Part 17

10. The books of the Star Coal Company, a corporation with a paid-up capital of $10,000.00, have been kept by single entry. The following facts are gathered from the books:

Cash in Bank $3,500.00 Personal Accounts Debit Balances 6,500.00 Cash in Office 200.00 Personal Accounts Credit Balances 2,500.00

An inventory results as follows:

Coal 3,750.00 Horses and Wagons 800.00 Furniture and Fixtures 300.00

Make necessary journal entries to change to double entry. Provide a reserve of 5% for uncollectible accounts, 10% for depreciation of horses and wagons, 10% for depreciation of furniture and fixtures. Declare a dividend of 10% and transfer balance of profits to surplus, making all journal entries to record these transactions.

11. Prepare a model trial balance of an imaginary business, or one with which you are familiar, giving special attention to the proper grouping of the accounts. Explain the benefits of your grouping of the accounts.

12. What is a _working balance sheet_? From the trial balance, which you have prepared, make up a working balance sheet, supplying such additional figures as may be necessary.

13. What are the fundamental advantages of comparative statements? On what basis should percentages be figured in on analysis of the manufacturing account? of the trading account?

14. To prove the accuracy of the ledger without a trial balance, what steps are necessary? What test is applied to determine whether the ledger balances?

15. What is meant by a _book inventory_? How can the receipts be determined? the disbursements or quantities sold?

16. What is the _reverse_ or _slip posting system_? How is it operated?

17. Describe, briefly, the _loose-leaf ledger_. Describe the principal methods of indexing. Name some of the advantages of the loose-leaf ledger.

18. For what classes of accounts is the card ledger specially desirable? What are the principal methods of indexing the card ledger?

19. What is a _tabular ledger_? Describe the Boston Bank Ledger. Is a tabular ledger well adapted for commercial accounts?

20. What is meant by a _balance ledger_? What are its advantages?

21. Prepare a form of cash journal segregating administrative, selling, and manufacturing expense for an imaginary business, or one with which you are familiar.

22. Prepare a form of sales journal for a business having five departments.

REVIEW QUESTIONS ON THE SUBJECT OF TRUSTEES' ACCOUNTS; STOCK BROKERS' ACCOUNTS

1. From an accounting standpoint, into what two classes can business be divided? What is the position of the trustee of an estate, as against the public?

2. Describe the essential features of the _accounting_ of an executor.

3. In what two forms may an executor's accounts be kept? By what term are his accounts with properties known?

4. What are the proper classifications of an executor's accounts?

5. Two trustees collect in one year an income of $50,000.00 for a beneficiary, at an expense of $3,100.00. If each trustee receives an equal share, what commission should each receive, and what amount will be paid to the beneficiary, under the New York law? Prepare a complete solution of this problem.

6. Prepare a solution of the following: Four trustees collect and pay out of an estate the sum of $416,000.00, the total debts of the estate being $201,000.00. What commission will each trustee receive?

7. Prepare a statement of the executor's accounts—from the particulars given on Pages 17 and 18—showing the balance due each legatee.

8. What is a _realization and liquidation account_? How is it made up?

9. What is a _statement of affairs_? In what respect does it differ from a balance sheet?

10. How does a statement of affairs of a bankrupt differ from that of a going concern?

11. What is the purpose of a _deficiency account_?

12. Wm. Andrews, finding himself on July 1st unable to meet his obligations, asks you to make up his statement of affairs for submission to his creditors, and a deficiency account for his own information. You find from his books and other sources the following facts regarding his business:

Unsecured creditors $9,000.00 Fully secured creditors 2,300.00 Holding securities of the value of $3,000.00 Partly secured creditors 35,000.00 Holding securities of the value of $20,000.00 Preferred claims 800.00 Bills payable 20,000.00 Accounts receivable, home office (good) 1,000.00 " " (doubtful) $200.00, estimated to realize 75.00 " " (bad) $300.00 Stock, Home Office, cost $1,500.00, estimated to realize 1,200.00 Stock and accounts receivable, less sundry liabilities, at branches 36,000.00 Of which it is estimated there will be a loss on realization of stock $6,000.00, of accounts receivable $9,000.00. Buildings and equipment at branches, cost $40,000.00, estimated to realize 20,000.00 Office furniture $300.00, estimated to realize 200.00 Cash in office 4.00 Cash in bank 80.00 Bonds held by fully secured creditors 3,000.00 Stocks held by partly secured creditors 20,000.00

Six years ago Andrews' capital was $42,000.00. The profits for the first three years appear to have been $3,000.00, $4,000.00, and $5,284.00, and the losses for the three subsequent years $1,500.00, $2,500.00, and $3,000.00, after allowing $2,000.00 a year for interest on capital. His withdrawals have been at the rate of $4,000.00 a year. From these particulars, prepare a statement of affairs and a deficiency account.

13. What differences exist between a transaction for the purchase or sale of stock, and the purchase or sale of grain?

14. Explain a _ring settlement_.

15. What is necessary to post to the customer's ledger account, and from what sources do you post?

16. Show form of _margin book_ and explain how it is kept.

17. In what cases should interest be charged? What is it charged for?

18. What should be entered in the general cash book?

19. Explain fully the handling of _office cash_.

20. If _A_ bought 5,000 bushels of wheat at $1.20, and sold 12,000 bushels at $1.21, how much cash would he be obliged to deposit to secure the fulfillment of his orders?

21. What is the cash which he deposits called?

22. Write an order form for the sale of 25,000 bushels of corn @ 76¼c made upon the orders of Mr. D.

23. Show what acknowledgment must be made to Mr. D.

24. What is the _daily record sheet_? For what purpose is it used? Explain the entries in this book.

25. Explain how stock purchases should be handled, what records should be kept, and what information in regard to them is necessary.

26. What is the difference between a _bull_ and a _bear_?

27. Explain the meaning of a buying order and state how it should be treated in the accounting department.

28. On July 5th James Robinson sold 25,000 bushels of September wheat at 1.04½; on July 10th he purchased 10,000 bushels wheat at 1.02¼, and on July 11th he purchased 15,000 bushels of wheat at 1.02. Make a statement of this account for Mr. Robinson.

29. What is the difference between _listed_ and _unlisted_ stock?

30. What is a _debit_ or _credit slip_ and for what purpose is it used?

31. Show the ruling of the stock ledger and explain the necessity of each column. Rule a sample page.

32. For what purpose is the journal used in connection with the brokerage business?

33. Explain the meaning of _buyer's option_.

34. Explain the meaning of _carrying charges_.

35. Explain the meaning of _a put_ and _a call_.

REVIEW QUESTIONS ON THE SUBJECT OF BILLING AND ORDER RECORDING

1. Explain the difference in principle between the _cylinder_ billing machine and the _flat-bed_ billing machine.

2. Explain the meaning of _manifolding_.

3. Explain in your own language why the plan of copying invoices in tissue books with a letter press is inferior to the billing-machine method of typewriting the invoice and sales sheet simultaneously.

4. If an office boy mailed a pen-written invoice without copying same in the tissue book, what method would enable the firm to detect such oversight?

5. What is the difference between the style of invoice used on flat-bed machines and on cylinder machines?

6. When a concern uses two ledgers on account of having too many customers to be conveniently held in one ledger, what change is advisable in ruling the columns of the sales sheet?

7. What plan is used in classifying sales according to territory, salesmen, etc.; and what means is used to prove the footings of each page?

8. How much of the left side of the sales sheet do you understand is covered by the invoice when they are both in the machine for the purpose of making the bill and charge?

9. How do you classify with the machine the amounts of the bills in the columns to the right of the total column?

10. Name all of the reasons you can, whether included in the textbook or not, for making duplicate invoices.

11. Explain why some firms are enabled to make their invoices (and, of course, sales sheets) before the goods are shipped, and give reasons why other firms are forced to wait until after the order has been shipped, or at least partially shipped, before making invoices.

12. Explain what plan you would use to inform the packer of the description of the goods to be shipped, but prevent him from knowing the quantities, in order to further prevent him from double-checking the figures showing quantities and at the same time neglecting to count the articles.

13. Where the firm sells three or four classes of goods and wishes to keep a continuous record of the tonnage sold, that is, weight of the various classes of goods, how would you rule the invoice and sales sheet in order to shorten the billing?

14. If you were forced to substitute one size of an article in place of another size ordered (without injury to the customer), how would you design your forms in order to enable you to typewrite the size shipped and size ordered on the sales sheet, and size ordered, only, on the invoice?

15. If you wish to typewrite a requisition for goods ordered at the time the invoice and sales sheet are written, how would you arrange it?

16. What is the difference between the terms _unit billing_ and _condensed billing_? Under what conditions would you recommend unit billing and when condensed billing?

17. What is the best plan of facilitating the filling of orders where there are a large number of floors or departments and where each day's orders are supposed to be filled upon the day the orders are received?

18. Why should a plan which is highly satisfactory in a small concern prove to be an absolute failure in a large one?

19. What is meant by _split orders_?

20. Describe the different forms of punched holes of loose-leaf sheets and why the closed-hole punching is not adapted for use with records which are to be removed and replaced in binders from time to time.

21. Describe the different forms of binders with which you are familiar.

22. In printing invoices what is the best plan of designing the headings in order to facilitate the execution of the invoice on billing machines? Would you pay any attention to the space between the lines of the heading and to the distance between the last line to be typewritten on the heading and the first line to be typewritten on the invoice?

23. Explain the mistakes made in using carbon paper, and under what conditions you would use the various weights of carbon paper.

24. Explain what is meant by a _blind_.

25. Explain what is meant by _credit memoranda_, and tell how to use them in connection with a sales book instead of having to use a separate credit sheet.

26. Explain the use of special characters on the billing machine, and what is meant by aligning them in order to prevent one abbreviation being printed over the top of another.

27. Explain the difference between a single-stop tabulator and a decimal-stop tabulator.

28. What is the advantage of having a billing operator on a platform on wheels in a wholesale dry goods house?

29. Under what conditions would you recommend the use of the separate billing machine and separate computing machine for the same work?

30. Explain the benefits to be derived from the use of the color scheme.

31. What is meant by _compound forms_, and under what conditions can they be used?

32. In what general way does retail dry goods billing differ from condensed billing and what is the difference in the general style of stationery used?

33. What is the best plan of filing the duplicate monthly retail dry goods bill?

34. What is the plan used in retail dry goods billing to prevent goods from being shipped out of the store without a charge being made?

35. What is the advantage of a subtracting device on the billing machine with adding attachment?

INDEX

_The page numbers of this volume will be found at the bottom of the pages; the numbers at the top refer only to the section._

A

Abstract of sales 1

Accounting forms, special 146-161

cash books 155

ledgers 147

balance 152

card 148

loose-leaf 147

tabular 152

pay-roll records 160

tabular sales book 157

Accounts with trust provisions 180

Adding machine and cylinder billing machine combined 301

Adding machine and typewriter combined 289

B

Back orders 262

Balance ledgers 152

with two balance columns 154

with two credit columns 154

for installment accounts 155

Bearing the market 229

Bid price 229

Billing machine

development of 242

how to handle orders and bills on 280

Smith Premier 300

Billing and order recording 235-301

acknowledgment of order to salesman 268

analysis of quantities and amounts 257

back orders 262

billing machine 241

carbon paper 277

colored sheets 288

compound forms 290

computing machines in connection with 286

duplicate invoices 253

goods purchased outside 258

information on sales sheet not on invoice 257

loose-leaf sales sheets and invoices 244

manifolding, machines for 239

order form 266

reference information 289

retail dry goods billing 292

split orders 264

stationery 269

traffic department records 256

unit billing 260

Blinds 280

Board of trade terms, glossary of 229-232

Book inventories 134

Borrowing stock 229

Boston bank ledger 152

Break in the market 229

Broken lot 229

Brokerage concern, legitimate 198

Broker's commission 197

Bucket shops 197, 229

Bulls and bears 196

Buy at market 229

Buyer's option 229

Buying order 230

C

Cables 230

"Call" 230

Card ledgers 148

Carbon paper 277

color 277

copy 279

finish 277

four-pound 278

full 279

pen 279

pencil 279

seven-pound 278

ten-pound 278

troubles and remedies 279

wearing quality 280

Carrying charges 230

Cash book 15, 155

Cash grain 230

Cash received book 49

Check register 45, 227

Clearing house 199

Colored sheet system for billing and order recording 288

Commission accounts 60-83

actual sales, treatment of 68

cash book 77

consignment 62

consignment ledger 77

exercise 76

manufacturer's agent 60

merchandise broker 60

produce shipper's books 63

receiving book 77

sales book 77

sample transactions 69, 78

shipments 61

shipper's trading account 68

Commission, executor's 168

Commissions 230

Commodities handled by brokers 200

Comparative statements 129

book inventories 134

proof without trial balance 131

reverse or slip posting 143

trial balance 129

Computing machines, use of, in connection with billing 286

Consignment 62

commission account 63

principal's account 62

Controlling accounts 12

"Cornering the market" 200

"Curb" 230

Curbstone broker 230

Customers' ledger 220

Customer's statement 224

Cylinder billing machines 241

D

Debit and credit rules 93

Debit and credit slip 206

"Delivery" 230

Designing stationery 273

"Dividend" 230

"Dump" 230

E

"Even" 230

Executor's accounts 163

classification 168

commissions 168

form of 166

sample accounts 169

schedules 164

Expense account, subdivision of 16

F

Flat-bed billing machines 241

"Flurry" 230

Forms

abstract of sales, departmental 43, 57

accounting of an executor 186

balance form for general ledger 222

balance form of ledger card 151

balance ledger for installment accounts 155

balance ledger with two balance columns 154

balance sheet and trial balance of general ledger 37

billing of invoicing loose-leaf sales book 249

Boston bank ledger 153

broker's general cash book 213

broker's statement to a customer 223

cash journal 156