Accounting theory and practice, Volume 1 (of 3)

INDEX

A
Acceptance (See “Trade Acceptance”)
Accounting,
Function of, 4
Fundamentals, 7
Place of, in business, 3
Purpose of, 5
Relation to economics, 6
Relation to law, 7
Terms, 7
Accounts, 67-84
(See also “Classification of Accounts,” and special kinds,
as “Controlling Accounts,” “Customers’ Accounts,”
“Notes Receivable Account,” etc.)
Analysis of, 477
Form, 478
Necessary to determine values, 40
Arrangement in ledger, 220
Asset, balance of account, 73
Averaging, 486
Balancing, 72, 107-110, 477-484
Capital stock, 338 (See also “Capital Stock, Account”)
Chart, 75, 217-220
Current, 468-476
Form, 470
Adjustment, 469-471, 473, 476
Form, 470
Bank account as, 472-476
Date of value, 469
Defined, 468
Entries, 469-472
Interest charges on, 468, 469
Partnership, 469
Liability,
Balance of account, 73
Mechanism of, 69
Mixed, 97-105, 215
Adjustment of, 237
Nominal, 216
Number of, 71
Real, 216
Sections, 69
Statement of, 190
Surplus, 338 (See also “Surplus Account”)
“T” account, 528
Title of, 68, 72
Transferring, 110
Form, 112
Accounts Payable,
Controlling account, 269, 276
Debit and credit of, 89
Liability, 14
Relation to purchases and cash, 61
Summary, under controlling account system, 276
Accounts Receivable,
Asset, 12
Balance sheet items, 26
Controlling account, 264, 276
Customers’ account as, 264
Debit and credit, 85
Ratio to sales, 65
Relation to sales and cash, 61
Summary, under controlling account system, 276
Valuation, 409
Accrued Expenses (See “Expenses”)
Accrued Income (See “Income, Accrued”)
Accuracy, Proof of,
Preliminary to closing entries, 221
Adjunct Account,
Defined, 103
Adjustments, 115-131 (See also “Summarization”)
Accounts current, 473, 476
Book entries, 237-244
Accrued expenses, 242
Accrued income, 241
Bad and doubtful accounts, 240
Deferred expenses, 241
Deferred income, 243
Depreciation, 240
Illustration, 245
Inventories, 238
Preliminary work, 221
Work sheet methods, 223, 224-230
Corporate, 359-365
Made in journal previous to ledger, 237
Trial balance, 483
Administration, 3
Adventure Accounts, 460-467
Joint, 460
Accounting, 461-467
Interest charges, 468
Relation of parties, 460
Single, 460
Advertising,
Expenses, 47
Agency Law, Applied to Consignment, 447
Agent, 448
Allowances Granted to Customers, 45
Credits and returned goods invoices, 188
Debit and credit, 87
Journal, 253
Sales analysis of, 435
Analysis,
Account marked for,
Form, 478
Ledger, 477-483
Procedure, 478
Sheet, 479
Form, 480
Analysis Paper,
Used for work sheet, 221
Analytical Journals, 163, 251-257
Form, 164
Appraisal (See also “Estimates,” “Valuation”)
Defined, 103
Single-entry bookkeeping, 500
Approval Sales, 442-444
Assets,
Account, 213, 214
Adjusted at close of fiscal period, 215
Analysis of, 123
Balance of account, 73
Chart, 217
Debit and credit applied to, 85-90
Fixed assets, debit and credit to, 88
Classified, 11-13
Comparison, 34
Current,
Balance sheet items, 26
Ratio of, to current liabilities, 27
Valuation, 407
Decrease covered by credit entry, 82
Described, 11-13
Fixed,
Balance sheet items, 27
Capital and revenue expenditures, 104
Comparison, 35
Debit and credit to account of, 88
Depreciation account, 102, 123
Valuation, 124, 408, 413
Increase covered by debit entry, 82
Increase in value of, 94
Not subject to depreciation,
Valuation, 413
Sale of in liquidation, 324
Subject to depreciation,
Valuation of, 414
Valuation, 29, 407-419
Assets and Liabilities,
Balance sheet arrangement, 25
Changes in value of, 57, 77
Averaging of Accounts, 486
Cash balance, 490
Compound equation, 489
B
Bad Debts,
Adjustment of entries, 240
Expense account for, 125
Expense item, 47
Handling of, 125
Valuation, 410
Bailment, Defined, 447
Balance Sheet, 22-37, 589 (See also “Trial Balance”)
Forms, 23, 230, 232
Accounts receivable items, 26
Accrued expense item, 27
Arrangement, 24
Assets and liabilities, 25-30
Capital stock items, 344
Cash items, 25
Comparative, 32-37
Content and form, 35
Confusion of items, 58
Content, 22, 29
Corporation proprietorship, 20
Current assets, 25
Current liabilities, 26
Deferred charges item, 27
Equation of, 74-76
Fixed assets, 27
Information on, 24
Information lacking in, 39
Interrelation of, and profit and loss statement, 60-64
Investment items, 26
Not a part of books, 230
Notes receivable items, 26
Partnership proprietorship, 20
Preliminary to closing entries, 221
Problems, 403
Proprietorship, 8-10, 19, 40-43
Purpose, 22
Ratio of items, 64
Single-entry bookkeeping, 500
Statement of profit and loss, 41
(For other references see under “Statement of Profit and Loss”)
Terminology, 23
Treasury stock on, 354
Valuation, 403-419
Based on correct analysis of accounts, 404
Rules, 407-409
Balancing Methods, 72, 73, 107-110, 477-484
Form, 109
Cash book, 151
Check figures in posting, 482
Errors, 482
Ledger analysis, 477-483
Form, 478, 480
Sheet, 479
Postings, 481
Red ink for, 108
Rulings, 108
Trial balance, 477
Bank,
Account,
Handling of, 370, 472-476
Interest on, 491
Opening of, 192
Agent for C. O. D. shipments, 190
Cash records, 366
Check book, 192, 194, 371
Deposit ticket,
Form, 193
Discount,
Calculation of, 492
Defined, 392
Draft, 180
Loans, 195
Methods, 192-198
Pass-book, 192, 194
Bankruptcy, Cause of Dissolution, 322
Betterment, Valuation, 416
Bill of Exchange, Foreign Draft, 181
Bill of Lading, 188
C. O. D. shipments, 190
Bindings, Ledger, 263
Bonds,
Accounting, 355-357
Discount and premium, 355, 356
Interest payments, 356
Maturity, 356
Payable, liability, 15
Sale of, 355
Sinking funds, 357
Valuation, 412
Bookkeeping,
Double-entry, 78
Single-entry, 495-512
Accrued and deferred items, 500
Balance sheet, 500
Books required, 496
Cash book, 497
Change to double, 502
Compared with double, 501
Debits and credits, 498
Inventory and appraisal, 500
Journal, 496
Ledger, 497
Net profit, 511
Opening entries, 504-511
Profit and loss statement, 499
Profits, 501
Proof of posting, 499
Proprietorship accounts, 498
Use of, 497
Books (See “Journal,” “Ledger”)
Branches,
Cash,372
Sales to,
Handling of, 437
Broker, Defined, 448
Buildings, Asset, 13
Business Organization, 2, 16
Business Papers, Defined, 185
Business Transaction,
Accounting classification for, 216
Analysis of, 80, 98, 132, 251
Defined as to debit and credit, 79
Buying (See “Purchases”)
C
Capital,
Account, changes in, 93
Balance sheet, 19
Borrowed, account, 303
Defined, 15
Expenditures, 104
Invested, 15
Changes in, 93
Partnership,
Accretions through profit, 301
Adjustments of, 297-300
Agreements concerning, 297, 558
Averaging investment, 292, 301
Interest on partners’, 294, 297-300, 316
Loans as distinguished from, 302, 317
Profit-sharing basis, 292
Sources, 297
Working defined, 26
Capital Stock,
Account, 338-348
Certificate book, 337
Common, 338
Entries for, 346
Defined, 15
Discount and premium,
Balance sheet item, 345
Entries for, 343
Donated (See “Treasury Stock”)
Entries,
Discount and premium, 343
On balance sheet, 344
On journal, 340
No-par value, 339
Entries for, 347
Preferred, 338
Dividends, 339
Entries for, 346
Subscriptions,
Book and ledger, 336
Entries, 338-348
Instalment payments, 345
Payment by property, 348
Transfer book, 337
Treasury stock, 352-355
Valuation, 412
Capitalization, Partnership, 297-304
Card Ledger, 263
Cash,
Account,
Cash journal replaces, 150
Debit and credit, 85
Asset, 11
Balance sheet item, 22
Bank account handling, 370
Branch funds, 372
Discount,
Form, 400
Accounting, 156, 396-402
Defined, 392, 537
Elements of, 395
Entries, 398
Handling, 156, 396-402
Journal entries, 155
Trade acceptance and, 402
Handling of, 366-375
Internal control, 373
Paid for merchandise, determination of, 61
Payments compared to draft, 178
Petty cash account, handling of, 367
Petty cash book, 368
Form, 369
Received from customers, determination of, 61
Record,
Bank, 366
Double, 366
Safeguarding, 373
Sales, handling, 436
Short and over, 151
Statement, 375
Total available balance, determination of, 473-476
Valuation, 409
Cash Disbursements Journal, 148
Form, 159
Analysis, 154
Columnar analysis, 161
Cash Journal, 138, 147-161
Form, 149, 158, 159
Analysis, 154
Analytic, 255
Balancing, 151
Cash discounts, 155
Cash purchase and sales, 152
Cash short and over, 151
Check entries, 371
Posting from, 150
Replaces cash account, 150
Ruling, 151
Single-entry bookkeeping, 497
Summary, Form, 281
Under controlling account system, 280
Cash Receipts Journal, 147
Analysis, 154
Illustration of, 157-160
Posting from, 200
Certificate of Incorporation, 332
Certificates of Stock, 337
Charge Account,
Handling of, 437, 444
Sales tickets, 187, 444
Charter, Corporate, 332
Charts, Accounts, 15
Check Book, 192, 194, 371
Check Figures in Posting, 482
Checks,
Cash book entries, 371
Cashing of, 372
Classified as cash, 11
Described, 181
Handling of, 370
Spoiled, 371
Classification of Accounts, 213-220
Assignment of account, 216
Basis of, 214
Business transaction, classified, 216
Chart, 217-220
Detailed, 217
Divisions, 213
Fundamentals of, 215
Purpose, 214
Three-group, 213, 216
Two group, 216
Closing
Entries,
Accuracy of proof preliminary to, 221
After adjusting, 245-250
Consignment sales, 456
Corporate, 359-365
Illustration, 247
Preliminary work to, 221
Profit and loss account, 249
Summarizing, 117-123, 214, 221
Work sheet, 221-230
Journal, 163
Journal entries, 167
Ledger accounting, 129-131
Merchandise records, 116, 121
C. O. D. Sales, 442
C. O. D. Shipments, 189
Collateral, Notes Receivable as, 390
Columnar,
Adjustments, work sheet, 228
Cash books,
Forms, 158, 159
Analysis, 154-161
Errors, 483
Journal,
Form, 164
Analytic, 163, 251-263
Summary entries, 278
Form, 279
Purchase journal, 253
Sales journal, 251
Sales records, 434
Commercial Discount, Defined, 392
Commercial Draft, 180
Commercial Paper (See “Negotiable Instruments”)
Commission Agents, 448
Commission Merchant (See “Factor”)
Commissions,
Expense item, 47
Income from, 46
Salesmen’s, 445
Common Stock, 338
Entries, 346
Comparative Balance Sheet, 32-37
Content and form, 35
Compensation, Partners,
Out of net profit, 313
Compound Interest, 485
Condition of Business,
Balance sheet, 25
Statements showing, 48
Consignee,
Defined, 447
Inventory by, 456
Consignment,
Account,
Account sales, 450
Closing of books, 456
Entries, 452-459
Expenses charged against, 450
Profit and loss, 453
Separate from others, 438, 449
Accounts by factor, collecting of, 452
Advantages, 452
Defined, 447
Goods in or out on, 431
Handling by,
Broker, 448
Factor, 448-459
Inventory,
Consignee’s, 456
Consignor’s, 454
Law, 447
Lien against, 450
Consignor,
Defined, 447
Inventory by, 454
Consolidation, Partnership, 310-312
Control of Business by Accounting, 38
Controlling Account,
Accounts payable, 269, 561
Summary, 276
Accounts receivable summary, 276, 561
Advantage of, 264
Cash journal summary, 280
Forms, 281
Credits, 268
Customers or accounts receivable, 265
Debits, 266
Defined, 264
Equilibrium of ledger changed by, 265
Errors, 483
Introduction of, into a system, 272
Journal summaries, 276-280
Forms, 279, 282
Note journal summary, 277
Posting, 270
Purchase journal summary, 276
Sales journal summary, 273, 278
Form, 279
Subsidiary ledger accounts, 282
Summaries, 265, 273-280
Forms, 278, 282
Withdrawals of stock-in-trade, 273
Corporations,
Accounting,
Closing books, 359-365
Current records, 351
Opening entries, 340-344
Advantages, 331
Bonds, 355-357
Books, 337
Minute book, 337
Stock certificate book and ledger, 337
Stock transfer book, 337
Subscription book and ledger, 336
Capital Stock,
Account, 338
Common, 338
No-par value, 339
Preferred, 338
Certificate of incorporation or charter, 332
Closing of books, 359-365
Control by stockholders, 359
Defined, 330
Directors, 334
Disadvantages, 331
Dividends, 339
Growth of, 330
Incorporation, 332
Liability of stockholders, 351
Officers, 335
Opening entries, 340-344
Organization, 18, 331-336
Organization expense,
Entries for, 340, 343
Partnership changed to, 348-350
Proprietorship, 335, 338
Balance sheet, 20
Surplus account, 338
Treasury stock, 352
Accounting, 353
Corrections, How Made in Books, 243
Cost of Goods Sold,
Analysis of, 436
Determining, 40-43, 117
Ledger adjustments, 117
Listed on statement of profit and loss, 50
Cost Value, 404
Credit (See also “Debit and Credit”)
Cash discount for goods sold on, 395
Returned goods as, 188
Current Assets (See “Assets”)
Current Liabilities (See “Liabilities”)
Customers’ Accounts,
Accounts receivable as, 264
Controlling account, 264
Debit and credit, 86, 266-269
Ledger, 265
Proving, 269
Cycle of Operations, 25
D
Data, Ledger, 132-135
Date Draft, 180
Date Due, Average, 486
Date of Value, 469
Debit and Credit, 78
Accounts receivable, 85
Allowances granted to customers, 87
Asset account, 85-90
Cash disbursements journal, 148
Cash receipts journal, 147
Controlling account, 266-269
Customers’ accounts, 86, 266-269
Discount, 87
Fixed asset accounts, 88
Illustrations determining, 82-84
Journal entry, 134
Liability account, 85-90
Merchandise account, 87, 99
Mixed account, 97-105
Notes, 384
Notes payable account, 89
Posting from journals, 200
Principle of, 81
Proprietorship accounts, 91-96
Schedule, 82
Single entry bookkeeping, 498
Use of, 81
Work sheet adjustments, 221-230
Debts (See also “Bad Debts”)
Listed on balance sheet, 25
Deferred Charges,
Adjustment of entries, 241
Asset, 12
Balance sheet items, 27
Estimates of, 126
Single-entry bookkeeping, 500
Valuation, 408, 413
Deficit, Partnership Distribution, 318
“Del Credere” Agency, 452
Delivery,
Goods for future, 432
Accounting for sales at, 441
Goods ready for, 432
Delivery Equipment, Asset, 13
Demurrage Cost, 550, 569
Department Stores,
Approval sales, 442-444
Charge system, 444
Sales, 442
Departments, Business, 2
Depletion, 413
Depreciation,
Account,
Fixed assets, 102, 123
Reserves, 103, 123
Adjustment of entries, 240
Assets not subject to, valuation, 413
Assets subject to, valuation, 414
Calculation of, 414
Expense item, 47
Directors, Corporate, 334
Discount,
Bank,
Calculation of, 492
Defined, 392
Cash,
Form, 400
Accounting, 156, 396-402
Defined, 392, 537
Elements, 395
Entries, 398
Handling of, 156, 396-402
Trade acceptance and, 402
Cash journal entries, 155
Commercial defined, 392
Debit and credit of, 87
Defined, 392
Expense item, 47
Income from, 46
Note,
Face value, 215, 382
Loan through, 195
Notes receivable, 384-387
Trade,
Defined, 392
Methods, 393-395
Not recorded, 393
Discount and Premium,
Bonds, 355, 356
Capital stock, balance sheet item, 345
Capital stock sold at, entries for, 343
Dissolution, Partnership, 321-329
(See also “Partnership”)
Dividends, 339
Declaration of, 359
Liquidating, 567
Paid out of profits, 360
Doubtful Accounts,
Adjustment of entries for, 240
Estimate of, 124
Handling of, 125
Reserve for, handling, 410
Valuation, 410
Draft,
Accepted discounted, 384-387
Bank, 180
C. O. D. shipment, 190
Commercial, 180
Compared with cash payments, 178
Date, 180
Defined, 175
Domestic, 180
Foreign, 180
Handling of, 176-179
Kinds of, 179
Sight, 179
Time, 180
E
Economics,
Relation to accounting, 6
Employment Department, 3
Entries,
Accounts current, 469
Adjustment, 237-244
Basis of, 116
Illustration, 245
Merchandise records, 115-123
Necessity of, 115
Capital stock, 340-348
Cash discount, 155, 398
Cash receipts journal, 147
Closing, 116, 221-250 (See also “Closing Entries”)
Illustration, 247
Consignments, 452-459
Corrections, 243
Cross-indexing for posting, 201
Form, 202
Draft, 177
Journal, 133
Adjusting, 167-172
Closing, 167-172, 359-365
Opening, 165, 340-344
Memorandum, 340, 341
Note journals, 379-383
Opening,
Corporate, 340-344
Single system, 504-511
Purchase journal, 139-144
Sales journal, 144-146
Single, 495-512
Equating Accounts (See “Averaging of Accounts”)
Equation,
Balance sheet, 74-76
Ledger account, 74-76
Proprietorship, 8-10, 74
Errors,
Cash short and over, 151
Columnar books and controlling accounts, 483
Corrected when discovered, 237
Posting, 200, 481
Transplacements, 211
Transposition of numbers, 209
Trial balance, 205-212
Estimates
(See also “Appraisal,” “Inventories,” “Valuation”)
Depreciation reserve, 103
Doubtful accounts, 124
Prepaid and accrued expenses and income, 126
Expenditures,
Capital, 104
From petty cash fund, 367
Revenue, 104
Writing off, 407
Expense Account,
Bad debts, 125
Chart, 219
Debit and credit to, 92-94
Proprietorship, 92
Treated as purchases, 254
Expense Bill,
Freight, 189
Expense Invoice,
Entry and posting, 254
Expenses,
Accrued,
Adjustment of entries, 242
Balance sheet items, 27
Estimates of, 126
Liability, 14
Advertising, 47
Bad debts, 47
Classification of items, 58
Deferred,
Adjustment of entries, 241
Estimates handling of, 126
Depreciation, 47
Discounts, 47
Incurred and unpaid,
Handled as purchases, 254
Kinds of, 46
Liquidating, 324
Maintenance and repairs, 47
Non-operating, 46
Listed on statement of profit and loss, 52
Operating, 46, 94
Chart of accounts, 219
List on statement of profit and loss, 51
Organization, entries for, 340
Prepaid, handling estimates of, 126
Purchasing, 47
Rent, 47
Salaries, 46
Traveling, 46
Unpaid (See above under “Accrued”)
Express Money Orders, 182
F
Face Value,
Notes, 215, 382
Factor,
Accounting, 448-459
Collecting of accounts by, 452
Compensation of, 452
Defined, 448
Duties, 449
Expenses, 450
Lien on consigned goods, 450
Fees,
Income from, 46
Finance, 3
Purchasing and, 421
Financial Statements (See also “Balance Sheet”)
Fiscal period for making, 48
Periodic, value of, 230, 236
Summary of results, 214
Fiscal Period,
Accounts at end of, 214
Financial statements, 48
Fixed Assets (See “Assets, Fixed”)
Fixed Liabilities (See “Liabilities, Fixed”)
Fixtures,
Asset, 13
Fool-proof Balance, 477
Freight Bill, 189
Freight Claims, 560
Freight Charges, 565
Apportioning, 493
Freight Notice, 189
Funds (See “Sinking Funds”)
Furniture,
Asset, 13
Future Delivery,
Accounting for goods sold at, 441
Inventory of goods sold at, 432
G
Good-Will,
Dissolution of partnership, 328
Valuation, 418
Goods (See “Merchandise”)
Gross Profit,
Listed on statement of profit and loss, 50
H
Horizontal Rulings, 434
I
Income,
Account, proprietorship, 92
Accrued,
Adjustment of entries, 241
Single-entry bookkeeping, 500
Valuation, 413
Classification of items, 58
Deferred,
Adjustment of entries, 243
Defined, 44
Estimates of, handling, 126
Kinds of, 44
Non-operating, 45
Listed on statement of profit and loss, 52
Operating, 44
Sources of,
Commissions, 46
Discounts, 46
Fees, 46
Interest, 46, 127
Rentals, 46, 127
Sales, 45, 61
Incorporation (See “Organization”)
Indexing,
Posting, 201, 552
Form, 202
Work sheet entries, 224
Indorsement,
Negotiable instruments, 183
Ink,
Use of red, 108
Instalments,
Accounting, 439-441
Capital stock subscriptions,
Entries for, 345
Contracts, 439
Distribution of proceeds by, during liquidation, 327
Sales on, 439-441
Insurance,
Paid and deferred expenses, 126
Interest,
Account, 128, 129, 383
Average due date, 486
Averaging of accounts, 486-490
Cash balance, 490
Compound equation, 489
100% method, 488
Balance sheet item, 26
Bank balances, 491
Bank discount, 492
Calculation, 195-198
Compound, 485
Cost, separate account for, 129
Date of value basis, 469
During construction period,
Charged to assets, 407
Expense item, 47
Income from, 46, 127
Nature of, 485
On accounts current, 468, 469
On bonds, payment of, 356
On notes, 382
On partial payments, 491
On partners’ investment, 294, 297-300, 316
Partners’ loan, 317
Rate on partnership investment, 314
Simple, 485
Internal Check, 373
Interstate Commerce Commission,
Bill of lading, 188
Inventories (See also “Estimates”)
Consignee’s, 456
Consignor’s, 454
Entries,
Adjustment, 238
Transferred to purchase account, 239
Goods for future delivery, 432
Goods in or out on consignment, 431
Goods in transit, 430
Goods ready for current delivery, 432
Goods received but not yet booked, 431
Mark-on, 425
Methods, 424
Perpetual formula, 424
Records for, 48
Retail system, 424
Single-entry bookkeeping, 500
Stock control card, 429
Form, 430
Valuation, 411
Methods, 239
Investments, 550, 558
Asset, 12
Balance sheet items, 26
Partners’ interest on, 294, 298
Valuation, 294
Invoice,
Charge and cash sales, 187
Credit for returned goods, 188
Defined, 185
Expense, 254
Purchase, 186
Purchasing procedure, 422
Sales, 187
Charge account, 444
Statement of account, 190
J
Joint Venture, 460-467
Joint-Stock Company, 288
Journal,
Form, 135
Analysis in, depends upon classification in ledger, 434
Analytic, 163, 251, 256
Form, 164
Cash, 138, 147-161 (See also “Cash Journal”)
Closing, 163
Columnar records, 163, 251, 278
Form, 279
Defined, 133
Entries,
Adjustment, 167-172, 237
Capital stock, 338-348
Cash discount, 398
Form, 400
Closing, 167-172
Debit and credit, 134
Opening, 165
Explanations, 163
Nature of, 133, 162
Note, 111, 255
Form, 113
Opening entries, 165, 340-344
Posting from, 163, 199-203 (see “Ledger, Posting”)
Purchase, 138, 139-144 (See also “Purchase Journals”)
Rulings, 251-257
Sales, 138, 144-146 (See also “Sales Journal”)
Single-entry bookkeeping, 496
Special, 137
Subdivisions, 136-138
Subsidiary, 138, 144-146, 200, 251
Summary entries,
Form, 279
Columnar books, 278
Use of, 162
L
Land Asset, 13
Law,
Principal and agent, 447
Relation of accountancy to, 7
Ledger,
Accounts,
Form, 70, 112, 113
Accounts payable, 269
Accounts receivable, 265
Arrangement of, 220
Classification, 213-220
(See also “Classification of Accounts”)
Construction of, 74
Controlling, 264-271
Customers’, 265-271
Defined, 68
Equation of, 74-76
Subdivision, 257
“T” account, 528
Adjustment of current entries, 115-131
Analysis, 257, 477-484
Analysis sheet, 479
Form, 480
Balancing, 107-110, 477-484
Bindings, 263
Capital stock subscription, 336
Card, 263
Cash account, cash book replaces, 150
Changes in assets and liabilities recorded, 77
Closing, 129-131
Cost of goods sold, 117
Data, sources of, 132-135
Defined, 67
Entries, 111
Adjustment of, 237
Loose-leaf, 263
Open account, 204
Periodic work on, 106-131
Posting, 133, 199-203, 560
Form, 202
Cash journal, 150, 200
Check figures, 482
Controlling account, 266, 270
Cross-indexing, 201, 552
Errors in, 200
Expense invoices, 254
Explanatory matter, 203
Profit and loss account, 249
Proof by slip or reverse method, 481
Proof, in single-entry bookkeeping, 499
Purchase journal, 143, 200
Sales journal, 145, 200
Time for, 199
Profit and loss account, 129
Record,
Insufficiency of, 132
Original or first, 132
Trial balance usage, 204
Rulings, 108, 111, 261
Form, 258-260, 262
Sales account,
Posting, 160
Rulings, 434
Single-entry bookkeeping, 497
Subsidiary, 257
For controlling accounts, 283
Self-balancing of, 271
Trial balance, 106 (See also “Trial Balance”)
Transferring accounts, 110
Form, 112
True financial condition reflected after adjusting entries, 244
Liabilities (See also “Assets and Liabilities”)
Accounts, 213, 214
Balance of account, 73
Chart, 218
Debit and credit, 85-90
Classified, 14
Comparison, 34
Contingent, transfer of note, 384
Current,
Balance sheet items, 26
Ratio of, to current assets, 27
Decrease covered by debit entry, 82
Described, 14
Fixed defined, 28
Increase covered by credit entry, 82
Note discounted as, 215
Valuation, 29, 419
Lien,
Factor’s on consigned goods, 450
Liquidation,
Partnership, 321-329 (See also “Partnership, Dissolution”)
Value, 404
Liquidator, 324
Loans,
Accounts, partners’, 302
Bank, 195
Borrowed capital, 303
Capital accretions as, 302
Partners, 302, 317
Long-Term Liabilities (See “Liabilities, Fixed”)
Loose-Leaf Ledger, 263
Losses,
Distributing a deficit, 318
Distribution of in partnership dissolution, 325
M
Maintenance Expense Item, 47, 405
Mark Down, 425
Mark-On, 425
Mark-Up, 425
Marketing, 3
Memorandum Entry, 340, 341
Merchandise,
Account,
Adjustments, 115, 123
Analysis of, 100, 117
Assets subject to depreciation, 102
Content and significance, 87
Debit and credit, 87, 99
Mixed, 97-105
Summarization, 117-123
Adjustment of inventory entries, 238
Asset, 12
Average stock to be carried, 426
Cash paid for, determination of, 61
Control, 424, 426
Goods for future delivery, 432
Goods in or out on consignment, 431
Goods in transit, 430
Goods ready for current delivery, 432
Goods received but not yet booked, 431
On hand, balance sheet item, 26
Stock control card, 429
Form, 430
Valuation, 411
Withdrawal, entered in sales journal, 273
Merchandise Trading Account, 364
Mining Partnership, 289
Minute Book, 337
Mixed Accounts, 97-105, 215
Adjustment of, 237
Money (See “Cash”)
Money Orders, 182
Mortgages, Payable, Liability, 14
N
Name of Firm,
On balance sheet, 24
On statement of profit and loss, 49
Negotiable Instruments, 173-184 (See also “Notes Payable”, “Notes Receivable”)
Checks, 181
Draft, 175-181
Indorsements, 183
Kinds, 175
Money orders, 182
Trade acceptance, 181
Uses and requisites, 174
Warehouse receipts, 182
Writing of, 183
Net Profit,
Determination of, 55
Under single-entry system, 511
Distribution of, 53
Net Worth (See also “Proprietorship”)
Balance sheet expansion, 40
Comparison, 32, 40
Shown under single-entry system, 500
Nominal Account, 216
No-Par-Value Stock, 339
Entries for, 347
Note Journals, 111, 255, 379
Form, 113, 380
Entries, 379-383
Summary, under controlling account system, 277
Notes,
Accounting of, 379-391
Contingent liability incurred by, 384
Discounting, 384-387
Face value, 215, 382
Loan through, 195
Dishonored, 387-390
Face value, always entered at, 382
History of, 376
Interest on, 382
Liquidity of, 378
Relation of open account to, 377
Renewal, 390
Notes Payable,
Account,
Form, 113
Debit and credit, 89
Posting, 203
Rulings and entries, 111
Credits record, 384
Defined, 377
Liability, 14
Partner’s, 302
Notes Receivable,
Accepted draft, entries, 177
Account,
Debit and credit, 85
Posting, 203
Rulings and entries, 111
As collateral, 390
Asset, 11
Balance sheet item, 26
Classification of, 390
Credits record, 384
Defined, 377
Discounted, 384-387
Dishonored, 387-390
Partial payments, 390
Use of, 173
Valuation, 409
O
Obsolescence, 414
Officers, Corporate, 335
Offset Account, Defined, 103
100% Method, Averaging Accounts, 488
Open Account, 204 (See also “Accounts, Current”)
Liquidity of, 378
Relation of note to, 377
Open-to-Buy Estimate, 427
Opening,
Corporate books, 338-350
Entries under single-entry system, 504-511
Journal entries, 165
Orders, Purchase, 422
Organization, 2
Corporation, 17
Expenses,
Entries for, 340
Sale of stock charged to account, 343
Writing off, 406
Partnership, 17
Single proprietorship, 16
Types of, 16
P
Parcels Post, C. O. D. Shipments, 190
Partial Payments, Interest on, 491
Partners,
Compensation out of net profit, 313
Deceased, 323
Liability, 284, 287
Loans, 302, 317
New, admission of, 295, 305-310, 320
Nominal, 289
Notes payable, 302
Ostensible, 289
Profits, closing of, 318
Salaries, 316
Secret, 289
Silent, 289
Withdrawing, 319
Liability of, 321
Partnership, 17
Accounts current, 469
Bankrupt, dissolution of, 322
Capital,
Accretions through profit, 301
Adjustments of, 297-300
Averaging investments, 292, 301
Interest on partners’, 294, 297-300, 316
Interest rate on, 314
Investment, original, 294, 550, 558
Valuation of original investment, 294, 550, 558
Capitalization, 297-304
Consolidation, 310-312
Defined, 284
Dissolution, 321-329
By liquidation, 323
By mutual consent, 322
Causes of, 321
Deceased partner, 323
Distribution by instalments, 327
Distribution of losses, 325-327
Distribution of proceeds, 324
Good-will, treatment of, 328
Liquidation expenses, 324
Methods of, 323
On account of war, 322
Problems of, 322
Withdrawal of partner to admit new, 321
Illegal, dissolution of, 322
Incorporation, 348-350
Interest of new partner, 295
Joint adventure accounts, 460-467
Limited, dissolution of, 322
Liquidation (See above under “Dissolution”)
Loans,
Distinguished from capital, 302, 317
Interest on, 317
Mining, 289
New partners, methods of admitting, 295, 305-310
Organization,
Characteristics of, 285
Classification of, 287
Contract, 286
Joint-stock company, 288
Nature of, 284
Partner’s loans accounts, 302, 316
Profit and loss account, 314-316
Profit-sharing, 290-294
Closing to partners’ accounts, 318
Distributing a deficit, 318
Interest on partners’ investment, 294
Investment average as a basis for, 292
Principles governing, 290
Ratio, 292, 301
Profits, 290-294, 313-320
Defined, 314
Determination upon admitting new partner, 320
Net, 314
Reserved, 317
Proprietorship, balance sheet, 20
Sale or transfer of, 322
Special, 287
Profit-sharing basis, 292
Personal Account,
Changes in, 93
Posting, 203
Rulings and entries, 111
Form, 113
Personnel Department, 3
Petty Cash,
Account,
Handling of, 367
Vouchers, 367
Book, 368
Form, 369
P. M.’s, 446
Postage, Expense Item, 47
Postal Money Orders, 182
Postal Service, C. O. D. Shipments, 190
Posting (See “Ledger,” “Journal”)
Preferred Stock, 338
Dividends, 339
Entries, 346
Premium (See “Discount and Premium”)
Principal and Agent, 447
Production, 3
Profit (See also “Gross Profit,” “Net Profit”)
As reserves, 360
Capital accretions through, 301
Corporate, handling of, 360
Defined, 313
Determined by single-entry system, 501
Dividends declared before distribution, 359
Dividends paid out of, 360
Net, 314
Net operating, 52
Partnership, 290-294, 313-320
Closing to partners’ account, 318
Defined, 314
Determination upon admitting new partner, 320
Distributing deficit, 318
Reserved profit, 317
Reserved, 317
Surplus, retained in the business, 301
Undivided, defined, 16
Profit and Loss (See also “Statement of Profit and Loss”)
Account,
Appropriation section, 318
Closing, 249
Closing profits to partners’ accounts, 318
Consignments, 453
Opening, 129
Partnership, 314-316
Posting, 203
Transfer of reserve profit, 317
Determination, 38-56
Liquidating partnership, 324-327
Relation to financial element, 57
Summary, 44-56
Profit-Sharing,
Average investment as a basis for, 292
Partnership, 290-294
Ratio, 292, 301
Promissory Notes
(See “Draft,” “Negotiable Instruments,” “Notes,”
“Notes Payable,” “Notes Receivable”)
Proof,
Postings, 481
Single-entry bookkeeping, 499
Property Asset, 13
Proportion, 492-494
Proprietorship (See also “Net Worth”)
Accounts, 213, 214
Capital account, 93
Chart, 218
Debit and credit, 91-96
Defined, 91
Expense, 92-94
Income, 92
Ledger adjustments, 129
Personal account, 93
Single-entry bookkeeping, 498
Temporary, 129, 214
Vested, 93, 214
Balance sheet, 8-10, 19, 40-43
Corporations, 335, 338
Double-entry bookkeeping, 78
Equation, 8-10, 74
Kinds of, 15
Single, 16
Temporary records, 40, 42, 57
Valuation, 419
Purchase Account,
Adjustment of, 239
Transfer of inventory to, 239
Purchase Discount, 395
Purchase Invoice, 186
Purchase Journal, 138, 139-144
Analytic, 253
Expenses handled through, 254
Posting from, 143, 200
Summary, under controlling account system, 273
Purchases,
Analysis of, 436
Buying,
Average stock to be carried, 426
Buying quota, 427
Control methods, 426
Department, 421
Estimates, 426
“Open-to-buy,” 427
Financing, 421
Function, of buying, 420
Orders, 422
Policies, 426
Procedure, 422
Records, use of, 426
Requisition, 421
Returned, 436
Stock control card, 429
Form, 430
Successful buying, elements of, 423
Cash disbursements, journal, 152, 154
Cash paid for, 61
Expense item, 47
Transaction, analysis of, 139
Purchasing Agent, 422
R
Ratio,
Accounts receivable to sales, 65
Balance sheet and profit and loss statement, 64
Profit-sharing of special partnership, 292
Proportion, 492
Turnover, 64
Real Account, 216
Receipts and Disbursements, Statement of, 375
Reconciliation of Bank Balance, 472-476
Records,
Functions, 1
Kinds of, 39
Renewals, 405, 416
Rent,
Expense item, 47
Income from, 46
Paid and deferred, 127
Repairs,
Expense item, 47
Valuation, 405, 416
Replacements,
Defined, 405
Valuation, 416
Requisitions, Purchases, 422
Reserve,
Account,
Depreciation, 103, 123
Doubtful accounts, 125
Created from profits distinguished from
valuation accounts, 318
Defined, 16
Depreciation, 103, 123
Doubtful accounts, handling, 410
Out of profits, 360
Reserve profits, 317
Sinking fund, 358
Retail Trade, Inventory System, 424
Returned Goods, 45
Analysis of, in sales, 435
Crediting of, 188
Debit and credit of, 87
Journal, 253
Purchases, 436
Revenue Expenditures, 104
Reverse Posting, 481
Rulings,
Balancing an account, 108
Cash book, 151
Cash journal, 157-160
Form, 158, 159
Horizontal and vertical, 434
Journals, 251-257
Ledger, 261
Forms, 258-260, 262
Note accounts, 111
Form, 113
Personal Account, 111
Form, 113
S
Safeguards, 373
Salaries,
Expenses, 46
Partners, 316
Sale Value, 404
Sales,
Account posting from journal, 160
Analysis, 98, 434
Allowances, 435
Cash sales, 436
Consignments, 438
Instalment sales, 439
Returned goods, 435
Sales to branches, 437
Use of ticket in, 435
Approval, 442-444
Branches, 437
Cash,
Handling of, 436
Receipts journal, 152, 154
Charge accounts, handling of, 437
Classification, 433
C. O. D., 442
Consignment, 438, 447-459
(See also “Consignment”)
Department, 433
Department stores, 441
Discount, 155, 395
Income from, 45, 61
Future delivery, 441
Instalment, 439-441
Quota, 424, 427
Ratio of, to accounts receivable, 65
Returned goods, analysis, 435, 560
Ticket (See also “Invoice”)
Charge and cash sales, 187, 444
Use of, in analysis, 435
Sales Journal, 138, 144-146
Columnar analysis, 160, 252
Methods of recording, 252
Posting from, 145, 200
To customers’ accounts, 266
Returns and allowance journal, 253
Rulings, 434
Summary,
Form, 279
Under controlling account system, 273, 278
Withdrawal of stock-in-trade, entered in, 273
Sales Ledger, Rulings, 434
Sales Price, Trade Discount, 392, 393-395
Salesmen,
Commission, 445
Records, 446
Schedules,
Balance sheet, 577
Profit and loss, 589
Cost of goods sold, 590
Securities, Valuation, 412
Self-Balancing Ledger, 270
Shipment of Goods,
Bill of lading, 188
C. O. D., 189
Freight notice, 189
Freight or expense bill, 189
Traffic department, 190
Sight Draft, 179
Simple Interest, 485
Single-Entry Bookkeeping, 495-512
(See also “Bookkeeping”)
Single Venture, 460
Sinking Funds, Accounting, 357
Slip or Reverse Posting System, 481
Solvency, How Judged, 27
“Spifs,” 446
Statement, Financial (See “Balance Sheet”)
Statement of Account, 190
Statement of Profit and Loss, 41, 44-56, 589
Forms, 49, 231, 234
Arrangement, 50
Operating expense section, 51
Trading section, 50
Confusion of items, 58
Content, 50
Equation, 52
Interrelation of, and comparative balance sheet, 60-64
Not a part of books, 230
Preliminary to closing entries, 221
Ratio of items, 64
Single-entry bookkeeping, 499
Title, 49
When drawn up, 229
Statement of Receipts and Disbursements, 375
Stationery, Expense Item, 47
Stock (See “Capital Stock”)
Stockholders,
Control by, 359
Liability of, 351
Stock-in-Trade (See “Inventories,” “Merchandise”)
Subscription Book, Capital Stock, 336
Subscription Ledger, Capital Stock, 336
Summarization (See also “Adjustments,” “Closing”)
Accounts receivable and payable,
Under controlling account system, 276
Book entries, 244-250
Cash journal,
Form, 281
Under controlling account system, 280
Columnar books, 278
Form, 279
Merchandise records, 117-123
Note journals,
Under controlling account system, 277
Preliminary to closing books, 221
Purchase Journal,
Under controlling account system, 273
Purpose of, 214, 244
Sales Journal,
Form, 279
Under controlling accounts system, 273, 278
Work sheet for, 221
Surplus,
Account, 338
Defined, 16
Donated (treasury stock), 352-355
T
Telephone and Telegraph, Expense Item, 47
Temporary Proprietorship Records, 40, 42, 57
Terms, 7 (See also “Discount, Cash”)
Tickler File, Approval Sale, 443
Time Draft, 180
Title, Account, 68, 72
Trade Acceptance, 181
Compared to cash discount, 402
Distinguished from notes, 377
Trade Discount,
Defined, 392
Methods, 393-395
Not recorded, 393
Trading Account, 364
Traffic Department, Duties, 190
Transfer of Stock, Book, 337
Transferring an Account, 110
Form, 112
Transplacements, Errors in, 211
Transposition of Numbers, Errors of, 209
Traveling Expenses, 46
Treasury Stock, 352
Accounting, 353
Purchase and sale, 353
Trial Balance, 106
Adjustment account, 483
Arrangement for work sheet, 224
Basis for balance sheet, 221
Classified, 220
Errors, 205-212
“Fool-proof,” 477
Methods, 204-212
Post-closing, 250
Work preliminary to, 107
Turnover,
Rate, 64, 420
U
Unpaid Expenses (See “Expenses, Accrued”)
V
Valuation,
Account defined, 103
Accounts receivable, 409
Assets, 407-419
Subject to cost, 413
Subject to depreciation, 414
Bad debts, 410
Balance sheet, 403-419
Rules, 407-409
Betterments, 416
Bonds, 412
Cash, 409
Current assets, 407
Deferred charges, 408, 413
Doubtful accounts, 410
Fixed assets, 124, 408, 413
Good-will, 418
Income accrued, 413
Liabilities, 419
Merchandise or inventory, 411
Notes receivable, 409
Proprietorship, 419
Repairs and replacements, 416
Securities, 412
Stock, 412
Value,
Cost, 404
Liquidation, 404
Sale, 404
Vertical Rulings, 434
Vested Proprietorship Account, 93
Volume of Business,
Records necessary to show, 39
Voucher System, 254
Vouchers, Petty Cash, 367
W
Wages,
Expenses, 46
Paid and deferred expenses, 127
War,
As a means of dissolving partnership, 322
Warehouse Receipts, 182
Work Sheet, 221-230, 576
Adjustment entries, 223, 224-230
Analysis paper for, 221
Columnar adjustment, 228
Defined, 221
Illustration, 222-224
Indexing, 224
Working Capital,
Defined, 26
Turnover, 65

Accounting theory and practice, Volume 1 (of 3)

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INDEX