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40   BOOKKEEPING

 

  1. Turn back to Mdse. Acct. ; see if you transferred the right amount, called checking back , and then enter the page of Loss and Gain Account, called checking of

  2. Bring down the Inventory on the opposite (Dr.) side, below the ruling, thus, " April I, Inventory, (page from which taken), $2180," for next month. Check back and check of Expense Account :

  3. There is no Inventory.

  4. Enter the difference, which is a loss, on the smaller (Cr.) side in red ink, thus, "Mar. 30, Loss, $65," to balance the account.

  5. Rule and foot the account.

  6. Transfer the loss to the opposite (Dr.) side of Loss and Gain Account in black ink, thus, " Mar. 30, Expense, (page of Expense Acct.), $65."

  7. Turn back to Expense Account and check back and check of

III. Close Loss and Gain Account.

  1. Enter the difference, which is the Net Gain, on the smaller (Dr.) side in red ink, thus, "Mar. 30, G. Grand, $20," to balance the account.

  2. Rule and foot the account.

  3. Transfer the Net Gain to the opposite (Cr.) side of G. Grand's Account, in black ink, thus. " Mar. 30, Net Gain, (page of Loss and Gain Account), $20."

  4. Turn back to the Loss and Gain Account, and check back and check of

IV. Close G. Grand's Account.

  1. Enter the difference, which is his Net Capital, on the smaller (Dr.) side in red ink, thus, "Mar. 30, Net Capital, $3520," to balance the account.

  2. Rule and foot the account.

  3. Bring down the balance on the opposite (Cr.) side, in black ink, thus, "April 1, Net Capital, (page from which taken), $3520," for next month. Check back and check off.

V. Close Cash, Account.

Balance it, rule and foot it, and bring the balance down. Do not close any other Asset and Liability Accounts. (See Section 54.)

b) Remarks :

  1. Asset Inventories are placed on the Cr. side, and Liability Inventories on the Dr. side, in red ink. They are afterward brought down in black ink, on the opposite side to the red ink entry.

  2. Red ink may be said to indicate that the entry is on its wrong side, and black ink that the entry is on its right side. Inventories are placed on their wrong sides in red ink, that the true gain or loss may be found ; all other red ink entries are so placed, simply to balance the accounts. In each case, the entry is afterwards transferred to its right side, in black ink.

  3. Real Estate.

This term includes land and anything attached to the land by nature or by man, such as houses, wells, mines, etc. This account is treated in the same way as any other loss and gain account, being made Dr. for costs and Cr. for proceeds.

  1. Opening Entry and the Proprietor's Account.

The openirfg entry is a transaction betweeen the proprietor and his business. He invests (gives) his assets for which he is made Cr. ; the assets are made Dr. He withdraws (receives back) part of his investment, when the business assumes any liabilities he may have, and for this he is made Dr. ; the liabilities are made Cr. Suppose D. Scott's Assets at commencement to be $3000, and his Liabilities $200 ; either of the following opening entries may be employed :


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