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A course in beginning bookkeeping

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A COURSE IN BEGINNING BOOKKEEPING

A P ro ject P re se n te d to the F a c u lty o f th e School of E d u c a tio n The U n i v e r s i t y o f S o u t h e r n C a l i f o r n i a

In P a r tia l F u lfillm en t o f th e R e q u ire m e n ts f o r th e D egree M aster o f S cien ce

in E d u catio n

by W illiam T. K itc h e n Ja n u ary 1950

UMI Number: EP45913

All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion.

UMI D issertation Publishing

UMI EP45913 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code

ProQuest ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 481 06- 1346

cJ

K

Th is pr o je c t report, w rit te n under the direction of the candidate’s ad v ise r a n d a p p r o v e d by him, has been p r es e nt e d to and ac ce p te d by the F ac u lty of the S c h o o l of E du c at io n in p a r ti a l fu lfillme nt of the requirements f o r the degre e of M a s t e r of Science in Ed ucation.

Adviser

D e an

ii TABLE OF CONTENTS CHAPTER

PAGE PART I .

A PERSONAL SERVICE BUSINESS

HOW TO KEEP THE SIMPLEST KIND OF RECORDS 1,

THE BALANCE SHEET;

HOW TO DISCOVER WHAT YOU ARE

WORTH................................................................................................................. A.

MOTIVATION: are

B.

V alu es o f f i n d i n g o u t what you ...................................................

w orth

DIRECTIONS:

S teps

to

fin a n c ia l co n d itio n 1.

ASSETS:

take

• • • • • •

How t o l i s t

LIABILITIES:

2

in d isco v erin g your ..........................

.

............................... How t o l i s t

PROPRIETORSHIP:

BALANCE SHEET:

2

3

How t o f i n d y o u r n e t

w orth or c a p i t a l 4.

2

your o u tstan d in g

deb ts • • • • • • • • * • • • • • • • • • • 3.

.

th e item s of v a lu e

w h i c h y o u own 2.

2

...............................

• • • • • •

3

How t o p r e p a r e a s t a t e m e n t

of the w orth of a s m a ll, p e rs o n a l s e r v ic e b u sin ess 5.

.............................................. • .

SOURCES FOR THIS CHAPTER: fu rth er a ssistan ce

C.

ACTIVITY ASSIGNMENTS: ences

. * .

4

W here t o g e t

.........................................

• • •

5

Some l e a r n i n g e x p e r i ­

to enhance your s k i l l

b a l a n c e s h e e t s .........................

in preparing 5

iii

CHAPTER D.

PAGE EVALUATION:

Some w ays y o u r s k i l l

in prep arin g

b a l a n c e s h e e t s may b e c h e c k e d ......................... 2.

THE LEDGER AND JOURNAL:

7

HOW TO OPEN THE BASIC

BOOKS OF THE B U S I N E S S .....................................................................10 A•

MOTIVATION: A d v a n t a g e s o f

k eeping a led g e r

a n d a j o u r n a l ............................................................................... 10 B«

DIRECTIONS: S t e p s books 1*

............................................................................. .....

JOURNALIZING: sh eet in the

2*

to tak e i n o pening th e

POSTING:

How t o r e c o r d journal

3.

POSTING RE TERENCES:

th e o pening

ACTIVITY ASSIGNMENTS:

• • .

• • • • • • • • • • •

..........................................

3,

EVALUATION: Some w ays y o u r s k i l l

DAILY TRANSACTIONS:

17

L ab o rato ry ex p erien ces in

o p e n i n g t h e r e c o r d s ..............................

b o o k s may b e m e a s u r e d

14

W here t o g e t

t h a t may h e l p y o u i m p r o v e y o u r s k i l l

D.

12

How t o k e e p t r a c k o f

SOURCES FOR THIS CHAPTER: fu rth e r assistan ce

C.

the b a la n ce

jo u r n a l to the le d g e r

what h a s b een p o s te d 4.

10

.....................................................10

How t o t r a n s f e r

e n t r y from the

. .

17 in

o pening

..................................................

18

HOW TO ACCOUNT FOR THE

REGULAR OPERATIONS OF THE B U S I N E S S ................................. 22 A.

MOTIVATION: A d v a n t a g e s

to

re c o rd day -by-day changes

be g a in e d i f you 22

iv

CHAPTER B.

PAGE DIRECTIONS: d a ily 1.

S teps

to

..................................................................

tran sactio n s

JOURNALIZING: i n the

take in a cc o u n tin g f o r

How t o r e c o r d t r a n s a c t i o n s

jo u rn a l subsequent to

en try 2m

the o pening

.............................................................

POSTING:

23

How t o p o s t i t e m s i n t h e l e d g e r

su b seq u e n t to th e opening e n t r y 3.

22

DEBITING AND CREDITING: tran sactio n s

so t h a t

.............................

24

How t o r e c o r d

the l e f t - h a n d

sid e

of your a c c o u n ts w i l l e q u a l the r i g h t h a n d s i d e .................................................................................. 4*

INVESTMENT: in c a p ita l

5*

How t o r e c o r d a n i n c r e a s e i n v e s t e d .......................................................

EQUIPMENT:

7.

on c r e d i t

ACCOUNTS RECEIVABLE: receip t

CASH SALE:

9m

CREDIT SALE:

10,

27

the

• • • • • •

How t o r e c o r d s a l e s f o r c a s h How t o r e c o r d s a l e s

26

the

• • • • • •

How t o r e c o r d

payment o f c a sh to a c r e d i t o r 8*

.

How t o r e c o r d

of c a s h from a d e b to r

ACCOUNTS PAYABLE:

account

26

How t o r e c o r d t h e p u r c h a s e

of fix ed a s s e ts 6.

26

27 «

28

on

.......................................................

CASH EXPENDITURE: expense item

2

How t o r e c o r d a c a s h

..........................

• • • • • • • • •

28

V

CHAPTER

PAGE 11#

CREDIT EXPENDITURE: ex p en d itu re

12.

SOURCES FOR THIS CHAPTER:

your a b i l i t y

the o p e r a tio n s

. . . * • •

29

to p e r f e c t of the

....................................................

. .

30

EVALUATION: Some p o s s i b l e w a y s t o c h e c k y o u r sk ill

4.

• .................................................... P ro jects

to r e c o r d

29

W here t o g e t

ACTIVITY ASSIGNMENTS:

b u sin ess D.

..........................

on a c c o u n t

fu rth e r a ssistan ce C.

How t o r e c o r d a n

in e n te rin g



32

TO CORRECT ERR O R S ..............................................................................

37

THE TRIAL BALANCE:

A.

tran sactio n s

HOW TO PROVE YOUR WORK AND

MOTIVATION: R e w a r d s t h a t may come f r o m h a v ­ in g n e a t and a c c u r a te r e c o r d s

B.

on t h e books

DIRECTIONS: Some s u g g e s t i o n s

• • • • • • • •

37

to g u ide you

i n c o r r e c t i n g m is ta k e s and ta k in g a t r i a l b alan ce 1.

• • • • • • • • • • • • • • • • • • •

JOURNAL VERIFICATION:

How t o p r o v e

n u m erica l a c c u ra c y of the 2.

LEDGER VERIFICATION:

jo urnal

accuracy of your p o stin g 3.

CASH VERIFICATION:

4.

DEBIT AND CREDIT CHECK:

the .

How t o p r o v e

• . .

38

the

. . • • • • • • •

How t o p r o v e

33

the cash .

39 39

How t o p r o v e

th e e q u a l i t y o f th e d e b i t s and c r e d i t s in

the le d g e r

.....................

. . » • • • • • •

40

vi

CHAPTER

PAGE 5.

JOURNAL CORRECTIONS: errors

6.

found i n

the

LEDGER CORRECTIONS:

How t o a d j u s t jo u rn al

........................... 40

How t o a d j u s t e r r o r s

f o u n d i n t h e l e d g e r ...............................................................41 7.

TRIAL BALANCE: balan ce

8.

........................................................................................ 41

TRIAL BALANCE DIFFERENCES: the e r r o r s of b alan ce

9.

How t o p r e p a r e a t r i a l

How t o f i n d

w h en y o u r t r i a l b a l a n c e

is

out

• • • • • • • • • • • • • • • •

TRIAL BALANCE ADJUSTMENTS: correct erro rs

How t o

f o u n d when b a l a n c i n g

the

b o o k s ........................................................ 10.

SOURCES FOR THIS CHAPTER: fu rth e r a ssistan ce

C.

ences

to enhance your s k i l l

EVALUATION: evaluate

In tak in g •

tria l

.........................

...................................

46

HOW TO FIND THE NET PROFIT

OR L O S S ........................................................................................................... MOTIVATION: fin d in g

45

th e n e a t n e s s and a c c u r a c y o f y o u r

FINANCIAL STATEMENTS:

A.

45

S a m p l e s o f ways i n w h i c h y o u may

work 5.

W h ere t o g e t

Some l e a r n i n g e x p e r i ­

b a l a n c e s and f i n d i n g e r r o r s D.

44

• • • • • • • • • • • .

ACTIVITY ASSIGNMENTS:

42

B en efits

49

t h a t a c c ru e from

the n e t r e s u l t s

of o p e ratio n s

• • • • •

49

v il CHAPTER B.

PAGE DIRECTIONS:

Steps

to take

changed f i n a n c i a l s t a t u s 1.

WORK SHEET: an aly sis

2.

to r e c o r d

the

of the b u s in e s s

• • •

49

How t o make a w o r k i n g

of the

records

BALANCE SHEET:

• •* • ...........................

49

How t o p r e p a r e a s t a t e ­

ment o f th e f i n a n c i a l c o n d i t i o n from th e work s h e e t 3.

• • • • • • • ................................

PROFIT AND LOSS STATEMENT : pare a statem en t

How t o p r e ­

o f income and e x p e n s e

fro m th e work s h e e t 4.

• • • • • • • • • • •

SOURCES FOR THIS CHAPTER:

ACTIVITY ASSIGNMENTS:

55

W h ere t o g e t

f u r t h e r a s s i s t a n c e ............................................... C.

52

.

.

57

L a b o r a t o r y work i n

p r e p a r i n g work s h e e t s and f i n a n c i a l s t a t e ­ m ents D.

• • • • • • • • • • • • • •

EVALUATION: to f in d

6,

or l o s s and p re p a re

................................................................

THE CLOSING PROCESS:

• • • .

MOTIVATION:

A dvantages

from p r o p e r l y c lo s in g B.

DIRECTIONS: process

Steps



60

HOW TO PREPARE THE BOOKS

TO RECEIVE THE ENTRIES OF THE NEXT PERIOD A.

59

Some w ays t o c h e c k y o u r a b i l i t y

the p r o f i t

statem en ts

..............................

. . . .

64

. . . • • •

64

th a t w ill accrue

the re c o rd s

to tak e i n th e c lo s in g

.....................................• • • • • .........................

64

v iii CHAPTER

PAGE 1.

PROPRIETORSHIP:

How t o c l o s e

t h e incom e

and expense a c c o u n t s 2•



PROFIT AND LOSS SUMMARY: fer

the n e t p r o f i t

3*

CLOSING ACCOUNTS:

How t o t r a n s ­

or lo ss

p ro p rie to rsh ip account

to the

• • • • • • • • • •

How t o r u l e

BALANCING ACCOUNTS:

RULING RECEIVABLES:

67

How t o b a l a n c e a n d

r u l e a c c o u n ts w hich a r e 5.

65

accounts

w h i c h h a v e b e e n c l o s e d .............................. 4•

64

to rem a in open • •

67

How t o s i m p l i f y t h e

f o o t i n g and r u l i n g o f c u sto m e rs * and cred ito rs* 6•

accounts

• • • • • • • • • • •

POST-CLOSING TRIAL BALANCE:

How t o make

a p r o o f o f t h e c l o s i n g p r o c e s s ......................... 7.

SOURCES FOR THIS CHAPTER: fu rth er a ssistan ce

C.

ACTIVITY ASSIGNMENTS:

EVALUATION:

70

in c lo sin g

t h e r e c o r d s ........................................ D*

69

Where t o g e t

.......................................... « « • P ro jects

69

Some w ays i n w h i c h y o u r s k i l l

70 in

p e r f o r m i n g t h e c l o s i n g p r o c e s s may b e m easured

• » • • • • • • • • • • • • • • • • •

71

ix CHAPTER

PAGE PART I I .

A SMALL MERCANTILE BUSINESS

HOW TO KEEP BOOKS WITH SPECIAL JOURNALS 7.

THE PURCHASES JOURNAL:

HOW TO KEEP A SPECIAL

RECORD OF MERCHANDISE PURCHASED ON ACCOUNT. . . . A.

MOTIVATION: A d v a n t a g e s o f r e c o r d i n g y o u r purchases

B.

76

in a sep arate

DIRECTIONS: S t e p s

journal

PURCHASE INVOICE: receip t

2.

in v o ices 3.

• • • • • • .

How t o v e r i f y

the

in the p u rc h a se s

ACCOUNTS PAYABLE LEDGER:

POSTING AND CLOSING: ru le

the p u rc h a se s

the t o t a l 5.

jo u rn al

• • • •

7.

t h e g e n e r a l l e d g e r .........

jo u rn al

78

j o u r n a l and t r a n s f e r

• •

SIMPLIFIED ACCOUNTING:

80

How t o

How t o make c o r r e c t i o n s

purchases

.

How t o t o t a l a n d

the acco un ts p ayable le d g e r

ERRORS:

77

How t o k e e p

ABSTRACT OP ACCOUNTS PAYABLE: prove

6.

to

76

How t o r e c o r d p u r c h a s e

s u b s id ia r y le d g e r accounts f o r c r e d i t o r s 4.

76

..............................................

of m erchandise

JOURNALIZING:

76

to tak e in a c c o u n tin g f o r

m e r c h a n d is e p u r c h a s e d on c r e d i t 1.

....................................

• • • •

82

i n the • • • • •

86

How t o u s e p u r ­

chase In v o ic e s as a p u rch a se s

jo u rn al

• •

86

X

CHAPTER

PAGE 8.

SOURCES FOR THIS CHAPTER: fu rth er assistan ce

C.

ACTIVITY ASSIGNMENTS:

Where t o g e t

...............................................

• •

L a b o ra to ry perform ances

to h e lp you to d e v elo p s k i l l

in acco u n tin g

f o r m e r c h a n d i s e p u r c h a s e d o n a c c o u n t ..................... D*

an accou nts p ayable le d g e r THE SALES JOURNAL:

j o u r n a l and

• • • • • • • • • •

94

MOTIVATION: A d v a n t a g e s o f r e c o r d i n g y o u r sales

B.

90

HOW TO KEEP A SPECIAL RECORD

OF MERCHANDISE SOLD ON ACCOUNT............................................... A,

88

EVALUATION: Some w a y s i n w h i c h y o u may c h e c k your a b i l i t y to keep a p u rc h a se s



88

in a separate

DIRECTIONS: S t e p s

j o u r n a l .......................................... to

take in a c c o u n tin g fo r

m e r c h a n d i s e s o l d o n a c c o u n t .......................................... 1*

SALES S L I P S : m erchandise

2*

in the s a l e s 3.

How t o v e r i f y

the sa le

jo u rn al

• • • • • • • • • • »

ACCOUNTS RECEIVABLE LEDGER:

POSTING AND CLOSING: ru le to ta l

5.

94

How t o r e c o r d s a l e s s l i p s

the s a le s

How t o

• • • •

97

t o t a l and

jo u r n a l and t r a n s f e r

the

t o t h e g e n e r a l l e d g e r ..............................

ABSTRACT OF ACCOUNTS RECEIVABLE: prove the a cc o u n ts r e c e i v a b le

95

How t o k e e p

s u b s id i a r y a c c o u n ts f o r custom ers 4.

94

of

• • • • • • • • • • « • • • •

JOURNALIZING:

94

98

How t o

ledger

• • •

100

xi CHAPTER

PAGE 6*

ERRORS: sales

7.

SIMPLIFIED ACCOUNTING: as a s a le s

the

How

journal

to u se s a le s • • • • « • •

ACTIVITY ASSIGNMENTS:

.....................

EVALUATION:

in

to keep a s a l e s

and an a c c o u n ts r e c e i v a b l e le d g e r THE CASH JOURNALS:

A,

1.

• • • • • •

10 7

c a s h ......................................................................................

108

S teps

in separate

jo u rn als

• .

to take i n a c c o u n tin g

CASH RECEIPTS JOURNAL:

How

CASH PAYMENTS J0URI4AL:

How

s p e c ia l re c o rd of cash p aid 3*

107

A dvantages o f r e c o r d i n g you r

to keep a

sp e c ia l reco rd of cash receiv ed 2.

103



DIRECTIONS: for

journal

T R A N S A C T I O N S .......................................

MOTIVATION:

1 01

HOW TO KEEP SPECIAL RECORDS

cash tra n s a c tio n s B.



Some w a y s i n w h i c h y o u may

check your a b i l i t y

OF CASH

10 1

L ab o rato ry p e r f o r ­

a c c o u n t i n g f o r m e rc h a n d is e s o l d on a c c o u n t

9.

10 0

. . . . . .

mances to h e l p you t o d e v e lo p s k i l l

D*

100

SOURCES FOR THIS CHAPTER: W h ere t o g e t fu rth e r a ssistan ce

C.

in

j o u r n a l ...................................................................

tic k ets 8.

How t o make c o r r e c t i o n s

CHECKBOOK: How t o p r e p a r e

.....................

108

to keep a • • • • • • •

111

checks and

keep a r e c o r d o f checks i s s u e d and bank b alan ces

• « • • • • • • • • • • • • • •

114

x ii

CHAPTER

PAGE 4.

DEPOSITS:

How t o p r e p a r e a n d r e c o r d

b a n k d e p o s i t s l i p s ........................................ 5*

CASH ON HAND:

How t o p r o v e

11 6

th e c a s h on

h a n d ................................................................................................... 117 6*

7.

CASH I N BANK:

How t o r e c o n c i l e

statem en t

......................................................................... 117

.

CASH DIFFERENCES:

th e bank

How t o r e c o r d u n l o c a t e d

c a s h o v e r a g e s a n d s h o r t a g e s ......................... • • 8.

SOURCES FOR THIS CHAPTER: fu rth er a ssistan ce

C.

ACTIVITY ASSIGNMENTS: ences

W h ere t o g e t

• ....................................... ..

118

In acco u n tin g

. . . . • • • •

EVALUATION:

.

Some l e a r n i n g e x p e r i ­

to enhance your s k i l l

fo r cash D.



118

. . . . . .

Some w a y s t h a t y o u may u s e

119

to

check your m astery of th e c ash jo u r n a ls and your a b il i ty 10,

to v e r i f y

THE GENERAL JOURNAL:

the cash

.............................

121

HCMF TO KEEP A SPECIAL

RECORD OF MISCELLANEOUS TRANSACTIONS..................................... 1 2 7 A.

MOTIVATION: journal

B.

DIRECTIONS:

V alues o f k eep in g a g e n e r a l ..............................

12 7

Ways i n w h i c h t o u s e

the g e n e r a l

j o u r n a l ............................................................................................. . 1,

OPENING ENTRIES:

127

How t o r e c o r d a n e n t r y

o p e n i n g a new s e t o f b o o k s

• • • • • • • *

128

x iii CHAPTER

PAGE 2.

MISCELLANEOUS ENTRIES: fo r current in sp ecial

3.

tra n s a c tio n s not recorded jo u rn als

CORRECTING ENTRIES: d iscovered a f t e r

4.

How t o a c c o u n t

« • « # • • • » • » • How t o a d j u s t e r r o r s

t a k i n g a t r i a l "balance

ADJUSTING ENTRIES:

128



13 0

How t o r e c o r d

changes i n in v e n to r y and p r e p a id ex ­ pense 5.

...........................................................................................

CLOSING ENTRIES: th a t prepare

How t o r e c o r d e n t r i e s

the books f o r

p eriod *s o p e ra tio n s 6.

ORDER OF POSTING: sp ecial at

7.

the next

........................................................

j o u r n a l s i n th e p ro p e r o rd e r and

th e p r o p e r tim e

• • • • • • • • • • •

SOURCES FOR THIS CHAPTER:

ACTIVITY ASSIGNMENTS: tie s

D.

EVALUATION: in

11,

jo u rn al

u sing

Where t o g e t .

. .

In u sin g

the 131

• • • • • • • •

G oals

133

HOW TO PREPARE A

WORKING ANALYSIS OF A MERCANTILE SET OF BOOKS .

p reparing

131

Some w a y s t o c h e c k y o u r s k i l l

the g e n e ra l jo u r n a l

MOTIVATION:



• • • • * • • • • • • • • • •

THE TEN-COLUMN WORK SHEET:

A.

131

Some l e a r n i n g a c t i v i ­

to d e v e lo p your s k i l l

general

130

How t o p o s t f r o m

f u r t h e r a s s i s t a n c e .............................. .. C.

130

.

137

t h a t may b e a c h i e v e d b y

te n - c o lu m n work s h e e t

• • • » • • •

137

x iv

CHAPTER B.

PAGE DIRECTIONS:

S teps

to tak e

t o p r e p a r e a work

s h e e t w i t h a d j u s t m e n t s colum ns 1*

• • • • • • • •

OPENING ENTRY:

How t o h e a d t h e w o r k

s h e e t and e n te r

the

t r i a l b alan ce

13 7

th ere­

o n ........................................................................................................ 13 7 2.

MERCHANDISE: chandise

3.

How t o a d j u s t

th e m er­

i n v e n t o r y a c c o u n t ....................................

SU PPLIES:

How t o a d j u s t

the s u p p lie s

a c c o u n t ......................................... 4.

INSURANCE:

How t o a d j u s t

138

141 the p r e p a id

i n s u r a n c e a c c o u n t ............................................................... 14 2 5.

ADJUSTED TRIAL BALANCE:

How t o e x t e n d

work s h e e t i te m s a f t e r m ak in g a d j u s t ­ m ents 6.

FINISHING THE WORK SHEET: p lete

7.

.....................................................

.

143

How t o com­

t h e w o r k s h e e t e x t e n s i o n s ........................... 1 4 4

BALANCING AND RULING: p r o f i t or lo ss

8.

..

and c l o s e

CLOSING THE BOOKS: and c l o s i n g

How t o f i n d

the

t h e work s h e e t



144

How t o make a d j u s t i n g

j o u r n a l e n t r i e s b a s e d on th e

t e n - c o l u m n w o r k s h e e t .....................................................1 45 9.

SOURCES FOR THIS CHAPTER: fu rth e r a ssistan ce

C.

ACTIVITY ASSIGNMENTS: your a b i l i t y

to p re p a re

• • • • •

Where t o g e t ..............................

Work t o do t o

146

Increase

t e n - c o lu m n work s h e e t s .

146

XV

CHAPTER P*

PAGE EVALUATION: to p re p a re

12.

FINAL REPORTS:

Some w a y s t o

t e s t your a b i l i t y

te n -c o lu m n w ork s h e e t s

• • • • • •

HOW TO PREPARE FINANCIAL STATE­

MENTS BASED ON THE TEN-COLUMN WORK SHEET A.

MOTIVATION:

148

B en efits

.

.• .

152

t h a t may r e s u l t f r o m

th e p r e p a r a t i o n of com prehensive r e p o r t s and s ta te m e n ts B.

DIRECTIONS:

.........................

Procedures

152

to fo llo w

i n m aking

f i n a l r e p o r t s and s u p p o r t i n g docum ents 1.

PROFIT AND LOSS STATEMENT :

•• •

How t o p r e ­

p a r e a r e p o r t o f income and e x p e n se 2m

BALANCE SHEET :

.......................... .....

3 m SUPPORTING SCHEDULES:

.

152



154

•• .

15 6

.

How t o p r e p a r e

s u p p le m e n ta ry f i n a n c i a l docum ents SOURCES FOR THIS CHAPTER:



W here t o g e t

fu rth e r a ssistan ce C.

..

How t o p r e p a r e a r e p o r t

of n e t w orth

4.

• •

ACTIVITY ASSIGNMENTS:

P ro jects

to I n c r e a s e your s k i l l

in p rep arin g f in a l

EVALUATION:

158

Some w a y s I n w h i c h y o u may

check your a b i l i t y m ents

158

to h e lp you

r e p o r t s ............................................................................................. Dm

152

t o make f i n a n c i a l s t a t e ­

« « • • • » . * • • • • ............................... •

159

RESERVE SHELF L I S T ........................................................................................

163

xvi

LIST OP EXHIBITS EXHIBIT

PAGE

A.

ACCOUNT BALANCE S H E E T .......................................................................

6

B.

OPENING GENERAL JOURNAL E N T R Y ......................................................... 13

C.

ASSET AND LIABILITY LEDGER ACCOUNTS......................................... 15

D•

PROPRIETORSHIP, INCOME, AND EXPENSELEDGER A C C O U N T S ............................................................................................

16

E.

GENERAL JOURNAL T R A N S A C T I O N S ......................................................... 25

F.

TRIAL BALANCE............................................................................

G.

SIX-COLUMN WORK S H E E T ............................................................................. 53

H.

REPORT BALANCE S H E E T ............................................................................. 56

I.

PERSONAL SERVICE PROFIT AND LOSS STATEMENT

J.

CLOSING GENERAL JOURNAL E N T R I E S ....................................................66

K.

PURCHASES JOURNA L........................................................................................ 7 9

L.

ACCOUNTS PAYABLE L E D G E R ........................

M.

MERCANTILE ASSET ACCOUNTS................................................................... 83

N.

MERCANTILE LIABILITY AND PROPRIETORSHIP ACCOUNTS

0.

MERCANTILE INCOME AND EXPENSE A C C O U N T S ............................... 85

P.

ABSTRACTS OF ACCOUNTS PAYABLE AND RECEIVABLE

43

. . . .

58

81

.

84

L E D G E R S .................................................................................................................. 87 Q.

SALES JO URNAL .................................................................................................. 96

R.

ACCOUNTS RECEIVABLE LEDGER

S.

CASH RECEIPTS JO URNA L...........................................................................112

T.

CASH PAYMENTS JO UR NA L ...........................................................................11 5

U.

MERCANTILE GENERAL JOURNAL E N T R I E S ....................................... 1 2 9

........................................................

99

x v ii

EXHIBIT

PAGE

V.

TEN-COLUMN WORK S H E E T ............................................................................ 1 3 9

W.

MERCANTILE ADJUSTING ANDCLOSINGENTRIES

X.

MERCANTILE PROFIT AND LOSSS T A T E M E N T ...................................... 1 5 5

Y.

MERCANTILE BALANCE S H E E T ..................................................................1 5 7

. . . . .

147

x v iii

PREFACE TO THE TEACHER T h i s s y l l a b u s was w r i t t e n f o r

the purp o se of g iv in g

to

th e im m ature, h i g h s c h o o l s t u d e n t a p r o b le m - s o lv in g a p p ro a c h to

th e s tu d y o f bookkeeping*

process

Each s te p

i n th e bookkeeping

i s p r e s e n te d a s a c l e a r - c u t problem t h a t

so lv e d by the procedures

stu d en t

can be

th ro u g h the a p p l i c a t i o n of d e f i n i t e

in a p r e c i s e and e x a c t m anner.

s k i l l developm ent o f the s t u d e n t , a s s ig n m e n ts , and e v a l u a t i o n s a re

As a n a i d

m o tiv atio n s,

to

the

a c tiv ity

in clu d ed w ith each s e t of

p roblem s• The m e t h o d o f p r e s e n t a t i o n h a s b e e n t o g i v e bookkeeping c y c le as q u ic k ly as p o s s ib le could see

th e p r o c e s s a s a w hole and n o t h a v e

th e end o f th e c o u rs e esse n tia l by f i r s t

in order

illu stra tin g

a personal serv ice b u sin e ss,

journals*

o r ig in a l approach,

it

in v o lv ed ,

W hile

to

the c a p a b i l i t i e s

To f a c i l i t a t e

where

and th e n p ro c e e d in g to of a m erc an tile business

th is

is

not an e n tir e ly

r e p r e s e n t s a d e p a r t u r e f ro m th e m ethod

u s e d by m ost b o o k k e e p in g t e x t s ; adapted

to w a it u n t i l

T his h a s b een acc o m p lish e d

t h e more c o m p l i c a t e d s e t o f r e c o r d s sp ecial

the s tu d e n t

to g a in t h a t " i n s i g h t ” so

t o good b o o k k e e p in g *

no m e r c h a n d i s e r e c o r d s a r e

w ith i t s

so t h a t

the e n t i r e

y e t,

it

is

an a p p ro ach w ell

of the h ig h sc h o o l s t u d e n t.

u n d erstan din g ,

s y lla b u s have b e e n w r i t t e n so as

ex h ib its

th ro u g h o u t the

to c o n s t i t u t e a com plete

x ix

se t of records tile

b u sin ess.

fo r a p erso n al se rv ice b u sin ess In a d d itio n ,

bave b e e n s e t up w hich a r e

and a m ercan­

a c t i v i t y assignm ent p r o je c ts

sim ilar

to

th o se e x h ib i t s

so t h a t

c h e c k in g o f s t u d e n t u n d e r s t a n d i n g and p r o j e c t work w i l l be made e a s i e r .

XX

PREFACE TO THE STUDENT The b u s i n e s s w o r l d r e v o l v e s a r o u n d i t s d esire

t o own o r v/o rk s o m e d a y i n a b u s i n e s s f i r m ,

n e e d to be c o n c e r n e d w i t h b o o k k e e p i n g . req u ire

the a b i l i t y

the f u t u r e ,

d isco v er

As a n o w n e r , y o u w i l l

i s m aking,

to av o id c o s t l y m is ta k e s ,

the causes

sh o w n t h a t

the b u s in e s s

of bu sin ess

th e m ajor re a s o n f o r

changes.

I f you

you w i l l

to keep and u n d e rs ta n d r e c o r d s

to s e e what p r o g r e s s for

records.

in order

t o make p l a n s

and to a n a l y z e and R ecent s tu d ie s have

the f a i l u r e

o f most s m a ll

b u s in e s s firm s has been th e la c k of an ad eq u ate s e t o f r e c o r d s . As a wage e a r n e r ,

you w i l l be a b l e

employment a s a b o o k k e e p e r , a c c o u n t a n t , you a r e n o t d i r e c t l y required

jo b .

men, and t y p i s t s

T odayfs s e c r e t a r i e s , are

or a u d ito r.

Even i f

e n g a g e d i n b o o k k e e p i n g w o r k , y o u may b e

t o do some w o r k o f t h a t n a t u r e

your re g u la r

to g a in p r o f i t a b l e

exp ected

in co n ju n ctio n w ith o ffice

c le rk s,

sales­

to be f a m i l i a r w ith b o o k k e ep in g

p r i n c i p l e s and te r m in o lo g y . You w i l l a l s o n e e d t o know some b o o k k e e p i n g i n o r d e r p a rticip a te life .

e ffectiv ely

in your s o c ia l,

c iv ic,

to

and f a m i l y

E v e ry i n d i v i d u a l i s a b u s i n e s s and must r u n h i s

a ffairs

i n a b u s i n e s s - l i k e m anner by b u d g e t i n g and a c c o u n t i n g f o r h i s receip ts to f i l l

and e x p e n d i t u r e s . ou t,

bank sta te m e n ts

You w i l l h a v e i n c o m e t a x b l a n k s t o r e c o n c i l e , money t o i n v e s t ,

and c lu b o r g a n i z a t i o n s and p o l i t i c a l g ro u p s

to a s s i s t .

xxi

Y o u r p r e s e n t k n o w l e d g e o f b o o k k e e p i n g may h e l p y o u t o secure p a rt-tim e

employm ent an d e n a b l e you t o u n d e r s t a n d

b e t t e r and l e a r n e a s i e r studying#

the o th e r b u sin e ss

su b jects

you a r e

P e r h a p s a k n o w l e d g e o f b o o k k e e p i n g may a s s i s t y o u

i n m a n a g i n g y o u r own f i n a n c i a l a f f a i r s

i n a more s y s t e m a t i c

an d p r o f i t a b l e manner# B e g i n now t o a d d t o y o u r a c c o m p l i s h m e n t s

the a b i l i t y

keep a sim p le s e t o f books and se c u re f o r y o u r s e l f fits

m entioned above t h a t

such a s k i l l a ffo rd s #

to

the bene­

1

PART I .

A PERSONAL SERVICE BUSINESS

HOW TO KEEP THE SIMPLEST KIND OF RECORDS L e a r n i n g how t o k e e p b o o k s i s

a b u ild in g -u p process*

You n e e d t o b e g i n w i t h t h e b a s i c r u l e s b o o k k e ep in g and g r a d u a l l y p ro c e e d

and p r i n c i p l e s

of

t o t h e m o re c o m p l i c a t e d

sy ste m s i n o r d e r to com prehend t h o r o u g h ly th e r e c o r d - k e e p i n g p r o c e s s and to d e v e lo p com petency i n th e f i e l d * In th is

s e c t i o n o f t h e s y l l a b u s y o u w i l l l e a r n how t o

keep th e books o f a p e rs o n a l s e r v ic e b u s in e s s , garage, rep air

laundry,

b a r b e r o r b e a u ty shop, d o c t o r fs o f f i c e ,

shop, h o t e l ,

re a l estate firm s are

firm ,

such as a

law yer*s o f f i c e ,

clean in g estab lish m en t,

or tr u c k in g concern*

The r e c o r d s

the s im p le s t k in d o f books to keep,

o f these

and yo u r

m a ste ry o f such r e c o r d s w i l l n o t o n ly e n a b le you to keep books i n such o r g a n i z a t i o n s b u t w i l l h e lp you to a c q u i r e a f i r m f o u n d a t i o n upon w hich t o b u i l d y o u r b o o k k e e p in g know l­ edge and c a r e e r * Make y o u r f i r s t rig h t

s t e p i n l e a r n i n g how t o k e e p b o o k s

o n e , a n d make i t

now I

the

2 CHAPTER 1 .

THE BALANCE SHEET

HOW TO DISCOVER WHAT YOU ARE WORTH A.

MOTIVATION: 1*

V a lu e s o f f i n d i n g o u t what you a r e w o r t h *

OPEN RECORDS:

You n e e d d a t a o n t h e f i n a n c i a l

p o s itio n o f a bu sin ess

in o rd e r to s t a r t

a set of

books and to open th e p r o p e r re c o rd s * 2*

GUIDANCE:

You w i l l b e

a b le to

check the p ro g re s s

o f your b u s in e s s a t r e g u l a r i n t e r v a l s and re d u c e o r Increase cash,

goods on h a n d , l e n d i n g s ,

equipm ent o r o t h e r ite m s so a s

3.

more p r o f i t a b l e

to you.

OBTAIN CREDIT:

I f you

b o rro w money, you w i l l sta tu s 4.

t o make y o u r b u s i n e s s

want to buy on tim e o r need to

show y o u r f i n a n c i a l

to p ro sp e c tiv e c r e d ito r s .

SECURE PUBLIC CONFIDENCE:

C ustom ers o r i n v e s t o r s

y o u r b u s i n e s s w i l l h a v e more c o n f i d e n c e and do more b u s i n e s s w i t h y o u i f

th ey a re

assured

th a t your fin a n c ia l co n d itio n is

sound*

S teps

1.

How t o l i s t

ASSETS: a*

to

L i s t item s a t

You

I n know ing w hat you

a r e w o r t h a n d how y o u r b u s i n e s s DIRECTIONS:

in

in your

a b ility

w i l l a l s o h a v e p e a c e o f m ind

B.

borrow ings,

is pro g ressin g .

take in d is c o v e rin g your w o rth . the

I t e m s o f v a l u e w h i c h y o u own.

t h e i r c u rre n t v alu e or o r i g in a l

c o s t to you, w hichever i s

the low er.

3

b.

Put cash f i r s t

and fo llo w w ith o t h e r a s s e t s

descending o rd er o f p o s s ib le

in

co n v ersio n in to

cash* c*

M a rk a s c u r r e n t a s s e t s

those

ite m s w hich a r e

in

t h e fo rm o f c a s h o r w i l l be c o n v e r t e d i n t o c ash * d.

In c lu d e u n d er the a ll

title

of acco u n ts re c e iv a b le

a m o u n t s owed t o y o u

by cu sto m ers

(debtors)

and n o t e v id e n ce d i n w r itin g * e*

M a rk a s f i x e d a s s e t s

those

a re not q u ic k ly used up

ite m s o f v a lu e w hich

i n th e norm al o p e r a tio n s

o f the b u s i n e s s . 2.

LIABILITIES: a.

L ist

How t o l i s t

item s a c c o rd in g to

unpaid a t b.

your o u tstan d in g d e b ts.

Put the

th e amount r e m a in in g

the p r e s e n t tim e .

ite m s t h a t a r e c u r r e n t l y due f i r s t

and

fo llo w w ith o th e r item s i n d e s c e n d in g o rd e r a c c o r d i n g to th e tim e o f p a y m e n t. c.

Mark a s c u r r e n t l i a b i l i t i e s are

d*

those

ite m s w hich

t o be p a i d w i t h i n a s h o r t p e r i o d o f t i m e .

In c lu d e u n d er the t i t l e

o f acc o u n ts payable a l l

a m o u n t s owed t o c r e d i t o r s

and n o t ev id e n ce d i n

w ritin g * e.

M a rk a s f i x e d

lia b ilitie s

th o s e d e b ts w hich w i l l

not be p a id i n f u l l f o r a lo n g p e r io d o f tim e . 3.

PROPRIETORSHIP: c ap ita l.

How t o f i n d y o u r n e t w o r t h o r

a.

P repare a b alan ce sh e e t l i s t i n g lia b ilitie s

b.

S u b tract assets

your a s s e ts

and

as s t a t e d above.

the

to ta l lia b ilitie s

and th e d i f f e r e n c e

is

from th e

to ta l

the p r o p r ie to r s h ip ,

your n e t w orth c.

Show y o u r p r o p r i e t o r s h i p a s e q u a l t o t h e a ssets,

to ta l

i f y o u h a v e no l i a b i l i t i e s .

BALANCE SHEET:

How t o p r e p a r e a s t a t e m e n t

w orth o f a s m a ll,

o f the

personal service b u sin e ss.

a.

Secure a p r in te d b a la n c e

b.

Head t h e

f o r m w i t h t h e name o f t h e b u s i n e s s

cen tered

on t h e

c.

s h e e t form .

top l i n e .

C e n te r th e words " B a la n c e S h e e t" and t h e d a t e w hich th e s ta te m e n t

is

for

p r e p a r e d d i r e c t l y below

t h e name o f t h e b u s i n e s s . d.

L ist a l l a sse ts

e.

L ist a l l

lia b ilitie s

hand sid e f.

L ist

at

the

o f the form

top o f th e r i g h t -

o f the form .

the p r o p r i e t o r s h i p a t th e b ottom o f the

rig h t-h a n d g.

on t h e l e f t - h a n d s i d e

In d icate

sid e o f the

form .

th e n e t w orth accoun t u n d er the

title

o f t h e o w n e r ' s name f o l l o w e d b y t h e w o r d " C a p i t a l h.

A lways l i s t

item s i n o rd e r o f l i q u i d i t y

and due

d ate • 1.

Always l i s t

current

item s p r i o r

to any f ix e d

5 j.

T o ta l the v a rio u s

sectio n s

k.

Draw a s i n g l e l i n e

across

o n ly , d i r e c t l y above a l l 1*

T o tal each sid e

m.

R ule d o u b le l i n e s

o f the b a la n c e

t h e amount colum ns to ta ls*

o f the b a lan ce

5.

sh eet,

a c r o s s th e amount colum ns,

im m e d ia te ly below t h e f i n a l n.

sheet*

to tals*

S e e e x h i b i t A.

SOURCES FOR THIS CHAPTER: assistan ce

Where t o g e t f u r t h e r

on m a t e r i a l i n t h i s

books th a t a re

c ite d rep eated ly .

A lth o lz 221-237; C a rlso n 1 -8 ; Pearon 1 -4 ,

ch ap ter*

A lexander 3 7 -4 4 ;

C rad it 1-8,

2 2 -2 6 ; Freem an 4 5 7 -4 8 2 ,

M cFarland 1 1 -2 2 ; S a l i e r s ACTIVITY ASSIGNMENTS:

67-76;

547-550;

17-35; Z e l l i o t t 15-22.

Some l e a r n i n g e x p e r i e n c e s

enhance your s k i l l

in p re p a rin g b alan ce

1.

Make u p a b a l a n c e

PERSONAL USE:

Pages in

sh eets•

s h e e t o f y o u r own

to d is c o v e r your f i n a n c ia l p o s itio n * ance sh e et as a b a s is

to

U se t h i s

b al­

f o r keeping a budget o f your

incom e an d e x p e n d i t u r e s • 2.

PROJECT:

P re p a re a b a la n c e s h e e t d a te d August 31,

1949,

th e Blue L a u n d ry .

for

A ssets:

M. I . B l u e i s

th e ow ner.

Cash $ 8 4 5 .2 0 , K. T. Didd | 1 6 . 1 0 , B u i l d i n g

and Lot $ 6 ,0 0 0 .

L ia b ilitie s:

C . C. Camp $ 5 5 . 0 0 ,

Q. P . D o l l $ 3 7 . 0 0 , M o r t g a g e P a y a b l e $ 3 , 0 0 0 . 3.

DICTIONARY: in g term s

S et up a sm all n o te

in order

to

fam ilia riz e

tab let

of bookkeep­

y o u r s e l f w ith the

6

o

■o

EXHIBIT A ACCOUNT BALANCE SHEET

7

new t e r m i n o l o g y a n d I n c r e a s e m a s t e r y o f t h e s u b j e c t . Have a s e p a r a t e p a g e f o r e a c h l e t t e r

o f the a lp h a b e t

and add words a s t h e y a r e e n c o u n t e r e d i n t h i s 4.

BROADEN VIEWPOINTS:

Secure c o p ies

from l o c a l b u s in e s s e s

SCRAPBOOK: co llec ted

sh eets.

Keep a workbook o f a l l

o f the item s

or p rep a red In c o n n e c tio n w ith t h i s

as a handy r e fe re n c e 6.

the p r e p a r a t i o n

Check b a l a n c e s h e e t s you

p rep are a g a in s t th e se b alance 5.

of b alan ce s h e e ts

to g u id e you i n

o f your b alan ce s h e e ts .

PRACTICAL USE:

course.

file

course

fo r fu tu re u se.

P rep are a b alan ce sh e e t to d is c o v e r

t h e f i n a n c i a l p o s i t i o n o f some f r i e n d . D.

EVALUATION:

Some wa ys y o u r s k i l l

in p re p a rin g b alance

s h e e t s may b e c h e c k e d . 1.

TRUE-FALSE: true

( )(

F ) You s h o u l d l i s t valu e

b.

( )(

( )(

a s an a s s e t a n y th in g o f

t h a t y o u own.

) The b e s t way t o d e t e r m i n e w h a t y o u a r e w orth i s

c.

the c o r r e c t space fo r

or f a ls e . T

a.

P lace an X in

to p rep a re a balan ce s h e e t.

) You s h o u l d c o m p u t e y o u r n e t w o r t h b y s u b ­ trac tin g

to ta l assets

from t o t a l l i a b i l i ­

tie s • d.

( )(

) A ssets sid e

s h o u ld be l i s t e d

o f the b a la n c e

on th e l e f t - h a n d

sh eet.

8 T e.

P

( )(

) You s h o u l d n e v e r e r a s e

on t h e b a l a n c e

sheet * f.

( )( ) I t

is b est

to use

zeros

colum n to i n d i c a t e

in the c e n ts

a n e v e n number o f

d o lla rs• g*

( )(

) House and l o t ,

equipm ent,

and m e rc h a n d is e

s h o u ld be l i s t e d u n d e r f i x e d a s s e t s # h.

( ) ( ) You s h o u l d l i s t tie s

as c u rr e n t

those l i a b i l i ­

w h ic h w i l l become c a s h i n a s h o r t

period* i.

( )( ) I t

is

in co rrect

rec eiv a b le j.

to put u nder acco u n ts

t h e a m o u n t owed t o c r e d i t o r s *

( ) ( ) When p r e p a r i n g t h e b a l a n c e should p la c e

sh eet,

you

th e p r o p r i e t o r s h i p below

lia b ilitie s• k*

( )(

) You s h o u l d e x t e n d r u l e d l i n e s

across

the

m oney c o l u m n s o n l y * 2*

RATING SCALE: C h e c k y o u r b a l a n c e s h e e t s fo llo w in g c r i t e r i a .

on th e

Give one p o i n t f o r p o o r ,

p o i n t s f o r good, and t h r e e p o i n t s

two

for e x ce llen t.

a.

(

) W ritin g n e a t and l e g i b l e .

b.

(

) W r i t t e n i n i n k an d no e r a s u r e s *

c.

(

) H e a d i n g c e n t e r e d a n d i n c l u d e s name

o f firm ,

w ords " B a la n c e S h e e t , ” and f u l l d a te *

9

d.

( ) A ssets

on l e f t ,

on r i g h t ,

lia b ilitie s

and p r o p r i e t o r s h i p

and each s e c t i o n p r o p e r ly h e a d e d .

e.

( ) A ll ru led lin e s

f.

( ) Two f i n a l

p erfectly stra ig h t.

to ta ls

o n sa m e l i n e

and i n a g r e e ­

ment • g#

( ) G lean,

good q u a l i t y b a l a n c e s h e e t p a p e r .

h.

( ) Item s l i s t e d

in order of l iq u id ity

and due

d ate • ( 3.

) TOTAL POINTS

PRECISION DEVICES:

How t o c h e c k y o u r p e r f o r m a n c e

sc ien tific ally . a.

Check th e b a l a n c e s h e e t you p r e p a r e d i n th e a c t i v i t y assig n m en ts p r o je c t a g a in s t s h e e t i n e x h i b i t A.

b.

Check th e b a la n c e b alan ce

the b alan ce

C a r e f u l l y m ark d i f f e r e n c e s .

s h e e t s you c o l l e c t e d w ith th e

s h e e t s t o be found i n th e books l i s t e d

under the h ead in g "Sources fo r

th is

c h a p te r.”

10 CHAPTER 2 .

THE LEDGER AND JOURNAL

HOW TO OPEN THE BASIC BOOKS OF THE BUSINESS A,

MOTIVATION: 1*

Adva n t a g e s

PERMANENT RECORDS: i n w hich v i t a l

o f k e e p in g a le d g e r and j o u r n a l . You w i l l h a v e a c e n t r a l i z e d p l a c e

in fo rm atio n about your b u sin ess

in

the

p a s t and p r e s e n t w i l l a lw a y s be a v a i l a b l e . 2.

BETTER BUSINESS DECISIONS:

You w i l l b e a b l e

q u i c k b u s i n e s s d e c i s i o n s b a s e d on f a c t s , because

it

is

of each f in a n c ia l item .

ECONOMY OF BOOKKEEPING TIME: records

track of d a ily

i n c h r o n o l o g i c a l o r d e r and from a l e d g e r

th a t keeps s e p a ra te acco u n ts 3.

not o p in io n ,

e a sy to g e t com plete and a c c u r a t e

in f o r m a ti o n from a j o u r n a l t h a t keep s tran sac tio n s

t o make

in a lo g ic a l,

You w i l l b e k e e p i n g

sy ste m atic,

and approved

fash io n . 4.

EASE IN LATER WORK:

You w i l l be a b l e

to f in d p r o f i t

o r l o s s and p r e p a r e f i n a n c i a l s ta te m e n ts f a s t e r and b e tter B.

DIRECTIONS: 1.

i f you keep a le d g e r and j o u r n a l . Steps

JOURNALIZING:

to ta k e i n o p ening th e b o o k s . How t o r e c o r d

the

jo u rn al.

a.

Secure p r i n te d ,

the b alan ce s h e e t in

tw o-colum n j o u r n a l p a p e r , p r e f e r ­

a b ly i n a bound book fo rm . b.

Head e a c h p a g e w i t h t h e w ords " G e n e r a l J o u r n a l " and number e a c h s i d e o f e a c h page c o n s e c u t i v e l y

11 throughout

the book,

s t a r t i n g w i t h th e number

" 1 ."

c*

R ecord th e d a te on t h e f i r s t

fo llo w in g the b alan ce

page o f th e

sh eet d ate

jo u r n a l i n the

two

colum ns on th e e x tre m e l e f t * d*

L ist

the a s s e t s

i n th e o r d e r i n w hich th e y a p p e a r

on th e b a la n c e s h e e t , sep arate lin e

p l a c in g e ach a s s e t on a

o f t h e d e s c r i p t i o n oolumn o f j o u r ­

n al* e*

Y /rite e a c h a s s e t so t h a t i t the v e r t i c a l re d l i n e

f*

sta rts

f lu s h w ith

o f t h e d a t e colum n*

L i s t i n p a r e n t h e s e s below a c c o u n ts r e c e i v a b l e t h e name o f e a c h c u s t o m e r o n a s e p a r a t e l i n e , f o llo w e d by th e i n d i v i d u a l amount r e c e i v a b l e *

g.

P u t e a c h a s s e t a m o u n t i n t h e l e f t - h a n d m oney colum n o p p o s i t e

the c o rre s p o n d in g a s s e t i n the

d e s c r i p t i o n colum n*

P ut only the

a cco u n ts r e c e iv a b le as h*

i.

t o t a l o f the

i n t h e m o n ey c o l u m n , kn o w n

t h e d e b i t colum n*

L ist

the l i a b i l i t i e s ,

fo llo w e d by th e p r o p r i e t o r ­

sh ip ,

e a c h i t e m on a s e p a r a t e

about

o n e - h a l f i n c h f r o m t h e d a t e colum n*

Put each l i a b i l i t y its

and i n d e n t e d

and p r o p r i e t o r s h i p amount on

co rresponding lin e

c o l u m n , k n ow n a s

lin e

i n t h e r i g h t - h a n d m oney

t h e c r e d i t column*

12 j*

W rit© a b r i e f e x p l a n a t i o n o f t h e t r a n s a c t i o n im m e d ia te ly b elow th e c r e d i t

item s i n

the d e s ­

c r i p t i o n colum n* k*

In d en t the e x p la n a tio n about

one i n c h fro m th e

d a t e column* 1. 2*

See e x h i b i t B.

POSTING: jo u rn al a*

How t o t r a n s f e r

th e o p ening e n t r y from the

to the le d g e r acco u n ts*

Secure d o u b le -e n try le d g e r p a p e r, a form e a s i e s t

to h an d le in your b u sin e ss*

(1)

Bound l e d g e r :

(2)

L o o se-leaf le d g e r: to f i t

(3)

p referab ly in

Pages i n a bound book*

a b in d er

Tray l e d g e r :

L o o s e - le a f p a p e r punched

(recom mended)*

L ed g e r s h e e t s p r e p a r e d on a

m achine and k e p t i n a tr a y * (4)

C ab in et le d g e r :

Ledger card s k ep t in f i l ­

in g c a b in e ts* b.

D ivide th is

the le d g e r i n t o f i v e

order:

assets,

incom e, and ex p en se* the p r o p r i e t o r s h i p c*

s e c tio n s headed In

lia b ilitie s,

p ro p rieto rsh ip ,

A llow o n l y a few p a g e s f o r

sectio n *

H e a d a s e p a r a t e p a g e i n t h e l e d g e r w i t h t h e name o f each acc o u n t a p p e a rin g In th e open in g e n tr y in the Its

j o u r n a l, k eep in g each type o f acco u n t i n

proper s e c tio n of

head in g s•

the le d g e r*

C enter the

13

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