
 interest on the partners* drawings in excess of salaries, reduced 
 by the interest on capital. To give effect to the interest on capi- 
 tal clause requires one entry, i.e., the setting up of an Interest 
 on Capital account, at the same time crediting each partner's 
 capital account with his interest. The Interest on Capital 
 account must then be credited with the interest on the partner's 
 drawings, with which each partner's current or drawing account 
 is charged. The balance of the Interest account then represents 
 the remaining income to be divided between the partners as 
 stated in the problem. The distribution of this should be shown 
 in a way to make clear the net increase or decrease in each 
 partner's capital account as the case may be. It should be 
 observed that partners' capital accounts are not required in the 
 solution. 
 
BUSINESS ACCOUNTING— VOLUME V i^ 
 
 Problem 16 
 
 This problem is constructed on the same lines as the preced- 
 ing one, and if its terms are carefully read you should be able to 
 solve it. Pay particular attention to the method you use for 
 determining the interest on each partner's drawings. 
 
 The problem is ambiguous in that there is no certainty con- 
 cerning the amount which B withdrew. In the solution it is 
 assumed that he drew $2,500 each quarter. However, it would 
 seem fairly reasonable to assume that his total drawings for the 
 year were $2,500. Ambiguities of this sort are regrettable in 
 C. P. A. problems, and yet they are so often found in actual 
 practice that their appearance in such problems may provide a 
 farther test of the candidate's qualifications for practice. 
 
 Problem 17 
 
 The working of this problem on partnership dissolution 
 presents little difficulty, though the form in which the require- 
 ments are to be fulfilled may not seem clear at the first reading. 
 The first step should be the preparation of a balance sheet to 
 disclose the loss and at the same time to furnish the balances of 
 all the accounts required for the solution. The solution may 
 be presented in the form of a running comment which explains 
 the division of the remaining cash balance after the trade cred- 
 itors' claims have been settled. 
 
 Problem 18 
 
 The solution of this problem follows the same general lines 
 as the solution of Problem 17. Having drawn up the balance 
 sheet, a comparison of the assets available for distribution with 
 the balances in the capital accounts discloses the loss (to be 
 borne by each partner in his profit -and loss sharing ratio). 
 
 Problems 19 to 21 
 
 These three problems furnish further practice work in part- 
 nership accounting. As the comments which accompany their 
 
130 READING GUIDE 
 
 solution are explanatory of the difficulties involved, no further 
 comment is here required. 
 
 Problem 22 
 
 The number of transactions involved and the lengthy require- 
 ments make this problem seem difficult, but it can be worked 
 out step by step on straightforward lines. The text covering 
 the various points illustrated should be reviewed as work pro- 
 gresses, both to insure correct procedure and to refresh the 
 memory on any doubtful points. 
 
 In solving the problem, take up first the prepaid and accrued 
 items, giving full explanation for each journal entry. In your 
 solution prepare a working sheet based on the procedure de- 
 scribed in Volume I, Chapter VIII, and compare it with the 
 working sheet shown in the solution. 
 
 Problem 23 
 
 In the organization of a corporation to acquire a business 
 formerly conducted by a partnership or a sole proprietor, the 
 cash of the old business as a rule is not taken over by the new 
 corporation. 
 
 The solution is based on the assumption that the partnership 
 books are to be discarded and a new set of books opened for the 
 corporation. When the partners in a business become the prin- 
 cipal stockholders in a new corporation formed to take it over, 
 it is advisable, though not necessary, to open a new set of books. 
 Entries could be made bringing onto the books only the new 
 accounts and closing out the capital accounts of the partners. 
 
 In this problem, if the accounts were to be continued in the 
 books of the former partnership, the only entry necessary would 
 be as follows: 
 
 Good- Will $25,000.00 
 
 Smith, Capital $ 10,000.00 
 
 Jones, Capital 10,000.00 
 
 Clark, Capital 5,000.00 
 
 (Explanation.) 
 
BUSINESS ACCOUNTING-VOLUME V 13, 
 
 Smith, Capital 70,000.00 
 
 Jones, Capital 70,000.00 
 
 Clark, Capital 35,000.00 
 
 Capital Stock 175/)00.00 
 
 (Explanation.) 
 
 Problem 24 
 
 When subscriptions to capital stock are taken, to be paid for 
 later, the stock certificates are usually not is.sued until the sub- 
 scriptions have been paid. In that event no credit can rightly 
 be made to the Capital Stock account until payment for the stock 
 has been received. This necessitates the opening of two tem- 
 porary accounts to record the subscriptions receivable and the 
 amount of the subscribed capital stock — as illustrated by this 
 problem. 
 
 Problem 25 
 
 By *'book value" in this problem is meant the net worth of 
 each share of common stock. The problem illustrates the fuunda- 
 mental accounting principle that the net worth or capital of a 
 business is the excess of its assets over its liabilities. It also 
 illustrates the fact that this essential nature of capital is as true 
 of the corporation as of any other form of business organization. 
 
 Problems 26 to 30 
 
 The chief requirement for the solving of this and the next 
 four problems is a thorough grasp of the procedure in drawing 
 up a statement of affairs, a deficiency account, and a statement 
 of realization and liquidation. A thorough knowledge of this 
 technique and procedure can be acquired only by working over 
 a number of problems until the correct methods come readily 
 to mind. 
 
 In this kind of problem it is particularly important that the 
 terms of the problem should be carefully read and understood 
 by the student. 
 
132 READING GUIDE 
 
 Problems 31 to 34 
 
 These problems on single-entry methods furnish valuable 
 practice work in fundamental principles and should be given 
 very careful study. As the comments in the *Toints Illus- 
 trated*' sufficiently cover each solution, no further explanation 
 is required. 
 
 The problems discussed up to this point are based on the 
 theory of accounts covered in Volume I and, as you will have 
 discovered, they cannot be solved without a thorough knowledge 
 of the principles and procedure explained therein. You should 
 continue to work over them until you are able to draw up the 
 correct solutions in the forms given in Volume V without re- 
 ferring to these for help or even suggestions. This practice 
 work is essential as a means of clearing up any doubts about 
 the correct method of procedure, and is a means of fixing in the 
 mind imperfectly memorized points of theory. Not until you 
 have made your ground firm behind you are you ready to pass 
 on to the remaining problems, the solutions of which require a 
 knowledge of the contents of Volumes I to IV. 
 
 In your attack upon the remaining problems you are left to 
 your own resources. You will find that problems of unusual 
 difficulty which contain complicated or ambiguous transactions 
 have attached to them a sufficient amount of explanatory com- 
 ment to indicate the correct method of solution — assuming, of 
 course, a thorough knowledge of the theory and procedure in- 
 volved. You should by now have acquired the knack of attack- 
 ing their difficulties in the right way — that is, one by one with 
 intense concentration, waiting for light to break in on the mind 
 both as to the nature of the transaction and the method of re- 
 cording it, 
 
General Index to 
 Business Accounting Set 
 
USE OF THE GENERAL INDEX 
 
 In addition to its primary purpose of providing 
 a complete course of study for the man whose ambi- 
 tion it is to become an accountant, a further practical 
 use to which ''Business Accounting" may be put is 
 that of a work of reference. The five volumes con- 
 stitute a storehouse or encyclopaedia of accounting 
 information from which the business man, the book- 
 keeper, and the accountant can pick and choose the 
 particular information they are in search of to solve 
 an accounting difficulty or problem. 
 
 The use of the volumes in this way will be facili- 
 tated by searching for the desired information, not in 
 one or more of the separate indexes found at the end 
 of each volume, but in the general or main index 
 which follows at the end of this guide. The separate 
 indexes serve the purpose of quick and ready refer- 
 ence to a matter which the reader knows to be dis- 
 cussed in a particular volume. The general index is 
 for the use of the reader who wishes to review all the 
 information on a given subject or for the business 
 man who desires to look up accepted practice on a 
 particular point. 
 
 The man who is not a professional accountant, 
 however extended and thorough his knowledge, of 
 the accounting field, has continual need of such a gen- 
 eral view of the subject as these volumes present, to 
 confirm his recollection of an item or to deteruune a 
 
 185 
 
136 READING GUIDE 
 
 puzzling application. Such a reader will naturally 
 turn first to the general index in this volume to trace 
 connections and cross-references. 
 
 Without this reference aid, the reader who is 
 studying business accounting as a whole, or is in 
 search of the best method of solving an accounting 
 problem, would be compelled to consult the indexes 
 of several of its volumes if he wished to exhaust the 
 information contained in its pages on a given subject. 
 With a general index, however, he can compare the 
 information in one volume with that in another; he 
 can look up rapidly and with precision the informa- 
 tion he is in search of; he can find in one place and 
 in one index reference by volume and page to the par- 
 ticular subject he wishes to study or refer to. 
 
 Few men carry in their recollection the full detail 
 of matters with which they are not working daily. 
 Yet not many business men have acquired the habit of 
 immediate recourse to the index of a book which will 
 give them the accounting or any other kind of infor- 
 mation they may need. In this respect the mental 
 attitude of the business man is unlike that of the pro- 
 fessional man. The professional man is compelled 
 to master the existing body of knowledge relating to 
 his profession, and in consequence he is trained to 
 have prompt recourse to books when in need of in- 
 formation. The business man has learned primarily 
 in the school of experience. As the knowledge to be 
 acquired from books, though exceedingly helpful, is 
 not among the first requisites for success in a busi- 
 
GENERAL INDEX |g- 
 
 ness career, the business man does not always know 
 to what extent books can help him. Moreover, even 
 when he feels the need of consulting books, he often 
 does not know the quickest way to obtain the informa- 
 tion he desires. 
 
 The purpose of an index is, of course, to enable 
 the reader of a particular book to find the page or 
 pages on which appears the information he is in search 
 of and which he knows to be or which may be assumed 
 to be in the book. The method of finding this in- 
 formation is too well known to require any explana- 
 tion. Attention, however, may be drawn to the utility 
 of cross-references as means of directing the search 
 if the reader wants to exhaust a given subject. In 
 cases where certain specific information forms a part 
 of a whole subject and it is desired to study the re- 
 lationship of the part to the whole, a cross-reference 
 will usually be found indicating the direction in whicli 
 the search is to be made. For instance, in looking up 
 a point relating to the transactions of a holding com- 
 pany, on referring to ''Holding Company" the cross- 
 reference is found ''See also 'Combinations and Con- 
 solidations' " ; under "Coinsurance Clause" appears 
 the cross-reference "See also 'Fire Insurance, Ad- 
 justment'"; under "Administrative Expense*' ap- 
 pears the cross-reference "See also Xabor, Indirect,' 
 'Non-productive Departments' " ; and so on. In each 
 of the above examples the reference is from the part to 
 the whole, so that if the study of the part fails to fur- 
 nish the explanation sought for, the reader's attention 
 
138 GENERAL INDEX 
 
 is directed to a larger and more comprehensive field 
 of information. 
 
 In the same way, one subject which is closely 
 allied to another subject may often be profitably re- 
 ferred to as a means of throwing further light on a 
 difficult point or matter. For example, in the study 
 of reserves an allied subject is that of sinking funds 
 and so a cross-reference is found under both heads 
 connecting one subject with another. 
 
 In the use of the general index two points in par- 
 ticular need to be stated: 
 
 1. All references to problems are page numbers 
 
 and are treated in the same manner as 
 references to forms, i.e., they are indented 
 beyond the margin of other headings and 
 in this way are distinguished from ordi- 
 nary text matter. 
 
 2. Cost accounting items have not in all cases 
 
 been distinguished as such in the general 
 index, but are to be inferred in all in- 
 stances of reference to Volume III, which 
 is entirely on the subject of cost ac- 
 counting. 
 
GENERAL INDEX 
 
 (All references are to pages. Roman numerals indicate volumtt) 
 
 Abstract of Stores Ledger, II, 143^ 144 
 Acceptances, Trade, I, 304, 305 
 Accident Insurance, III, 238 
 Accommodation Indorsement, IV, 248 
 Account, (See also "Accounts," "Accounting," 
 "Controlling accounts," "Ledger") 
 Forms, I, 43 
 Books of (See "Books of account") 
 Capital, I, 67 
 Cost of sales. III, 357 
 
 Illustrated, III, 320, 360 
 Debits and credits defined, I, 17, -ft, 176 
 Deficiency, I, 140, 141; IV, 319, 326 
 Illustrative statements, I, 140; IV, 32Q 
 Problem, V, 61 
 Defined, I, 17 
 Field of service, II, 265-267 
 
 Example, II, 265, 266 
 Form of, I, 42-44 
 
 Forms, I, 43 
 Mixed, I, 79-83 
 Adjustingf I, 80-83 
 Example and treatment of, I, 80-83 
 Nominal, I, 59, 60 
 Personal, I, 58, 59 
 riant and sundry assets, I, 371 
 
 Problems, V, 170, 202, 277, 281 
 Profit and loss (See "Profit and loss ac- 
 count") 
 Real, I, 58, 59 
 Surplus (See "Surplus") 
 Work in process. III, 79, 83 
 Entries, III, 83 
 Illustrated, III, 85, 90 
 Journal entry illustrated, III, 107 
 Process method. III. 90. 
 Production-center system, illustrated, III, 
 
 324 
 Textile costs, III, 369-376, 380-389 
 Accountancy, 
 
 Defined, I, 5, 16, 17; II, 3 
 Functions of, classified, I, 5 
 
 Accountant, 
 
 Defined. I. 10 
 
 Duties of, I, 6, 7, 16 
 
 Functions of, I, 7-10, 18 
 Auditing, I, 0, 10 
 Clear reports and statemrata. I. f 
 Planning and adapUnff lystema, I, 7 
 Recording financial history qI 
 
 1.8 
 Special investigaliona, I, 0, 10 
 
 Professional, I, IS 
 
 Public,.ccrlified, I, IS, 14 
 
 Training of, I. 12 
 
 Accounting. (See also "Account,- 
 "Bookkeeping") 
 Advanced. I. 8, 9; IV, 5-11 
 Auditing, I. 9, 10 
 
 Distinguished from elemenUry. IV. S 
 Scope of, IV. S-n 
 Analytical. II. 6 
 Branches and chain alorts (8m **BrBack 
 
 stores") 
 Branches of. II, 5-8 
 Cash discount. I. 375-00 
 Club (See "Cluba") 
 Constructive, 
 Defined. I. 7 
 Function of, II, 7 
 Corporation (Sec "CocporaUoa**) 
 Cost (See "Coat ac<x>untinf ") 
 Dealing with— 
 Persons. II, iS 
 Progression or retrogrcaMon. 
 
 11.25 
 Property. II, tS 
 Defined. II, 8 
 Department, 
 Expense diatribution. II. 468 
 Functions of. II. \i 
 Estate (See "Estate accountiac") 
 Inspective, II. 
 
 Methods, modernisatioa ol. I. 5-5 
 Operative, II. 6 
 Partnership (Sec "Parlncrabip'*) 
 
 189 
 
140 
 
 GENERAL INDEX 
 
 Accounting — Conlinued 
 
 Place of, in organization, II, 4 
 
 Plant (See "Plant") 
 
 Presentation of figures in statements, ^I, 
 
 8, 153 
 Professional (See "Professional accounts") 
 Records. (See "Records") 
 
 Stores, III, 122-141 (See also "Stores") 
 System, 
 
 Elaborate, not desirable, II, 53 
 
 Establishing, II, 266 
 
 Mechanical, II, 173-175 
 
 Necessity for proper, II, 5 
 
 Officials and employees, co-operation of, 
 II, '44 
 
 Organization plan, II, 43 
 
 Planning and installing, I, 7; II, 32-51 
 (See also "Business, survey of," "Busi- 
 ness, planning accounting system for") 
 
 SuperHsion, Mathews, George, quoted, 
 11,50 
 Terms used in, I, 16-26 
 
 Account, I, 17 
 
 Accountancy, I, 16, 17 
 
 Accountant, I, 16 
 
 Assets, I, 20 
 
 Bookkeeper, I, 16 
 
 Books of account, I, 10, 23 
 
 Capital, I, 22 
 
 Corporation, I, 19 
 
 Credit, I, 17 
 
 Debit, I, 17 
 
 Liabilities, I, 21 
 
 Partnership, I, 18 
 
 Proprietorship, sole, I, 18 
 
 Statement, I, 25 * 
 Theory and practice, II, S 
 
 Accounts, (See also "Account," "Accounting," 
 
 "Ledger") 
 Adjusting (See "Adjustments") 
 Agency, II, 373, 374 
 Analysis of, I, 399-425 
 
 Credit accounts, I, 415-425 
 
 Debit accounts, I, 399-414 
 Asset, I, 65 
 
 Depreciation, I, 317-321 
 Attorneys' (See "Professional accounts") 
 Auditing, II, 6 
 Balancing, I, 44 
 Charts, II, 45; III, 20 
 
 Form, III, 19, 20 
 
 Accounts — Continued 
 
 Classification, I, 57-69, 259, 399-425; 
 II, 264-286 
 Problems, V, 100, 215, 362 
 Aid to correct bookkeeping, I, 62-64 
 Aid to preparation of statements, I, 64, 65 
 Branches and chain stores, II, 379, 380 
 Chronological record, II, 269 
 Correct, importance of, I, 57 
 Credit accounts, I, 415-425 
 Debit accounts, I, 399-414 
 Grouping to facilitate statement prepara- 
 tion, II, 284-286 
 Groups, variations in size of, II, ^69 
 Ledger arrangement, II, 270 
 Manufacturing or trading company, II, 
 
 272-284 
 Methods of, II, 267-269 
 Name and purpose of account both con- 
 sidered, II, 269, 270 
 Numeric system, II, 268, 271, 277-283 
 Personal accounts, II, 267 
 Process cost system. III, 131, 328 
 Retail business, II, 268 
 Subdivisions, I, 60-62 
 Closing (See "Entries, closing") 
 Controlling (See "Controlling accounts") 
 Credit, analysis of, I, 415-425 
 Creditors', mail-order business, II, 392 
 Debit, analysis of, I, 399-414 
 Departmentalization of. III, 5, 7, 22 
 Details to be recorded, II, 266 
 
 Working balance sheets, II, 266 
 Estimated cost system. III, 354-361 
 Expense, indirect, I, 68, 69, 236; III, 95-105, 
 212, 217, 221, 223, 234-242, 268, 310 
 (See also "Expense") 
 Fixed charges. III, 234-242 (See also "Fixed 
 
 charges") 
 Income, I, 67 
 Inventory, III, 79 
 Journal entries (See "Journal") 
 Liability, I, 66 
 
 Numbering, II, 268, 271, 277-283 
 Decimal system, II, 271, 280-283 
 Universal system, II, 271, 277-279 
 Offsetting entries, I, 64 
 Opening entries, I, 180, 263, 339-343, 367, 
 370; II, 233, 234 (See also "Entries, 
 opening") 
 Forms, I, 181, 339, 340, 367, 368 
 
GENERAL INDEX 
 
 141 
 
 Accounts — Continued 
 Payable. I, 113, 267 
 
 Analysis of, I, 415, 416 
 Personal, II, 268 
 
 Posting (See "Ledger, posting to") 
 Process cost system. III, 86-97, 269, 271, 
 328, 343-347 
 Classification, III, 328 
 Closing accounts, III, 106-108 
 Illustrated, III, 343-347 
 Forms, III, 344, 346 
 Production-center system. III, 310-327 
 Chart, III, 310 
 
 Form, III, 312, 313 
 Illustrated accounts, III, 319-326 
 Receivable, I, 109, 266 
 
 Problems, V, 19, 21, 70, 231 
 Analysis of, I, 402 
 Assignment of, IV, 221 
 Assignment of, special register, IV, 222 
 Losses on, as closing problem, IV, 13 
 Schedule of, I, 157, 158 
 Uncollectible, I, 326, 327 
 
 Problem, V, 19 
 Valuation of. IV, 218 
 
 Problem, V, 70 
 Verification, IV, 426 
 Suspense, IV, 22, 27 
 
 Problem, V, 137 
 Textile costs. III, 366-401 (See also under 
 
 "Textile costs") 
 Use of, illustrated, I, 41, 42 
 Verification of, IV, 418 
 "Accrual Basis" as Compared with "Cash 
 
 Basis," IV, 19, 20 
 Accruals, (See also "Deferred credits," 
 "Deferred debits") 
 Accrued interest distinguished from interest 
 accrued, IV, 13 
 Accumulation Envelope, Hotel Guest 
 Charges, II, 439, 440 
 Form, II, 440 
 Adding Machine^ II, 350 
 Additions, Expenditures on, Capital 
 
 Charges, IV, 47 
 Adjustments, (See also "Entries, adjusting") 
 Problems, V, 125, 132, 180, 271, 343 
 Advanced accounting, scope of, IV, 3-1 1 
 Between actual and applied expense. III, 
 212, 282-285, 295 
 Flat percentage charge. III. 284 
 
 AojCHTMBNTs— ConhntM^ 
 
 Between actual and applied mmM 
 
 Continued 
 
 Production-center lyitem. III. tM 
 
 Reserve account. III. MS 
 Between actual and eatimatcd raata. III. SS) 
 Capital or surplui. achedak of. I. IM. I« 
 Capital, partnership. I. S48-SM 
 
 Problem. V. 116. 183. 187 
 Corporate dividends. IV. 55-M 
 Deferreff credits. IV, ««-S< 
 
 Problems. V, 125. \3i. 1S7. 180 
 Deferred debits. IV. 12-23 
 
 Problems. V. 125. 132. 187. 180 
 Fire loss (Sec "Fire loss adjustmrnU'*) 
 Intercompany. IV. 365. 366 
 Inventory (See "Inventory") 
 Mercantile budneaa, illustrative atJiteaenl, 
 
 IV. 815 
 Profit determination. IV. 33-54 
 Reserves and funds. IV. 104-118 
 Sinking fund. IV. 160 
 Stores, II, 143; III. 189 
 Surplus, I, 159; IV. 95-103 
 
 Problems, V, 15, 16. 18. 21. IM. ISt, IS7. 
 148, 180, 266, 271. 284. 312 
 Administrative Expense. I. 69; II. 29A; III. 
 
 18. 98, 102, 168, 172. 187. 213. 220. Ml 
 
 (See also generally "Labor, iodirect," 
 
 "Non-productive departments") 
 Account illustrated. 
 
 Textile costs. III. 896. 397 
 Account, process system. III. 166. 344 
 
 Form. III. 344 
 On distribuUon sheet. lO. 224. tSS, M0 
 Production-center system. III. 291 
 
 Account illustrated. III. 321 
 Standing expense. orders. III. 2M 
 Sub-departments. III. 265 
 Administrator, II. 404 (See •ko **Cat«t« 
 
 accounting") 
 Advertising, 
 
 Department. II. 154 
 
 Sales department, relation to, II. IM 
 Expense. I. 65. 98. 113. 119; II. 468; UI. 
 
 217. 220; IV. 14. 27 
 Good- will value of. IV. 18. 254 
 Mail-order busineas. II. 393 
 Agencies. II. 373 
 
 Accounts of. II. 373. 374 
 Home office, accounts with. II. 374 
 Agent's Orocb Bu.\nk. II. 391 
 
142 
 
 GENERAL INDEX 
 
 Agbeement, Pabtnebship, II, 17 
 Aids, Mechanical, II, 3,49-359 
 Automatic register, II, Z5(i, 357 
 Billing machine, II, 169-171, 352 
 Calculating machine, II, S50-S52 
 Cash register, II, 358 
 Essential requirements of, II, 349 
 Importance of, II, 349, 350 
 Numbering ma hine, II, 358 
 Photographing machine, II, 357 
 Prevention of errors, IV, 380-381 
 Slide rule, II, 355 
 Stamp affix'jr, II, 357 
 Tabulating machine, II, 353-355 
 Time recorder, II, 307-309, 358; III. 176, 179 
 Typewriter, II, 356 
 A LA Cabte Dinivg Room, Checking Sys- 
 tem, II, 433-435 
 Allowable Deductions Recobd, II, 848 
 
 Form, II, 347 
 Allowance Joubnal, II, 386 
 
 Form, II, 337 
 Allowances, 
 Discount (See "Discounts") 
 Purchase rebates and, account, analysis of, 
 
 I, 434 
 Returns and. 
 Analysis sheet of allowances, II, 126 
 
 Form, II, 125 
 Journal entries, I, 184 
 Refund ticket, II, 225 
 
 Form, II, 226 
 Register, II, 125 
 Form, II, 125 
 Sales, I, 99 
 
 Rebates and allowances account, analysis 
 of, I, 411 
 Alterations ob Additions, 
 
 Expenditures on, capital charges, IV, 47, 61, 
 235-237 
 Alternate Sales System fob a Small Con- 
 cern, II, 172 
 Form, II, 172 
 Amebican Institute of Accountants, I, 14 
 Amebican Plan, Hotel, II.. 432 
 Amobtization, 
 
 Bonds, IV, 128, 135 
 
 Problems, V, 146, 148 
 Debt, IV, 153 
 
 Sinking fund method compared with, IV, 
 153, 154 
 
 Analysis, (See also "Accounts, classification," 
 "Schedule") 
 Accounts, 
 
 Credit accounts, I, 415-425 
 Debit accounts, I. 399-414 
 Expense, indirect (See ' £xpeD<ie, distribu 
 
 tion") 
 Pay-roll (See "Pay-roll") 
 Anai-ysis Sheets, 
 Allowances, II, 126 
 
 Form, II, 120 
 Textile costs (See under "Textile costs") 
 Annuity, IV, 144-154 (See also "Sinking 
 fund") 
 Amount of, IV, 146-148, 151-158 
 Computation of. 
 
 Problems, V, 146, 165, 166 
 Comjx)und discount, IV, 149, 153 
 Compound interest, IV, 144-146, 153 
 Nature of problem, IV, 9 
 Principle based on, IV, 144 
 Future worth, IV, 146-148, 151, 153 
 Present worth. IV, 148-151, 153 
 
 Problem, V, 146 
 Rents of, IV, 146 
 Applied Rates of Expense Distbibution, 
 III, 212, 271-285 (See also under "Ex- 
 pense, distribution over product") 
 Adjustment between actual and. III, 212, 
 282-285, 295 
 Appraisal (See "Valuation") 
 Appbeciation, 
 
 Fixed assets, IV, 96 
 Land values, I, 325; IV. 231 
 Abticles of Partnership, II, 13 
 Articulation Statement, Defined, IV, 413 
 Assembly Products, III, 66 
 Asset and Liability Method of Determin- 
 ing Profit or Loss, I, 392, 393; IV, 52 
 Assets, 
 Accounts. I, 65 
 Appreciation, IV, 96 
 
 Problems, V, 66, 70 
 Arrangement on balance sheet, IV, 281 
 Ascertaining, method of, I, 46 
 Book value, I, 132, 133, 138 
 Current, I, 65; IV, 215-229 
 Accounts receivable, assignment of, IV, 
 
 221 
 Accounts receivable, valuation of, IV, 218 
 Bad debts, accounting for, IV, 219 
 
GENERAL INDEX 
 
 148 
 
 Assets — Continued 
 Current — Continued 
 
 Bad debts, reserve for, IV, 216 
 
 Basis of valuation of, IV, 44, 45 
 
 Classification, IV, 215 
 Problem, V, 319 
 
 Defined, IV, 215 
 
 Merchandise inventory, IV, 222 
 
 Merchandise inventory, insurance of, IV, 
 227, 228 
 
 Merchandise inventory, pricing of, IV, 224 
 
 Nature of, IV, 215 
 
 Stock-in-trade, IV, 223, 227 
 
 Stocks and bonds as, IV, 334, 335 
 Deferred expense, I, 65 
 Defined, I, 20, 21 
 
 Depreciation, I, 315; IV, 12 (See also "De- 
 preciation") 
 Disposition of. 
 
 Losses, I, 35 
 
 Payments, I, 35 
 
 Withdrawals, I, 35 
 Estate accounting for, II, 405-407 
 Existence of, verification of, IV, 419 
 Fixed, I, 62, 65; IV, 230-238 
 
 Basis of valuation of, IV, 44, 45 
 
 Buildings, IV, 234-237 
 
 Changes in valuation of, IV, 96 
 
 Land, IV, 231-234 
 
 Machinery and equipment, IV, 237, 238 
 
 Nature of, IV, 230 
 
 Reserve for depreciation on, IV, 115 
 
 Sale of, I, 112 
 
 Securities owned for purposes of control, 
 IV, 335 
 
 Valuation, effect of depreciation on, IV, 49 
 
 Verification of, IV, 428 
 Floating (See subheading "Current, "above) 
 Intangible, I, 393, 394; IV, 250-264 
 
 Copyrights, IV, 261 
 
 Franchises, IV, 263 
 
 Good-will, IV, 250-257 
 
 Nature of, IV, 250 
 
 Patents, IV, 257-260 
 
 Royalties, IV, 262 
 
 Trade-marks, IV, 260 
 
 Trade secrets. IV, 261 
 Liquidation, I, 146-148 
 Plant (See "Plant") 
 Recording, illustrated, I, 62, 63 
 Replacement of (See "Repairs and re- 
 newals") 
 
 AsBcn— CorUin tud 
 
 Revaluation, relation to Burplttt. IV. 1 
 Single-entry bookkeeping (Sm 
 
 ing. singles itry *) 
 Sources of. I, S4, 35 
 Creditors, I. S4, 35 
 Profits. I, 31. 34. 35 
 Proprietor. I, 34. S5 
 Surplus from sale of. IV. M 
 Tangible and intangible, ^n f fa-e a try. t. 
 
 393. 394 
 Valuation of, IV. 7, 41-~45. 168. tlS^fiO 
 Problems, V. 15. 16. 18 
 Data, sources of, IV, 45 
 Insolvency. I. 132. 138; IV. SW 
 Kinds of, IV. 42. 43 
 
 Knowledge required by aecottntABt lor, 
 IV, 7 
 Verification of. 
 
 Existence of asset, IV, 419 
 Importance of, IV, 417 
 Ledger account, IV, 418 
 Wasting. 
 
 Accounting for, IV, 239 
 
 Problem, V. 207 
 Definition and treatment. IV. tS8 
 Distinguished from depreciation, IV, t9# 
 Reserve for, IV, 115 
 Assets and Liabilities. STATKMB!rr or. I, 
 46-49 (See also "Balance abect.'* 
 "Statements") 
 Forms, I. 46-49 
 Problem. V, 336 
 Assignees (See "Receiveri") 
 Attorneys' Accounts (See "Proliwi nn a l 
 
 accounts") 
 Auditing, I, 9, 10; II. 6; IV. S 
 
 Necessity for, I, 74 
 Auditor, Functions or, I, 10 
 Automatic RsaisTrJi. II. S5<l. 357 
 Automobile Factor r. 
 Inventory sheet. III. 121 
 Form. III. 120 
 Averages. Theory or. 
 
 Applied to accrued liabtUtica. IV. H 
 Applied to keeping books oo cask 
 IV. 20 
 
 B 
 
 Bad Debts (See "Debta, b^d") 
 Balance, 
 
 Account, I, 44 
 
144 
 
 GENERAL INDEX 
 
 Balance — Continued 
 Bank, 
 Interest on, I, 111 
 Reconciliation of, I. 225-227; IV, 425 
 
 Problems, V, 3, 4 
 Verification of, IV, 425 
 In hand and on deposit, I, 108 
 Trial, locating differences in, IV, 405-410 
 Balance Division of Stores Ledgeb, II, 
 
 142, 143 
 Balance Sheet, I, 58, 59, 102, 116-128; H, 
 289; IV, 279-293 (See also"Statements") 
 Account form, I, 117; IV, 285 
 
 Forms, I, 118, 337; IV, 286, 287 
 Accounts, II, 264 
 
 Arrangement of content, I, 117-123; IV, 
 281-287 
 Assets, I, 117-119; IV, 281 
 Capital, I, 117-120; IV, 283 
 Liabilities, I, 117-120; IV, 282 
 Purpose to be served, factor in, IV, 281 
 Comparative, IV, 288 
 
 Problem, V, 253 
 Condensed form, IV, 285 
 Form, IV, 286, 287 
 Problem, V, 395 
 Consolidated, IV, 353-375 
 
 Problems, V, 277, 304, 312, 319, 328 
 Advances to subsidiaries, IV, 373 
 Complications, suggestions for avoiding, 
 
 IV, 356-358 
 Good-will, IV, 361 
 
 Problems, V, 202, 277, 328 
 Illustrative statements, IV, 354-356 
 Income tax regulation, IV, 353 
 Investment accounts, substitution of 
 
 assets and liabilities for, IV, 356, 358 
 Liabilities and deficit of a subsidiary, IV, 
 
 373 
 Method of consolidation, IV, 354 
 Minority interest of subsidiaries, IV, 372, 
 373 
 
 Premiums, IV, 361 
 Problems, V, 300, 328 
 
 Profits of subsidiaries prior to consolida- 
 tion, IV, 359-360 
 
 Purpose, IV, 353 
 
 Surplus adjustments, I, 159; IV, 95-103 
 Problems, V, 284, 312 
 
 Surplus and dividends of subsidiaries, IV, 
 872 
 
 Balance Sheet — Continued 
 Consolidated — Continued 
 
 Surplus of subsidiaries, IV, 361, 363 
 
 Problem, V, 304 
 Surplus of subsidiaries, when stock only 
 partly acquired, IV, 363 
 
 Contingent liabilities, I, 120; IV, 288 
 Corrected, I, 126 
 
 Form, I, 126 
 Date of, I, 122 
 Deferred charges, I, 118, 119 
 Deficit, showing of, I, 119; IV, 284 
 
 Problems, V, 271, 304 
 Defined, I, 116; IV, 279 
 Depreciation reserve, I, 318 
 
 Problem, V, 271 
 V Dividends, cumulative, unpaid, IV, 291 
 Entry of inventory accounts. III, 79 
 Federal Reserve Board form, IV, 287 
 
 Form, IV, 288, 289 
 Form of, IV, 280 
 
 English, reverse of American, IV, 280 
 Holding company, IV, 340-352 (See also 
 subheading "Consolidated," above) 
 
 Compared with consolidated balance 
 sheet, IV, 340 
 
 Complications, IV, 343, 344 
 
 Illustrative statements, IV, 341, 342, 
 347-349 
 
 Method of showing investments in the 
 subsidiaries, IV, 347 
 
 Methods of presentation compared, IV, 
 344-347 
 
 Necessity for consolidated balance sheet, 
 IV, 343 
 
 Objection to, IV, 350 
 Illustrative form, IV, 285-287 
 Importance of, IV, 279 
 Inadequacy of, for insolvents, I, 130, 131 
 Incorrect form of, I, 121 
 
 Form, I, 121, 122 
 Ledger balances, correct showing of, IV, 291 
 Liabilities, 
 
 Contingent, I, 120; IV, 288 
 
 Notes receivable discounted, IV, 288 
 
 Showing of, I, 117-120; IV, 282 
 Manufacturing company, illustrative state- 
 ment, IV, 304 
 Mercantile business, illustrative statement, 
 
 IV, 311 
 
 V 
 
GENERAL INDEX 
 
 145 
 
 Balance Sheet — Continued 
 
 Notes due from or payable to proprietors or 
 
 corporation officials, IV, 291 
 Purpose of, I, 110; IV, 281 
 Real and personal accounts, I, 58, 59 
 Receiver's, I, 143, 149 
 
 Form, I, 151 ■ 
 
 Report form, I, 117; IV, 286 
 Forms, I, 103, 118, 119 
 Problem, V, 45 
 Representing insolvency, example of, 1, 134, 
 135 
 Form, I, 134, 135 
 Reserves, showing of, IV, 284 
 Special points, IV, 288 
 Stock brokerage, II, 428-431 
 Tie-up with income statement, IV, 292 
 
 Problems, V, 132, 221, 336 
 Treasury stock on, IV, 208 
 Problems, V, 152, 277 
 Bank, 
 
 Account, charge for, I, 223 
 Balance, 
 
 Interest on, I, 111, 220 
 Reconciliation of, I, 225-227; IV, 425 
 
 Problems, V, 3, 4 
 Verification of, IV, 425 
 Columns in cash book, I, 228 
 Depositors ledger, II, 253 
 
 Form, II, 252 
 Statement, I, 224, 225 
 
 Form, I, 224 
 Stock, IV, 200 
 Surplus, 
 
 Creation of, IV, 96 
 
 Distinguished from undivided profits, FV, 
 97, 98 
 Transfers, recording, I, 228, 229 
 Bankers' Investments in Corporate 
 
 Stocks, IV, 334 
 Bankruptcy, 
 
 Accounts and reports of trustees, IV, 322 
 Appraisal of property, 1, 132; IV, 322 
 Deficiency statement, I, 140, 141; IV, 319. 
 326 I 
 
 Problems, V, 61, 66, 70 
 Priority of debts, IV, 323 
 Realization and Hquidation statement, I, 
 142-152 (See also "Realization and liqui- 
 dation statement") 
 Form, I, 145 
 Referees in, IV. 321 
 
 Bankroptct— ConlmiMrf 
 
 Statement of affairs, I. ItO-Ul; IV. tU. N* 
 
 (See also "Statement ol tJUinT) 
 Trustees in. 
 
 Problems. V, 78, 83 
 Appointment and duties. I. I4f ; IV. tit 
 Betterments. PBoriTii ExrnrDKO Poa. «• 
 
 Basis or Dividcnm. IV, 91 
 Bill or Material, III. 135. 304 
 
 Form. III. 135. 304 
 Billing Machine, ll, 100-171. 8M 
 Department store work. If. 170. 171 
 Invoices, making. II. 169. 55i 
 Bills or Exchange. I, 295 
 Bin Tag. III. 132 
 
 Form. III. 133 
 Block System or CLABSincATioN, HI. IM 
 Blotter, 
 
 Attorney's office. II. 390. 397 
 
 Form, II, 397 
 Stock broker's. II. 420-423, 
 Forms, II. 421 
 Boiler Insurance, III. 238 
 Bond Dividends. IV, 74, 92 
 Bond Tables, Use of, IV, 9 
 Bonds, (See also "Securities") 
 Account, analysis of, I. 418 
 Accounting for. IV, 132-142 
 Investment, IV, 132-139 
 Issues, IV, 139-142 
 
 Problems. V, 140. 140. 148. 152. !«• 
 Accumulation defined. IV. 129 
 AmortizaUon. IV. 128-131. 135 
 
 Problems, V. 146. 148 
 As current assets of certain corporalioM. 
 
 IV, 334. 333 
 Brokerage on, IV. 123 
 Classification of, IV, 122 
 Corporate. IV, 121 
 Coupon. IV. 122. 123 
 Defined. IV, 121 
 Denomination of. IV, 122 
 Discount. IV, 9. 124. 137, 141 
 
 Problems. V. 152. 100. 215. 177 
 Account, analysis of. I. 407 
 Accounting for. IV. 137. 138. 141 
 Distinguished from notes, IV, It* 
 Distinguished from real MUto hamd aad 
 
 mortgage. IV. 121 
 Interest (See "Interest") 
 Investment value, rakulatton ol. IV, ISf- 
 142 
 
146 
 
 GENERAL INDEX 
 
 B ONDS — Continued 
 Investments in. 
 
 Balance sheet treatment of, IV, SS5 
 Journal entries, IV, 136 
 Problem, V, 148 
 Issue, 
 
 Discount, IV, 141 
 Entries in books, IV, 139, 140 
 Interest, IV, 140 
 Premium, IV, 141 
 Owned, account, analysis of, I, 404 
 Par value, IV, 123 
 
 Premium, IV, 9, 124, 125, 134, 135, 141 
 Problems, V, 148, 300 
 Account, analysis of, I, 419 
 Accounting for, IV, 135 
 Price, IV, 123, 124 
 
 Factors determining, IV, 124 
 "Market value," IV, 124 
 Profit and loss on sales, IV, 138 
 Real estate distinguished from corporate, 
 
 IV, 121 
 Redeemable at face value, IV, 124 
 Registered, IV, 122 
 Sale of, profit and loss on, IV, 138 
 Schedule of investment, I, 159 
 Security for, IV, 122 
 Sinking fund, to provide for retirement of 
 
 (See "Sinking fund") 
 Term, IV, 122 
 Trust deed securing, provisions of, FV, 155, 
 
 157 
 Trustee, IV, 121, 157 
 Unissued, IV, 140 
 Value, computing, IV, 124-126 
 
 Investment value method, IV, 132-139 
 Bonus On Total Purchases, I, 277 
 Bonus Stock, IV, 209 
 Bonus System or Wage Payment, II, 305; 
 
 m, 204 
 Book of Original Entry (See "Books of 
 
 account") 
 Book Value, I, 132, 133, 138 
 Bookkeeper, 
 Defined, 1, 16 
 
 Duties of, interlocking accountant's duties, 
 I, 6, 7, 16 
 Bookkeeping, 
 
 Double-entry, I, 38-45 
 Cost accounting, II, 461 
 
 Bookkeeping — Continued 
 Double-entry — Continued 
 Purposes of, I, 79 
 Value of, I. 175 
 What must be shown, I, 38 
 When should be used, I, 38 
 Kinds of, I, 38 
 
 Machine (See "Billing machine") 
 Records, primary purposes of, I, 24 
 Relation to advanced accounting, IV, 3 
 Single-entry, I, 38, 377-395 
 Cash book, I, 382-384 
 
 Form, I, 383 
 Day-book, I, 378-381 (See abo "Day- 
 book") 
 Form, I, 379 
 Fundamental characteristic, I, 377 
 Inadequacy of, I, 394 
 Ledger, I, 381, 382 
 
 Form, I, 382 
 Ledger accounts, insufficiency of, I, 385 
 Profit and loss, methods and formulas for 
 
 determining, I, 389-394 
 Statement of condition, I, 385-389 
 
 Forms, I, 387, 388 
 Summary of changes of assets and liabili- 
 ties, I, 389 
 Form, I, 389 
 Tangible and intangible assets, I, 393, 394 
 When may be used, I, 38 
 Books of Account, (See also "Records") 
 Columns, 
 
 Entering items in, II, 58 
 Figures in, arrangement of, 11, 57 
 Use and number of, II, 57, 58 
 Defined, I, 16 
 Grouping, II, 36, 37 
 List of, U, 35, 36 
 
 Original entry, I, 39, 40; II, 7, 27-29, 46, 47. 
 231, 232, 247 
 
 Form, II, 231 
 Defined, I, 39 
 Development of, II, 27-29 
 Entering business transaction, example, 
 
 I, 40 
 Errors occurring in, I, 73, 74 
 Form of, II, 47 
 Functions of, II, 46, 47 
 Purposes of, II, 232 
 Subsequent entry, II, 7 (See also "Ledger") 
 
GENERAL INDEX 
 
 147 
 
 Branch Stores, II, 374-388 
 
 Problems, V, 106, 108, 119, 140. 253 
 Accounting system for, II, 377-388 
 Accounts of, methods of keeping, II, 375 
 Books and records, II, 380-388 
 
 Forms, II, 382-388 
 Classification of accounts, II, 378, 379 
 ^ Home office accounts with, II, 376 
 Ledger accounts, arrangement of, II, 379, 
 
 380 
 Shipments between, II, 377 
 Breakfast-Food Factory, III, 42 
 Brick Manufacturing Plant, III, 46, 50, 
 87, 328-348 (See also under "Process cost 
 system") 
 
 Brokerage on Bonds, IV, 123 
 
 Brokers' Investments in Corporate 
 
 Stocks, IV, 334 
 Budget, II, 316-333 
 » Approval of, II, 322 
 Defined, II, 316 
 Estimate of — 
 Costs, II, 321 
 Expenditures, II, 321, 322 
 Needs of business as a whole, II, 322, 323 
 Revenue, II, 320, 321 
 Importance of. 
 General, II, 317 
 
 To organization officials in lesser capac- 
 ities, II, 318 
 To the executive, II, 317, 318 
 Institutional, illustrated, II, 325-327 
 Lump sum, II, 316, 317 
 Modifications, II, 322 
 Plan, basis of, II, 323 
 Preparation of, II, 318-320 
 
 Points to be considered, II, 319 
 Schedule, II, 323, 324 
 
 Form, II, 324 
 Segregated, II, 316 
 
 Trading business, illustrated, II, 327-333 
 Building and Construction Companies, 
 Stocks of other corp)orations received on 
 payment for services, IV, 334 
 Building Expense, III, 230, 237 
 Account, 
 
 Analysis, I, 409 
 
 Production-center system. III, 289, 319 
 Textile costs, III, 395 
 Maintenance (See also "Repairs and re- 
 newals") 
 
 Bdildino ExpttTtnt—ConHntud 
 Maintenance — ConHnutd 
 
 Chargeable to capitaJ. when. IV. «7 fi 
 
 236, 237 * * 
 
 Depreciation and, IV. 167 
 Buildings (Src "Plunl") 
 Burden (See "Expeate") 
 Business, 
 And proprietor, relationaliip brt»««a | 
 
 19, 20 
 Control, types of, II, l«, is (8w nh rt 
 "Organization") 
 Corporation. II, IS, 18 (See aim "Corpors. 
 
 tion") 
 Partnership, II. IS. 17 (See alw **Pkrta«7. 
 
 ship") 
 Proprietorship. II. IS 
 Cost of doing, II, 304 
 Information, recording, I. 24, fS 
 Mail-order (See "Mail-order") 
 Manufacturing (See "Manufactariag tn- 
 
 terprise") 
 Object of. II. 364 
 Operation of. 
 Accounting. II, 11, 12 (See alM **Acco«uit. 
 
 ing") 
 Financing, II, 11, 12 
 Fundamental divisions of. II. 10 
 
 Form. II. 1 1 
 Office administration. II, II, li 
 Producing, II. 10 
 Selling. II. 10 
 Organization. II. ^2S (See abo **OfaBit». 
 
 tion") 
 Planning accounting system for. II. 9i-41, 
 2S6 (See also subheading "Stayry of.'* 
 below) 
 Installation, time for. II. 48 
 Ledger accounts, II, 46 (See a!ao "Lm!- 
 
 ger") 
 Officials and employee*, co-oprralion of, 
 
 11.44 
 Organization plan. II. iS 
 Outlining plan. II. 42 
 Records of original entry, II, 46. 47 (9*« 
 also "Books uf account. oHcinaJ r«try") 
 Subsidiary and auxiliary rrcurtK II. 
 
 47. 48 
 Supervision, provision for. II. 30 
 Retail (S<*e "Retail organisation") 
 Rules for office routine. II, 49. 30 
 
148 
 
 GENERAL INDEX 
 
 B usiNESS — Continued 
 
 Statement of a going, I, 47-49 
 Survey of, II, 32-41 
 Accounts in use, II, 38 
 Books in use, II, 35, 36 
 Character of business, II, 33 
 Object of, II, 32, 33 
 Preliminary considerations, II, 32 
 Records, grouping, II, 36-38 
 Specific cases, II, 39 
 
 Trading and manufacturing records, com- 
 paring, II, 34, 35 
 Working papers, II, 40, 41 
 Trading (See "Trading business") 
 Transaction, 
 
 Analysis of a, I, 39 
 Changes in, recording, I, 49 
 Factors involved in, I, 39 
 First entry of, I, 39 
 Wholesale, II, 152-154, 268, 363-372 
 Classification methods, II, 268 
 Combined with retail, II, 152-154 
 Cost accounting for (See "Cost accounting 
 
 for trading enterprise") 
 Sales book, II, 171 
 Business Corporations Law, II, 20 
 Business Executives (See "Executives, busi- 
 ness") 
 By-Froducts, III, 147 
 
 Calculating Machine, II, 350-352 
 Listing, II, 352 
 Non-listing, II, 351 
 
 Purchasing, points to observe in, II, 352 
 Candy Factory, Cost System, III, 13 
 Capital, I, 28-36; IV, 283 
 Account, I, 67 
 
 Closing drawing account into, I, 100, 101 
 Closing profit and loss into, I, 83-86 
 Partnership adjustments, I, 348-350 
 Problems, V, 116, 183, 187 
 Accountant's point of view of, 1, 30 
 Accounting definition of, I, 22, 28 
 Additions to, I, 35, 36, 112 
 Adjustments, schedule of, I, 159, 160 
 An accountability, not a liability, I, 120; 
 
 IV, 283 
 Ascertaining, method of, I, 46 
 Balance sheet presentation of, IV, 283 
 
 Capital — Continued 
 Changes in. 
 
 Adjustments of, I, 159, 160 
 Causes of, I, 35, 36 
 Example of, I, 36 
 Factors of, I, 389 
 Summary of, I, 34-36 
 Contributions, single-entry statements, 1,31, 
 32, 112, 390-392 
 Problem, V, 90 
 Decrease in, single-entry statements, I, 332 
 
 Problem, V, 97 
 Deductions from, I, 35, 36 
 Dividends not to be paid from, IV, 57 
 Economic definition of, I, 29, 30 
 Expenditures, 
 
 As related to profits, IV, 61 
 Compared with revenue expenditures, IV, 
 45-49, 61, 97, 235-237 
 Problem, V, 132 
 Defined, IV, 46 
 
 Maintenance — repairs, renewals, and re- 
 placements, IV, 47 (See also "Repairs 
 and renewals") 
 Expenses, IV, 296, 297 (See also subheading 
 
 "Expenditures," above) 
 Income and expense, I, 99 
 Incorrectly defined, I, 33 
 Nature of, I, 120 
 Net worth, I, 29 
 Problem, V, 61 
 Or deficit, determining, I, 46-52 
 Method of, I, 46, 47 
 Subsequent facts, recording, I, 49-51 
 Partnership (See "Partnership") 
 Profit, IV, 34, 35 
 Profit balance retained as, IV, 95 
 Withdrawals of (See "Withdrawals") 
 Working, I, 124 
 "Capital" Assets (See "Assets, fixed") 
 Capital Stock (See "Stock, capital") 
 Card Ledger, I, 260 
 Card System, Law Offices, Laying out 
 
 Daily Work, II, 397, 398 
 Cards, II, 66, 67 
 Index, II, 67 
 Job, II, 307, 309 
 Time (See "Time card") 
 Cash, 
 Account, 
 
 Analysis of, I, 401 
 
GENERAL INDEX 
 
 149 
 
 C ASH — Contin ued 
 Account — Continued 
 Receiver's, I, 149 
 Form, I, 150 
 Accountability, retail organization, II, 36ff 
 
 368 
 Balance, I, 194, 195 
 Testing, I, 195 
 Verifying, I, 225-227 
 Book (See "Cash book," below) 
 Carrier system, distribution of expense of, 
 
 II, 467, 468 
 Defined, from accounting viewpoint, II, 190 
 Disbursements, 
 Attorney's, II, 401 
 By check, II, 192 
 
 Identification of payments, I, 193, 194 
 Journal entry, I, 183, 184 
 Petty cash, II, 192, 217 
 Proof of payment, I, 193, 194 
 Record, hotel, II, 441 
 
 Form, II, 442 
 Register, mail-order house, II, 393 
 
 Form, II, 394 
 Statement of, I, 104-115 (See also "State- 
 ments, receipts and payments") 
 Discounts (See "Discounts, cash") 
 Distribution sheet, II, 226, 227 
 
 Form, II, 227 
 Dividends, IV, 72, 82, 83 
 Journal (See "Cash book," below) 
 Memorandum for goods returned, II, 225 
 
 Form, II, 226 , 
 
 Methods of handling accounts, IV, 19 
 Petty, 
 
 Problem, V, 7 
 Account, analysis of, I, 401 
 Book, I, 231; II, 218-220 
 
 Form, n, 219 
 Defined, I, 191, 229 
 Distinction between cash and petty cash, 
 
 I, 191 
 Fixed fund and account, II, 217, 218 
 Imprest system, I, 229-231; II, 192, 217 
 Items of similar kind, handling, II, 221 
 Vouchers, II, 220, 221 
 Form, II, 220 
 Purchases, I, 113; II, 122 
 Realization and liquidation statement, 1, 147 
 (See also "Realization and liquidation 
 statement") 
 
 Cahu— Continued 
 
 Recapitulation record. II, fn 
 Form. II. 211 
 
 Receipts and paym-nt*. 
 Separate Inxik for. I, 100 
 Statement of. I. 10*-l|3 (See •'» •'Suir. 
 ments, receipt* and p«yuj.nwi > 
 Receipts. dfpf)sit of. J, 193; I.'. 1 >J 
 Receipts register. U, 206-iOO 
 Form, II. 208 
 Hotels. II, 440 
 Form, II, 4^\ 
 Mail-6rder house, II, 393 
 
 Form, II, 394 
 Reasons for use of, II. 407 
 Use of two or more at sanM line. II. t07. 
 209 
 
 Records, II. 18^230 
 Development of. II. 191 
 General, II, 189-210 
 
 Forms. II. 193. 199. 80«. 205. 108, til. 
 213, 214 
 Miscellaneous, II, 222-230 
 Forms, II, 224. 22r»-229 
 Petty cash. II, 217-221 
 
 Forms, II, 219. 220 
 Separate, reasons for, II. 189-191 
 Refund ticket, II, 223 
 
 Form, II. 226 
 Register, II. 177, 21.^ 358 
 Report, daily. II. 227, 228 
 
 Form. II. 228 
 Sales (See "Sales, cash") 
 System, essentials of. II. \99 
 Verification. IV, 421-425 (See »!» **Vrnfie». 
 tion") 
 Bank balance. IV. 425 
 Cash in hand. IV. 421 
 Payments. IV. 423 * 
 
 Receipts, IV, 422 
 Cash Book, I, 188-197. 215 217. S8t-»4: 
 II. 26, 27, 190-200 
 Accepted as evidence in ct»urt«, II. *7 
 Arrangement of entries, I. 189. IBO 
 Balance, reconciliatiun with bank 
 I, 225-227 
 Problems. V. 3. 4 
 Entry in cash book. I. 2t6. NT 
 
 Form. I. 227 
 
 Method. I. 226 
 
 Bank columns. I. 228 
 
150 
 
 GENERAL INDEX 
 
 Cash Book — Continued 
 Charitable institution, II, 204-206 
 
 Form, II, 205 
 Closing, I, 195-197 
 
 Columnar, I, 215-217, 284, 328; II, 196, 197 
 Forms, I, 216, 217, 288, 289, 330, 331 
 Chain stores, II, 381 
 Forms, II, 385 
 Controlling accounts in, II, 200 
 
 Form, II, 199 
 Dates, entering, I, 192 
 Development of, II, 28, 29 
 Discount colunm, I, 215-217, 279, 280; II, 
 198-200 
 Forms, II, 199 
 Entries, I, 284-293; II, 195, 196 
 Footings, I, 192 
 Function of, II, 190 
 General, for mercantile concern, II, 201-204 
 
 Form, II, 202 
 Headings, I, 284, 285 
 Modern, development of, I, 215 
 Not a ledger account, II, 194 
 Petty cash, I, 231; II, 218-220 
 Form, II, 219 
 Chain stores, II, 381 
 
 Form, II, 386 
 Posting from, II, 218, 220 
 Posting to ledger, I, 196, 291-293 
 Private, II, 228 
 Form, II, 229 
 Receipts and payments, separate books for, 
 
 I, 190 
 Ruling of, I, 284, 285; II, 261 
 Simple, I, 191; II, 193 
 
 Forms, I, 191; II, 193 
 Single-entry bookkeeping, I, 382-384 
 
 Form, I, 383 
 Treated as ledger account, I, 190 
 Where no creditors ledger is kept, II, 122 
 Form, II, 121 
 Castings, III, 50 
 Catalogue File, II, 76 
 Catalogue, Stores, III, 161 
 Cement Manufacture, III, 88, 92 
 Certified Public Accountants, I, 13, 14 
 Chain Stores (See "Branch stores") 
 Charge Slip, Hotel Guest, II, 438, 439 
 
 Form, II, 439 
 Charges (See "Costs") 
 Chabqes, Deferred (See "Deferred debits") 
 
 Charitable Institution, 
 Cash book, II, 204-206 
 
 Form, II, 205 
 Pledge record, II, 841 
 Form, II, 341 
 Charts, 
 
 Accounts, III, 20 
 
 Forms, III, 20, 21 
 Production-center system. III, 310 
 Form, III, 312, 313 
 Elements of selling price. III, 25 
 
 Form, III, 25 
 Expense accounts, III, 212 
 
 Forms, III, 19, 20, 214-216 
 Production-center system. III, 310 
 Form, III, 312, 313 
 Graphic, III, 405-418; IV, 399-401 
 Advantages, III, 405 
 Comparison of expenses, IV, 401 
 
 Form, IV, 400 
 Difference, III, 406-409 
 
 Forms, III, 408, 416 
 Pay-roll, III, 191 
 
 Forms, III, 192, 193 
 Plotted from statements. III, 414, 415 
 Ratio, III, 406, 410-418 
 Forms, III, 413, 418 
 Production-center system, HI, 303 
 Form, III, 303 
 Accounts, III, 310 
 Form, III, 312, 313 
 Value of, II, 295 
 Check, 
 
 Canceled, I, 241 
 Exchange Charges, I, 218, 219 
 Exchanged, I, 219, 220 
 Method of entry on bdbks, I, 193, 194 
 Proof of payment, I, 193 
 Register, II, 209-211 
 Form, II, 208 
 Functions of, II, 210 
 Separate for each bank, II, 210 
 Void, I, 223 
 
 Voucher (See "Voucher") 
 Check-marking Corrections, IV, 434-436 
 
 System of check-marks, IV, 435 
 Checking or Proving Figures, III, 96 
 Church Pledge Record, II, 341 
 
 Form, II, 3il 
 Classification, 
 Accounts (See "Accounts, classification") 
 Expense, indirect. Ill, 213 
 
GENERAL INDEX 
 
 151 
 
 Classification — Continued 
 Invoices, indirect expense. III, 217 
 Subsidiary ledger, III, 218 
 Form, III, 219 
 Labor, III, 166-168 
 Labor, indirect. III, 221 
 Material requisitions. III, 131, 136 
 Parts, III, 305 
 ' Standing expense orders. III, 229-232, 267 
 Numerical system. III, 229-232, 267 
 Form, III, 230 
 Stores, III, 122, 138, 153-162 (See also 
 "Stores, classification") 
 Clay Products (See "Process cost system, 
 
 brickmaking plant") 
 Clayton Act of 1914, IV, 333 
 Cleaning Factory, III, 221, 226 
 Clearance Sheet, II, 417 
 
 Form, II, 418 
 Clearing House, 
 
 Stock exchange, II, 416, 417 
 Ticket, II, 416 
 Clock Card, II, 306-309; III, 167, 168, 176 
 
 Form, III, 181 
 Closing Entries (See "Entries, closing") 
 Closing Factory, III, 42 
 
 Piece-work time record. III, 185 
 Form, III, 186 
 
 Cloth Manufacture (See "Textile costs" 
 Clubs, II, 446-452 
 
 Accounting for, character of, II, 446 
 Accounts, 
 
 Classification of, II, 446-448 
 Closing, II, 452 
 House, II, 450, 452 
 Dues, II, 449 
 Fees, initiation, II, 449 
 Life membership, II, 449 
 Membership ledger, II, 452 
 
 Forms, II, 451 
 Records required, II, 253, 448 
 Subscriptions, special, II, 452 
 Unprofitable activities, II, 449, 450 
 C. O. D., 
 
 Register, II, 391, 392 
 Sales, I, 110, 254; II, 181-183 
 Route ledger, II, 183 
 
 Form, II, 182 
 
 Route sheet, II, 181 
 
 Form, II, 182 
 
 CoiNsuRANcc Clauss, IV. i6»-tn (8m alM 
 
 "Fire loss adjustmenU'*) 
 Apportionment of liability. IV, tTO 
 Defined. IV. 260 
 Object of, IV, 269 
 CoiNSUBia, IV, 269 ' 
 
 Collection Accouim, Attcmimbt'a. II. 40t 
 Columns; Ruunos and. II. 5^M (Sec a.'«D 
 
 "Journal, columnar") 
 Combinations and CoNsouDA-noim, 
 
 Problems, IV, S67-S71: V. «W. m, tSI. 
 284, 288. 293. SCO. 304. SI 2. 910. HS 
 By lease of property. IV. S32, S37 
 
 Difficulty of valuing leaw. IV. 337 
 By purchase of property. IV, 332. 336, 337 
 Account illustrated. IV, 33«, 337 
 Distinguished from boldiog compuqr, IV, 
 383 
 Causes leading to, IV, 330 
 Consolidation, IV, 339 
 Dividends (See "Dividends") 
 Growth and development of. IV, SSO 
 Holding company, 333-352 (See also **Iiol4|. 
 
 ing company") 
 Methods of, IV, 830-330 
 Pools and gentlemen's agreements, IV, SSI 
 Special points, IV, 371-375 
 Trusts, IV, 381 
 
 Working capital provided by subsultanei^ 
 IV, 371 
 Combined Process and Ohokb Mbtboo cm 
 
 Cost-Finding. III. 48 
 Commercial Accounting Distinct moM 
 
 Cost Accounting, III, 4 
 Commission, 
 
 Merchant's consignment register. 11, *U. 
 
 348 
 Salesmen's. II, 340. 341 
 Community Associations, fob Combixatkmv 
 
 of Corporations, IV. 331 
 Comparative Statement or PnoriT A>f» 
 Loss, II, 294; IV. 300 
 Federal Reserve Board form. IV. SCO 
 Form. IV. 300. 301 
 Comparison or Costs at Vabiocs rKStooa, 
 
 III. 66 
 Compensating Eiuioiis. I. 73 
 Competition, Ignorant, Dub to Ij«co««crr 
 
 Cost Calculation, III. 6 
 Composite Life Mbtmoo, DwrmmnAywm 
 Rates. IV. 177. 178 
 Problem, V. 168 
 
152 
 
 GENERAL INDEX 
 
 Compound DiscotiNT, IV, 149, 153 
 
 Rule for finding, IV, 153 
 Compound Interest, IV, 144-146, 153 (See 
 also "Annuity") 
 Rule for finding, IV, 153 
 Compound Interest Tables, Use of, IV, 9 
 Compound Products, III, 54-69 
 
 Form, III, 57, 59 
 Consignee, Sales Book for, II, 180 
 
 Form, II, 176 
 Consignment, 
 
 Register, II, 345, 348 
 Sales on, II, 177-179 
 
 Sales book for consignee, II, 180 
 Form, II, 176 
 Consolidated Balance Sheet (See "Balance 
 
 sheet, consolidated") 
 Consolidated Income Statement, 
 Eliminations, IV, 365 
 Intercompany adjustments, IV, 3C5, 366 
 Intercompany profits, treatment of, IV, 366 
 Consolidation (See "Combinations and con- 
 solidations") 
 Construction Work, II, 313, 314; IV, 36 
 Anticipation of profits, IV, 36 
 Employment record, II, 313 
 Local conditions to be observed, II, 313 
 Recording workmen's time, methods of, II, 
 313 
 Constructive Accounting, I, 7 
 Containers, 
 
 Accounting procedure for, II, 183-185 
 Column in sales book, II, 183 
 
 Form, II, 184 
 Sale of, I, 253 
 Contingencies, Reserve for (See "Re- 
 serves") 
 Contingent Liabilities (See "Liabilities, 
 
 contingent") 
 Contract, (See also "Contractors, building") 
 Cost sheet, II, 454 
 
 Form, II, 455 
 Filing, II, 454 
 Numbering, II, 454 
 Profit and loss, II, 459 
 
 Estimated profits, II, 459 
 Register, II, 454 
 Subcontract, 
 
 Payment sheet, II, 454 
 
 Form, II, 455 
 Payments, II, 458 
 Register, II, 454 
 
 Contractors, Bttildinq, H, 453-460 (See also 
 
 "Contract") 
 Charges to owners, periodical, II, 458, 459 
 Labor, accounting for, II, 457, 458 
 Material, 
 
 Accounting procedure for, II, 457 
 
 Requisitions, II, 457 
 Pay-roll, 
 
 Preparation of, II, 457 
 
 Voucher, II, 458 
 Records required, II, 453 
 Subcontractors, II, 453 
 Voucher register, II, 455-457 
 
 Form, II, 456 
 Controlling Accounts, 
 
 Problems, V, 9, 10, 11, 106, 119. 372 
 Advantages of, I, 260-262; II, 30; III, 77 
 Balances, III, 108 
 Checking figures, III, 96 
 Closing, illustrated, III, 106-109 
 
 Process cost system. III, 106-109 
 Depreciation reserve, IV, 184 
 
 Form, IV, 183 
 Entries, I, 265, 267; III, 81-97 
 Expense, indirect (See "Expense accounts") 
 Finished goods. III, 79 
 
 Entries, III, 85 
 
 Illustrated, III, 86 
 
 Journal entry illustrated. III, 108 
 
 Process method. III, 91 
 
 Production-center system, illustrated. III, 
 325 
 Finished parts. III, 86 
 Function of, I, 259 
 Ledger made self-balancing, I, 243 
 Manufacturing enterprise, II, 465 
 
 Form, U, 464 
 Material, III, 79, 81, 122 
 
 Entries. Ill, 81 
 
 Estimated cost system, illustrated. III, 
 359 
 
 Illustrated, 111, 83 
 
 Journal entries, illustrated. III, 106 
 
 Process cost system, III, 86 
 
 Textile costs, lU, 367, 368 
 Opening, I, 262-264 
 
 Journal entry, I, 263 
 Pay-roll, 
 
 Illustrated, III, 95 
 
 Journal entry, illustrated, III, 107 
 
 Process cost system. III, 88 
 
GENERAL INDEX 
 
 153 
 
 Controlling Accounts — Continued 
 Pay-roll — Continued 
 
 Production-center system, III, 323 
 
 Textile costs, III, 400 
 Plant, IV, 181, 184 
 
 Form, IV, 182 ^ 
 
 Posting, I, 263, 264; II, 200 
 
 Labor-saving devices, I, 264 
 Principle, extension of, I, 270 
 Process cost system. III, 86-95, 345 
 Production-center system, III, 310-327 
 
 Chart, III, 310 
 Form, III, 312, 313 
 
 Illustrated accounts, III, 319-326 
 Proving balance, I, 244 
 Stores (See subheading "Material," above) 
 Subsidiary ledger, posting to, I, 265, 267 
 Supplies, III, 122 
 
 Journal entries, illustrated. III, 106 
 
 Process cost system. III, 88 
 With debtors and creditors, II, 200 
 
 Form, II, 199 
 Work in process. III, 79, 83 
 
 Entries, III, 83 
 
 Illustrated, III. 85, 90 
 
 Journal entry illustrated, III, 107 
 
 Process method, III, 90 
 
 Textile costs, UI, 369-376. 380-389 
 Conversion Costs, III, 88, 92 
 Accounts, III, 93 
 Distributed over yarn cost, textile mill. III, 
 
 376 
 Statement, III, 93 
 Co-operation Methods, for Combination 
 
 OF Corporations, IV, 331 
 Copper Smelter, III, 42 
 Copyrights, IV, 261 
 
 Corporate Control, II, 18, 10 (See also 
 "Corporation") 
 
 Form, II, 19 
 Corporation, 
 Accounting, 
 
 Books and records, II, 20 
 
 Features of, special, I, 362 
 
 Opening entries, I, 367, 370; II, «S3, 234 
 
 Procedure, I, 367-371 
 Board of directors, II, 18 
 Bonds (See "Bonds") 
 Committees, II, 18, 19 
 
 CoRPOBATiOK— CorUmtMi 
 
 Consolidation (See aUo *'CombiiutioM aad 
 
 Consolidations") 
 
 Problems. IV, S67-S71; V. »«. f77. tSl. 
 281. 288. 293. SOO. 804. Sit. Sl». 8« 
 
 Causes which lead to. IV, 890 
 
 Combination by, IV. 390 
 
 Special points. IV. 971-975 
 
 Working capital provided by subaidiarNs, 
 IV. 871 
 Defined. I. 19. ^i 
 Dividends (See "Dividends") 
 General manager. II. 18 
 Holding company. IV. 939-992 
 
 Advances to subsidiaries. IV, 849, 979 
 
 Balance sheet. IV, 940-95« (See also 
 "Balance sheet") 
 
 Consolidated income tUtement, IV, 96^ 
 366 
 
 Distinguished from combination by p«tr- 
 chase. IV. 339 
 
 Formation of. IV, 999 
 
 Income, chief source of, IV, 930 
 
 Not illegal per se. IV. 994 
 
 Profit and loss statement, IV, 940 
 
 Purpose of, IV, 335 
 
 "Restraining" trade, IV, 999 
 
 Statements, IV. 340 
 Problem, V. 300 
 
 Statutes permitting formation, IV. 999 
 
 Working capital provided by sub«diarirs. 
 IV. 371 
 Investment in stock of other corporations, 
 
 IV, 334 
 Law governing, II. 20 
 Legal requirements, I. 962-9<V4 
 
 Capital, withdrawals of, I. 962, 9«9 
 
 Profit and loss. I. 364 
 Notes, IV, 121 
 
 Short-term. IV. 122 
 Organization and management, II. 18 
 
 Form. II. 19 
 Organization expenses. 
 Problems. V. 207. 804 
 
 Capitalization. IV. 17 
 
 When to write of!. IV. 17 
 Profits (See "Profits") 
 Promoting uncertain bustneat veolurf. I, 
 
 871-873 
 Protection of creditors, Iccal. I. 9*t-ti4 
 Scrip. IV. 74. 75. 85 
 
 Journal entries, illustrated. IV. M 
 
154 
 
 GENERAL INDEX 
 
 CoBPOBATiON — Continued 
 Stock (See "Stock, capiul") 
 Stockholders (See "Stockholders") 
 Subsidiaries, 
 
 Problems. V, 221, 228, 231, 249, 293, 304 
 Advances to, IV, 343, 373 
 Dividends declared upon acquisition of 
 
 stock by holding company, IV, 372 
 Liabilities and deficit, IV, 373 
 Minority interests of, IV, 372, 373 
 Profits of, prior to consolidation, IV, 359, 
 360 
 Problem, V, 293 
 Surplus, as premium, IV, 858 
 Surplus, treatment of, IV, 361, 372 
 
 Problems, V, 304 
 Surplus, treatment of, when stock only 
 
 partly acquired, IV, 363 
 Working capital provided by, IV, 371 
 
 Cost, 
 
 Accounting (See "Cost accounting," below) 
 Conversion (See under "Costs") 
 Goods sold, I, 96 
 
 Problems, V, 127, 130 
 
 Account, III, 357-360 
 
 Analysis of, I, 161 
 
 Illustrative statement, IV, 308 
 
 Information necessary, I, 161 
 
 Method of ascertaining, I, 90, C7, 201-204 
 
 Schedule of, I, 161 
 Inventory at, II, 145 
 Ledger (See "Ledger, cost") 
 Percentages based on, compared v.ith selling 
 
 price basis, II, 293 
 Prime, III, 16 
 Production, ratio of selling expense to, II 
 
 300,301 
 Sheets (See "Cost sheets," below) I 
 Summary, III, 347 
 
 Form, m, 348 
 
 Problem, V, 347 
 Total, m, 16, 25 
 Cost Accounting, (See also Vol. II, 461-465) 
 Bicycle costs. 
 
 Problem, V, 380 
 Breakfast-food factory, in, 42 
 Brick manufacture, HI, 46, 50, 87 
 
 Illustrated system, HI, 328-348 
 Candy factory. III, 13 
 Clothing factory. III. 43, 186 
 Form, m, 186 
 
 Cost Accounting — Continued 
 
 Combined job order and process system, 
 
 III, 48 (See also "Textile costs") 
 Compound products. III, 54-69 
 Copper smelter, III, 42 
 Definition, III, 3 
 Distinct from commercial, III, 4 
 Efficiency, standards laid down by, III, 5, 7 
 Estimated cost system, III, 63-65, 349-362 
 Flouring mill, III, 43 
 Foundries, III, 50, 147, 261 
 
 Form, III, 51 
 Functions of, III, 5-11 
 Hat factory. III, 55 
 
 Form, III, 57 
 Ice factory, III, 12 
 Illustrated systems, III, 301-401 
 Importance of, I, 11; III, 3 
 Inventories, perpetual, maintained by, II. 
 
 5,9 
 Job order system. III, 13, 41, 47-52 
 
 Job cards, II, 307, 309 
 
 Production-center, III, 98 
 
 Production-center, illustrated, electrical 
 goods, III, 301-327 
 
 Records, III, 29 
 
 Textile costs, illustrated. III, 363-401 
 Lumber company. 
 
 Problem, V, 377 
 Multiple partw products. III, 66 
 "Needle" industries, HI, 65 
 Paper mill, HI, 43 
 Patterns, III, 52 
 Perplexities of. III, 13 
 Printing plant, HI, 33, 42, 182 
 
 Form, III, 32 
 
 Problem, V, 386 
 Process cost system. III, 12, 43-49, 86-95 
 
 Brick manufacturing, III, 46, 50, 87 
 
 Brick manufacturing, illustrated. III, 328- 
 348 
 
 Textile costs, illustrated, HI, 363 
 Profits of different lines indicated by, HI, 
 
 5,6 
 Service, unit costs of. 
 
 Problem, V, 367 
 Shoe factory. Ill, 58, 63 
 
 Form, HI, 59, 60 
 Shows profit and loss, IH, 4 
 Silk-throwing mill, 
 
 Problems, V, 351, 353, 355, 357 
 
GENERAL INDEX 
 
 155 
 
 Cost Accounting — Continued 
 Simple prod-ucts, III, 41-53 
 Stock products, III, 48 
 Tradins: enterprise (See "Cost accounting 
 
 for trading enterprise," below) 
 Textile costs (See "Textile costs") 
 Twine factory. III, 42 
 Uniform system, III, 12 
 When necessary. III, 11 
 Woven fabric, costs of. 
 
 Problem, V, 347 
 Yarn spinning. III, 46, 47 (See also "Textile 
 
 costs") 
 Cost Accounting for Trading Enterprise, 
 
 II, 466-477; III, 25, 74 
 Cost of sales schedule, II, 475 
 Direct charges, II, 466 
 Inventory, opening, II, 471 
 Overhead, distribution of, II, 467-470 
 
 Accounting department, II, 468 
 
 Advertising, II, 468 
 
 Dehvery expense, II, 468 
 
 Departmentalization method, II, 467 
 
 Depreciation, II, 475 
 
 Educational department, II, 469 
 
 Elevator, II, 469 
 
 Employment bureau, II, 470 
 
 Fixed charges, II, 475 
 
 Floor space, basis of, II, 467 
 
 General expense, II, 470 
 
 Heat, II, 473, 474 
 
 Insurance on furniture and fixtures, II, 475 
 
 Insurance on stock, II, 470 
 
 Liability insurance, II, 470 
 
 Light, II, 473, 474 
 
 Power, II, 473, 474 
 
 Rental expense, II, 471 
 
 Service, special, expense, II, 469 
 
 Supplies department, II, 469 
 
 Telephone, II, 468 
 
 Window dressing, II, 469 
 Pay-roll analysis, II, 475 
 Profit on sales, analysis of, II, 476-477 
 
 Form, II, 476 
 Purchases, analysis, II, 475 
 Sales, net, II, 475 
 Cost Accounts (See also "Accounts") 
 
 Relation between general ledger and, III, 73 
 Cost Distribution, Manufacturing, Proc- 
 ess System, HI, 92 
 Cost-finding (See "Cost accounting") 
 
 Cost Ledobb (See 'Xedgw. eoet** -Coet 
 
 sheets") 
 
 Cost or Goods Sold Accotnrr, III. M7 
 
 Illustrated. III. SM. 900 
 Cost of SALia, II, 144 
 
 Distribution of, U, 475 
 Cost Period, Short, III. |0. W 
 
 Coinciding with pay-ron period. III. tS 
 Cost Records, III. 29 (See dso "Records") 
 Cost Sheets, III, 30, 88, 55. 76 (See dUo 
 "Ledger, cost") 
 Forms, III, 39. 57 
 Contract. II, 454 
 Form, II. 455 
 Material recorded on. III. 131 
 
 Proof of, III, 132 
 Production-center system. HI, 808 
 
 Form. Ill, 309 
 Record of stores issued. Ill, 138 
 Requisitions posted to. III. 300 
 Cost Summary, 
 
 Process cost system, HI, 847 
 Form, III, 348 
 Problem, V, 347 
 Costs (See also "Cost accounting") 
 
 Comparison of, at various periods. HI. 66 
 Conversion. III. 88. 92 
 Accounts, III, 93 
 Distributed over yam cost, textile wUH, 
 
 III. 376 
 Statement of. III. 93 
 Departmentalization of all. process cost ^jr»> 
 
 tern. Ill, 95 
 Estimated (See "Estimated cost ^jrsteoB") 
 Estimated material. III. OS 
 Labor (See also "Labor") 
 Direct, III. 18 
 Indirect, III. 18 
 Making and selling, chart. HI. 25 
 Material (See also "Material") 
 Direct. lU, 17 
 
 Indirect. Ill, 17 (See also •^upplks") 
 Prices fixed by. Ill, 5. 6 
 Cotton Mill, 111. 43, 91 
 Spinning, lU, 40. 47 (See also Textile 
 costs") 
 Production report, weekly. III. 44, 45 
 Form. 111. 45 
 Coupon Books. 11. 187 
 Coupon Productiom Okobs. III. 58 
 Form, UI. 59. 00 
 
156 
 
 GENERAL INDEX 
 
 Credit, 
 
 Department, sales orders, approving, II, 157 
 Memorandum, II, 127, 128 
 
 Form, II, 128 
 Requisition, II, 141, 142 ' 
 Sales on, II, 163 
 Creditobs, 
 
 Accounts, nuul-order business, II, 392 
 Status of, in liquidation proceedings, I, 146 
 Credits, 
 
 Deferred (See "Deferred credits") 
 Defined, I, 17, 41, 176 
 Cross-indexing, II, 27 
 Cdmulation of Statistics, II, 294| 295 
 Current, 
 Assets, I, 65 
 Liabilities, I, 66 
 Customers', 
 Accounts, 
 
 Arrangement of, II, 268 
 Loose-leaf ledger, II, 340 
 Order register, II, 340, 341 
 Form, 11, 339 
 Bill, II, 338 
 Form, II, 339 
 Cut Sheet Journal, II, 245 
 Form, II, 244 
 
 D 
 
 Dat-Book, I, 378-381; II, 26, 27 
 Form, I, 379 
 Accepted as evidence in courts, II, 27 
 Development of, II, 27 
 Entries, I, 380 
 
 Transactions included in, I, 380 
 Posting to ledger, methods of, I, 381, 382 
 
 Form, I, 382 
 Requirements for, I, 378 
 Ruling and form, I, 379 
 Day-Rate Method of Wage Payment, III, 
 169 
 Disadvantages of, 195-197 
 Debit Memorandum, II, 127 
 
 Form, n, 127 
 Debits, 
 
 Deferred (See "Deferred debits") 
 Defined, I, 17, 41, 176 
 Debts, 
 
 Amortization of, compared with sinking fund 
 
 method of payment, IV, 153, 154 
 Bad, 
 
 Account, analysis of, I, 41? , 
 
 Accounting for, IV, 219 
 
 Debts — Continued 
 Bad — Continued 
 Balance sheet, treatment on, I, 326, 327 
 
 Problem. V, 202 
 Computation of probable loss from, IV, 
 
 217 
 Income tax requirements, IV, 220 
 Provision for, I, 326. 327 
 
 Problem, V, 19 
 Relation between losses and sales, IV, 216 
 Reserve account, analysis of, I, 420 
 Reserve for, I, 326, 327; IV, 105, 115, 216 
 
 Problems, V, 19, 21, 228 
 Valuation of accounts receivable, IV, 218 
 Estate, accounting for, II, 407 
 Priority of, in bankruptcy proceedings, IV,. 
 323 
 Decimal System op Numbering Accounts,. 
 
 II, 271 
 Decimal System of Stores Classification,. 
 
 m, 156 
 Defective Work, III, 146 
 Deferred, 
 
 Credits, III, 98, 101, 217; IV, 26-32 
 
 Problems, V, 106. 108, 119, 152, 215, 2.53 
 Discount on bonds, IV, 137, 141 
 Expenses accrued, IV, 27 
 Income, deferred, I, 66; IV, 30-32 
 Liabilities accrued, IV, 26 
 Taxes accrued, IV, 29 
 Debits, I, 63, 65, 98. 113, 119; III, 98, lOI, 
 217; IV, 12-25 
 Problems, V, 125, 132, 137, 152. 180, 
 202, 215, 277, 304 
 Accounts, cash methods of handling, IV, 
 
 19 
 Accrued interest vs. interest accrued, IV, 
 
 13 
 Adjusting entries, IV, 15-17 
 Advertising, IV, 18 
 Dividends receivable, IV, 24 
 Income accrued, IV, 19-24 (See also "In- 
 come, accrued") 
 Insurance. IV, 14-17 
 Interest (See "Interest") 
 Organization expenses, IV, 17 
 Prepaid expenses, IV, 12-19 (See also sub- 
 heading "Charges," above) 
 Profits as affected by manner of treat- 
 ment, IV, 14 
 Royalties, IV, 18 
 Expense (See subheading "Charges," above) 
 
GENERAL INDEX 
 
 137 
 
 Deferred — Continued 
 
 Liabilities (See subheading "Credits," 
 above) 
 Deficiency Account, 1, 140, 141; IV, 319, 826 
 Problems, V, 61, 66, 70 
 Illustrative statements, I, 140; IV, 329 
 Deficit, 
 
 Ascertaining, method of, I, 46 
 Defined, I, 33, 34 
 
 Showing of, on balance sheet, 1, 119; IV, 284 
 Problems, V, 271, 304 
 Departments, 
 
 Accounting, II, 12, 468 
 Administrative (See "Administrative ex- 
 pense") 
 Advertising, II, 154 
 Credit, II, 157 
 Distribution of indirect expense over (See 
 
 "Expense") 
 Educational, expense, distribution of, II, 469 
 Financial, II, 12 
 
 Non-productive, III, 102, 268 (See also 
 
 "Administrative expense," "Building 
 
 expense," "Power plant expense," 
 
 "Stores department expense") 
 
 Distribution of indirect expense. III, 99, 
 
 103, 107, 257-270 
 Sub-departments, III, 265-268 
 Office (See "Administrative expense") 
 Power plant (See "Power plant expense") 
 Process cost system (See "Process cost 
 
 system") 
 Productive, 
 
 Expense, indirect. III, 212 
 
 Expense, indirect, account illustrated, 
 
 III, 104 
 Expense, indirect, distribution over. III, 
 
 99, 103, 104 
 Functions of, II, 10 
 Purchasing (See "Purchasing department") 
 Sales (See "Sales department") 
 Service (See subheading "Non-productive," 
 
 above) 
 Shipping, 
 
 Account, illustrated, textile costs. III, 393 
 Chart, graphic. III, 417 
 
 Form, III, 418 
 Checking goods in, II, 160 
 Expense, III, 393 
 Tickets. II, 159, 160 
 Stores (See "Stores") 
 
 Dzp x&Tussm—ConHnMti 
 
 Sub-, 
 
 Non-productive, II, 10, It; HI. 
 
 Productive (machine groups). III. fit, 
 287. 301 (See alio **M«rliine mU 
 method of distributing expca« evar 
 product") 
 Supplies, expense, distribution ol, II, 4M 
 Traffic. II. 154. 155 
 Departmental CLAaAtncATioii or Svosn. 
 
 Process system. Ill, ISl 
 Departmentalization or Aooomm, III, 
 
 5. 7. 22 
 Departmentalizatiom or Exrzsnz, II. 467 
 Departure Recoro, Hotel. Gcann, 11. 4iS 
 Deposits, 
 
 Charged back, I, 22« 
 Interest on, I, 220 
 Depreciation, I, 815-8«7; 11. 475; HI. M. 
 
 100, 244-252; IV. 185-188 (See nlw gracr- 
 
 ally "Fixed charges") 
 Accounting covering, I, 817-819; III. ttS; 
 
 IV, 179-188 
 Actual and estimated vary, IV, 99. 100 
 Adjusting entries, IV, 185-188 
 
 Problems, V, 15, 18, 18. 19. «1, 215 
 Appraisal method, IV. 168 
 
 Disadvantages of, IV, 168 
 Assets subject to, I, 315 
 Auxiliary equipment. III. 248 
 Buildings, 
 
 Account, analysis of, I, 41f 
 
 Reserve account, analysis of. I. 419 
 Causes of, I, 315, 318 
 
 Obsolescence, I, 315. 818 
 
 Time, lapse of, I. 815 
 
 Wear and tear. I. 815 
 Charge for, wrongly shown. IV. 108 
 Defined. I, 315 
 Distribution of charge in trading < 
 
 II. 475 
 Effect on profits, IV, 49 
 Problem. V, 182 
 
 Legal recognition, IV, 8S 
 Effect on valuation. IV. 49 
 Fire loss adjustment, IV, il74 
 Fluctuations, I. 828 
 Franchises. IV. 263. 284 
 Good-will. IV. 255 
 Journal entry. I. 818; HI. 107 
 Kinds of. I. 316. 817 
 Leaseholds, IV. 167 
 
158 
 
 GENERAL INDEX 
 
 Depbecxation — Continued 
 
 Machinery and equipment. III, 290; IV, 237 
 Manufacturing business, IV, 40 
 Obsolescence, III, 245 
 Original cost values, in arriving at gross 
 
 profits, IV, 35 
 Patents, IV. 258 
 
 Physical and functional, I, 316, 317 
 Principles and policies, IV, 165 
 Prior periods, accounting covering, IV, 98, 99 
 
 Problem. V, 180 
 Production-center ^system. III, 290 
 Purpose of, IV, 50 
 
 Rates, determination of, 1, 321-325; III, 247; 
 IV, 169- 178 
 Composite rate, IV, 169, 177 
 
 Problem. V, 168 
 Fixed percentage of diminishing value 
 method, I, 322-324; IV, 173, 174 
 Problem, V, 168 
 Fixed proportion methods, IV, 170-172 
 
 Problems, V, 16, 18, 168 
 Service method, IV, 172 
 Sinking-fund method, I. 324. 325; IV, 
 
 175-177 
 Straight-line method, I, 322; IV, 171 
 
 Problem. V, 168 
 Working hours method, IV, 172 
 Repairs and renewals not compensation for, 
 IV, 167 
 Exception, IV, 167 
 Reserve for (See "Reserves," "Sinking 
 
 fund") 
 Schedule, III, 224, 234, 249, 253 
 Form, III, 250, 251 
 Sub-departments, III, 266 
 Textile costs. III, 397, 398 
 Stock-in-trade, IV, 223 
 Reserve for, IV, 115 
 Values, estimation of, IV, 168 
 
 Precautions, IV, 168, 169 
 Wasting of assets distinguished from, IV, 239 
 Designing Forms, II, 56, 57 
 Dewey Decimal System of Classification, 
 
 III, 156 
 Diagrams, Value of, II, 295 
 Diamond Register, II, 342 
 
 Forms, II, 343 
 Dickinson, A. Lowes, Quoted, 
 Maintenance expenditures, IV. 47 
 Profit and loss sUtement, IV, 298, 299 
 
 Dickinson, A. Lowes, QvoTED^Continued 
 Profits of subsidiaries prior to consolidation, 
 
 IV, 360 
 Reserves, secret, arguments for and against, 
 IV, 113 
 Difference Charts, III, 406-409 
 
 Forms, III, 408, 416 
 Differential Piece-Rate Method of Wage 
 
 Payment, II, 305; III, 200 
 Direct Expense, III, 18 
 Direct Labor, III, 18 (See also "Labor," 
 "Pay-roll") 
 Chart, graphic. III. 407HH7 
 Forms. Ill, 408, 413, 416, 418 
 Directorates, Interlocking, IV, 332 
 Directors, Corporation, II, 18 
 Disbursements, Cash (See "Cash disburse- 
 ments") 
 Discounts, 
 Account, analysis of, I, 421 
 Bank, I, 299 
 Bonds (See "Bonds") 
 Cash, I, 99, 275; II, 98; IV, 35, 244 
 
 Problems, V, 11, 13, 23, 61, 70, 233, 345 
 Abolishing, desirability of, I, 282 
 Account, analysis of, I, 412 
 Accounting treatment of, I, 277-280; IV, 
 
 244 
 Bonus instead of, I, 282, 283 
 Calculating, basis for, I, 276 
 Cash book column for, I, 279, 280 
 Cash book entry, I, 217 
 Disadvantages of, I, 283 
 JournaUzing, I, 277, 278 
 
 Problem, V, 23 
 Nature and elements of, I, 275 
 Not deducted in ascertaining gross profit, 
 
 IV, 35 
 Not deducted in calculating bonus on total 
 
 purchases, I, 277 
 Provision for, in closing entry, I, 281 
 Received, account, analysis of, I, 423 
 Recording, I, 278, 279; II, 197-200 
 
 Form, II, 199 
 "Terms," I, 233 
 Columns in cash book, I, 215-217 
 Compound, IV, 149, 153 
 
 Rule for finding, IV, 153 
 Defined, I, 271 
 Notes receivable, I, 299 
 
 Problems, V, 13, 61, 70 
 Accoimting covering, I, 300 
 
 & 
 
GENERAL INDEX 
 
 150 
 
 Discounts — Contin ued 
 Paid in advance, IV, 14 
 Trade, I, 100, 271-275 
 
 Calculating, quick methods, I, 272-274 
 
 Deducted in ascertaining gross profit, 
 IV, 35 
 
 Stating, methods of, I, 272 
 Dish Breakage, Hotels and Restaurants, 
 
 II, 442 
 Dissolution, Partnership, I, 352-361 (See 
 
 also "Partnership, dissolution") 
 Distribution of Costs Direct to Product, 
 
 Process Cost System, III, 44, 92 
 Distribution of Expense (See "Expense") 
 Distribution Sheet, Cash, II, 226, 227 
 
 Form, II, 227 
 Dividends, 
 Account, analysis of, I, 421 
 Accounting for, IV, 77-94 
 
 Problems, V, 137, 209, 215 
 Applied to stock subscriptions, entries for 
 
 IV, 87-89 
 As liability on consolidation. 
 
 Problem, V, 312 
 Bond, IV, 7> 
 
 Entries for, IV, 92 
 Cash, IV, 72 
 
 Entries for, IV, 82, 83 
 Cumulative, IV, 89 
 Problem, V, 233 
 
 Entries for, IV, 89-91 
 Declaration of, IV, 62-64 
 
 Closing transfer books, IV, 63, 64 
 
 Forcing, IV, 64 
 Declared, status of, IV, 66 
 Definition, IV, 55 
 Dividend sheet or book, IV, 79 
 
 Forms, IV, 80, 81 
 Expenditures, revenue and capital, IV, 61 
 Illegal. IV, 93 
 
 Accounting for, IV, 93 
 Interim, IV, 87 
 
 Entries for, IV, 86, 87 
 List, IV, 79 
 
 Form, IV, 80 
 New York law, IV, 56 
 Notice of, IV, 69 
 Participation in, IV, 65 
 Payment, IV, 70-73, 77-79 
 
 Form of, IV, 72 
 
 Out of capital, IV, 93 
 
 Procedure for, IV, 77 I 
 
 DiVIDENM— Cofth'niMd 
 Pay ment— C'on/in lud 
 To whom paid, IV. i 
 With borrowed money. IV, M 
 Profit* avaiUble for. IV, 58 
 Property, IV. 75 
 
 Accounting for, IV, M 
 Receivable, IV, U 
 Scrip. IV, 74 
 
 Entries for, IV, 85 
 Sources of, IV, 56-58 
 Special, IV, 86 
 
 Entries for. IV, 86. 87 
 Status of declared. IV, 68 
 Stock, I. Ill; IV, 73 
 Problem, V. 284 
 Entries for, IV, 91 
 Prohibited in Massachusetts, IV, 7S 
 Subsidiary companies, elimiiuitioo oo cos* 
 
 solidated balance sheet, IV. 96S 
 "Wasting" enterprises, IV, 57 
 English decision. IV. 58 
 Double-Entrt BooKKEEPC«a (See **Book 
 
 keeping, double-entry") 
 Dbaftinq Expense Accoukt, IixcmraAniw 
 
 III, 326 
 Drafts, 
 
 Acceptance of, I, 304. 805 
 Accounting covering, I, 805 
 Collected by bank. I, 221 
 Drawings (Sec "Withdrawals") 
 Driver's, 
 Book, II, 336, 338 
 
 Form, II, 338 
 Sales, II, 336, 838, 840 
 Customer's bill. II, 388 
 
 Form, II, 339 
 Tickets, accounting (or, II, 840 
 Due Bill Reoister, II, 309, 870 
 Dues, Cldb. II, 449 
 
 Economics. Dbmneo. I. 80 
 Economist, I. 80 
 
 Educational DEFA»r»iE!«rr Lxnmm, Dis- 
 tribution or, II, 469 
 Efficiency, ^ ^ 
 
 Increased by modern accottnlinf ■MlWHii. 
 
 ^•* 
 Records, application to wrwcOoo of tnvn^ 
 
 IV. 430 
 
160 
 
 GENERAL INDEX 
 
 E FFiciEXC Y — Con tin ued 
 
 Standard of, laid down by cost accounting, 
 III, 5, 7 
 Electrical Goods Factory, 
 
 Illustrative production-center system. III, 
 301-327 
 Electricity Expense, III, 233, 233 (See also 
 generally "Fixed charges," "Light and 
 heat") 
 Elevator Expense, Distribc^tion of, II, 469 
 Emerson System, Wage Payment, II, 306 
 Employer's Liability Insurance, III, 238 
 Employment Bureau Expense, Distribu 
 
 TioN of, II, 470 
 Engineering Plant, 
 
 Expense distribution, III, 260 
 Engineering Trade, Anticipation of 
 
 Profits, IV, 36 
 Entries, 
 
 Adjusting, I, 79-83; IV, 4-6 (See also 
 "Adjustments") 
 Check-marking corrections, IV, 434-436 
 Deferred charges, IV, 15-17 
 Gross profit, determination of, I, 85 
 Merchandise accounts, I, 81 
 Mixed account, example and treatment of, 
 
 I, 80-83 
 Sinking fund, IV, 160 
 Surplus (See "Surplus") 
 Cash book, II, 195, 196 
 
 Closing, I, 83-85, 91, 92, 100, 101; II, 234; 
 III, 106-110; IV, 6, 7, 12 
 Controlling accounts, process cost system, 
 
 m, 106-109 
 Example of, I, 84-86 
 Preparation of, I, 91 
 
 Proprietors' drawing accounts, I, 100, 101 
 Provision for discounts, I, 281 
 Work in process account, process method, 
 
 m, 90 
 
 Current, I, 265 
 Journal (See "Journal") 
 Offsetting, I, 64 
 Opening, I, 180; II, 233, 234 
 Form, I, 181 
 ControlUng accounts, I, 263 
 Corporation, I, 367, 368, 370, 371; II, 
 233, 234 
 Form, I, 367, 368 
 Partnership, I, 339-343; II. 233 
 Form, I, 339, 840 
 
 Entries — Continued 
 Original, 
 
 Fraudulent, avoiding, II, 30, 31 
 
 Grouping into accounts, I, 39 
 Unusual, I, 267 
 Equipment, HI, 213, 217, 222 
 Accounting for, IV, 237 
 Depreciation, III, 244-252; IV, 237 
 Errors, 
 
 As to profits, IV, 93 
 
 Problem, V, 59 
 Classification, IV, 383-335 
 Compensating, I, 73 
 Corporation, IV, 389 
 .Correction of, IV, 430-442 
 
 Check-marking, IV, 434-436 
 
 Fundamental principle, IV, 431 
 
 Necessity^for, IV, 387 
 
 Organization and efficiency records, IV, 
 430 
 
 Rules of procedure, IV, 432 ' 
 
 Rules of procedure, illustration of, IV, 
 436-441 
 
 Three steps in making, IV, 433 
 Detection oi, by bookkeeping department, 
 1,73, 2r, 262; IV, 408-416 
 Problem, V, 343 
 
 Analysis of the ledger, IV, 409-413 
 
 Articulation statement, IV, 413 
 
 Importance of, IV, 403 
 
 Kinds of mistakes to be expected, IV, 403 
 
 Tests, IV, 414 
 
 Trial balance differences, IV, 404-409 
 Problem, V, 137 
 Detection of, by executives, IV, 390-402 
 Problem, V, 336 
 
 Casual scrutiny, IV, 401 
 
 Expenses, percentage of, IV, 398 
 
 Graphic statements, IV, 399-401 
 Form, IV, 400 
 
 Gross profit, percentage of, IV, 392-394 
 
 Inventory test, example of, IV, 395 
 
 Percentage methods, IV, 391-399 
 
 Turnover, percentage of, IV, 395-397 
 Examples of, IV, 385-387 
 Formal, IV, 384 
 Intentional, IV, 383-386, 388 
 Ledger, analysis of, illustrated, IV, 409-41§ 
 Of principle, IV, 383-388 
 Of tecnnique, IV, 384-387' 
 Partnership, IV, 388 
 
 ^!^ 
 
GENERAL INDEX 
 
 161 
 
 Errors — Continued 
 
 Prevention of, IV, 380-382 
 Internal check, IV, 381 
 Mechanical devices, IV, 380-381 
 Proprietorship, sole, IV, 388-389 
 Statistical, IV, 383-386, 388 
 Substantial, IV, 384 
 Trial balance differences, IV, 404 
 Problem, V, 137 
 Rules for locating, IV, 405-409 
 Unintentional, IV, 382-386, 388 
 Estate Accounting, II, 404-414 
 Form, II, 411-413 
 Administrator, II, 404 
 Assets, II, 405-407 
 Authority to act, II, 404, 405 
 Debts and expenses, II, 407 
 Executor, II, 404 
 Final accounting, II, 410 
 
 Duties subsequent to, II, 410, 414 
 Income, II, 408 
 Principal, II, 408 
 Records, II, 402, 409, 410 
 Trustee, II, 404 
 Estimated Cost System, III, 63-65, 343-332 
 Accounts illustrated. III, 353, 360 
 Adjustment between actual and estimated 
 
 costs. III, 359 
 Basic principles. III, 352 
 Closing inventory. III, 356 
 Computing estimates. III, 353 
 Conditions necessary for. III, 350, 351 
 Cost of goods sold account. III, 357 
 
 Illustrated, III, 360 
 Factory ledger. III, 358 
 Opening inventory. III, 354 
 Estimated Material. Costs, III, 63, 1 19 
 Estimated Supplies on Job, Unusual. 
 
 Method, III, 222 
 Estimation of Asset Values, IV, 7, 41-45, 
 
 168 
 European Pian, Hotel, II, 482 
 Exchange, 
 Bills of, I, 295 
 Charges, I, 218 
 Executive, 
 
 Detection of errors by, IV, 390-402 
 
 Problem, V, 336 
 Functions, IV, 390, 391 
 Importance of a budget to, II, 317, 318 
 Organization by, IV, 390, 391 
 Supervision, IV, 390, 391 
 
 ExBcuTOB. n, 404 (S«« «bo "EaUU i 
 
 ing") 
 
 Exhibits, Scbeduudi aicd SrATSMcsrrm. II. 
 
 288. 289 
 Expemditdres, 
 
 Capiul (Sec "Capita] expeoditorr*") 
 Revenue, dwtinction between. aii4 rapitU. 
 I, 107; IV, 45-49, 97. 2S5-«37 
 Problem, V, 132 
 Expense, 
 "Account," 
 
 Estimated co«t ayitem. III. MO 
 Accounts, I, 68, 69, «Sfl; 111, 9S-105. f I ?. 
 217, 221, 223, 234-242. 288. SIO 
 "Catch-all," inadvisabtlity of, I, 161 
 Chart, III, 212, 810, 
 
 Forms, III, 19. 21, 214-216, 812, SIS 
 Illustrated. Ill, 101-104 
 Journal entries. III, 106-108 
 Opening. III. 98 
 
 Posting to profit and lorn acrouat. 1. 5t 
 Process cost system. Ill, 89, 106-loa. fOJ, 
 
 271. 844 
 Production-center system, illustrated. III. 
 
 819-828 
 Purchase journal. I. 286 
 Reserve account. III. 28S 
 Selling expenses, I, 97. 98 
 Textile costs. Ill, 867, S0»-9M (Sm a!a» 
 under "Textile costs") 
 Accrued, III, 98. 100; IV. 27 
 
 Problem, V. 123 
 Adjustment between actual and appfied. III. 
 212, 282-285, 295 
 Flat percentage charge, m. 284 
 Production-center system. III. 205 
 Reserve account. III. 28S 
 Administrative. I. 69; II. 298; III. 18. M. 
 102. 168. 172. 187. 218. 220. 221 (Sm ako 
 generally subheading **Labor, iaAmU" 
 below) 
 
 Problem. V. 841 
 On distribution sheet. III. 224. 259. 220 
 Process cost system. III. 160. 544 
 
 Form. III. 844 
 Production-center system. Ill, 291, »* I 
 Standing expense orders. 111. 226 
 Sub-departmenU. 111. 265 
 Textile costs. III. 306, 397 
 Advertising. II. 468; III. 217, 220 
 Analysis, extent of. III. 211 
 And expenditure, disllbctioa betww*. I. IVf 
 
16? 
 
 GENERAL INDEX 
 
 Expense — Continued 
 
 Applied (See subheading "Rates of distribu- 
 tion, predetermined," below) 
 Building, III, 236, 237 
 
 Production-center system. III, 289, 319 
 Textile costs. III, 395 
 Capital, IV, 296, 297 (See also "Capital 
 
 expenditures") 
 Capitalizing, danger of, IV, 46 
 Chart, III, 212, 310 
 
 Forms, III, 19, 21, 214-216, 312, 313 , 
 Graphic, III, 407-415 
 
 Forms, III, 408, 413, 416, 418 
 Classification of, I, 99, 162; III, 18, 21, 213 
 Classification of invoices. III, 217 
 Subsidiary ledger. III, 218 
 Form, III, 219 
 Columns in purchase journal, II, 110-115 
 
 Forms II, 111, 113 
 Comparison of, graphic chart, IV, 401 
 
 Form, IV, 400 
 Deferred, I, 65, 98, 113, 119; III, 98, 101, 
 
 217; IV, 12-19 
 Delivery, II, 468 
 
 Depreciation, II, 475; III, 98, 100, 244-252 
 (See also generally subheading "Fixed 
 charges," below) 
 Account, III, 223 
 Auxiliary equipment, HI, 246 
 Journal entry, illustrated. III, 107 
 Machinery, III, 290 
 Obsolescence, III, 245 
 Production-center system. III, 290 
 Rates, III, 247 
 Schedule, III, 224, 234, 249, 253 
 
 Form, III, 250, 251 
 Schedule, textile costs. III, 397, 398 
 Sub-departments, III, 266 
 Direct, II, 466; III, 18 
 Distribution, II, 463, 467-477; III, 36, 98, 
 212, 213, 225, 253-286 
 Chart, III, 212 
 
 Form, III, 214-216 
 Non-productive departments exx)ense. III, 
 
 257-270 
 Procedure outlined. III, 98, 212 
 Process cost system. III, 89, 271 
 
 Direct to product. III, 44, 92 
 Sources for charges. III, 224, 253 
 Distribution over departments, II, 467-477 
 III, 99, 103, 104 
 Problem, V, Sm 
 
 Expense — Continued 
 
 Distribution over departments — Continued 
 
 Sub-departments, III, 265-268 
 Distribution over product. III, 98, 213, 225, 
 271-286 
 Problems, V, 351, 353, 355 
 Adjustment between actual and applied 
 expense. III, 212, 282-285 
 Flat percentage charge. III, 284 
 Reserve account. III, 283 
 Machine-rate method. III, 272, 277-279, 
 287-298, 301-327 (See also "Machine- 
 rate method") 
 Material cost method. III, 272, 281 
 Percentage of labor method. III, 272-275 
 Prime cost method. III, 272, 281 
 Productive-hour method. III, 272, 275- 
 
 277 
 Rates, predetermined. III, 42, 212, 271- 
 
 285 
 Sold-hour method. III, 272, 279 
 Distribution sheet. III, 29, 36, 38, 253-270 
 Forms, III, 37, 254, 255, 258, 259, 262, 
 263 
 Administrative expense, III, 260 
 Depreciation (See subheading "Deprecia- 
 tion schedule," above) 
 Fixed charges (See subheading **Fixed 
 
 charges schedule," below) 
 Power plant. III, 260 
 Standing orders and supplies requisitions 
 
 distributed on, III, 224 
 Statement of expenses, production-center 
 system. III, 308 
 Form, III, 307 
 Stores department expense. III, 260, 264 
 Stores department expense applied direct 
 
 to material. III, 268 
 Sub-departments, III, 265-268 
 Educational department, II, 469 
 Electricity, III, 233, 239 (See also subhead- 
 ings "Fixed charges," "Light and heat," 
 below) 
 Elevator, II, 469 
 Employment bureau, II, 470 
 Equipment, III, 213, 217, 222 
 Estate accounting for, II, 407 
 Estimate of, departmental, II, 321, 322 
 Estimated cost system (See "Estimated cost 
 
 system") 
 Fixed charges, II, 475; lit, 213, 217. 233- 
 243 (See also "Fixed charges") 
 
GENERAL INDEX 
 
 108 
 
 Expense — Continued 
 
 Fixed charges — Continued 
 
 "Account" illustrated, production-center 
 
 system, III, 320 
 Schedule, III, 224, 233, 253 
 
 Form, III, 235 
 Schedule, process system. III, 341 
 
 Form, III, 342 
 Schedule, sub-departments. III, 266 
 Floor space, II, 467 
 
 Gas, III, 213, 233, 239 (See also generally 
 subheadings "Fixed charges," "Light and 
 heat") 
 General, II, 470 
 
 Schedule of, I, 162 
 "General expense account," 
 
 Textile costs. III, 396 
 Indirect, III, 18, 83 
 
 Insurance, II, 470; 475; III, 98, 100,^213, 
 217, 233, 238 (See also generally sub- 
 heading "Fixed charges," above) 
 Account illustrated, III, 102 
 Furniture and fixtures. III, 475 
 Journal entry illustrated. III, 107 
 liability, II, 470 
 
 Production-center system, III, 290 
 Stock, II, 470 
 Textile costs. III, 399 
 Interest on investment. III, 240 (See also 
 generally subheading "Fixed charges," 
 above) 
 Journal entries illustrated. III, 106-108 
 Labor, indirect. III, 166, 168, 213, 220, 
 226-232 
 Accounts, III, 221 
 
 Administrative (See subheading "Admin- 
 istrative," above) 
 Chart, graphic, III, 191 
 
 Form, III, 193 
 Classification, III, 221 
 Inspection, III, 226 
 Repairs to machinery. III, 221, 226 
 Standing expense orders. III, 224, 226-232 
 Ledger, subsidiary, III, 218, 266, 267 
 Form, III, 219 
 Estimated cost system. III, 358 
 Process cost system. III, 343 
 Form, III, 344 
 Light and heat, II. 473, 474; III, 226, 304 
 (See also subheadings "Electricity," 
 "Gas," above) 
 
 ExPENSB — Continued 
 Light and beat— Con/tntM^ 
 
 Account illustrated, p^xliniina tmmUt 
 
 system. Ill, S20 
 Account illustrated, textile cxmU. III. tH 
 Machine-rate method of distributiiMi C8w 
 
 "Machine-rate method") 
 Machinery, III. 21S. 217, 2«f (Sm ahs 
 "Machine-rate method") 
 Depreciation, III. 244-252, 290 
 Expense account. III, 2M, SfS 
 Insurance, III, 290 
 Power expense, distribution. III, tit 
 Taxes, III. 290 
 Manufacturing enterprise. II, 46S 
 Miscellaneous, accounts, analysis ol, I, 414 
 Non-productive departments (See **A(lam»- 
 istrative expense." "Building i 
 "Power plant expense," 
 partment expense") 
 Accounts. III. 102. 268 
 Chart. III. 212 
 
 Form. III. 216 
 Distribution of expense, m, M. 103, 101. 
 
 257-270 
 Sub-departments, III, 265-268 
 Office. (See subheading "Administrative.'* 
 above) 
 Account, textile costs. III, S97 
 Organization, IV. 14, 17 
 Problems. V. 207. 304 
 Account, analysis of, I, 406 
 "Overhead" account, illustrated. HI. I<H 
 Plant assets. Ill, 213. 217, ftt 
 Plant ledger. III. 220 
 Power. II, 473, 474; III, S»i 
 Power plant. III. 98. 99, 10« 
 Account. III. 217 
 Account, illustrated. III. lOS 
 Journal entr> , illustrated. Ill, 107 
 On distribution shret. III. 260 
 Process cost system. III. 3*4 
 Production-center system. III. 289, 290,319 
 Prepaid. I, 63. 98, 113, 119; III. 98. 161. 
 217; IV. 12-19 
 Problem. V, 180 
 Production-center system (See **llArfci«e- 
 
 rate method") 
 Productive departments. III. 105-I8i, tU 
 Account illustrated. 111. 101 
 Chart. III. 212 
 Form, HI. 214. 215 
 
164 
 
 GENERAL INDEX 
 
 Expense — Continued 
 Productive departments— CoreitnutJcZ 
 
 Distribution of expense over. III, 99, 103, 
 104 (See also subheading "Distribu- 
 tion," above) 
 Journal entry, illustrated, III, 107 
 Purchase journal. III, 213, 217, 224, 253 
 Purchasing department, II, 297, 298 
 Rates of distribution, predetermined. III, 
 
 42, 212, 271-285 
 Recording, I, 63 
 
 Records, III, 224 (See also individual sub- 
 headings) 
 Rent, II, 471; III, 98, 100, 233, 236 (See also 
 generally subheading "Fixed charges," 
 above) 
 Account illustrated. III, 101 
 Journal entry, illustrated. III, 107 
 Production-center system. III, 289 
 Reserve for (See "Reserves") 
 S-lling. I, 68. 97, 98; II, 299, 477 
 
 As rate per pound or per* ton of product 
 
 shipped, II, 301 
 Disposition of, II, 301 
 Items included in, II, 299 
 Ratio of, to production cost, II, 300, 301 
 Ratio of, to sales, 11, 299, 300 
 Problem, V, 341 
 Service, special, II, 469 
 Sinking fund, treatment of, IV, 158 
 Standing expense orders. III, 31, 224, 
 226-232 
 Classification, III, 227, 229-232 
 Distribution sheet. III, 221 
 Distribution, sub-departments. III, 266 
 List of numbers. III, 227, 229 
 
 Form, III, 230 
 Time tickets. III, 227 
 Form, 111,228 
 Statement of, production-center system, 
 III; 308 
 Form, III, 307 
 Stock-in-trade, IV, 227 
 Stores department. III, 98, 102 
 Account, III, 217 
 Account, illustrated, production-center 
 
 system. III, 321 
 Applied direct to material. III, 238, 297, 
 
 302 
 On distribution sheet. III, 260, 264 
 Sub-departments, III, 266 
 
 Expense — Continued 
 
 Stores, incurred before receipt. III, 150; 
 IV, 227 
 
 Stores ledger. III, 218 
 
 Sub-departments, III, 265-268 (See also 
 "Machine-rate method") 
 
 Supplies, II, 469; III, 17, 213, 217, 221, 
 226-232 
 Account, III, 81, 122 
 Charged direct, unusual method. III, 222 
 Included in term "stores," III, 23 
 Journal entries, illustrated. III, 106 
 Posting from stores issued book. III, 138 
 Process cost system. III, 88 
 Production-center system. III, 291, 325 
 Requisitions, III, 221, 253 
 Standing expense orders. III, 224, 226-232 
 Form, III, 230 
 
 Taxes, III, 98, 100, 213, 233, 238 (See also 
 generally subheading "Fixed charges," 
 above) 
 Account, illustrated, textile costs. III, 399 
 Journal entry, illustrated. III, 107 
 Machinery, III, 290 
 Production-center system. III, 290 
 
 Telephone, II, 488; III, 213, 233 (See also 
 generally subheading "Fixed charges," 
 above) 
 
 Tools, 
 
 Production-center system. III, 291, 322 
 
 Trading concern, II, 467-470 
 
 Water, III, 233, 239 (See also generally sub- 
 heading "Fixed charges," above) 
 
 Window dressing, II, 469 
 Extensions, Reserve for (See "Reserves") 
 Extractive Industries, III, 91, (See also 
 "Process cost system, brick-making 
 plant") * 
 
 F 
 
 Factory, 
 
 Journal, II, 465 
 Ledger, II, 465; III, 76 
 
 Controlled by general ledger. III, 74 
 Estimated cost system. III, 358 
 Process cost system. III, 328, 343-348 
 Forms, III, 345, 346, 348 
 Records (See also "Records") 
 
 Controlled by general ledger; III, 74 
 Federal Reserve Board, 
 
 Balance sheet form recommended, IV, 287 
 Form, IV, 288, 289 
 
GENERAL INDEX 
 
 IM 
 
 Federal Reserve Board — Continued 
 
 Comparative profit and loss statement, IV, 
 300 
 Form, IV, 300, 301 
 Fee, 
 
 Book, attorney's, II, 402 
 
 Form, II, 402 
 Initiation, club, II, 449 
 Stock-broker's, II, 423 
 File, 
 
 Catalogue, II, 76 
 Quotation, II, 76, 77 
 
 Order record, II, 77 
 Source, II, 77 
 Filing, 
 
 Data, informal, II, 73 
 Invoices, purchase, II, 103 
 Purchase orders, II, 95 
 Financial Department, Functions or, II, 12 
 Finished Goods, III, 40; IV, 37 
 Account, III, 79 
 Illustrated, III, 86 
 Journal entry, illustrated. III, 108 
 Process cost system. III, 91 
 Production-center system, illustrated. III, 
 
 325 
 Textile costs, illustrated, III, 391, 392 
 Definition, III, 24 
 Inventory or record. III, 75, 76 
 Ledger, III, 77 
 Form, III, 78 
 Profit on, IV, 37 
 Finished Parts (Stores\ III, 67 
 Account, III, 86 
 Definition, III, 24 
 Fire Loss Adjustments, 
 
 Problems, V, 194, 196, 199 
 Accounting for, IV, 273 
 Appraisers, IV, 268 
 Coinsurance clause, IV, 268-271 
 Apportionment of liability, IV, 270 
 Object of, IV, 269 
 Depreciation factor, IV, 274 
 Evidences of value, IV, 265 
 Insurance policy, II, 342-345; IV, 266 
 Register for, II, 345 
 Form, II, 344 
 Inventory valuation, IV, 272 
 Liability of insurance company, IV, 268-271 
 Nature of problem, IV, 265 
 Proof of loss, IV, 265 
 Settlement of losses, IV, 267, 268 
 
 Fiscal Pebiom, I, 2S«, tS9 
 
 Fiscal Yeah, as Coiit Pnioo. Ill, tt 
 
 Fixed Assets (See "Assets, ftscd") 
 
 Fixed Charges. II, 467-<475; III. f IS, tS»-<l« 
 
 "Account." illustrsted, pfniiurtioa naui 
 
 system. Ill, 820 
 Building expense. III. tS6, tS7 
 
 Production-cenler lyitem. Ill, tSt. tit 
 
 Textile costs. III, 305 
 Cssh system expense, II. 447. 468 
 Depredation, III, 98. 100, 844-fM 
 
 Account, III. ««S 
 
 Auxiliary equipment. Ill, t48 
 
 Journal entry, illustrated. III, 18T 
 
 Machinery, III, 290 
 
 Obsolescence. III. 245 
 
 Production-center system, III« tf§ 
 
 Rates, III, 247 
 
 Schedule. III. 224. 234, 240, t5S 
 Form. III. 250. 251 
 
 Schedule, sub-departments, HI, ti8 
 
 Schedule, textile costs. III. 507. 808 
 Electricity, III, 288, 289 (See also tntnOy 
 
 subheading "Light and beat." belov) 
 Elevator expense, II. 469 
 Furniture and fixtures. II. 475 
 Gas, III, 213, 238. 289 (See also geutnlfy 
 
 subheading "Light and beat." below) 
 Insurance. II, 470; III. 98, 100, flS. 117. 
 233, 238 
 
 Account, illustrated. III. 10« 
 
 Journal entry, illustrated. Ill, 107 
 
 Production-center system. III. 100 
 
 Textile costs, account illustrated. III. Itt 
 Interest on investment. III. 240 
 Light and heat. II. 478. 474; III. ft«, tM 
 
 (See also subheadings ''Electricity.'* 
 
 "Gas," above) 
 Power, II. 473; III. 894 
 Rent, II, 471; III, 98. 100. tSS. tSf 
 
 Account, illustrated. III. 101 
 
 Journal entry, illustrated. III. 107 
 
 Production-center system. Ill, 180 
 Schedule. III. 224. 288. 258 
 Form. III. 285 
 
 Process system. III, 341 
 Form. III. 842 
 
 Sub-departments, III. 268 
 Taxes. III. 98. 100. 218. 288, tSt 
 
 Journal entry, illustrated. III. ItT 
 
 Production-center tyttem. III. €88 
 
 Textile costs, accouBt iUustratsd. HI. 188 
 
166 
 
 GENERAL INDEX 
 
 Fixed Ch.\bges — Continued 
 
 Telephone, II, 468; III, 213, 233 
 Window dressing expense, II, 469 
 Water, III, 233, 239 
 Fixed Percentage of Diminishing Value 
 Method, Depreciation Rates, I, 322, 
 324; IV, 173 
 Problem, V, 168 
 Fixed Proportion Methods, Depreciation 
 Rates, IV, 170-172 
 Problems, V, 16, 18, 168 
 Service method, IV, 172 
 Straight-line method, I, 322; IV, 171 
 Working hours method, IV, 172 
 Fixed Rate of Expense Distribution (See 
 
 "Rates of expense distribution") 
 Floor Space, Basis of Expense Apportion- 
 ment, II, 467 
 Flour Mill, III, 43, 87, 92 
 Fluctuations, 
 
 Prices of stores. III, 142 
 Weight or volume of material. III, 144 
 Folios, Inserting, if, 27 
 Follow-Up Systems and Devices, II, 94 
 Forfeited Stock, IV, 210, 211 
 Forms and Records, General Discussion, 
 
 II, 52-58 (See also "Records") 
 Foundry, III, 50 
 
 Defective castings. III, 147 
 Expense, III, 261 
 Production order. III, 50 
 
 Form, III, 51 
 Stores classification, I'll, 154 
 Four-Column Journal, II, 239-241 
 
 Form, II, 240 
 Franchises, IV, 263, 264 
 Depreciation, IV, 264 
 
 New York Public Service Commission's rul- 
 ing as to, IV, 264 
 Valuation, IV, 63 
 Freight and Cartage, 
 Expense, 
 
 Charging to accounts, I, 97 
 Deducted from sales, when, I, 96 
 Stores, III, 150 
 Inward, analysis of account, I, 411 
 
 Problems, V, 23, 242 
 Outward, I, 253 
 Problem, V, 23 
 Funds (See also "Reserves," "Sinking fund") 
 Compared with reserves, IV, lOd-111 
 Creation of, IV, 107 
 
 Tv^us— Continued 
 Nature of, IV, 107 
 Trustee for, IV, 110 
 
 Furniture and Fixtures, 
 Problem, V, 90 
 Account, analysis of, I, 409 
 
 Gantt System of Wage Payment, III, 204 
 Gas Expense, III, 213, 233, 239 (See also 
 generally "Fixed charges," "Light and 
 heat") 
 "General Expense Account," Illustrated. 
 
 Textile costs. III, 396 
 General Journal CSee "Journal") 
 General Ledger (See "Ledger") 
 ''Gentlemen's Agreements," IV, 331 
 Good-W^ill, I, 370; IV, 250-257 
 Account, analysis of, I, 410 
 Accounting for, IV, 256, 257 
 
 Dissolution of partnership, I, COO 
 Problems, V, 56, 140 
 Advertising expense capitalized as, IV, 18 
 Corporation accounting, I, 369, 370 
 
 Problems, V, 140, 170, 202 
 Defined, IV, 251 
 Depreciation of, IV, 255 
 Determination, method of, IV, 252 
 Patents, IV, 258-260 
 Premiums and, on consolidated balance 
 
 sheet, IV, 361 
 Relation to trade marks and patents, IV, 260 
 Valuation of, IV, 253 
 
 Problems, V, 183, 186, 187, 190, 202, 277, 
 288, 312, 328 
 Goods, Finished (See "Finished goods") 
 Goods in Process (See "Work in process") 
 Graduated Premium System of Wage Pay* 
 
 ment, III, 206 
 Graphic Charts (See "Charts'') 
 Gross Profit (See "Profits") 
 Guests, Hotel (See "Hotels and restaurants") 
 
 H 
 
 IIalsey System, Payment of Wages, II, 315 
 Harvard Bureau op Business RssEARCii, 
 
 Bulletin No. 1, 
 Conclusions as to gross profits, IV, 393 
 Hat Factory, III, 55 
 
 Form, III, 57 
 IL\.uLiNG Expense, Stores, III, 150 
 
GENERAL INDEX 
 
 167 
 
 Heat and Light (See "Light and heat") 
 Holding Company, IV, 333-352 (See also 
 "Combinations and consolidations'") 
 Advances to subsidiaries, IV, 343, 373 
 Balance sheet, IV. 340-352 
 
 Compared with consolidated balance sheet, 
 
 IV, 340 
 Complications, IV, 343, 344 
 Illustrative statements, IV, 341, 342, 
 
 347-349 
 Method of showing investments in sub- 
 sidiaries, IV, 347 
 Methods of presentation, compared, IV, 
 
 344-347 
 Necessity for consolidated balance sheet, 
 
 IV, 343 
 Objection to, IV, 350 
 Consolidated income statement, IV, 334-366 
 Distinguished from combination by pur- 
 chase, IV, 333 
 Formation of, IV, 333 
 Income, chief source of, IV, 350 
 Not illegal per se, IV, 33 i 
 Profit and loss statement, IV, 349 
 Purpose of, IV, 335 
 "Restraining" trade, IV, 333 
 Statements, IV, 340 
 
 Problem, V, 300 
 Statutes permitting formation, IV, 333 
 Working capital provided by subsidiaries, 
 IV, 371 
 Home Office, 
 Accounts, 
 
 With agencies, II, 374 
 With branches, II, 376 
 Hotels and Restaurants, II, 432-445 
 A la carte dining room, II, 433-435 
 Check system, II, 433, 434 
 Fraud, detection of, II, 434 
 American plan, II, 432 
 Breakage of dishes, II, 442 
 Cash rece'ipts register, II, 440 
 
 Form, II, 441 
 Charge journal, II, 439 
 Earnings, monthly, II, 444 
 European plan, II, 432 
 Expenditures, II, 441, 442 
 
 Cash disbursements record, II, 441 
 
 Form, II, 442 
 Check register, II, 442 
 Voucher register, II, 441 
 Form, II. 441 
 
 Hotels and RasTAPiu om Camtimttad 
 
 Guests, 
 
 Accumulation envelope. II, 440 
 
 Form. II. 440 
 Charge slip. II. 4S8. 450 
 
 Form. 11. 430 
 Complimentary. II. 44S 
 Departure record, II, 44S 
 Ledger. II. 437. 438 
 
 Form. II. 438 
 Recording services mnd cxpradilarw 
 
 chargeable to, II, 433 
 Register. II, 436 
 Form. II. 437 
 Office, arrangement of. II. 435 
 Profit and loss staUment. form of. 11. 444. 
 
 445 
 Records required, II, 436 
 Room ticket, II. 436 
 
 Form. II, 437 
 Stores, II. 44i 
 
 Inventory of. II. *M 
 Report of goods {'♦•livered, II, 44t 
 Table d'hote dining roooi, !I, 433 
 Working hours. II, 433, 438 
 Shifts, II, 435, 436 
 House Accounts, Club, II, 450. 45« 
 
 I 
 
 Ice Factory, Cost System. III. H 
 Idle Time, Machines. Ill, «95 
 Impression Book, II. 166, 167 
 Imprest Fund. I. «29-«3l; II. IW. IM 
 
 Problem. V. 7 
 Income, 
 
 Accounts, I, 67 
 
 Posting to profit and loss account. I. »« 
 Accrued. 
 
 Accounting for. IV. iO-«4 
 Adjusting entries. IV. <l <4 
 Cash methods of handlin< accoimU l\ . I» 
 Distinguished from drferrrd iiKO«» IV. 
 19 
 Deferred. I. 66; IV. 1*. 30-3< 
 Estate aecountinic for. II. 40« 
 Miscellaneous, account, aiialystt of. i. «« 
 Record. II. 348 
 Form. II. 3*6 
 Sales. I. 67. HO 
 Sinking fund. Ireatroenl of. IN. »5» 
 
168 
 
 GENERAL INDEX 
 
 Income and Expense (See also "Profit and 
 loss") 
 Capital, I, 99 
 Income Statement, 
 
 Consolidated, IV, 364-366 
 Tie-up with balance sheet, IV, 292 
 Income Tax, 
 
 Bad debts, reserve for, law concerning, IV, 
 
 220 
 Consolidated balance sheet, regulations 
 
 covering, IV, 353 
 Penalties for intentional errors, IV, 388 
 Records, II, 348 
 
 Allowable deductions record, II, 348 
 
 Form, II, 347 
 Income record, II, 348 
 
 Form, II, 346 
 Securities register, II, 348 
 Form, II, 346 
 Index, 
 
 Cards, II, 67 
 
 For stock, II, 390 
 Form, II, 390 
 Of dealers, II, 76 
 Indirect Expense (See "Expense") 
 Indirect Labor (See "Labor, indirect") 
 iNDraECT Material (See "Supplies") 
 Initiation Fees, Club, II, 449 
 Insolvency (See also "Bankruptcy," "Reali- 
 zation and liquidation statement," "State- 
 ment of affairs") 
 Balance sheet illustrating, I, 134, 135 
 Balance sheet inadequate, I, 130, 131 
 Defined, I, 130 
 Inspecting Material, II, 74 
 Inspection Expense, III, 226 
 Inspective Accounting, II, 6 
 Installation of Accounting System, Time 
 
 FOR, II, 48 
 
 Instalment, Sales on, II, 185-187 
 
 Form, II, 185 
 
 Problem, V, 109 
 Institutional Budget, Illustrated, II, 
 
 325-327 
 Insurance, I. 65, 98, 117, 119; II, 342, 345, 
 
 470; III, 98, 100, 213, 217, 233, 238; IV. 
 
 265, 276 (See also generally "Fixed 
 
 charges") 
 Accident, III, 238 
 Account illustrated, III, 102 
 
 Journal entry illustrated. III, 107 
 
 Textile costs. III, 399 
 
 Insurance — Continued 
 Boiler, III, 238 
 
 Fire, III, 238; IV, 265-276 (See also "Fire 
 loss adjustment") 
 Coinsurance clause, IV, 268-271 
 Statement showing amounts and costs 
 illustrated. IV, 314 
 Furniture and fixtures, II, 475 
 Liability, II, 476 
 
 Merchandise inventory, advisability of in- 
 suring, IV, 227, 228 
 Policy, II, 342-345; IV, 266 
 Register for, II, 345 
 Form, II, 344 
 Problem, V, 116 
 Prepaid, I, 65, 98, 114, 119; IV, 14-17 
 
 Account, analysis of, I, 407 
 Production-center system, III, 290 
 Register, II, 342, 345 
 
 Form, II, 344 
 Stock, II, 470 
 
 Unexpired, statement of affairs. 
 Problems, V, 66, 70 
 Interest, 
 Account, 
 
 Problem, V, 249 
 Analysis of, I, 423 
 Accrued, 
 
 Account, analysis of, I, 417 
 Adjusting entries, IV, 23-24 
 Distinguished from "accrued interest " 
 
 IV, 13 
 Expense, IV, 27 
 Included in purchase price of security, IV, 
 
 133, 134 
 Income, IV, 1^ 
 
 Interest period diflFerent from fiscal period, 
 IV, 142 
 Bank, I, 111, 220 
 
 Bond, I, 110, 111; IV, 123-127, 140-142 
 Problems, V, 146, 148 
 Account, analysis of, I, 413 
 Accrued (See subheading "Accrued," 
 
 above) 
 Effective, calculation of, IV, 127 
 Effective, rate, IV, 126 
 Effective, recording, IV, 132 
 Instalments, IV, 126 
 Marked rate, fluctuation of, IV, 125 
 Nominal vs. effective, IV, 126, 127 
 Paid on par value, IV, 123 
 Payment of, IV, 140 
 
GENERAL INDEX 
 
 IW 
 
 Interesi' — Continued 
 
 Compound, IV, 144-146, 153 (See also 
 "Annuity") 
 Rule for finding, IV, 153 
 Deducted, cash book entry, I, 217 
 Due date coinciding with fiscal period of 
 
 corporation, IV, 141 
 Due date not coinciding with fiscal period of 
 
 corporation, IV, 142 
 Elimination of, on consolidated income state- 
 ments, IV, 365 
 Income derived from, on profit and loss 
 
 statement, I, 100 
 Mortgages, 
 
 Problems, V, 66, 70 
 Payable, account, analysis of, I, 413 
 Notes receivable, I, 299 
 On capital, I, 348 
 Problem, V, 93 
 Paid borrower of stocks, II, 426 
 Partnership, adjustment of capital, I, 348- 
 350 
 Problems, V, 27, 28, 31 
 Prepaid, IV, 14 
 
 Account, analysis of, I, 407 
 Interest on Investment, Buildings and 
 Machinery, III, 240 (See also generally 
 "Fixed charges") 
 "Interlocking Directorates," IV, 332 
 Internal Checks for Prevention or 
 Errors, IV, 380, 381 
 Illustrative example, IV, 381 
 Inventory, 
 
 Adjustments, IV, 226 
 
 Problems, V, 70, 180 
 Analysis of, I, 403 
 Problem, V, 23 
 At cost, II, 145 
 At selling prices, II, 145 
 Controlling accounts. III, 79 
 Depreciation factor, IV, 223 
 Ending, IV, 12 
 
 Estimated, I, 204, 205; IV, 394 
 Problems, V, 127, 130, 331 
 Testing by use of gross profit percentage, 
 I, 205; IV, 394, 395 
 Finished goods. III, 75, 76 
 Goods on consignment, IV, 222 
 Insurance of, IV, 227, 228 
 Invoices not received, IV, 223 
 
 Problem, V, 90 
 Manufacturing, IV, 21^ 
 
 Inventory— Coiih'niMf 
 Merchandiae. IV. Mt-tlt 
 Problem, V, iS 
 When itema should not be catcf«4 «• i^ 
 books. IV, tiS 
 Opening, trading entcrpriae. II. 471 
 Overhead applicable, IV, «t7 
 Perpetual, 
 
 Advantages, III, 10 
 Card form. I. «01 
 Cost accounting maintaina. III, M 
 Necessity for. III, 75 
 Raw material. III. 76 
 Schedule, I, 158 
 
 Purposes and uses of, I, 158, IM 
 Sheet, III, 121 
 
 Form, III, 120 
 Stores, III, 118 
 
 Physical, III, 10, 121 
 Valuation, I, 123; IV, 224-n6 
 
 Problems, V, 108, 127. ISO, SSI 
 Fire loss adjustment. IV, f7i 
 Verification of, IV, 447 
 
 Problem, V, 338 
 Work in process. III. 74 
 Investigations. Special, I, 9, 10 
 Investment, Buildings aitd MAOinisaT, 
 
 Interest on. III, 240 
 Investment Ledoeb. II, «M 
 Investments, (See also "Bonds." **Slock»'*) 
 Accountancy of, IV, 
 Corporations, in stock H other rocporatioMw 
 
 IV, 334 
 Interest on (See "Interert") 
 Real estate, IV, 19. 2S9-tS4 
 Schedule of, I, 159 
 
 Sinking fund, IV. 9. 157 (Se« alM *'SniUa« 
 fund") 
 Invoices, 
 
 Classification of, indirect expanse. III. tIT 
 Subsidiary ledger. III. f 18 
 Form, III, «19 
 Creditors', procedure in haadUng. U , M 
 Handling. II. 74 
 Numbering, II, 89, 90 
 Purchase, 
 Accuracy in handling, nccesdty ol. II. 9t 
 Allowances, checking. II. 101 
 Book. II. 108, 109 
 Cash discount, II. 98 
 Checking and approving. II, ••-lit, •• 
 JS^tenaions, cbeckiag. II, 101 
 
170 
 
 GENERAL INDEX 
 
 Invoices — Contin ued 
 Purchase — Continued 
 Filing, II, 103, 370 
 Freight charges, checking, II, 101 
 Handling without record of creditors, II, 
 121-122 
 Form, II, 121 
 Numbering, II, 102 
 Procedure in handling, II, 96-103 
 Recording, II, 101-103 
 Register, II, 97 
 Form, II, 97 
 Retail organization, II, 369 
 Rubber stamp for checking and approv- 
 ing, II, 98 
 Form, II, 98 
 Separate forms for checking and approv- 
 ing, II, 99 
 Stamping, II, 102 
 Voucher system, II, 118 
 Sales, II, 159-161 
 
 Binding in book form, II, 167, 168 
 Duplicate loose-leaf, II, 168 
 Retail organization, II, 371 
 Simplicity of form advantageous, II, 47 
 Unpaid, Ust of , obtaining, II, 112 
 IssxTiNG Material, II, 74 
 
 Jewelry Manufacturing Concern, III, 350 
 Job Cards, II, 307, 309 
 Job Cost Sheets (See "Cost sheets") 
 Job Order System, III, 13, 29, 41, 47-52 (See 
 also "Cost accounting") 
 Problem, V, 386 
 Jobbing Organization, II, 150, 151 
 
 Retail organization combined with, II, 152- 
 154 
 Journal, 
 
 Allowance, II, 336 
 
 Form, II, 337 
 Cash (See "Cash book") 
 Cash sales. 
 
 Chain stores, 11, 381 
 Form, II, 386 
 Columnar, I, 232-237, 306-309; 11, C3, 1C5, 
 109-115, 164, 165, 236-242 
 Forms, I, 234, 235, 309; II, ICG, 111, 
 113, 164, 237, 238, 240, 212 
 Posting facilitated by, II, 28 
 Cut-sheet, II, 245, 246 
 Form, II, 244 
 
 Journal — Continued 
 Development of, I, 306 
 Entries, 
 
 Closing, I, 313; II, 234 
 
 Controlling accounts (See "Controlling 
 
 accounts") 
 Date and amounts, I, 174 
 Equilibrium of, I, 175, 176 
 Explanations covering, I, 173 
 Form of, I, 170-172 
 Illustrative, I, 171, 172, 179-187, 307. 
 
 310-313; II, 233, 234, 245 
 Items, adding, I, 174 
 Kinds of, I, 306 
 Object of, I, 172 
 Opening, I, 180; II, 233, 23 1 
 
 Form, I, 181 
 Opening controlling account, I, 263 
 Partnership (See "Partnership") 
 Production-centersystem, III, 31 1,314-318 
 Purchases and sales, I, 182, 183 
 Receipts and payments, I, 183, 184 
 Returns and allowances (See "Returns") 
 Rules for, I, 175, 176 
 Self-explanatory, II, 243 
 Use of "to" and "by," I, 173, 174 
 Factory, II, 465 
 Form of, I, 170-172 
 Four-column, II, 239-241 
 Form, II, 240 
 Transactions in two kinds of money, II, 
 239, 240 
 Function of, I, 170 
 General, I, 177 
 Form, I, 332 
 Development of, I, 176, 177 
 Entries included in, I, 177 
 Hotels and restaurants, II, 439 
 Ledger in relation to, I, 170 
 "Left and right," II, 243 
 
 Form, II, 244 
 Posting to ledger, I, 175, 263, 264 
 Purchase, I, 198-200. 232-239; II, 105-118; 
 III, 81, 122, 130 
 Forms, I, 200, 233; II, 107, 108 
 Analysis of entries, I, 234 
 Analysis of expense columns, II, 110 
 And voucher register, distinction between, 
 II, 116-118 
 Forms, II, 117 
 Checking accuracy of, U, 112 
 Closing, I, 233, 237 
 
GENERAT. INDEX 
 
 171 
 
 Journal — Continued 
 Purchase — Continued 
 
 Columnar, I, 232-237; II, 109-115 
 
 Forms, I, 234, 235; II, 111, 113 
 Columnar, when undesirable, II, 116 
 Departmental, simple, I, 232 
 
 Form, I, 234, 235 
 Expenses included in, I, 236; II, 110-115; 
 III, 213, 217, 224, 253 
 
 Forms, I, 234, 235; II, 111, 113, 115, 117 
 Folio-column, I, 236 
 Form of, I, 198 
 Function of, I, 198 
 
 Posting to general ledger, II, 108; III, ISO 
 Process cost system, III, 339 
 Returns, I, 238 
 Summary, I, 237, 238 
 Use of, illustrated, I, 198-200 
 Voucher register, I, 241 
 Retail organization, II, 366 
 Ruling when private ledger is used, II, 261 
 Sales, I, 207, 208; II, 165, 166 
 
 Forms, I, 208, 332; II, 166 
 Advantages of, II, 166 
 Analytical form of, I, 248 
 
 Form, I, 250, 251 
 Cash sales, I, 249-252 
 Charge entries, I, 249 
 C. O. D. sales, I, 254 
 Consignment and general, II, 180 
 
 Form, II, 176 
 Containers, I, 253; II, 183 
 
 Form, II, 184 
 Entries by number, I, 249 
 Form of, I, 207, 208 
 Freight outward, I, 253 
 Function of, I, 207 
 Proprietor, sales to, I, 252, 253 
 Returned sales, I, 254 
 Special forms and methods, I, 255 
 Sundry sales, I, 249, 252 
 Terms of sale, I, 248 
 Wholesale concern, 11^171 
 
 Form, II, 171 
 Simple, developed from day-book, II, 27 
 Six-column, II, 241 
 
 Form, II, 242 
 Posting to ledger, II, 241 
 Subsidiary, I, 188 
 
 Advantages of, I, 188, 189 
 Columnar, use of, I, 328-337 
 
 Forms. I, 330-333 
 
 JoDRNAL— -Con/mW 
 
 Three-column, II, 105. IM, |65, tf7-| 
 Forms. II, 106. IW, iS9 
 With sales column, II. |ft4. 105 
 Form, II, 164 
 Two-column, II, W6, W7 
 
 Form, II, 237 
 Vouchers, 11, «S4. «35 
 Form, II. 235 
 Journal-ruled Leooer. II, 250 
 
 Form, II, 251 
 Journalizing, Rules roA. I. 173. 176, ; 
 
 Labor, II, 303-315; III, 165-208 
 Account, illustrated. Ill, 95 
 
 Estimated cost system. Ill, S59 
 
 Journal entry illustrated. Ill, 107 
 Account, process cost system. Ill, 89 
 Accounting for, building contnM-ton. II. 
 
 457, 458 
 Classification, III. 167. 168 
 Cost period different from pay perind. III. 
 
 172 
 Direct, III, 18 
 
 Graphic chart. III, 407-417 
 Forms, III. 408. 413. 416. 418 
 Indirect (See "Labor, indirect." below) 
 Manufacturing enterprise, charging. II, 4tff. 
 
 463 
 Methods of distributing expenae over pn>d» 
 
 uct based on. III. 272-282 
 Pay-roll (See "Pay-roll") 
 Piece-work basis. III. 169-171 
 Production-center system. III. 306 
 Records. II. 303-314: III. 165-lM 
 
 Accuracy essential. HI. 165 
 
 Construction work. II. SIS. 314 
 
 Importance of. II, 303, 304 
 
 Job order system. II. 307. 308; III. 23 
 
 Original. II. 306. S07 
 
 Process cost system. III. 166 
 
 Purposes. III. 166 
 Salaries and separate record, II. 303-611 
 Time basis. III. 109 
 
 Process cost system. III. 167 
 Time records (See "Time records") 
 Wage systems (See "Wages") 
 Labor. iNoiRErr. ITT. 18. 166. 168. tIS, ttV 
 
 232. S20 
 Accounts. III. 221 
 
172 
 
 GENERAL INDEX 
 
 Labor, Indibbct — ConHnued 
 Administrative ' (See "Adimnistrative ex- 
 pense") 
 Chart, graphic, HI, 191 
 
 Form, III, 193 
 Classification, III, 221 
 Inspection, III, 226 
 Repairs to machinery. III, 221, 226 
 Standing expense orders, III, 31, 224, 226- 
 232 
 Classification, III, 227, 229-232 
 Distribution, III, 224 
 Distribution, sub-departments. III, 266 
 List of numbers, UI. 227, 229 
 
 Form, 111, 230 
 Time tickets. III, 227 
 Form, m, 228 
 Land, 
 Account, analysis of, I, 408 
 Accounting for, IV, 231-234 
 And buildings, need for separate accounts, 
 IV, 233 
 Problem, V, 132 
 Appreciation of, I, 326; IV, 231 
 Depreciation, IV, 232 
 Development and carrying costs, IV, 234 
 Investments in, IV, 232, 233 
 Purchased for resale, IV, 234 
 Value, 
 
 At purchase price, items included in, IV, 
 
 234 
 Fluctuations in, IV, 231 
 L.vw Offices, Accounting fob (See "Pro- 
 fessional accoimts") 
 Lease, Combination by, IV, 337, 338 
 Leaseholds, 
 
 Additions to leased property, IV, 338 
 Amortization, IV, 168, 338 
 
 England, method in, IV, 338 
 Depreciation, IV, 167 
 Repairs and improvements, charging, IV, 
 
 168 
 Short-term vs. long-term, IV, 338 
 Ledgeb, (See also "Account," "Accounts") 
 Accounts, 
 
 Forms, I, 43 
 Analysis of, I, 399-425 
 Arrangement, I, 259; II, 270 
 Balancing, I, 44 
 Classification, I, 57-69. 259. 399-425 (See 
 
 also "Accounts, classification") 
 Forms of, I. 42-44 
 
 Ledger — Continued 
 
 Accounts — Continued 
 Numbering, II, 271 
 Payable, I, 267 
 Planning, II, 46 
 Receivable, I, 266 
 
 Single-entry, insuflBciency of, I, 385 
 Trial balance, I, 71-77 (See also "Trial 
 balance") 
 
 Analysis of, IV, 409 
 
 Attorney's, II, 401 
 
 Balance column in center, II, 256 
 Form, II, 254 
 
 Bank depositors, II, 253 
 Form, II, 252 
 
 Branch and chain stores, II, 379, 380 
 
 Card, I, 260; II, 67 
 
 Cash account in, II, 194 
 
 Cash book not a ledger account, II, 194 
 
 Club membership. IIj 45'2 
 Form, II. 451 
 
 Columnar, II. 259, 260 
 
 Content of, II, 29, 30 
 
 Control, II, 262 
 
 Controlling accounts (See "Controlling ac- 
 counts") 
 
 Corporation stock, II, 261. 262 
 
 Cost, II, 465; III, 76 (See also "Cost sheets") 
 Controlled by general ledger. Ill, 74 
 Estimated cost system. III, 358 
 Process cost system, III, 90, 328, 343-348 
 
 Forms, III, 344, 346, 348 
 Summary, process system. III, 347 
 Form, III, 348 
 
 Creditors, inadequacy of, I, 240 
 
 Dealers, II, 380 
 Form, II, 383 
 
 Debits and credits in center, 11, 250 
 Form, II, 249 
 
 Development of, II, 29, 30 
 
 Expense. III. 218. 266, 267 
 Form, III. 219 
 
 Explanation column, wide, II, 253 
 
 Factory, II. 465; III, 76 (See also subhead- 
 ing "Cost," above) 
 
 Functions of, I, 50; II, 29, 247 
 
 General, 
 
 "Account," III, 360 
 
 Relation between cost accounts and. III, 
 4, 73 
 
 Hotel guest, II, 437, 438 
 Form, II, 438 
 
GENERAL INDEX 
 
 178 
 
 Ledger — Continued 
 Investment, II, 262 
 
 Journal in relation to, function of, I, 170 
 Journal-ruled, II, 250 
 
 Form, II, 251 
 Loose-leaf, I, 260 
 
 Not accepted as evidence in courts, II, 27 
 Plant, III, 220; IV, 180 
 
 Form, IV, 182, 183 
 Posting to. 
 
 Advantages of columnar records, II, 28, 
 105, 106, 164 
 
 Controlling accounts, II, 200 
 
 Cross-indexing, I, 175 
 
 Defined, II, 26, 27 
 
 Errors in, detecting, I, 74 
 
 From cash journal, II, 223, 225 
 
 From petty cash book, II, 218, 220 
 
 From six-column journal, II, 241 
 
 Labor-saving devices, I, 264 
 
 Methods of, I, 196, 237, 263, 264, 291-293, 
 381 
 
 Posting ticket, II, 159-161 
 
 Time of, I, 267 
 Private, II, 46, 260, 261 
 
 Cash book, ruling, II, 261 
 
 Controlling account, II, 261 
 
 Journal, general, ruling, II, 261 
 Purchases, recording, I, 200 
 Record, insufficiency of, I, 167 
 
 Problem, I, 167-169 
 Recording accounts direct inadvisable, I, 
 167-170 
 
 Example, I, 167-169 
 
 Reasons why, I, 169, 170 
 Retail organization, II, 371, 372 
 Ruling, II, 30 
 
 Development of, II, 248, 250 
 Sales, 
 
 Containers column in, II, 185 
 Form, II, 184 
 
 Special form, 11, 256, 257 
 Form, II, 255 
 Self-balancing, I, 243 
 Single-entry bookkeeping, I, 381, 882 
 
 Form, I, 382 
 Size of, II, 30 
 Standard form, II, 248 
 Form, II, 249 
 
 Balance column at right, II, 256 
 Form, II, 255 
 
 Ledo KB—Contin ued 
 Standard lorxxk—Cmtimutd 
 Double rolumnn, II, 457, t50 
 Form. II, 258 
 Stock (finished good*). Ill, 77 
 
 Form. III. 78 
 Stores. II. 138-145; III. 76-78, 81. ||f. \n. 
 218 
 Forms. II. 140; III. 78. 1«8. 119 
 Abstract of. II. 143. 144 
 Adjustments. II, 143; III. 199 
 Balance division. II. 142. 14S 
 Control of. II. 143; III, 190 
 Discrepancies. Ill, 199 
 Entries. II. 190. 141 
 Installing. II. 199 
 Loose-leaf, II. 198 
 
 Form, II. 140 
 Posting from stores recdrgd book, HI. 
 
 126, 130 
 Process cost system. Ill, 88 
 Purchased division. II. 190 
 Reconciliation with general ledger, II, I4t 
 Sold division, II. 141, 142 
 Subsidiary, I, 259 
 
 Controlling account in. I, 289 
 Posting to, I. 265. 267 
 Reconcilement of. with controltiaf •»> 
 count. II. 267 
 Problem. V. 11 
 Self-balancing. I. 209 
 Tabular. II. 251 
 Transactions, illustrative. I. 41 
 Trial balance. I. 268 
 "Left and Right" Journal, II. 249 
 
 Form, II. 244 
 Letter Code of CLASsincATioN. III. 153. IM 
 
 Standing expense orders. 111, 987 
 Liabilities, 
 Accounting for. I. M; IV. t4t 
 Accrued. IV. 26 
 
 Problems. V. 89. 192,178. 180.915.999. US 
 Ascertaining, method ol, I. 49 
 Balance sheet. 
 
 Arrangement on. IV, 989 
 Classification. IV. 249 
 Contingent. I. 120; IV. 949. 947 
 Problems. V. 178. 945 
 Accommodation indorsrmrnt. IT. 9lt 
 Kinds of. IV. 247. 249 
 Notes receivable. discuuBlcd. I. IM. If. 
 300.901; IV. 288 
 
174 
 
 GENERAL INDEX 
 
 Liabilities — Continued 
 
 Current. I, 66; IV, 242-244 
 
 Accounts payable, IV, 243 
 
 Differentiated from fixed liabilities, IV, 
 242 
 
 Discounts, treatment of, IV, 244 
 
 Dividends declared but not paid, IV, 244 
 
 Expenses accrued, IV, 27, 242 
 
 Manufacturing business, IV, 243 
 
 Notes payable, IV, 243 
 
 Retail business, IV, 243 
 
 Short-term loans, IV, 242 
 Deferred (See "Deferred credits") 
 Defined, I, 21, 66; IV, 242 
 Fixed, I, 66; IV, 242 
 
 Accounts with stockholders, open, IV, 244 
 
 Bonds (See "Bonds") 
 
 Collateral loans, IV, 19, 245 
 
 Defined. IV, 242 
 
 Notes payable, certain kinds of, IV, 243, 
 244 
 
 Purpose of, IV, 242 
 
 Real estate mortgages, IV, 244 
 Floating (See subheading "Current," above) 
 Secured, I, 133 
 Showing of, on balance sheet, I, 119, 120; 
 
 IV, 288 
 Statement of, insolvency (See "Statement of 
 
 affairs") 
 Verification of, IV, 8, 428 
 Verification of existence of, IV, 419 
 Light and Heat, III, 226, 394 (See also 
 
 "Electricity," "Gas"; also generally 
 
 "Fixed charges") 
 Account illustrated. 
 
 Production-center system, HI, 320 
 
 Textile costs. III, 394 
 Expense, distribution of, II, 473, 474 
 Liquidation, (See also "Realization and 
 
 liquidation statement," "Statement of 
 
 affairs") 
 Partnership, I, 352-361 (See also "Partner- 
 ship") 
 Receivership, I, 142 
 
 Problem, V, 266 
 Status of creditors in, I, 146 
 Liquidators (See "Receivers") 
 Loans, on Collateral, IV, 19, 245 
 "Long" Account (See "Stock brokerage") 
 Loose-leaf, 
 
 Ledger, I, 260; II, 138 
 
 Form, II, 140 
 
 Loose-leap' — Continued 
 Records, II, 60, 01, 64-66 
 Advantages of, II, 63-65 
 Binders, II, 60, 61 
 Disadvantages of, II, 65 
 Installing, precautions taken in, II, 66 
 Marking sheets, II, 66 
 Spoiled sheets, II, 66 
 Unused sheets, II, 66 
 Use of, increase in, II, 60 
 Stores ledger, II, 138 (See also "Ledger, 
 stores") 
 Form, II, 140 
 Loss, Defined, I, 32 
 Losses, (See also "Debts, bad") 
 
 Distribution of, deficiency account, I, 140 
 
 Problem, V, 61 
 Expected, on accounts receivable and notes 
 
 receivable, IV, 13 
 Fire (See "Fire loss adjustments") 
 Partnership, sharing, I, 358, 359 
 Reserve for (See "Reserves") 
 Lumber Industry, Cost Accounting, III, 
 150 
 Problem, V, 377 
 Lump Sum Budget, II, 316, 317 
 
 M 
 
 Machine-bate Method of Distributing 
 Expense Over Product, III, 272, 277- 
 279, 287-298, 301-327 
 
 Accounts, III, 310-327 
 Chart, III, 310 
 
 Form, III, 312, 313 
 Elustrated, III, 319-326 
 
 Chart of procedure. III, 303 
 Form, III, 303 
 
 Cost sheet. III, 308 
 Form, III, 309 
 
 Departmental division into production cen- 
 ters, III, 98, 278, 287, 301 
 
 Illustrative system. III, 301-327 
 
 Journal entries. III, 311, 314 
 Illustrated, III, 314-318 
 
 Labor cost. III, 306 
 
 Machine expense account. III, 296 
 
 Material cost. III, 306, 309 
 
 Parts classification. III, 305 
 
 Production orders. III, 305 
 
 Rates, 
 
 Administrative expense. III, 291 
 
GENERAL INDEX 
 
 175 
 
 Machine-bate Method of Distributing 
 Expense Over Product — Continued 
 Rates — Continued 
 
 Building expense, III, 289 
 Charging, III, 293 
 Checking, III, 294 ' 
 
 Computing, III, 288-293 
 Depreciation charge. III, 290 
 Insurance charge. III, 290 
 Power plant expense. III, 289, 290 
 Rent, III, 289 
 Repairs expense. III, 291 
 Schedule of. III, 292 
 Supplementary, for idle time. III, 295 
 Supplies, etc., expense, III, 291 
 Taxes charge. III, 290 
 Tools expense. III, 291 
 Statement of expenses, HI, 308 
 
 Form, ni; 307 
 Stock list. III, 304 
 Form, m, 304 
 Machinery, HI, 213, 217, 222 (See also 
 "Machine-rate method of distributing ex- 
 pense") 
 Depreciation, HI, 244-252, 290 
 Expense account. III, 296 
 
 Elustrated, III, 323 
 Insurance, III, 290 
 Power expense, distribution. III, 260 
 Taxes, III, 290 
 Mail, 
 
 Checking enclosures, II, 214, 215 
 Opening, II, 214, 215 
 Reading, II, 214 
 Receipts memorandum, II, 215 
 Form, n, 214 
 Mail-order, 
 
 Accounting, II, 389-395 
 Agent's order blank, II, 391 
 C. O. D. register, II, 391 
 
 Form, II, 391 
 Creditors' accounts, II, 392 
 Purchase register, II, 392 
 Receipts and disbursements, cash, II, 39S 
 
 Forms, II, 394 
 
 Records required, II, 389, 390 
 
 Stock record, II, 390 
 
 Form, II, 390 
 
 Business, II, 151, 389 
 
 Advertising! II. 395 
 
 M A I iMiUDKR— Continued 
 Handlinfc of. 
 
 Retail and jobbiof 
 
 bined. II. IAS 
 Retail bu«ne«. II, 140 
 Maintenance or Builoom* (Sot 
 
 expenje," "Repain aad roMwsk^) 
 Management, Ernrisirr. II, 147 
 
 MANUrACTUBINO AND PBOnt AJTD LOM 
 
 Statement. III. 100 
 MANXTrACTUBiNG ENTEarBoiE, (Sw aI» "Cm! 
 accounting") 
 Records. II. SOS-SI 4. 4«S, 46ft; Of. IW-n 
 (See also "Records ") 
 Form. II. 464 
 Statements. IV. S0S-S08 (See «1m ""Slal*- 
 ments") 
 Arrangement of. IV. SOS 
 Constituent parts, IV. SOS 
 IllustraUve. IV. S04-S09 
 
 Problems. V. «l. W8. «S1. tSS 
 "Manufactdbino Inventobt." DcmriBk tl* 
 "Margin" Deposit, Stock Bbokouob. O. 
 
 423 
 Married Women, ab STOcKBoukiaii. IV, m 
 Material, (See also "Stowe," "^ppUtT) 
 Account. lU. 79. 81. 86. Itt 
 Entries, III. 81 
 Estimated co«t system. Qhtftralcd, III* 
 
 S59 
 lUustrated. HI. 8S 
 Journal entries, illustrated. Ill, lOi 
 Production-center system. III. Si4 
 TexUle costs, HI. S«7. 8«8 
 BUI of. UI. 1S5 
 
 Form. III. 1S5 
 Contractors, buUdinf, i 
 
 for, II. 457 
 Costs. 
 Estimated, III. SS 
 Process method. III. 86 
 EsUmatcd cost. III. •*-«. 149 (S« •*» 
 
 "Estimated cost system") 
 Included in term "stores," III. tS 
 Indirect, III. 17 (See J 
 Inspecting. II, 74 
 Inventory or record. III. 7f 
 Issuing. II. 74 (See also I " " 
 
 sition." below) 
 Parts classification. III. S05 
 Purchasing. II. 87. W (See •!» 
 purchase." "B«|ui*lkMi. pwrcke* ) 
 
176 
 
 GENERAL INDEX 
 
 Material — Continued 
 Received, 
 
 Delivering to departments direct, II, 136, 
 
 137 
 Receipt form, II, 134, 135 
 Recording, II, 100 
 Report, II, 135, 136 
 Forms, II, 135, 136 
 Receiving, II, 74, 134-137 
 Record on cost sheets. III, 131, 306 
 
 Proof of. III, 132 
 Records, III, 76 (See also "Stores") 
 Requisitions, II, 141; III, 39, 55, 133 
 Forms, III, 34, 57, 134 
 Analysis, III, 226 
 Chain stores, daily, II, 380 
 
 Form, II, 383 
 Classification, III, 131, 136 
 Contractor's, building, II, 457 
 Parts, III, 67 
 
 Posting to general ledger. III, 131, 136 
 Process cost system. III, 134 
 Production-center system. III, 306 
 Purposes of, III, 134 
 Record on stores ledger, HI, 127, 306 
 Stock, II, 159 
 
 Summarized in stores issued book, m, 131 
 Supplies, on distribution sheet, HI, 224, 
 
 253 
 When impracticable to use. III, 148 
 Sheet, III, 135 
 
 Form, III, 135 
 Stock list. III, 135, 304 
 
 Form, m, 135, 304 
 Stores department expense applied direct 
 
 to. III, 268, 297, 302 
 Storing (See "Stores department") 
 Material Cost Method of Distributing 
 
 Expense Over Product, HI, 272, 281 
 Materials Ordered Register, II, 86 
 Mathews, George, Quoted on Supervis- 
 ion, II, 50 
 Maximum Stores, II, 133 
 Mechanical Aids (See "Aids, mechanical") 
 Membership Ledger, Club, II, 452 
 
 Form, II, 451 
 Mercantile Business (See "Trading busi- 
 ness") 
 Merchandise, 
 Account, 
 
 Problems, V, 23, 196 
 ^Adjusting, I, 81 
 
 Merchandise — Continued 
 
 Gross profit on, ascertaining, I, 81 
 
 Problem, V, 127 
 Inventory (See "Inventory") 
 Sales to proprietor, I, 209 
 Sold, determining cost of (See "Cost, goods 
 sold") 
 Merchandise Returned Memorandum, II, 
 123, 124 
 Form, II, 124 
 Merchandise Stock-in-Trade, Defined, IV, 
 
 215 
 Messenger Service, III, 221 (See also gen- 
 eral subject of "Labor, indirect") 
 Methods of Cost Accounting (See "Cost 
 
 accounting") 
 Methods of Distributing Expense Over 
 Product (See "Expense, distribution over 
 product") 
 Minimum Stores, II, 132, 133 
 Mining, III, 91, 328 (See also "Process cost 
 
 system, brick making plant") 
 MiNORiTr Interests (See "Corporation, 
 
 subsidiary") 
 Mixed Accounts, I, 79-83 
 Problem, V, 23 
 Adjusting, I, 80-83 
 Mnemonic System of Stores Classifica-* 
 
 tion, III, 159 
 Modernization of Accounting Methods, I, 
 3-5 
 Purposes of, I, 4 
 Monthly Reports of Production, HI, 336 
 
 Form. Ill, 337 
 Mortgages, I, 124, 125; IV, 244, 245 
 Accrued income from, IV, 19 
 Compared with corporate bonds, IV, 121 
 Interest (See "Interest") 
 Payable, account, analysis of, I, 418 
 Recei viable, account, analysis of, I, 404 
 Schedule of investment, I, 159 
 Treatment of, statement of affairs, I, 138 
 Problems, V. 66, 70 
 
 N 
 
 "Needle" Industries, Estimating Cost in, 
 
 III. 65 
 
 Net Profit (See "Profits") 
 Net Worth (See "Capital") 
 New York Public Service Commission, 
 Ruling as to charges to franchise account, 
 
 IV, 264 
 
GENERAL INDEX 
 
 177 
 
 Nominal Accounts, I, 59 
 Non-productive Departments, (See aUo 
 "Administrative expense," "Building ex- 
 pense," "Power plant expense," "Stores 
 department expense") 
 Accounts, III, 102, 268 
 Dfetribution of indirect expense. III, 99, 
 103, 104, 257-270 
 Sub-departments expense. III, 265-268 
 Expense, indirect, 
 a»rt. III. 212 
 Form, III, 216 
 Non-productive Labor (See "Labor, in- 
 direct") 
 Notes, 
 
 Collected by bank, I, 221 
 Compared with bonds, IV, 122 
 Discounted, I, 299, 300 
 
 Contingent liability, I, 120, 157, 300, 301 
 Dishonored, I, 302 
 
 Payment of, journal entry, I, 301, 802 
 Dishonored, I, 296, 302 
 
 Accounting covering, I, 298 
 Interest, I, 297, 298 
 Paid for depositor, I, 222 
 Payable, I, 294, 304; IV, 243, 244 
 Account, analysis of, I, 415 
 Register, I, 303; II, 334 
 
 Form, II, 335 
 Schedule of, I, 157 
 
 Treatment of, statement of affairs, I, 139 
 Promissory, defined, I, 294 
 Protest of, I, 221, 298 
 Charging fees, I, 221 
 Receivable, I, 294; IV, 13 
 Account, analysis of, I, 402, 40S 
 Accounting covering, I, 296 
 Collected, accounting covering, I, 297 
 Discounted, I, 299-302 
 
 Problems, V, 13, 61, 70 319, 345 
 Discounted, account, analysis of, I, 418 
 Schedule of, I, 157 
 Register, I, 297, 303; II, 334 
 Form, II, 335 
 Notions Manufacturing Concern, III, 350 
 Number, Order, III, 33 
 Numbering Contracts, II, 454 
 
 Machine, II, 358 
 Numerical System of Classification, 
 Accounts II, 268, 271, 277-283 
 
 NuMmcAL Sr»rsM or ^' — fnriTicwi Cje 
 tinned 
 
 Standing exprnae 
 List. III. W7. 
 Form, III, 290 
 Stores, ill. 155 
 
 ordsn.UI.tt9-ttt.MT 
 
 Obsolescence, I, 815, 816; III, ttf 
 OrncE, 
 Administration department, II, It 
 Arrangement, hotels, II, 485 
 Blotter, attorney's, II, 890. 89T 
 
 Form, II, 897 
 Expense (See also "Admtnislrativ* csp*w*1 
 Account, illustrated, textile cmU, III, 
 896. 397 
 Routine, II, 49, 50 
 Opening Entries (See "Entries, t 
 Operating Departmentk. (See 
 ductive departments") 
 Subdivided into productioa cestera. Ill, 
 278, 287, 301 
 
 Operative Accountino, II, 6 
 Order. 
 Follow-up systems and devton. II, 9i 
 Record, kept in quoUtion file. II, 77 
 Register. II. 840, 841 
 
 Form. II. 339 
 Shipments on, II, 04. M 
 Order Method or Coar-nwiMiMi, m. ||^ 
 41. 47-52 (See also "Cost accooali^^ 
 Entries in controUioc noeottaU III. tl-tl^ 
 95,90 
 Orders, 
 
 Production. III. tO. 50. 55. SOC 
 
 Forms. III. Si. 51. 57 
 
 Authorization of, III. 9i 
 
 Form. III. Si 
 Combination. III. 55 
 
 Form. III. 57 
 Cost sbeeU (See "Coat slweU**) 
 Coupon. III. 58 
 
 Form. III. 59. flO 
 Numbering. III. 88 
 Parts product. III. 67 
 Process cost syttrm. III. ISt 
 
 Form. III. 187 
 Sources of. III. SI 
 Summary of storea km t d, HI. Iti 
 
178 
 
 GENERAL INDEX 
 
 Orders — Continued 
 Purchase, II, 88-93; III, 124 
 Form, II, 89 
 
 Checking, II, 95 
 
 Copies, number of, II, 90 
 
 Filing, II, 95 
 
 Handling of, II, 74 
 
 In duplicate, II, 91 
 
 In quadruplicate, II, 92 
 
 In triplicate, II, 91 
 
 Numbering bills and invoices to corre- 
 spond with, II, 89 
 
 Papers accompanying, numbering, II, 90 
 
 Placing, II, 87, 88 
 
 Procedure in handling, II, 90-93 
 
 Punching, II, 90 
 
 Receiving clerk's copy, II, 92 
 
 Register, II, 93, 94 
 
 Used as material received form, II, 100 
 Replacement, III, 146 
 Sales, II, 156-161 
 
 Accounting department, routine in, II, 
 160, 161 
 
 Acknowledgment of, II, 159 
 
 Approval of, by credit department, II, 157 
 
 Duplicate copies, II, 158-160 
 
 Handling of, importance of careful, II, 156 
 
 Interpretation by order department, H, 
 158 
 
 Invoice, II, 159-161 
 
 Order blank, II, 172 
 Form, II, 172 
 
 Order department copy, II, 159 
 
 Package labels, II, 159 
 
 Posting ticket, II. 159-161 
 
 Recording, uniform blank, II, 156 
 
 Sales register, entering on, II, 157 
 
 Shipping tickets, II, 159, 160 
 
 Stock requisition, II, 159 
 Standing expense (See "Standing expense 
 
 orders") 
 Obqanization, II, 4, 9-23; IV, 390 
 Business, H, 9-23 (See also "Business") 
 Capitalization, II, 4 
 Chart, II. 21-23 
 
 Form, II, 22 
 Control of, II, 4, 12, IS 
 Corporation, II, 18-20 
 
 Form, II, 19 
 Expense, IV, 14, 17 
 
 Problems, V, 207, 304 
 
 Account, analysis of, I, 406 
 
 Organization — Continued 
 Jobbing, II, 150, 151 
 
 Retail combined with, II, 152-154 
 Lines of. general, II, 20, 21 
 Officials, importance of a budget to, II, 318 
 Partnership, II, 13, 17 
 Forms, II, 14, 15, 16 
 Place of accounting in, II, 4 
 Proprietorship, II, 13 
 Purchase department, II, 69-75 (See also 
 
 "Purchasing department") 
 Retail (See "Retail organization") 
 Sales department, II, 148 (See also "Sales 
 
 department") 
 Scope of, II, 9 
 Types of, II, 12, 13 
 Wholesale (See "Business, wholesale") 
 Original Entries, I, 39-41; H, 30, 31 
 Original Entry, Books of (See "Books of 
 
 account, original entry") 
 Overhead (See "Expense") 
 Overpayments, 
 
 avoiding in partnership dissolution, I, 356- 
 358 
 Problems, V, 35, 37 
 Refunds for, I, 112 
 Overtime, Effect on Expense Distribu- 
 tion Rates, III, 282 
 
 Package Labels. II. 159 
 Paper Mill. Ill, 43, 50 
 Partnership, 
 
 Accounting. I. 338-361; II, 17, 18 
 
 Problems, V, 27, 31. 56. 116. 140. 183, 
 186, 187. 190 
 Capital indefinite, opening entry. I, 341, 
 
 342 
 Features of, special, I, 338 
 Interest. I. 348-350 
 
 Problems. V, 27. 31 
 No capital contributed, opening entry, I, 
 
 342 
 Opening entries, I, 339-343; II, 233 
 Form, I, 339, 340 
 Problem, V, 88 
 Agreement, II, 13, 17 
 Capital, 
 
 Accounts, I, 338 
 
 Problems, V, 116, 183, 187 
 Adjustments, I, 348-350 
 
GENERAL INDEX 
 
 17f 
 
 Partnership — Continued 
 Capital — Continued 
 
 Assets other than cash, I, 339 
 Denned, I, 18 
 Dissolution, I, 352-361 
 
 Problems, I, 355; V, 34, 35, 37, 39, 42, 
 190 
 Accounting covering, I, 354 
 Causes of, I, 352, 353 
 Debit balance against partner, I, 358, 359 
 Distribution of assets, I, 353 
 
 Problems, V, 34, 35, 42 
 Distribution of proceeds, I, 356 
 Distribution of proceeds, instalment 
 
 method, I, 356 
 Losses, sharing, I, 357-359 
 Methods of, I, 352 
 
 Overpayment of partners, avoiding, I, 
 356-358 
 Problems, V, 35, 37 
 Procedure, I, 353 
 Sale of business, I, 359-361 
 Good-will, accounting for, I, 360 
 
 Problems, V, 56, 140 
 Net profit retained as capital, IV, 95 
 Organization, II, 13-17 
 Charts, II, 14, 15, 16 
 Articles of, II, 13 
 Profits and losses, division of, I, 343 
 Problems, V, 27, 31, 183, 187 
 Bases of, I, 344 
 
 Capital and time, basis of, I, 345-347 
 Capital invested, basis of, I, 344 
 Fixed percentages, I, 344 
 Salaries, I, 348, 350, 351 
 
 Considered as expense, I, 351 
 Sale of business, I, 359-361 
 Withdrawals, I, 348, 349 
 Parts, 
 
 Account illustrated, production-center sys- 
 tem, III, 324 
 As stores. III, 115 
 Classification, III, 305 
 Finished, III, 67 
 Account, III, 86 
 Definition, III, 24 
 
 When "stores" and when "stock," III, 24 
 Parts Product, III, 66 
 Patents, 
 
 Accounting for, IV, 259, 260 
 Defined, IV, 257 
 Depreciation on, IV, 258 
 
 Patents — Continued 
 
 Relation to good-irill and tnil».MAfkji, IV 
 
 260 
 
 Pattern Costs, III, 5«, t81 
 Pat Pebiod. II, 804; III. tS 
 Pay-Roll, II, 309-31 S. 437. 474; III. IfT. |«. 
 172. 187 - 193. SS9 (Sc« sl» "Ubcr. 
 indirect") 
 Forms, III, 188-100, S40 
 Account, III, 89. 94 
 
 Process cost system. III. 89 
 Account illustrated. III. 95. 107 
 Journal entry illustrated. III. 107 
 Production-center system. III. MS 
 Textile costs. III. 400 
 Accounting procedure for. II. S1I. Sit 
 Analysis. II. 475; III. 172. ttS 
 Charts, graphic. III. 100 
 
 Forms, III. 192. 19S 
 Contractor's, building. 11, 4d7, 4S8 
 Cost period different from psy period. III. 
 
 172 
 Departmental distribution. D. 478; III. IM, 
 
 168. 220, 226-232 
 Padding, guarding against. LI, 81t 
 Period. II, 304; III. 23 
 Process cost system. III, 88. 390 
 
 Form, III, 340 
 Record, chain stores, II. 881 
 
 Form. II. 887 
 Routine. II. 309-812 
 Sources of data. III. 88 
 Time sheets, II, 310, 811; III. 178. Itt 
 Pay Systems (See "Wages") 
 Payments, 
 
 And disbursements, distinctkm b«t«««a, I. 
 
 107 
 Cash. I. 104-115; II. 192. 803, 401. HI (8m 
 also "Cash disbursements." "SUIraMSU. 
 receipts and pay menu") 
 Febcentaoe or DiMiN»niMO VAtim Uwfmem 
 orCAuroLATiNo DsrftacuTWii.l.M** 
 824; IV. 178. 174 
 Problem. V. 108 
 Percentage or Gross PRonr. IV, SN SSI 
 Based on sales. IV. 88<-8»« 
 Harvard Bureau of BoiiasM RtMSft^ 
 IV, 895 
 Estimated inventory, tcstinf. IV. SM 
 Test for detection of errors, IV. aSt-SM 
 
180 
 
 GENERAL INDEX 
 
 Percentage op Labor Method of Dis- 
 tributing Expense over Product, III, 
 274-275 
 Percentage of Turnover, IV, 395-398 
 
 Illustrative calculation, IV, 397 
 Percentages, 
 
 Based on cost, compared with selling price 
 
 basis, II, 293 
 Predetermined, detecting errors by, IV, 391- 
 
 399 (See also "Errors") 
 Use of, for comparison tests, IV, 398 
 Use of, in statements, II, 292, 293 
 Period, Cost (See "Cost period") 
 Perpetual Inventory (See "Inventory") 
 Personal Accounts, I, 58, 59 
 Petty Cash (See "Cash, petty") 
 Photographing Machine, II, 357 
 Physical Inventory of Stores, III, 121 
 Piice-Rate Method of Wage Payment (See 
 also "Piece-work," below) 
 Differential piece-rate method, II, 305; 
 
 m, 200 
 Straight method. III, 197-200 
 Fixing rate. III, 198 
 PIECE-WORK, III, 169-171 
 Chart, graphic. III, 191 
 
 Form, III, 192 
 Pay-roll, III, 187 
 Form, III, 188 
 Time card. III, 170, 184 
 Forms, III, 184. 186 
 Coupons, III, 185 
 Form. Ill, 186 
 
 Plant. 
 
 Account, IV. 181 184 
 
 Assets, III, 213, 217, 222; IV, 179 
 
 Building expense (See "Building expense") 
 
 Cost should be entered in full, IV, 233 
 
 Depreciation (See "Depreciation") 
 
 Items, classification of, IV, 179 
 
 Ledger, IV, 180 
 
 Form, IV, 182, 183 
 Losses on, accounting for, IV, 235 
 Repairs and renewals, IV, 235-237 (See also 
 
 "Repairs and renewals") 
 Valuation at cost includes what, IV, 231 
 Plant and Sundry Assets Account, I, 371 
 
 Problems, V, 170, 202, 277, 281 
 Pledge Record, II, 341 
 
 Form, II, 341 
 Pledgee's Right to Dividends, IV, 68, 69 
 
 Policies, Insurance, II. 342-345; IV, 266 
 Register for, II, 345 
 Forms, II, 344 
 Pools, IV, 331 
 
 Posting (See "Ledger, posting to") 
 Power Expense, 
 
 Account illustrated, textile costs. III, 394 
 Power Plant Expense, 
 Account, III, 217 
 Account illustrated, III, 103 
 
 Journal entry illustrated. III, 107 
 Distribution of, II, 473, 474; III, 260 
 Process system, III, 344 
 Production-center system. III, 289, 290, 319 
 Account illustrated. III, 319 
 Premium Basis, Payment of Wages, II, 305 
 Premium System of Wage Payment, III, 202 
 
 Graduated method. III, 206 
 Premiums, 
 
 Bond (See "Bonds") 
 Insurance, paid in advance, IV, 14-17 
 Stock (See "Stock") 
 Preferred Claims, Statement of Affairs, 
 I, 133; IV, 323 
 Problem, V, 61 
 Prepaid Expense, I. 63, 65, 98, 113, 119; III, 
 
 98, 101, 217; IV, 12-19 
 Price Agreement with Supply House, II, 88 
 Prices, 
 
 Securing, purchasing department, II, 73 
 Selling (See "Selling price") 
 Stores, III, 123, 128 
 
 Fluctuations in. III, 142 
 Prime Cost, Elements of. III, 16 
 Prime Cost Method of Distributing Ex- 
 pense Over Product, III, 272, 281 
 Principal, Estate Accounting for, II, 408 
 Printing Plant, III, 42 
 Problem, V, 386 
 Daily time sheet. III, 182 
 
 Form, III, 183 
 Production order. III, 33 
 Form, III, 32 
 Private, 
 
 Cash book, II, 228 
 
 Form, II, 229 
 Ledger, li, 260, 261 
 Process Cost System, III, 12, 43-49, 86-95. 
 3^<-3^S 
 ^-oblems, V, 3t7, 351, 353, 357 s 
 Account cla§§ifiv:ation, III, 323 
 
GENERAL INDEX 
 
 181 
 
 •Trocess Cost System — Continwd 
 Accounts, III, 271 
 Problem, V, 357 
 Brick-making plant. III, 46, 50, 87, 328-348 
 Accounts, III, 328, 343-347 
 
 Forms, III, 344, 346 
 Administrative expense account. III, 344 
 
 Form, III, 344 
 Brick production record, daily, III, 334 
 
 Form, III, 334 
 Broken brick record, daily, III, 335 
 
 Form, III, 335 
 Broken brick record, monthly. III, 336 
 
 Form, III, 337 
 Cost-estimating for special orders, III, 
 
 329, 330 
 Cost ledger, III, 328, 343-348 
 
 Forms, III, 345, 346 
 Cost ledger summary, III, 347 
 
 Form, III, 348 
 Drawing report. III, 332 
 
 Form, III, 333 
 Fixed charges schedule. III, 841 
 
 Form, III, 342 
 Kiln record, III, 337 
 
 Form, III, 338 
 Pay-roll, III, 339 
 Form, III, 340 
 Power plant expense. III, 34S 
 Purchase journal. III, 339 
 Setting report. III, 332 
 
 Form, III, 333 
 Time ticket, III, 179, 331 
 Form, III, 180 
 Cement plant. III, 87 
 Classification of stores. III, 131 
 Closing controlling accounts. III, 90, 106- 
 
 108 
 Combined with order system. III, 48 
 Compared with order system. III, 95 
 
 Problems, V, 347, 351 
 Cost ledger. III. 90 
 Defined, III, 41 
 Distribution of costs direct to product. III, 
 
 92 
 Distribution of expense, over product, III, 
 
 271 
 Distribution of manufacturing costs, III, 92 
 Entries in controlling accounts. III, 86-96 
 Expense, indirect. 
 
 Accounts, III, 89, 106-108, 269, 344 
 Distribution, III, 89, 271 
 
 Pboci»9 Co»iT SYtTCM — ComHm^ 
 Expense. Indirect— CoMlimMrf 
 
 Distribution dirrrt to product. III. 44, H 
 Flour mill. III. 87 
 
 Journal entries, illustrated. III. 10«-1M 
 Labor. III. 88. »4. 165 
 
 Account, illustrated. III. M 
 Records. III. 10« 
 Time basis of payment. III, Iff? 
 Material cost. III. 86 
 Material requisitions. III, ISi 
 Pay roll. III. 839 
 Form. III. 340 
 Account. III. 89 
 Analysis. III. 712 
 Per unit of product. Ill, 47 
 
 Problems. V, 353. 357 
 Production reports. Ill, 4S 
 
 Form, III. 45 
 Purchase journal. III. SS9 
 Stores classification. III. ISI 
 Stores issued book. III. 198 
 Stores ledger. III. 88 
 Supplies account. III. 88 
 Textile costs. III. 363 (See alw Tcstib 
 
 costs") 
 Textile costs, illustrated. Ill, 8« 
 Work in process account. III. 88 
 Closing, III, 90 
 Illustrated. III. 90 
 Product. 
 
 Distribution of expense over. III. ••. tl*. 
 225. 271-280 (Sc« also under Exprntr**) 
 Pboddction-Center Mcthoo or Di«Tmi»trr- 
 iNo Expense (Sec "Machine-rate 
 method") 
 Pboddction Chabt. GRAraic. III. 4IS 
 
 Form, III, 4 IS 
 Production Orders (See •'Orders") 
 Production Reports. III. 44. SS« 5S9 
 Forms. III. 45. SSS-SS5. SS7. S98 
 Summary. 
 
 Daily. III. 337 
 
 Form. III. 338 
 Monthly. III. SS6 
 Form. III. SS7 
 Weekly. III. 44 
 Form. III. 45 , 
 
 Productive Departheitts, 
 Functions of, II. 10 
 Indirect expense, III, til 
 
182 
 
 GENERAL INDEX 
 
 Productive Departments — Continued 
 Indirect Expense — Continued 
 Chart, III, 212 
 
 Form, III, 214, 215 
 Distribution over departments. III, 99, 
 103, 104 (See also "Expense, distribu- 
 tion") 
 Indirect expense account, 
 Illustrated, III, 104 
 Journal entry, illustrated. III, 107 
 Productive-center sub-departments, HI, 
 278, 287 
 Productive-Hour Method of Distributinq 
 Expense Over Product, III, 272, 275- 
 277 
 Professional Accounts, II, 396-403 
 
 Card system for laying out daily work, II, 
 
 397, 398 
 Collection, II, 402, 403 
 Estate records, II, 402 
 Fee book, II, 402 
 
 Form, II, 402 
 Journal, cash, II, 399-401 
 
 Form, II, 400 
 Ledger. II, 401 
 Office blotter, II, 396, 397 
 
 Form, II. 397 
 Payments, cash, II, 401 
 Time cards, II, 398, 399 
 Form, II, 398 
 Profit and Loss Account, I, 83-87; II, 264; 
 III, 109 
 Form, I, 86 
 
 Problems, V, 132 215 253, 266, 377, 399 
 Adjusting entries, I, 85 
 Analysis of. I, 425 
 Closing entries, I, 83-85, 91, 92 
 Nominal, I, 59 
 
 Subsequent facts, recording, I, 49-51 
 Time of opening, I, 84 
 trial balance, I, 89-91 
 
 Form, I, 90 
 Use of, I, 52 
 Profit and Loss Statement, I, 89-103; II, 
 290; III, 109; IV, 294-302 
 Form, I, 336, 337 
 
 Problems, V, 45-112, 132, 190, 337. 395 
 Accounting procedure, I, 95-102 
 And account, distinction between, I, 95 
 Capital expenses, IV, 296, 297 
 Comparative, 
 
 Problem, V, 395 
 
 Profit and Loss Statement — Continued 
 Compara ti ve — Contin ued 
 
 Federal Reserve Board form, IV, 300 
 Form, IV, 300, 301 
 Corrected, I, 101, 102 
 
 Form, I, 101, 102 
 Definition, IV, 294 
 Form of, I, 94, 95 
 
 Hotel, II, 444, 445 
 Function of, I, 89 
 Holding company, IV, 349 
 Illustrative form, IV, 298, 299 
 
 Form, IV, 299 
 Incorrect, I, 92 
 
 Form, I, 92. 93 
 Manufacturing company, illustrative state- 
 ments, IV, 299, 307 
 Mercantile business, illustrative statement, 
 
 IV, 316 
 Operating expenses, IV, 296 
 Profit or loss resulting from operations, IV, 
 
 295 
 Purpose. IV, 294 
 
 Supporting schedules, IV, 301, 302 
 Title of, I, 93, 94 
 Profit, Book, II, 871 
 Profit or Loss, 
 
 Determination of, I, 79-87 
 Double-entry, I, 79 
 Proving correctness of, I, 87 
 Shown by cost accounting, III, 4 
 Single-entry bookkeeping. 
 
 Asset and liability method, I, 392, 393 
 Formulas for determining, I, 390-392 
 Inadequacy of, I, 394 
 Method of determining, I, 389, 390 
 Summary of changes of assets and liabili- 
 ties, I, 389 
 Form, I, 389 
 Tangible and intangible assets, I. 393, 394 
 Profit-Sharing, Partnership, I, 343, 347 
 Profits, (See also "Surplus") 
 "^Anticipation of, IV, 36-38, 53, 60, 61 
 Apportionment, IV, 6 
 Available for dividends, IV, 58-61 
 Capital, IV, 34 
 Classification, IV, 34 
 
 Contingent, in branch accounting, IV, 38, 31), 
 366, 367 
 Problems, V, 106, 108, 119 
 Corporations, IV, 59-61, 95 
 
 Close, distribution of profits, IV, 56 
 
GENERAL INDEX 
 
 183 
 
 Profits — Continued 
 
 Corporations — Continued 
 ^ - DiflFerences of opinion as to what con" 
 stitutes, IV, 60 
 Errors affecting, IV, 93 (See also "Errors") 
 Expenditures for betterments, IV, 61 
 Invested profits, IV, 59, 60 
 Irregular distribution, IV, 56 
 Ownership of, IV, 55 
 Passed over to surplus, IV, 59, 60, 95 
 Source of dividends, IV, 56-58 
 Subsidiaries, prior to consolidation, IV, 
 359, 360 
 Problem, V, 293 
 Cost of production and, II, 70 
 Definition, I, 31, 32; IV, 33 
 Determination of, II, 365; IV, 6, 33-5S 
 Appraisal of asset values, IV, 41, 42 
 Aspects of value, IV, 42, 43 
 Asset and liability method, IV, 52 
 Capital profit, IV, 34 
 Capital vs. revenue expenditures, IV, 45, 
 
 61 
 Problems of, IV, 40 
 Profit or loss, I, 79-87, 389-394; IV, 52 
 Repairs, renewals and replacements, IV, 
 
 47-49 
 Summary of principles of, IV, 53 
 Valuation, basis of, IV, 44 
 Valuation, kinds of, IV, 42, 43 
 Valuation, sources of data for, IV, 45 
 Division of partners', I, 343-347 
 Problems, V, 27, 31, 183, 187 
 Effect of appreciation on, IV, 50 
 Effect of depreciation on, IV, 49 
 
 Problem, V, 132 
 Eliminations, on consolidated income state- 
 ments, IV, 365 
 Expected, and realized, discrepancy be- 
 tween. It, 145 
 Factors on which dependent, II, 14G 
 Gross, I, 81, 85, 96, 110, 200, 201; II, 144, 
 475-477; IV, 35 
 Problems, V, 23, 127, 341 
 Harvard Bureau of Business Research, 
 
 Bulletin No. 1, IV, 393 
 Manufacturing profits differentiated from, 
 
 IV, 35 
 Percentage of, test for detection of errors, 
 IV, 392-394 (See also "Percentage of 
 gross profit") 
 Increasing, II, 70 
 
 Profits — Continued 
 Instalment nalcs, fT. IS5-187 
 
 Problem. V, 100 
 Intercompany, IV, 366 
 Interdepartmental, IV, S8 
 Manufacturing, IV, 35 
 Net, 
 
 Problems. V. 88. 97, 841 
 
 Corporations, IV, 59, 95 
 
 Defined, IV. 39 
 
 Determining. I, 85. 86 
 
 Partnership. IV, 95 
 
 Sole proprietorship, IV, 95 
 On finished goods, IV, 37 
 On sales, analysis of, II, 477-470 
 
 Form. II. 478 
 On work in process, IV. 36 
 Prepaid expenses as affected by trc«iaeai 
 
 of, IV. 14 
 Recording items affecting, I, 50-52 
 Retained as capital, IV, 95 
 Trading, IV. 85 
 Profits of Different Linhk 
 
 Cost accounting indicates. III. 5, 6 
 Property Dividends, IV, 75, 9i 
 Proprietor, 
 
 And business, relation between, 1, 19^ •• 
 Drawings by I. 100, 114 
 
 Problems, V. 93, 242 
 Information necessary to, I, 84 
 Sales. I. 209, 252. 253 
 Proprietorship, I, 18; II. IS 
 Protesting Notes. I. 221, 298 
 Punching Machine. II. 354 
 Purchase, (See also "Purchoaes," below) 
 And sales records, stock broker's, II, 440 
 
 Form. II. 420 
 Elements of a. II. 78 
 Invoice (See "Invoice, purchase") 
 Journal (See "Journal, purchase") 
 Order register. II. 93. 94 
 Orders (See "Orders, purchase") 
 Records. II. 104-129 
 
 Retail organization. II, 868-S70 
 
 Voucher system. II. 116 (Ss« a!so 
 "Voucher register") 
 Register. II, 392 
 
 Requisition (See "Requisilio0, purckaas") 
 Specifications. II. 70-8i 
 
 Object of. II. 79 
 
 SUndard. advanlafea of. II, iO. SI 
 System, requirements of, II. T? 
 
184 
 
 GENERAL INDEX 
 
 Purchase ftooK ^ee "Journal, purchase") 
 PuBCHASED Division of Stores Ledger, II> 
 
 139 
 Purchases, (See also "Purchase," above) 
 
 Problem, V, 93 
 Account, I, 200 
 
 Analysis of, I, 403 
 
 Closing, I, 202, 203 
 Forms, I, 202, 203 
 
 Operating of, I, 202 
 Analysis of, II, 475 
 Cash, I, 113; II, 122 
 Departmental distribution, II, 475 
 Discount on, not deducted, I, 97 
 Material (See also "Orders, purchase," "Req- 
 uisition, purchase") 
 
 Placing the order, II, 87 
 
 Price agreement, II, 88 
 
 Quotations, new, securing, II, 88 
 Rebates and allowances, account, analysis 
 
 of, I, 424 
 Returned (See "Returns") 
 Summary of, monthly, II, 123 
 
 Form, II, 123 
 Purchasing Agent, and Stores Keeper, 
 
 Relation between, II, 82 
 Purchasing Department, II, 76-103; III» 
 
 116, 124 
 Activities of, II, 73-75 
 Card system, use of, II, 87 
 Cost of goods sold, II, 70 
 £xi)enditures, careful, importance of, II, 
 
 69, 70 
 Expense, II, 297, 298 
 Filing data, II, 73 
 Inspecting material, II, 74 
 Invoices, handling, II, 74 
 Issuing material, II, 74 
 Loose-leaf system, use of, II, 87 
 Order record, II, 77 
 Orders, purchase, handling, II, 74 
 Organization, II, 69-75 
 Preparation for purchasing, II, 76 
 Price information, recording, II, 76 
 Prices, determining, II, 73 
 Receiving material, II, 74 
 Requisitions, purchase, handling of, II, 75 
 
 (See also "Requisition, purchase") 
 Routine of, II, 76-95 
 Small vs. large business, II, 72 
 Storing material, II, 74 
 
 Purchasing Department — Continued 
 Traffic, directing, II, 75 
 Unscientific purchasing methods, results of, 
 11,71 
 
 Q 
 
 Quotation File, II, 76, 77 
 Quotations, New, Securing, II, 88 
 
 Rate Card, II, 304 
 
 Rates, Depreciation (See "Depreciation") 
 Rates of Expense Distribution Oveu 
 Product, III, 42, 212, 271-285 
 Adjustment between actual and applied ex- 
 pense, III, 212, 282-285, 295 
 Flat percentage charge. III, 284 
 Reserve account. III, 283 
 Machine-rate method. III, 272, 277, 279, 
 287-298, 301-327 (See also "Machine-rate 
 method") 
 Material cost method. III, 272, 281 
 Percentage of labor method. III, 272-275 
 Prime cost method. III, 272, 281 
 Process system. III, 271 
 Productive-hour method. III, 272, 275-277 
 Sold-hour method. III, 272, 279 
 Ratio Charts, III, 406, 410-418; IV, 399, 401. 
 
 Forms, III, 413, 418; IV, 400 
 Raw Material (See "Material") 
 Real and Personal Accounts, I, 58, 59 
 Real Estate, (See also "Land") 
 Mortgage, I, 124, 125 
 
 Bond distinguished from corporate bond, 
 IV, 121 
 Realization and Liquidation Statement, 
 I, 142-152 
 Form, I, 145 
 Problems, V, 78, 83, 266 
 Assets, 
 
 Realized, I, 147, 148 
 To be realized, I, 146 
 Cash included among assets, I, 147 
 Credits, supplementary, I, 148 
 Debits, supplementary, I, 149 
 Form of, I, 143 
 
 Information required, I, 143, 144 
 Liabilities, 
 
 Liquidated, I, 148 
 To be liquidated, I. 147 
 Unliquidated, I, 149 
 Preparatory statements, I, 143 
 
GENERAL INDEX 
 
 185 
 
 Rebates (See "Allowances," "Discounts") 
 Recapitulation, 
 Record, cash, II, 211 
 
 Form, II, 211 
 Sheet, sales, II, 172, 173 
 Forms, II, 174 ' 
 
 Receipts, 
 Cash, 
 Arrangement of items, order of, I, 109 
 Deposit of, daily, II, 192 
 Register, mail-order house, II, 893 
 
 Form, II, 394 
 Statement of, I, 104-115 
 Journal entries, I, 183 
 Receivers, 
 
 Problems, V, 266, 271 
 Appointment of, I, 142 
 Balance sheet, I, 143, 149 
 
 Form, I, 151 
 Cash account, I, 149 
 
 Form, I, 150 
 Deficiency statement, I, 140, 141; IV, 319- 
 326 
 Illustrative examples, I, 140; IV, 329 
 Duties of, I, 142 
 
 Realization and liquidation statement, I, 
 142-152 (See also "Realization and liq- 
 uidation statement") 
 Form, I, 145 
 Reports, I, 143, 149 
 
 Statement of affairs (See also "Statement of 
 affairs") I, 129-141; IV, 319, 324 
 Form, I, 136, 137 
 Receiving, 
 Clerk, duties of, II, 92, 134 
 Material, II, 74, 134-137 
 Reconciliation of Cash Book with Bank 
 Balance, I, 225-227; IV, 425 
 Problems, V, 3, 4 
 Record, 
 Books of original (See "Books of aooount* 
 
 original entry") 
 Capital stock transfer, II, 336 
 
 Form, II, 337 
 Pledge, II, 341 
 Form, II, 341 
 Recording Business Information, I, 22, 2S 
 Records, 
 Arrangement and classification of items, II, 
 
 58 
 Auxiliary, II, 47, 48 
 
 Rxcobda— Conh'n usd 
 Books and. for braocliM uhI ehaim i 
 II. 880-388 
 Forms. II. 882-888 
 Bound. II. 61-08 
 AdvanUges of, II, 61, 0« 
 Disadvantages of, II, M 
 Cards, II, 66, 67 
 
 Advantages of, II. 67 
 Cash (Sec "Cash records") 
 CJub. II. 448 (See also "Clubs") 
 Columnar, advantages of, II, tS. \M IM 
 
 164 
 Contractors, building. II, 458 (S*« 
 
 "Contract," "Contractors, building") 
 Cost, III, 29 (See also "Cost acrounUBf ") 
 Cost sheets. III. 80, 88, 76 (See also "Cost 
 
 sheets." "Ledger, cost") 
 Detail, amount of, II, 55 
 Development of, II, 25-81 
 Estate, II, 402, 409. 410 
 Estimated cost system (See "Estimated rast 
 
 system") 
 Expense, indirect. III, 224 
 Form of, II, 52-58 
 Adaptable to more than one purpose, 
 
 11,55 
 Columns. II. 57. 58 
 Designing. II, 56. 57 
 How determined. II, 58 
 Relation of. to system. II, 5fl-M 
 Ruling. II. 56-58 
 Uniformity of. II, 54 
 Grouping. II. 36. 87 
 Hotels and restaurants, H. 486 (See also 
 
 "Hotels and restaurants") 
 Income tax. II. 848 
 
 Forms. II. 846. 847 
 Inventory sheet. III. 121 
 
 Form. Ill, 120 
 Job order system. Ill, 29 
 Labor (See "Labor records") 
 list of. II. 85, 86 
 Loose-leaf. II. 60. 61. 64-M (Se« abo **Lom». 
 
 leaf records") 
 Mail-order accounting. II. 889, 890 
 Manufacturing enterprise. II. 35. 808-314. 
 463-465: III. 165-194 
 Form. II. 464 
 Mercantile business (Sec 'Traiiiac Wii- 
 
 ness") 
 Primary purpose of, 1. 14 
 
186 
 
 GENERAL INDEX 
 
 Records — Continued 
 
 Process cost system (See "Process cost sys- 
 tem") 
 Production-center system (See "Machine- 
 rate method") 
 Purchase (See "Purchase records") 
 Reports (See "Reports") 
 Retail organization, II, 34, 35, 365-372 
 Sales (See "Sales records") 
 Special, II, 33^348 
 
 Forms, II, 335, 337-339, 341, 343, 344, 
 346, 347 
 Spoiled and returned goods, II, 380 
 
 Form, II, 384 
 Stock, general, II, 380 
 
 Form, II, 382 
 Stores, III, 115, 118-141 (See also "Stores") 
 Subsidiary, I, 328-337; II, 47, 48 
 
 Forms, I, 330-333 
 Summarization, II, 247, 248 
 Textile costs (See "Textile costs") 
 Time (See "Time records") 
 Trading business (See "Trading business") 
 Refunds, (See also "Returns and allowances") 
 
 For overpayments, I, 112 
 Register, 
 
 Automatic, II, 356, 357 
 Cash, II, 177, 215, 358 
 
 Disbursements, mail-order house, II, 393 
 Form, II, 394 
 
 Receipts (See "Cash receipts register") 
 Check, II, 209-211 
 
 Form, II, 208 
 C. O. D., II, 391 
 
 Form, II, 391 
 Commission merchant's consignment, II, 
 
 345, 348 
 Contract, II, 454 
 Diamond, II, 342 
 
 Form, II. 343 
 Due biU, II, 369, 370 
 Hotel guest, II, 436, 437 
 
 Form, II, 437 
 Insurance, II, 342, 345 
 
 •Form, II, 344 
 Invoice, II, 97 
 Materials ordered, II, 86 
 Notes, 
 
 Payable, I, 303; II, 334 
 Form, II, 335 
 
 Receivable. I, 297, 303; II, 334 
 Form, n, 335 
 
 REGJBTEa-r-CorUinued 
 Order, II, 340, 341 
 
 Form, II, 339 
 Purchase order, II, 93, 94, 392 
 Rent, II, 253 
 
 Form, II, 254 
 Return and allowance, II, 125 
 
 Form, II, 125 
 Sales, II, 157 
 Securities, II, 348 
 
 Form, II, 346 
 Storage, chain stores, II, 381 
 
 Form, II, 388 
 Subcontract, II, 454 
 
 Voucher (See "Voucher," "Journal, pur- 
 chase") 
 Registering Stock, II, 415 
 Regulations, Stock Exchange, II, 415 
 Renewals (See "Repairs and renewals") 
 Rent, III, 98, 101, 233, 236; IV, 14, 19, 21, 27 
 (See also generally "Fixed charges") 
 Account illustrated. III, 101 
 
 Journal entries, III, 107; IV, 21, 22 
 Distribution of expense, II, 471-473; III, 107 
 
 Production-center system. III, 289 
 Register, II, 253 
 Form, II, 254 
 Rents of an Annuity, IV, 146 (See also 
 
 "Annuity") 
 Repair Shops, Records in. III, 30 
 Repairs and Renewals, 
 Problems, V, 15, 16, 18 
 Accounting covering, I, 319-321 
 Buildings, improvements to, IV, 235-237 
 Chargeable to capital, when, IV, 45-49, 61, 
 
 97, 235-237 
 Depreciation and, IV, 167 
 Machinery, III, 221 (See also general sub- 
 ject of "Labor, indirect") 
 Production -center system. III, 291 
 Standing expense orders. III, 226 
 Replacement Order, III, 146 
 Replacements (See "Repairs and renewals") 
 Reports, (See also "Statements") 
 Cash, daily, II, 227, 228 
 
 Form, II, 228 
 Material used. III, 148 
 Production (See "Production reports") 
 Time (See "Time records") 
 Requisition, 
 
 Credit, II, 141, 142 
 Delivery, II, 83 
 
GENERAL INDEX 
 
 187 
 
 Requisition — Continued 
 
 Material (See "Material requisitiona**) 
 Purchase, II, 82-87 
 
 Accuracy of content, checking, II, 83 
 
 Colors, different, when used, II, 83 
 
 Contents of, II, 85, 86. 
 
 Copies, number of, II, 85 
 
 Defined, II, 82 
 
 Form of, II, 84 
 Form, II, 84 
 
 Handling of, II, 73, 86, 87 
 
 Materials ordered register, II, 86 
 
 Signing, II, 87 
 •Reserve Fund," (See also "Reserves," 
 
 below) 
 Canadian term for surplus, IV, 95 
 Compared with "reserve account," IV, 106, 
 
 107 
 Reserves, (See also "Funds") 
 
 Problems, V, 19, 21, 207, 271, 293, 319, 331 
 Accounting for, IV, 101-103 
 Accounts, IV, 180 
 Available, when, IV, 109 
 Bad debts, IV, 105, 115, 216 
 Problems, V, 19, 21, 328 
 
 Income tax requirements, IV, 220 
 Balance sheet treatment of, IV, 105 
 Compared with funds, IV, 107-111 
 Contingent, IV, 105 
 Created from surplus, IV, 104, 105 
 
 Problem, V, 207 
 Damage claims, IV, 118 
 Definition, IV, 104 
 Depreciation, IV, 105 
 
 Accounts, IV, 181, 184, 187, 188 
 Form, IV, 183 
 
 Amount inadequate, how handled, IV, 99 
 
 Fixed assets, IV, 115 
 
 Journal entries, illustrative, IV, 184-187 
 
 Revaluation of assets, IV, 101 
 
 Stock-in-trade, IV, 115 
 Disposition of, on payment of bond issue, 
 
 IV, 161 
 Equivalent to surplus, in Germany, IV, 95 
 Estimated losses, IV, 115 
 For expense account, III, 283 
 For extensions, IV, 105 
 Injuries to employees, IV, 118 
 Kinds of. IV, 104, 105, 114, 115 
 Nature of, IV, 107 
 "Necessary," IV, 114 
 Presentation on balance sheet, IV, 284 
 
 Reserves — Continiud 
 Purpose of, IV, 104 
 Relation to profit*. IV, 6 
 Secret. IV, 111-114 
 Problem, V. 319 
 Arguments for and liffaiiut. IV, IIS 
 How created. IV. Ill 
 Propriety of, IV. 112 
 Shown on balance ahcct. IV, «4 
 Sinking fund, IV, 156 (Sc« abo '^Siakiaf 
 
 fund") 
 True, IV, 104, 105, 114 
 Entries for. IV. 115 
 Factors determining. IV, 115 
 Valuation. IV. 104. 105. 114, 115. 117 
 Accounting for, IV, 117, 118 
 Shown on balance sheet. IV, 105 
 Voluntary, IV, 114 
 
 Wasting assets, depletion of, IV, 115. 440 
 "Rest." English Term for SiBPLts. IV. M 
 Restaurants (See "Hotels and restaurants") 
 Restraining Trade, Br HoLoiNa Com* 
 
 PANIES, IV, 333 
 Retail Organization, II. H&-150. S6S-87t 
 Advertising department. II, 149 
 Branch stores, organizing, II, 153-154 
 Cash accountability. II, 366-368 
 Classification methods, II. 268 
 Cost accounting for (See "Costiiif acrouBl- 
 
 ing for trading enterprise") 
 Invoices, 
 
 Purchase, II, 369 
 
 Sales, II, 371 
 Jobbing combined with, II, 15t-154 
 Journal, II. 366 
 Ledger. II. 871. 372 
 Mail orders. II. 149 
 Profit book. II. 371 
 Records, II, 365 
 
 Purchase, II. 368-870 
 
 Sales. II. 370. 371 
 Small, II, 150 
 Statements. II, 366 
 
 System of accounts for, problrm of. II. M3 
 Returns, 
 
 Adjustment of, II. tiS 
 And allowances. 
 
 Analysis sheet of allowaocM, II, IM 
 Form. II. 126 
 
 Journal entries. I, 184 
 
 Refund ticket. II. iiS 
 Form. II. ii6 
 
188 
 
 GENERAL INDEX 
 
 Returns — Continued 
 
 And allowances — Continued 
 Register, II, 125 
 Form, II, 125 
 Purchases, I, 184, 238; III, 1S9 
 Account, analysis of, I, 424 
 Method of handling entries, I, 288 
 Memorandum of, II, 123, 124 
 Form, II, 124 
 Sales, I, 210; II, 175-177 
 Form, II, 176 
 Account, analysis of, I, 411 
 Cash memorandum for, II, 225 
 
 Form, II, 226 
 Entering in journal, I, 254 
 Spoiled and returned goods record, II, 880 
 Form, II, 381 
 Stores, III, 133 
 Revenue, 
 
 Estimate of, II, 320, 321 
 Expenditures, compared with capital ex* 
 penditures, IV, 45-49, 61, 97, 235-237 
 Room Ticket, Hotel, II, 436, 437 
 
 Form, II, 437 
 Rooms Occupied, Hotel, Vebification of 
 
 Receipts from, II, 443 
 RoPB Making, III, 50 
 Routine, 
 
 Automatic, II, 49 
 Completeness of, essential, II, 54 
 Office, rules for, II, 49, 50 
 Rowan System, Payment of Wages, II, 305 
 Royalties, 
 
 Defined, IV, 262 
 
 Minimum payment per year, IV, 18, 263 
 Paid in advance, IV, 14 
 Rules, Office Routine, II, 49, 50 
 Rulings and Columns, II, 56-58 (See also 
 "Journal, columnar") 
 
 Salaries. (See also "Labor," "Pay-roll,' 
 "Wages") 
 Partners', I, 3il8, 350, 351 
 Problem, V, 42 
 Sale of Partnership Business, I, 859-361 
 Sales, 
 
 Account, I, 208 
 
 Analysis of, I, 422 
 Allowances I, 99 
 Analysis of. I. 160 
 
 Sales — Continued 
 Cash, I, 110, 249-252 
 
 Accounting procedure, I, 249-252; II, 204 
 Income for period, I, 110 
 Receipts for, duplicate, II, 177 
 Recording, II, 163 
 Charge, I, 249 
 
 C. O. D., I, 110-254; II, 181-183 
 Route ledger, II, 183 
 
 Form, II, 182 
 Route sheet, II, 181 
 Form, II, 182 
 Commission on, accounting procedure for, 
 
 11,340, 341; IV, 27 
 Containers, I, 253 
 Cost of, II, 144 
 
 Overhead distribution of, II, 475 
 Coupon books, use of, II, 187 
 Deductions from, I, 95-97 
 Department, II, 146-155 
 
 Advertising department, relation to, 11,154 
 Functions of, II, 10, 147 
 Jobbing organizations, II, 150, 151 
 Organization of, II, 148 
 Retail and jobbing organization com- 
 bined, II, 152-154 
 Retail organization, II, 148-150 
 Traffic department, relation to, II, 15 1, 155 
 Discounts, I, 99 
 Drivers', II, 336, 338. 840 
 
 Form, II, 338 
 Fixed asset, I, 112 
 Impression book, II, 166, 167 
 Instalment, II, 185-187 
 Form. II, 185 
 Problem, V, 109 
 Tickler file, II, 185 
 Invoices, II, 159-161 (See also "Invoices, 
 
 sales") 
 Journal (See "Journal, sales") 
 Ledger, 
 
 Containers column in, II, 185 
 
 Form, II, 184 
 Special form, II, 256, 257 
 Form, II, 255 
 Net, 
 
 Problem, V, 93 
 Overhead distribution of, II, 475 
 On approval, II, 180, 181 
 On consignment, II, 177-179 
 Sales book for consignee, II, 180 
 Form, II, 176 
 
GENERAL INDEX 
 
 189 
 
 Sales — Continiied 
 
 On credit, records of, II, 163, 164 
 Order blanks, II, 172 
 
 Form, II, 172 
 Orders (See "Orders, sales") 
 Percentage of gross profits based on, IV, 
 
 392-394 
 Profit on, II, 365 
 Problem, V, 23 
 
 Analysis of, II, 477 
 Form, II, 476 
 
 Gross, II, 475-477 
 Ratio to selling expense, II, 299, 300 
 
 Problem, V, 341 
 Rebates, I, 99 
 Rebates and allowances account. 
 
 Analysis of, I, 411 
 Recapitulation, II, 172, 173 
 
 Forms, II, 174 
 Recording, by tabulating machine, I, 160 
 Records, II, 162-188 
 
 Alternate order system, II, 172 
 Form, II, 172 
 
 Journal (See "Journal, sales") 
 
 Ledger (See subheading "Ledger," above) 
 
 Mechanical account system, II, 173, 175 
 
 Necessity for, II, 162, 163 
 
 Retail organization, II, 370-371 
 Register, II, 157 
 Returned (See "Returns") 
 Schedule of, I, 160 
 Sundry, I, 249-252 
 System, alternate, for a small concern, II, 172 
 
 Form, II, 172 
 To proprietor, I, 209, 252, 253 
 Sales Book (See "Journal, sales") 
 Salesmen's Commissions, II, 340, 341 
 Schedule, (See also "Statements") 
 Accounts receivable, I, 157, 158 
 Capital or surplus adjustments, I, 159, 160 
 Cost of goods sold, I, 161 
 Depreciation, III, 22 1. 234, 249, 253 
 Form, III, 250, 251 
 
 Textile costs. III, 397. 398 
 Expenses, general, L 162 
 Fixed charges. Ill, 224, 233, 253 
 Form, III, 235 
 
 Process system. III, 341 
 Form, III, 342 
 Functions of, II. 288, 289 
 Inventory, I, 158 
 
 Purposes ajxd uses of» 1, 1^8, 150 
 
 Schedule— Con/miMrf 
 Investmenta, I, 159 
 Miscellaneouii, I, lOf 
 Notes, 
 
 Payable. 1. 157 
 Receivable, I, 157 
 Sales, I, 160 
 Supporting, I, 153-1 6S 
 Desirable, when, I, 16S 
 Example of, I, 155. 156 
 Presentation, interpretative, prinripjr* 
 and method of. I, I5S-I55, 169 
 ScHEDiLiNa Work in DEPARTUKjm, Fott 
 
 Even Capacitt, III. 6i 
 Scrap, I, 319, 320: III, 147 
 
 Problem. V, 23S 
 Scrip Dividends (See "Dividend***) 
 Secret Reserves (See "Reserve*") 
 Securities. (See also "Bonds." "Slock**) 
 Account, analysis of, I, 404 
 Handled on the exchange, II, 415 
 Register, II, 348 
 Form, II, 346 
 Schedule of investments. 1, 150 
 Verification of, IV, 427 
 Segregated Budget, II, 316 
 Selling. 
 Expense (See "Expense, aelliaf '*) 
 Price, 
 
 Elements of. III, 25 
 
 Form. Ill, 25 
 Fixing. Ill, 5, 6 
 Inventory at, II, 145 
 Relation to production coats. II. 70; III. 
 5, 6 
 Profitable, factors in. II. 146 
 Service Departments (See *'Adiium«trativ« 
 expense " "Power plant rtpenae" **SliM«t 
 department expense") 
 Service Metuod. Dcpretutiom RAxai. IV, 
 
 172 
 Service. SpeciaLi, Distmibution or ExroMl 
 
 or. II, 460 
 Services Expcmbc, IV, «7 
 Sheets, 
 Cost (See "Cott sbceU**) 
 Dxpenae distribution (Se* "ExprtM* db- 
 tribution sheet") 
 Sherman Anti-Tmust L4W or 1880. IV, SS» 
 Shipduiloino T«aok, AjmciFAnoii or 
 PnoriTa. IV. 36 
 
190 
 
 GENERAL INDEX 
 
 Shipments, 
 
 Between branches, II, 877 
 On order, II, 94, 95 
 Shipping, 
 Department, 
 
 Account illustrated, textile costs, HI, 393 
 Checking goods in, II, 160 
 Expense, 
 
 Chart, graphic, III, 417 
 Form, III, 418 
 Tickets, n, 159, 160 
 Shoe Factory, 
 
 Day's work sheet. III, 62 
 Estimated cost of material. III, 149 
 Estimated costs in, III, 63 
 Shoe tag, III, 58 
 Form, III, 59, 60 
 "Short" Account (See "Stock brokerage") 
 Single-Entry Bookkeeping (See "Book- 
 keeping, single-entry") 
 Sinking Fund, IV, 143-164 
 
 Problems, IV, 162, 163; V, 152, 160, 
 207, 300 
 Account, analysis of, I, 410 
 Accounting procedure, IV, 155-163 
 Adjusting entries, IV, 160 
 Disposition of fund after payment of 
 
 debt, IV, 161 
 Expenses, IV, 158 
 Income, IV, 158 
 Investments, IV, 9, 10, 157 
 Payments into fund, IV, 156 
 Redemption of debt, IV, 159 
 Sinking fund reserve, IV, 156 
 Amortization of debt, compared with sink- 
 ing fund method of payment, IV, 153, 154 
 Annuity method, IV, 144-154 (See also 
 "Annuity") 
 Computing, IV, 144-148 
 Future worth of annuity, IV, 146, 151, 153 
 Present worth of annuity, IV, 148-151, 
 153 
 Compound interest method of calculating 
 
 depreciation, IV, 175-177 
 Creating, methods of, IV, 144 
 
 Problem, V, 207 
 Debt, redemption of, IV, 144, 151-154, 159 
 Defined, IV, 143 
 Disposition of, IV, 161 
 
 Entries, IV, 161 
 Expenses, due to, IV, 158 
 Income derived from, IV, 158 
 
 Sinking Fund — Continued 
 Investments, IV, 9, 10, 157 
 
 Entries, IV, 158 
 Methods of creating, IV, 144 
 Payments into, IV, 156 
 Purpose of, IV, 143 
 Reserve, IV, 156 
 
 Problem, V, 300 
 Account, analysis of, I, 420 
 Trust deed, provisions of, IV, 155, 157 
 Trustee, report of, IV, 157 
 Sinking Fund Method, Depreciation 
 
 Rates, I, 324, 325; IV, 175-177 
 Six-Column Journal, II, 241 
 
 Form, II, 242 
 Slide Rule, II, 355 
 Soap Factory, By-Products,' III, 148 
 Sold Division of Stores Ledger, II, 141 
 SoLD-HouR Method of Distributing Ex- 
 pense Over Product, III, 272, 279 
 Problem, V, 386 
 Sole Proprietorship, I, 18; II, 13 (See also 
 
 "Proprietor") 
 Sorting Machine, II, 355 
 Source File, II, 77 
 Specifications, Standard, Advantages of, 
 
 II, 80, 81 
 Spinning Mill, III, 46 (See also "Textile 
 costs") 
 Problems, V, 351, 353, 355, 357 
 Weekly production report. III, 44, 45 
 Form, III, 45 
 Spoilage of Material, III, 146 
 Spoiled and Returned Goods Record, II, 
 380 
 Form, II, 384 
 Stamp Affixer, II, 357 
 Standing Expense Orders, III, 31, 224, 
 226-232 
 Classification, III, 227, 229-232 
 Distribution, III, 224 
 
 Sub-departments, III, 266 
 Numbering, III, 229 
 List of. III, 227, 229 
 Form, III, 230 
 Time tickets. III, 227 
 Form, III, 228 
 Statement of Affairs, I, 129-141; IV, 319, 
 324 
 Form, I, 136, 137 
 Problems, V, 61, 66, 70 
 
GENERAL INDEX 
 
 101 
 
 Statement of ArPAiRS — Continued 
 
 Assets, valuing and stating, I, 132 
 Problems, V, 66, 70 
 
 Deficiency statement, I, 140, 141; IV, 819- 
 326 
 Problems, V, 61, 66, 70 
 Illustrative examples, I, 140; IV, 329 
 
 Example of, I, 136-140 
 
 Form of, I, 141 
 
 Illustrative example, IV, 327-329 
 
 Information required, I, 135, 136 
 
 Liabilities, stating, I, 133 
 
 Treatment of, I, 138-140 
 Statement of Condition, I, 385-387 
 Form, I. 387 
 
 Comparative, I, 387-389 
 Form, I, 388 
 
 Form of, I, 386 
 Statement Voucher, II, 121 
 Statements, (See also "Balance sheet") 
 
 Account form, I, 117; II, 290; IV, 285 
 
 Articulation, IV, 413 * 
 
 Assets and liabilities, I, 46-49 
 Forms, I, 46-49 
 Problem, V, 336 
 Summary of changes of, I, 389 
 
 Balancing, I, 49 
 
 Bank, form of, I, 224, 225 
 Form, I, 224 
 
 Basic, II, 289 
 
 Cash discount, treatment of, I, 280, 281 
 
 Comparative, II, 294 
 
 Contents of, I, 25 
 
 Deficiency (See "Statement of affairs") 
 
 Defined, I, 25 
 
 Designing, 
 
 Importance of, II, 287, 288 
 Time of, II, 288 
 
 Exhibits, schedules, and, II, 288, 289 
 
 Expenses, production-center system. III, 308 
 Form, III, 307 
 
 Form and arrangement of, I, 26 
 
 Income, 
 
 Consolidated, IV, 364-366 
 Tie-up with balance sheet, IV, 292 
 Problems, V, 132, 221, 336 
 
 Manufacturing business (See "Manufactur- 
 ing enterprise") 
 
 Mercantile business (See "Trading busi- 
 ness") 
 
 Of going business, I, 47-49 
 Form, I, 48, 49 
 
 Statcmsnts— ConiiniMJ 
 Pay-roU (See 'Tay-rolT*) 
 Percentage. u«e of, II. «M. AM 
 Preparation of. I. 885; IV, 10. II 
 Problem. V. 28 
 
 ClaasificatioD of accotuta. aid to. I« il( 
 n, 284-:«8« 
 PresentatJon. interpretive, I, t» lit 
 
 Method of, I. 155 
 
 Principles of. I. 154. 168 
 Profit and loss (See "Profit and Iims i 
 
 ment") 
 Purpose and use of, I. 25. 154 
 Realization and liquidation (See ** 
 
 tion and liquidation statement") 
 Receipts and payments, cash, I. lOf-115 
 Form. I. 106 
 
 Dates of. I. 107 
 
 Details included. I. 108 
 
 Form and content of. I. 105 
 
 Items, arrangement of, I, 100 
 
 Items not disclosed, I. 114 
 
 Profit and loss not disclosed by, h 1*i> lU 
 
 Purpose and use of, I, 104, 115 
 
 Title of, I. 106, 107 
 Report form, I, 117; II. 201; IV, tSt 
 Retail organization. II, 8M 
 Schedules, exhibits, and, II, tM, t8t 
 SuUsUcal. III. 405. 414 
 Time periods covered by, 11, fOl, ftt 
 
 Monthly. II, 292; UI. 28 
 
 Weekly. II. 292 
 
 Yearly. II, 291 
 Units used in, II. 298 
 Statistical Ckabts (See "Charts. grapWen 
 Statistics, 
 
 Comparison of. II. f08. 104; IV. 800-401 
 
 Form. IV, 400 
 Cumulation of, II, tM^ tif 
 Steel Industbt. CnAnoM Aftuid to Eaw 
 
 Matsbial, UI. 150 
 Stock. III. 40 (See also "MaterUl" "S^mrnD 
 Index card for auul-octlsr necowMini. tU 
 
 890 
 Ledger (finished foods). III. 77 
 
 Form. III. 78. 
 List. III. 185. 804 
 
 Forms. III. 185. 804 
 Record, general. II. ••• 
 
 Form, II«88t 
 
192 
 
 GENERAL INDEX 
 
 Stock — Continued 
 
 Turnover, I, 210, 211; IV, 395-397 
 
 Calculating, I, 211; IV, 397 
 Problem, V, 341 
 
 Defined, IV, 395 
 Stock Brokerage, II, 415-431 
 Accounting, 
 
 Records, II, 419, 420 
 
 Status of, II, 415 
 Balance sheet, II, 428-431 
 Blotter, II. 420-423 
 
 Forms, II, 421 
 Clearance sheet, II, 417 
 Form, II, 418 
 
 Time of delivery, II, 417 
 Clearing house ticket, II, 416 
 Exchange memberships, II, 429 
 Fee, II, 423 
 Inventories, II, 427 
 "Long," II, 423-425 
 
 Account, II, 424, 425 
 Margin deposit, II, 423 
 Profit and loss account, II, 431 
 Purchase and sales records, II, 420 
 
 Form, II, 420 
 Securities, 
 
 Disposition of, II, 427 
 
 Handled on the exchange, II, 415 
 
 Inventory of, II, 427 
 "Short," II, 423, 425-427 
 
 Account, II, 426, 427 
 
 Borrowing stocks, II, 425 
 
 Delivery, clearing house procedure, II, 425 
 
 Interest paid borrower of stocks, II, 426 
 Stock exchange clearing house, IT, 410, 417 
 Trading on the exchange, II, 413 
 Stock, Capital, 
 Accounting for. 
 
 Different kinds, IV, 196 
 
 Issues, actual, IV, 190 
 
 Problems, V, 170, 173, 176 
 
 Nature of problem, IV, 8, 9 
 
 Total authorized issue, IV, 192-194 
 Problem. V, 176 
 Accounts, 
 
 Analysis of, I. 422 
 
 Purpose of. IV, 189 
 Acquired from other CMporations. IV, 19, 
 334 
 
 For purposes of control, IV, 335 
 
 For purposes of investment, IV, 334 
 
 Illegal, when, IV, 331 
 
 Stock, Capital — Continued 
 
 Acquired from other (.-orporations — Contin- 
 ued 
 
 Not illegal, IV, 334 
 
 Statutes allowing, IV, 333 
 Bank, IV. 200 
 Bonus, IV, 209 
 
 Certificates, I, 364, 365; II, 415 
 Closing transfer books, IV, 63, 64 
 Common, I, 366 
 
 Problem, V, 60 
 Discount on, IV, 9, 199 
 
 Accounting for, IV, 200 
 
 Not allowable in State of New York, IV. 
 199 
 Dividends (See "Dividends") 
 Dividing into shares, I, 364, 365 
 Donated, I, 372, 373 
 
 Problems, V, 173, 176, 277 
 Exchange (See "Stock brokerage") 
 Exchanged between corporations, IV, 339 
 Forfeited, IV, 210 
 
 Surplus from, IV, 211 
 Instalment account, analysis of, I, 406 
 Ledger. II, 261, 262 
 
 Form, II, 258 
 Owned, account, analysis of, I, 404 
 Owned for purposes of control, IV, 335 
 Owned for purposes of investment, IV, 334 
 Ownership, forms of, IV, 334 
 Payment for, by instalment, IV, 194 
 Preferred, I, 366, 367; IV, 65 
 Premium, 
 
 Account, analysis of. I. 424 
 
 Accounting for. IV. 199 
 
 As good-will, IV, 361 
 
 Disposition of, IV. 199 
 
 Method of treating, IV, 9 
 
 Surplus of subsidiary, IV, 358, 361 
 Problem, V, 312 
 Registering, II, 415 
 Schedule of investments, I, 159 
 Stock book, II, 336 
 
 Form, II, 337 
 Subscribed, account, analysis of, I, 418 
 Subscriptions. 
 
 Problems. V, 59, 152, 170 
 
 Account, analysis of, 1, 405 
 
 Di\ndends applied to, IV, 87 
 
 Paid subsequently or in instalments, I, 369 
 Transfer record, II, 338 
 
 Form, II, 337 
 
GENERAL INDEX 
 
 103 
 
 Stock, Capital — Continued 
 
 Treasury, I. 371-373; IV, 201-208 
 Account, analysis of, I, 406 
 Accounting for, IV, 202-205 
 
 Problem, V, 277 
 Balance sheet treatment, IV, 208 
 
 Problem, V, 152, 277 
 Defined, IV, 201 
 Purchase, above par, IV, 207 
 Purchase below par, IV, 200 
 Purchases, IV, 205 
 Surplus account, analysis of^ I, 421 
 Problems, V, 173, 176 
 Trust company, IV, 200 
 Without par value, IV, 200 
 
 Balance sheet reference to, IV, 201 
 Entries, IV, 201 
 Stock-in-Trade, 
 Defined, IV, 215 
 Depreciation on, IV, 223, 224 
 
 Reserve for, IV, 115 (See also "Reserves") 
 Overhead applicable to, IV, 227 
 Stockholders, 
 
 Corporate control, II, 18 
 Estates, IV, 69 
 Married women, IV, 68 
 Notice of dividends, IV, 69 
 Of record, IV, 66 
 Pledgees, IV, 68 
 Straight-Line Method, Depreciation 
 
 Rates, IV, 171 
 Storage Register, Chain Stores, II, 381 
 
 Form, II, 388 
 Stores, (See also "Material," "Supplies") 
 Account, 
 
 Illustrated, III, 83 
 Journal entries, illustrated, III, 106 
 Accounting, II, 137-145; III. 122-141 
 Accuracy essential. III, 123 
 Adjustments, III, 139 
 Arrangement, III, 117 
 Bill of material, III, 135 
 
 Form, III, 135 
 Bin tag. III, 132 
 Form, III, 133 
 By-products, III, 147 
 Card, II, 139 
 
 Form, II, 140 
 Charging, II, 462; III. 150 
 Classification, III. 122. 138, 153-16* 
 Advantages. Ill, 154 
 Basis for system used, Ili, 160 
 
 Sron M—Contin utd 
 
 Classification — ConHnutd 
 "Block" tyctem. III. IM 
 Catalogue. III. 101 
 Combination of letter* and nualiera. III. 
 
 155. 160 
 Dewey decimal •>'stein. III. \M 
 Letter system. HI. 155. 159 
 Mnemonic system. III. 159 
 Numerical system. III. 1A5 
 Symbols used. Ill, 154 
 Control, factors in. II. ISS. 1S4 
 Controlling account. III. 81, \ti 
 Defective work. Ill, 14« 
 Defined. II. 131, 13«; III, 23. llS 
 Department. 
 Control centralized. II, ISl 
 Development of. II, 1S£ 
 Functions of. II. 74 
 Separate, II. 131 
 Uniformity in, II. \Si 
 Department expense. III. 98. 104 (Sc« ako 
 generally "Non-productive dtpart* 
 ments") 
 Account. III. 217 
 Account illustrated. produrtioB-«Mil«r 
 
 system. III. 321 
 Applied direct to material. III, MS, €97. 
 
 302 
 On distnhution sheet. III. MO. M4 
 Sub-departments. III. 2W 
 Estimated quantity. III. 149 
 Expense, incurred before reiTipt, III. IJO 
 Finished parts. III. 24. 07, 80 
 Fluctuations in weight or volume. III. 141 
 Hotel. II. 442 
 
 Inventory (See "Inventory") 
 Issuance of. II. Ill: III. 131-lSS 
 Issued book. III. 131. ISO 
 Form. III. 137 
 Control of. III. 131 
 Posting to general ledjcrr. III. IM 
 Requisitions summariicd in. III. ISl. IM 
 Keeper. III. 118 
 Ledger (See "Ledgrr. ftofm") 
 Maximum. II. ISS 
 Minimum. II. 1S<. ISS 
 Organization. II. ISO. ISl 
 Prices, III. lis. 1« 
 Estimated, shoe fatiory. 111. lit 
 Fluctuations in. III. I4< 
 Purchase order (See "iXTtlcr*. pvnkmm") 
 
194 
 
 GENERAL INDEX 
 
 SronEa— Continued 
 
 Purchasing department (See "Purchasing 
 
 department") 
 Received book, III, 124 
 Form, III, 125 
 Agreement with purchase journal. III, ISO 
 Posting to stores ledger. III, 126, 130 
 Received report, II, 134-136 
 
 Forms, II, 135, 136 
 Record on cost sheets. III, 131 
 
 Proof of. III, 132 
 Records, II, 137-145; HI, 115, 118-141 
 Requisitions (See "Material requisitions") 
 Retail, organizing, II, 153, 154 
 Returned, III, 138 
 Scrap, I, 319, 320; III, 147 
 Shrinkage, adjustment on books. III, 140 
 Spoilage. Ill, 146 
 Supplies (See "Supplies") 
 Systems, II, 130-145 
 
 Planning, factors to be considered in, II, 
 130 
 Used, report of. III, 148 
 Waste, III, 142, 145 
 
 Adjustment on books. III, 140 
 Before use of stores, III, 150 
 Stores-Keeper, 
 
 Accountability, II, 137 
 
 And purchasing agent, relations between 
 
 11,82 
 Duties of, II. 134 
 Stobino Material (See "Stores") 
 Straight-Line Method of Calculating 
 Rates, I, 322 
 Problems, V, 16, 18, 168 
 Subcontract (See "Contract") 
 Subcontractors, II, 453 (See also "Con- 
 tractors, building") 
 Sub-Departments, 
 
 Non-productive, II, 10, 12; III, 265-268 
 Productive (machine groups). III, 278, 287, 
 301 (See also "Machine-rate method of 
 distributing expense over product") 
 Subscriptions, 
 
 Special, club, II, 452 
 Stock (See "Stock") 
 Subsidiary, 
 
 Departments (See "Sub-departments") 
 Journal (See "Journal, subsidiary") 
 Ledgers (See "Ledger") 
 Records. I. 328-337; II, 47, 48 
 Forms, I, 330-333 
 
 Subsidiaries (See "Corporation, subsidiaries") 
 Summarization, Records or, II, 247 
 Summary, 
 
 Analysis of sales, IV, 317 
 Cost, cost ledger, process cost system, III, 
 347 
 Form, in, 348 
 Daily work sheet. III, 62 
 Journal entries, I, 237 
 Production, 
 Daily, UI, 337 
 
 Form. Ill, 338 
 
 Monthly, III. 336 
 
 Form. III. 337 
 
 Weekly, III, 44 
 
 Form, III, 45 
 
 Purchases, II, 123 
 
 Form. II, 123 
 Time tickets, III, 171, 173, 177 
 Sundry Expense Account, III, 291. 322 
 Supervision, Accounting System, II. 50 
 Supplies, II, 74, 141, 469; III, 17, 213, 217, 
 221, 226-232 
 Account, III, 81, 122 
 
 Journal entries, illustrated, III, 106 
 Process cost system, III, 88 
 Charged direct, unusual method. III, 222 
 Department expense, distribution of, II, 469 
 Included in term "stores," III, 23 
 Issuing, II, 74, 141 
 
 Not exhausted (See "Deferred debits") 
 Office, account, analysis of. I, 408 
 Posting from stores issued book. III, 138 
 Production-center system, III, 291 
 
 Account illustrated. III, 325 
 Requisitions (See "Material requisitions") 
 Standing expense orders. III, 224. 226-232 
 Form, m, 230 
 Surplus, 
 Account, 
 
 Problems, V, 137, 173, 176, 277 
 Analysis of, I, 421 
 Compared with undivided profits account, 
 
 IV, 97, 98 
 Entries to, IV, 98 
 Accounting for, IV, 101-103 
 
 Effect of entries on balance sheet, IV, 102 
 Adjustments, I, 159; IV. 95-103 
 
 Problems. V, 15, 16, 18, 21, 125, 132, 
 148, 180, 266, 271, 284, 312 
 Schedule of, I, 159, 160 
 
GENERAL INDEX 
 
 IM 
 
 Surplus — Continued 
 Bank, 
 
 At organization, IV, 96 
 
 Provision for, IV, 200 
 Definition, IV, 95 
 
 Dividends declared froin, IV, 55-59 
 Forfeited stock, payments on, IV, 211 
 Nature and sources, IV, 95-103 
 Reserve from, IV, 104, 105 (See also "Re- 
 serves") 
 
 Advisability of, IV, 60 
 
 Factors determining, IV, 115 
 Revaluation of assets, IV, 100 
 Sale of assets, IV, 99 
 Sources of, IV, 96 
 
 Items other than realized profits, IV, 95 
 Special accounts, IV, 51, 96 
 Specially created on organization of an 
 
 enterprise, IV, 96 
 Subsidiary (See "Corporation, subsidiaries") 
 Unearned, special account for, IV, 51 
 Suspense Accounts, IV, 22, 27 
 Systems, Accounting, (See also these head- 
 ings throughout index) 
 Agencies, II, 373, 374 
 Branches, II, 374-388 
 Chain stores, II, 374-388 
 Clubs, II, 446-452 
 Contractors, building, II, 453-460 
 Cost accounting, II, 461-477; III, 801-400 
 Estates, II, 404-414 
 Hotels and restaurants, II, 432-445 
 Mail-order business, II, 389-395 
 Manufacturing enterprise, II, 461-465 
 Professions, II, 396-403 
 Retail business, II, 363-372 
 Stock brokerage, II, 415-431 
 Stores, II, 130-145 
 Trading enterprise, cost accounting, II, 
 
 466-477 
 Wholesale business, II, 363-372 
 Suspense Account, IV, 22, 27 
 
 Problem, V, 137 
 
 T 
 
 Table D'hote Dining Room, II, 43S 
 
 Tabular Ledgers, II, 251 
 
 Tabulating Machines, Operation of, II, 
 
 353-355 
 Tasx System of Wage Payment, III, 204 
 Tax, Income (See "Income tax") 
 
 Taxes ExractB. Ilf. M. 100. fit. ftl. tM; 
 IV. 29 (See alao geoeraUy *'FbW dwfv *) 
 
 Account, analyitfl o(. I. 410. 417 
 Account, illustrated. 
 
 Textile cotU. III. SM 
 Journal entry, illustrated. III. 107 
 Production <enter system. UI, <90 
 Taylob Systkm, PATMDrr or Waovk II* 310 
 Telephone Expxnbb. 11. 468; III. tlS. flti 
 
 (See also "Fixed chargct") 
 Textile Costs. III. 4S. 01 . S09-401 
 
 Problems, V. 847. 851, 888. SM. 887 
 Analysis sheets. 
 
 Cost of cloth knit, HI. 887. 888 
 Cost of cloth woven. HI. 881. 884. 888 
 Cost of mixes. III, 872. 378 
 Cost of yam carded and spoa. III« 878. 878 
 Finished cloth. III. 887. 890 
 Conversion cost distributed uvrr jrsni casl« 
 
 III, 378 
 Depreciation schedule. III. 897. 888 
 Dyeing and finishing. III. 806 
 Expense accounts, indirect. III. 867. SS9-8^ 
 Boarding house. III, 896 
 Building expense. III. 895 
 "General expense." Ill, 896 
 Insurance. Ill, 399 
 Light, heat, and power. III. 394 
 Office expense. Ill, 397 
 Taxes, III. 399 
 Finished cloth account. III. 891. 80t 
 Fluctuations in weight and ^-olums ol i 
 
 rial. III. 144 
 Knitting process. III. 864 
 Non-productive departments. III. 366 
 
 Accounts. III. 393-399 
 Operating department*. Ill, 866 
 Pay-roll account. III. 400 
 Raw material account. 111. 86T 
 Shipping expense account. III. 888 
 Spinning, III. 46, 47 
 
 Production report, weekly. III, 44. 48 
 Form. 111. 45 
 Waste account. III. 867 
 Weaving process. III. 364 
 Work in process accounts. 
 Dye house. III. 369. 870 
 Knitting. III. 385. 386 
 Mixes. 111. 369. 371 
 Weaving. III. 380-888 
 Wet and dry fi.iiskinf . 111. 887. 888 
 
196 
 
 GENERAL INDEX 
 
 Textile Costs — Continued 
 
 ^Vork in process accounts — Continued 
 
 Yarn, III, 374-376 
 Yarn spinning. III, 46, 47, 364 
 Theory of Averages, IV, 20, 26 
 Three-Column Journal, II, 105, 164, 165, 
 237-239 
 Forms, II, 106, 164, 238 
 Ticket, Hotel Room, II, 436, 437 
 
 Form, II, 437 
 Tickets, TiifE (See under "Time records") 
 Tie-Up Between Statements, IV, 292 
 
 Problems, V, 78, 132, 221, 336 
 Time, 
 
 Basis of wage payment, II, 305; III, 169 
 Cards, 
 
 Mechanical, II, 306-309; III» 167, 168, 176 
 
 Form, III, 181 
 Non-mechanical, II, 313, 398, 399; III. 
 29, 35, 167-182, 331 
 Forms, II, 398; III, 35, 178, 180 
 Clock, II, 307-309, 358; III, 176, 179 
 "In and out," II, 307, 308; III, 167, 168, 176 
 Time Records, 
 
 Pay-roll (See "Pay-roll") 
 Production-center system. III, 306 
 Time clock card, ll, 306-309; III, 167, 168, 
 176 
 Form, III, 181 
 Time sheets, II, 310, 311; III, 175, 182 
 
 Form, III, 183 
 Time tickets, II, 313, 398, 399, 462; III, 29. 
 35, 167-182, 331 
 Forms, II, 398; III, 35, 178, 180 
 Checking accuracy of. III, 169, 173 
 Lost time. III, 175 
 Piece-work, III, 170-184 
 
 Forms, III, 184, 186 
 Piece-work, coupons. III, 185 
 
 Form, III, 186 
 Standing order. III, 227 
 
 Form, III, 228 
 Summary, lU, 171, 173, 177 
 Tools, Expense, 
 
 Production-center system, III, 291 
 Account illustrated. III, 322 
 Total Cost, Elements of, III, 16, 25 
 Towne Plan, Payment of Wages, II, 305 
 Trade, 
 
 Acceptances, I, 304, 305 
 Discounts (See "Discounts") 
 
 Trade-Marks, 
 Defined, IV, 260 
 
 Relation to good-will and patents, IV, 260 
 Trade Secrets, IV, 261 
 Trading Account, I, 203, 204 
 
 Problems, V, 23, 83 
 Trading Business, (See also "Retail organiza- 
 tion, "Wholesale business") 
 Budget for, illustrated, II, 327-333 
 Cash book, general, II, 201-204 
 
 Form, II, 203 
 Cost accounting for, II, 466-477; III, 24, 
 25, 74 CSee also "Cost accounting for 
 trading enterprise") 
 Records, II, 34, 35, 365-372 
 Statements, IV, 310-318 
 
 Illustrative, II, 476; IV, 311-318 
 
 Problems, V, 242, 249, 253 
 Trading account, I, 203, 204 
 Stores accountability, II, 141, 142 
 Trading on the Stock Exchange, II, 416 
 
 (See also "Stock brokerage") 
 Traffic, 
 
 Department, 11, 154, 
 
 Relation to sales department, II, 154, 155 
 Directing, II, 75 
 Transfers Between Banks, I, 228, 229 
 Traveling Expenses, IV, 27 
 Treasury Stock (See under "Stock, capital") 
 Trial Balance, I, 71-77, 127 
 Form, I, 336 
 Problems, V, 45, 119, 137, 304, 319, 336, 
 343 
 Errors, 
 
 Problems, V, 137, 319, 343 
 Controlling accounts, I, 261 
 Locating, I, 73 
 Illustrative, I, 74-77 
 Limitations of, I, 73 
 Method of showing balances, I, 72, 73 
 Monthly, I, 268 
 Post-closing, I, 127, 123 
 Form, I, 90 
 Problem, V, 45 
 Analysis of, I, 400 
 Preparation, methods of, I, 71 
 Preparation of balance sheet not obviated 
 
 by, I, 127, 128 
 Purpose and use of, I, 71, 72, 73 
 Repetitions, avoiding, I, 72 - 
 Trust Companies, Investments in Stocks 
 OF OTHER Corporations, IV, 334 
 
GENERAL INDEX 
 
 107 
 
 Trust Deed Securing Bond Issue, Provi- 
 sions OF, IV, 155, 157 
 Trustees, (See also "Receivers") 
 Problems, V, 78, 83 
 Deficiency statement, I, 140, 141; IV, Sl»- 
 326 
 Problems, V, 61, 66, 70 
 Illustrative examples, I, 140; IV. 329 
 Estate of deceased person, II, 404 (See also 
 
 "Estate accounting") 
 In bankruptcy, IV, 319, 322 
 Accounts and reports, IV, 322 
 Appointment and duties, IV, 319 
 Sinking fund, IV, 157 
 
 Statement of affairs, 1, 129-141; IV, 319, 324 
 (See also "Statement of affairs") 
 Form, I, 136, 137 
 Trusts, (See also "Holding company") 
 Clayton Act, IV, 333 
 Development of, IV, 331 
 Sherman Anti-Trust Law, IV, 333 
 Turnover, I, 210, 211 
 
 Calculating, I, 211; IV, 397 
 
 Problem, V, 341 
 Defined, IV, 395 
 How stated, IV, 396 
 Twine Factory, III, 42, 91 
 Two-Column Journal, II, 236, 237 
 
 Form, II, 237 
 Typewriter, II, 356 
 
 U 
 
 Undervaluation, IV, 41, 42 
 
 Underwear Factory, III, 187 
 Form, III, 188 
 
 Undivided Profits (See "Surplus") 
 
 Unearned Surplus, IV, 51 
 
 Uniform Cost System, III, 12 
 
 Unit Cost of Product or Service, III, 47 
 Problems, V, 353, 367 
 
 United States Supreme Court, Profits 
 Out of Wuich Dividends May Be De- 
 clared, Defined, IV, 58 
 
 UxiTS Used in Statements, II, 293 
 
 Universal System of Numberino Accounts, 
 II, 271, 277-279 
 
 Up-Keep of Buildings (See "Building ex- 
 pense") 
 
 V 
 
 Valuation, (See also "Profits, determination 
 of") 
 Accounts, IV, 101 
 
 Valuation — Continued 
 Accounti receivabU, IV, tl8 
 
 Problem, V, 70 
 A«mU, IV, 7, A\-46. 198, tl»-tM 
 
 Innolvency or bankrui^Ujr, 1, 191. IMe 
 IV, 82« 
 Basis of. IV, 44. 45 
 Bonds, IV. W4-U9 
 
 Investment value method. IV. IM-IM 
 Copyrights, IV. ««1 
 Effect of depreciation on, IV, 49 
 Fluctuations, method of rccordiag. IT, 7 
 Franchises, IV, 265 
 Good-will. IV. 25S-i57 
 
 Problems, V. 183. 186. 187. IM. «M. 
 277. 288. 312. 928 
 
 Advertising, IV, 251 
 Inventory, I, 123; IV, S2WM3 (Sc« aOm 
 "Inventory") 
 
 Fire loss adjustment. IV. 27< 
 Kinds of, IV, 42. 43 
 Land. IV. 231. 234 
 PatenU, IV, 257-261 
 Reserve, IV. 104. 105. 114. 115. 117 (8m 
 
 also "Reserves") 
 Royalties. IV. 262. 263 
 Sources of data for. IV, 45 
 Trade-marks, IV. 260 
 Trade secrets. IV. 261 
 Verification. IV. 377-44« 
 Account. IV. 418 
 Accounts receivable. IV, 4W 
 Assets and liabilities, IV, 417-4« 
 
 Existence of. IV. 418-421 
 Assets, fixed, IV. 428 
 Bank balance. IV. 425 
 
 Problems. V. 3, 4 
 Cash. 
 
 Balance. I, 225-227 
 Problem. V. 4 
 
 In hand. IV, 422 
 
 Payments. IV, 425-425 
 
 Receipts. IV. 422 
 Controlling accounts. baUnce, I. §44 
 
 Problem. V. 11 
 Facts vs. opinion*. IV. 417 
 Fundamental »tei». IV. 417 
 Importance of. IV. 417 
 Inventories. IV, 426 
 
 Problems. V. 127. 130. SSI. SSi 
 Ledger account. IV. 418 
 Note* rtceivable. IV. 4«e 
 
198 
 
 GENERAL INDEX 
 
 / 
 
 VEBiricATiON — Continued 
 Securities, IV, 427 
 Trial balance, IV, 405-410 
 Problem. V, 343 
 Voucher, 
 
 Canceled checks, I, 241 
 Checks, I, 247; II, 212, 213 
 
 Form, II, 213 
 Folder, I, 241 
 
 Form, I, 242 
 Journal, II, 234, 235 
 
 Form, II, 235 
 Journal entry, canceling, I, 246 
 Payment of, I, 245-247 
 
 Allowances and discounts, I, 246 
 Petty cash, II, 220, 221 
 
 Form, II, 220 
 Register, I, 241; II, 116; III, 130. 213, 339 
 Forms, I, 244, 245; II, 117 
 Problem, V, 9 
 And purchase journal, distinction be- 
 tween, II, 116, 117 
 Forms, II, 117 
 Contractor's, II, 455-457 
 
 Form, II, 456 
 Hotel, II, 441 
 
 Form, II, 441 
 Items entered on, II, 118 
 Operation of, I, 241 
 Posting from, I, 243 
 Purchase journal as, I, 240, 241 
 Statement. II. 121 
 System, I, 240-247; II. 118-121 
 
 w 
 
 Wages, I, 113; H. 304-306; III, 169, 195-20 
 
 (See also "Labor," "Pay-roll") 
 Bonus plan, II, 305; III, 204 
 Day-rate method, advantages of, III, 195- 
 
 197 
 Emerson system, II, 306 
 Gantt system. III, 204 
 Halsey system, II, 305 
 Pay period, II, 304 
 Payment, methods of, II, 305, 306 
 Piece-rate, II, 305; III, 197-200 
 
 DiflFerential, II, 305; III, 200 
 
 Fixing rate. III, 198 
 Premium method, II, 305; III, 202 
 
 Graduated, III, 206 
 Rowan system, II, 305 
 
 Wagks — Contin ucd 
 
 Task and bonus system. III, 204 
 
 Taylor system, II, 305 
 
 Time basis, II, 305 
 
 Towne plan, II, 305 
 Waste, III, 142, 145 
 
 Account, textile costs. III, 368 
 
 Adjustments on books. III, 140 
 Control of. III, 65 
 
 Preventable, III, 8 
 
 Stores, before used. III, 150 
 Wasting Assets, IV, 238, 239 
 Problem, V, 207 
 
 Reserve for, IV, 115 
 "Wasting" Enterprises, 
 
 Dividends may be paid out of capital, when, 
 IV, 57, 58 
 AVater, III, 233, 239; IV, 27 (See also gener- 
 ally "Fixed charges") 
 Weight of Material, Fluctuations in, 
 
 m, 144 
 
 Wholesale Business, II, 152-154, 268, 3G3- 
 372 (See also "Trading business") 
 Classification methods, II, 268 
 Combined with retail, II, 152-154 
 Cost accounting for (See "Cost accounting 
 
 for trading enterprise") 
 Sales book, II, 171 
 Window Dressing Expense, Distribution 
 
 OF, n, 469 
 Withdrawals, I, 33 
 
 Accounting covering, I, 209 
 By proprietor, I, 114 
 
 Problems, V, 93, 242 
 Closing accounts, I, 100, 101 
 Directly, I, 33 
 Indirectly, I, 33 
 Partnership, I, 348, 349 
 Wood- Working Industries, Scrap, III, 148 
 Woolen Mill (See also "Textile costs") 
 Expense accounts, chart. III, 212 
 Form, III, 214-216 
 Work in Process, 
 Account, III, 79, 83 
 Entries, III, 83 
 Illustrated, III, 85, 90 
 Journal entry, illustrated. III, 107 
 Process method. III, 90 
 Production-center system, illustrated. III 
 
 324 
 Textile costs. III, 369-376, 380-389 
 
GENERAL INDEX 
 
 190 
 
 Work in Process — Continued 
 
 Definition, III, 23 
 
 Inventory or record. III, 74, 76 
 
 Profit on, IV, 36, 37 
 Work Sheet, Daily, III, 62 
 Working Capital, I, 124 
 Working Hours, Hotels and Restaurants, 
 
 II, 435, 536 
 Working Hours Method, Depreciation 
 Rates, IV, 172 
 
 WoBKiNo Oboamixatioii (Sm *t>r|»aii«tiaa*^ 
 Working pArnw. II. 40. 41 
 
 Analysis paper, II, 40 
 
 Cross-section paper. II. 41 
 
 Legal cap, II. 41 
 
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 UNIVERSITY OF CALIFORNIA LIBRARY