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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.
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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
8»
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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