Part 16

=Goods Shipped for Entire Order.= If the nature of the business is such that the firm can always fill its orders completely, it is perfectly safe to enter prices, make the extensions, and complete the invoice, with the possible exception of the date when the goods are finally shipped, if they cannot be sent out the same day. In such cases, a printed heading is provided on the invoice, opposite which the shipping date is typewritten. This then becomes the date of invoice.

=Goods Almost Completely Shipped.= If it is possible that one, two, or three items cannot be shipped at all, or in part only, it is the custom to hold the invoice (and copy, or copies, when there are any) in the office, arranged alphabetically according to customers, pending receipt of information from the shipping department as to quantities, weights, etc., of goods shipped. This invoice is an exact typewritten duplicate of the balance of the order forms, and has the heading for quantities to be shipped and, usually, prices for each article. Neither the extensions of the items nor the footing of the bill have been made. Generally, a copy of the order showing the quantities, weights, or measures marked thereon is handed to the office. The copy of the invoice is then placed in the machine, and the prices, extensions, and footings made to correspond with the items which have been shipped. The question arises in regard to the items which have not been shipped. Some firms print on the bottom of each invoice the sentence: _All items which are not priced nor extended have been "back-ordered" and will be shipped later._ Other firms typewrite an _X_ in the price column, or number the items which have not been shipped. They then make a written explanation on the bottom of the invoice regarding the date at which the balance of the goods will be shipped. In some lines of business this plan tells the customer not only what he ordered, but what has been shipped and when the balance will be shipped. The memo on the bottom of the invoice also saves the writing of letters to customers.

In other lines of business, this plan would be absolutely unfit—for the reason that certain firms do not wish to call the customer's attention to the items which have been omitted.

Compound forms generally have two columns at the left—one for the goods ordered, the other for the goods shipped. If this were not provided, it would be necessary to erase quantities in all instances where a different quantity were shipped from the quantity ordered.

Fig. 24 is a good illustration of forms for a line of business which always has the goods in stock. The various brands of goods are printed in the body of the invoice. All that is necessary is to write the quantities, prices, extensions, and footings. Four copies are manifolded—invoice, warehouse order, house record, and collection record.

RETAIL DRY GOODS BILLING

The retail dry goods houses and department stores use a form of billing which is different from any other, in that the bills are rendered to the customer once a month only. There are other lines of business which render their bills monthly, and which use the same style of billing.

A folded form is used, the top sheet when completed at the end of the month is mailed to the customer. The second or duplicate is retained for the record of purchases.

When a customer makes a purchase, the saleslady makes the charge in her sales book. One copy goes with the goods to the wrapping desk, the other goes to the cashier's desk. The wrapper cannot handle a package without a duplicate sales slip. The packer removes from his duplicate slip a stub bearing the same number as the slip. This is to prevent goods being removed from the house without proper authority. The cashier retains the slip if cash has been paid, but passes the slip on to the auditing department, if the slip is marked by the saleslady _charge_.

In large stores like John Wanamaker's, the customers are given by the credit man a brass check with their number marked thereon. This shows each clerk with whom they deal that they are entitled to credit, without having them identified each time they make a purchase. In smaller cities, the clerks become familiar with all the charge customers, and any plan of this character is not needed.

The sales slips are all numbered from _1_ to _50_, and the auditing department checks back each day all the slips of the different sales-people to see if all the slips have been accounted for. Some stores have a chart on the cashier's desk _with the clerk's number at the top of each column_, and the check numbers listed serially in each column, as shown in Table I.

Table I CHART FOR CHECKING RETAIL SALES SLIPS

══╤══╤══╤══╤══╤══╤══╤══╤══╤══╤══╤══╤══╤══╤══ 1│ 2│ 3│ 4│ 5│ 6│ 7│ 8│ 9│10│11│12│13│14│15 ──┼──┼──┼──┼──┼──┼──┼──┼──┼──┼──┼──┼──┼──┼── 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1│ 1 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2│ 2 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3│ 3 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4│ 4 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5│ 5 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6│ 6 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7│ 7 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8│ 8 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9│ 9 10│10│10│10│10│10│10│10│10│10│10│10│10│10│10 ──┴──┴──┴──┴──┴──┴──┴──┴──┴──┴──┴──┴──┴──┴──

As fast as the checks are received at the cashier's desk they are checked. If one of the clerks should sell goods to a friend, and send one slip to the packer, but destroy the cashier's copy, the fraud would be detected, as the next slip which would be sent in would show by the number that the previous one was missing. The matter could be investigated immediately. The auditing departments of different stores handle the detail of the work in various ways—which, however, are about the same. Some stores, after they prove that there are no slips missing by checking the slips by the serial numbers, add them up on adding machines. As some stores do not care for a list of the slips, they use a non-listing machine, such as the comptometer. Other stores add the sales of each clerk separately, and add the totals of all the clerks to secure the total sales. The total sales of each clerk are then entered on a statistical sheet which shows a comparison of the total daily sales of each clerk for the month, as shown in Table II.

The slips are then sorted according to departments, then added again, and similar information written on statistical sheets with the department numbers at the top, instead of the clerk numbers. The grand totals must agree to prove the work.

The slips are then sorted according to customers. If Mrs. J. B. Jackson has bought goods in three different departments, the auditing department will pin the three slips together and mark the total of the slips to be charged to her account on the back of the under slip. If there are twelve bill clerks and twelve billing machines, all the slips will then be assorted into twelve lots, each lot representing the number of accounts taken care of by each bill clerk.

TABLE II COMPARISON OF DAILY SALES OF CLERKS

══════╤═════════╤═════╤═════╤═════╤═════╤═════╤═════╤═════╤═════ │Clerk No.│ 1 │ 2 │ 3 │ 4 │ 5 │ 6 │ 7 │ 8 ──────┼─────────┼─────┼─────┼─────┼─────┼─────┼─────┼─────┼───── Total │ Days │ │ │ │ │ │ │ │ 335 38│ 1 │30 50│55 45│47 70│35 35│56 78│34 25│40 56│34 79 492 53│ 2 │56 74│87 55│9 76 │87 23│54 09│19 89│86 75│90 52 etc. │ etc. │etc. │etc. │etc. │etc. │etc. │etc. │etc. │etc. ──────┼─────────┼─────┼─────┼─────┼─────┼─────┼─────┼─────┼───── │ │ │ │ │ │ │ │ │ ──────┴─────────┴─────┴─────┴─────┴─────┴─────┴─────┴─────┴─────

Each bill clerk receives the slips in alphabetical order. The monthly folded bills are arranged in the same order. These are held in binders—a special kind, such as the Tengwall, being used—from which the bills can be easily and quickly removed. Some firms prefer to file daily in vertical files the current monthly bills, upon which the charges are being made.

Some machines, such as the Smith Premier and the Elliott-Fisher, have a carbon roll on their machines for manifolding these duplicate folded bills without handling the carbon paper. These attachments were especially designed for this particular work.

After the operator has entered the charges of the three slips for Mrs. J. B. Jackson, or any other customer having more than one slip for the previous day's purchases, she compares the total she has placed on the bill with the total marked on the back of the slips by the auditing department.

Fig. 25 shows samples of folded monthly retail bills. The black showing under the top sheet, which is turned over, is the carbon paper used with the bills when made on machines not equipped with the carbon-roll attachment. Some firms place the carbon paper between the sheets at the beginning of the month, and leave it there; others place the carbon paper between the sheets for every charge which is made to the bill.

After all the charges have been made, the operator adds up on the adding machine the totals of all the last charges on the various bills to which charges have been made that day. This total must agree with the amount which the auditing department handed over to each bill clerk to be entered upon these bills. The Smith Premier and Elliott-Fisher have tally-strip devices which automatically record the total of each charge made to all the various bills each day. This paper strip, when added up, must agree with the total of the auditing department figures.

At the end of the month, about the 26th, most firms begin to total the columns of the bill. The final total of each bill added to the total of every other bill must give a grand total equal to all the charges for the month. This proves that each bill has been correctly added. The balance due from the previous bills is then brought forward, and any payments made during the month deducted, and the bill footed. All credits for returned goods are entered during the month the same as the charges, excepting that they are placed in a separate column provided for that purpose, and deducted at the end of the month from the charges.

Some firms post the total charges and credits for the month to the ledger in two lump sums. Other firms prefer to post the total of each day's charges to the ledger daily, instead of letting the posting go until the end of the month. This is a matter to be decided from a bookkeeping standpoint. If the bookkeepers have the current month's charges in the ledger, it saves referring to the bills at the bill clerk's desk for information or the current month's charges.

After the bills have been sent out, the duplicates are filed away. The best known way to file them is alphabetically; each customer's bill for the various months together. This is in contrast to the plan of filing each month's bills away separately. If it is wished to refer to any one person's charges for a given number of months it is necessary, under the latter plan, to refer to several binders.

One of the devices which did more to permit cylinder machines to do billing successfully is shown in Fig. 26. Formerly, when two or more sheets of paper were inserted in a cylinder machine, the small feed roll which rests against the large rubber platen, fed the under papers at a different speed than those sheets which rested against the large roll. The result was that the papers were fed unevenly into the machine. When removed, it was impossible to replace them in the same relation in which they were before.

The device illustrated furnishes a resting place for evenly placing all the sheets in the machine by pressing a release lever which draws the feed rolls away from the large roll until the papers or sheets are properly placed in the machine. Started evenly, they will invariably feed evenly.

This is of particular advantage in retail dry goods billing, where a sheet is placed in and out of a machine as many as thirty times a month. If the top of the bill is each time started from the same starting point, namely, the top of the statement, it will feed correctly to the next writing point on the statement without any adjustment. The Remington, Fig. 27, and Underwood machines are equipped with devices for the same purpose. The Smith Premier, Fig. 28, and the Elliott-Fisher machines are equipped with rolls of carbon which automatically manifold folded monthly bill forms.

DEVICES OF THE FUTURE

One of the successful devices which is being perfected at this time is a combination of an adding machine and a cylinder billing machine which can be operated as a combined machine or separately as two machines, and may be actually removed, one from another. The idea is to have a platen or roll which can act as shuttle between the typewriter and the adding machine. By pressing a button, the roll travels from the typewriter to the adding machine. This scheme has the same advantage as has the farmer who can operate his horses singly or in pairs.

The adding machine people have been experimenting and gradually increasing the printing capacity of their machines. They are now able to print the different months of the year and some other abbreviations for monthly statement work. Further developments can be expected along this line. Adding machines which list are a very important factor in office work and their capacity is so large for certain classes of work that space does not permit of detailed treatment here.

While marvelous improvements have been made in the last decade, the next one promises equally well, especially in the adding-machine line.

REVIEW QUESTIONS.

PRACTICAL TEST QUESTIONS.

In the foregoing sections of this Cyclopedia numerous illustrative examples are worked out in detail in order to show the application of the various methods and principles. Accompanying these are examples for practice which will aid the reader in fixing the principles in mind.

In the following pages are given a large number of test questions and problems which afford a valuable means of testing the reader's knowledge of the subjects treated. They will be found excellent practice for those preparing for Civil Service Examinations. In some cases numerical answers are given as a further aid in this work.

REVIEW QUESTIONS ON THE SUBJECT OF COMMISSION AND STORAGE

1. What advantages are derived from a division of the ledger? Name the three most common subdivisions of the ledger.

2. What accounts are kept in the purchase ledger; in the sales ledger; in the general ledger? Under what circumstances should accounts with an individual be kept in both purchase and sales ledgers?

3. What is a controlling account? What do the balances of sales and purchase controlling accounts represent? From what sources are the debits and credits to these accounts derived?

4. When loose-leaf order blanks are used, what is the customary routine followed in filling and charging orders?

5. For what purposes are special distribution columns in a sales book used?

6. To what accounts in the general ledger are total purchases, as shown by the invoice register, posted? In what way are these two accounts distinguished?

7. Describe briefly the cash journal, and explain how it is used? What, if any, objection can be raised to making entries which do not involve an exchange of cash, or its equivalent, in the cash journal?

8. Why is the expense account divided? Name some of the accounts representing different classes of expense.

9. What is meant by petty cash, and how should the account with petty cash be handled?

10. The check of Martin Mason for $164.20 went to protest, and was returned by our bank with a protest fee of $2.50. What entry is necessary to record this on our books?

11. Prepare trading and profit and loss accounts representing the transactions listed in Art. 16, Pages 28 to 31, inclusive.

12. How can an order record be used as a sales record? Why is an abstract of sales used in connection with such sales records? Explain how this abstract is made up.

13. If goods are sold at f. o. b. prices, but the freight is prepaid as an accommodation to the customer, how should it be treated on the books? Why?

14. Name three or more subdivisions of sales expense, and explain what items are properly included in each.

15. Why are check registers taking the place of the old style check book? When a check register is used, how are the checks kept?

16. What is a cash received book, and for what purpose is it used?

17. Complete the exercise given at the end of Art. 29, Page 42.

18. What is your understanding of the meaning of the terms _commission_ and _brokerage_? What is the distinction between a commission merchant and a merchandise broker?

19. What is a manufacturer's agent, and how does his business differ from that of a commission merchant or broker?

20. By what term is a consignment of goods to a broker known on the books of the shipper? In what name is an account opened to represent the consignment?

21. How is the above account made up? When is the account closed, and to what account is the balance transferred?

22. What is an _account sales_? When an account sales is received without a remittance, what account should be opened, and what does it represent?

23. When a broker receives a shipment of goods to be sold on commission, by what name is it known on his books? In what name is an account opened?

24. If a broker renders an account sales without a remittance, to what account should he credit the net proceeds? Why?

25. If a broker has on hand any unsold consignments when his books are closed, do the accounts represent assets or liabilities? How would you determine the broker's liabilities on account of consignments?

26. Name the books used by a produce shipper, and explain how each is used.

27. What is a _shipment ledger account_, and how is it made up? What is a _profit and loss on shipments account_?

28. In what way does the journal used by a shipper differ from the one used by the average merchant?

29. How is the trading account of a shipper made up?

30. Prepare trading and profit and loss accounts called for in Art. 48.

31. Name and describe the uses of the books used by a commission merchant.

32. Prepare trading and profit and loss accounts, and balance sheet called for in Art. 57.

33. What is a storage business, and for what purpose is it conducted?

34. What is a warehouse receipt, and what does it represent?

35. Explain what is meant by _simple storage_, and _average storage_.

REVIEW QUESTIONS ON THE SUBJECT OF SINGLE ENTRY—COMPARATIVE STATEMENTS

1. What is the distinctive feature of single entry bookkeeping? In what respect does single entry fail to fulfil the functions of bookkeeping?

2. What books are usually used in single entry? How does the single entry cash book differ from that used in double entry?

3. In posting, what features distinguish single entry from double entry?

4. How can the accuracy of single entry books be proved?

5. To determine the profits of a business whose books are kept by single entry, what steps are necessary? What are the steps in closing single entry books?

6. On a certain date the assets and liabilities of Henry Lamson are as follows:

ASSETS

Cash $452.00 Due from sundry debtors 77.20 Merchandise per inventory 764.50

LIABILITIES

Due sundry creditors 142.00

The following transactions are recorded:

Sales to sundry persons on account $46.71 Bought from sundry persons on account 339.54 Sales for cash 96.90 Received cash on account 64.00 Paid cash on account 133.50 Paid cash for rent 37.50 Paid cash for clerk hire 8.00

Record these transactions in single entry books; prepare proof of ledger and statements of assets and liabilities, the merchandise inventory at end of period being $983.75. Do the books show a profit or a loss, and how does it affect the account of the proprietor?

7. Explain, briefly, the necessary routine followed in changing single entry books to double entry.

8. H. P. Hayes established a small factory upon a borrowed capital of $10,000. The undertaking was a success, and at the close of the first year his financial condition was disclosed by the following particulars:

Bills payable $4,000.00 Accounts payable 6,574.50 Cash 1,752.50 Accounts receivable 12,694.18 Inventory 4,765.90 Salaries 3,500.00 Sundry expenses 435.50 Manufacturing expenses 11,759.50

Mr. Hayes kept his own books during his first year in business, but did not keep them by double entry. His sales for the year amounted to $35,643.25, and his total purchases amounted to $16,076.07. At this point Mr. Hayes admitted as a partner, A. B. Andrews, who contributed $10,000.00 to the partnership upon the agreement that the partners should share equally in the business. A bookkeeper was engaged to keep the books by the double entry system. From the particulars given, make a trial balance and the necessary journal entries to complete the change to the double entry method. Ascertain the interest of Mr. Hayes in the business, and credit his account with the same.

9. Foster, Harvey, and Morton—a copartnership—wish to change their method of bookkeeping from single to double entry. The partnership agreement provides that each partner shall share in the profits in proportion to his investment. Separate investment and withdrawal accounts have been kept with each partner. In the following statement of ledger accounts, partners' investment accounts show the same balances as at the last adjustment, no additional investments having been made:

Foster, Investment Credit Balance $1,600.00 Harvey, Investment Credit Balance 1,200.00 Morton, Investment Credit Balance 1,200.00 Personal Accounts Credit Balance 900.00 Personal Accounts Debit Balance 1,900.00 Foster, Withdrawals Debit Balance 315.00 Harvey, Withdrawals Debit Balance 240.00 Morton, Withdrawals Debit Balance 155.00 Bank Debit Balance 2,050.00 Cash in Office 45.00

An inventory shows merchandise $1,775.00, fixtures $300.00.

Show all entries necessary to make the partnership adjustment and change the books to double entry, indicating by check √ the accounts to be posted.