Previous Ontario School Bookkeeping (1909) Next

 

BOOKKEEPING   37

1. TRIAL BALANCE, Feb. 28, 19--.   2. TRIAL BALANCE, Mar. 31, 19—.

DR.   CR.   DR.   CR.

F. Munro (Capital) -

 

 

2040

 

Merchandise   -

3507

50

3150

60

Merchandise   -   -

2800

 

2750

 

Expense   -

257

60

210

90

Expense   -

72

 

 

 

Real Estate

2800

 

 

 

Cash -   -   -

1800

 

 

 

W. Green   -

 

 

160

 

Bills Receivable -

500

 

 

 

J.   Williams   -

325

80

 

 

Bills Payable   -

 

 

400

 

Bills Receivable

275

30

 

 

W. Sheppard   -

128

 

 

 

Bills Payable -

 

 

160

45

D. Lindsay   -

 

 

110

 

Cash   -   -   -

1125

75

 

 

 

 

 

 

 

C. Wilson (Capital)

 

 

4610

 

 

5300

 

5300

 

 

8291

95

8291

95

INVENTORIES, Feb.

28, 19—.

 

INVENTORIES, March 31,

19—.

Merchandise on hand -   -

-

$270

Merchandise on hand   -

- $1110.70

Expense—Office Furniture -   -

-   -

35

Real Estate on hand   -   -

-   2650.00

Net Gain, $183.   Net Gain, $557.10

  1. Trial Balance, taken April 30, 19— : J. S. Willmott (Capital), Cr. $4300 ; Cash, $2825 ; s:C Bills Payable, $2101. Bills Receivable, $560„ F. Clarkson, Dr. $370 ; J. Walker, Cr. $175 ; Merchandise, Dr. $3515, Cr. $2760 ; Expense, Dr. $175. Inventories : Merchandise on hand, $1310 ; Office Furniture on hand, $75. Net Gain, $455.

  2. On May 31, 19—, J. M. Foster's books show the following : Merchandise, Dr. $3890.50, Cr. $2780.30 ; Real Estate, Dr. $2600, Cr. $1200 ; Expense, Dr. $275.50, Cr. $60.50 ; Cash, $511.10; Bills Receivable, $181.50; Bills Payable, $175.40; W. Cairns, Dr. $467.80; C. F. Patterson, Cr. $210.20 ; J. M. Foster (Capital), Cr. $3500. Inventories : Merchandise, $1040.80; Furniture and Fixtures, $150; Real Estate, $1500. Net Loss, $34.40.

  3. Purpose of Closing the Ledger.

Since the Loss and Gain Statement shows the details of losses and gains, and the net gain or the net loss for the year, there would seem to be no need of closing the Ledger. It is necessary, however, to close the Ledger : (1) to have a permanent record of the gains, the losses, the net gain or the net loss, and the net capital for the year or the period under consideration ; and (2) to make a separation, in the loss and gain accounts, between the entries of successive years, so that the facts mentioned above may be determined for each year. It is quite evident that there is no need of closing asset and liability accounts for this purpose ; they are closed only when they balance, or are settled, or transferred to a new page.

  1. Steps to Close a Double Entry Ledger.

After stock-taking, taking a trial balance, and making financial statements, proceed to close the Ledger as follows :

  1. Open Loss and Gain Account.

  2. Close the loss and gain accounts, such as Mdse. and Expense, transfer the gains and losses to the Loss and Gain Account, and bring down the Inventories.

3. Close Loss and Gain Account, and transfer the net gain or the net loss. to the Proprietor's Account.

  1. Close the Proprietor's Account, and bring down the Net Capital.

  2. Do not close any asset and liability accounts except Cash Account and Bank Account. These two accounts are not usually kept in the Ledger, but when they are, they should be closed and the balances brought down, so as to tally with the balances of the Cash Book and the Bank Pass Book respectively.


Previous Ontario School Bookkeeping (1909) Next