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64   BOOKKEEPING'

93, Financial Statement—Form I.

(a) STATEMENT OF LOSSES AND GAINS, May 31, 19-.

Losses.

 

 

Gains.

 

 

Expense -   -

220

 

Merchandise

1110

40

Interest and Discount

1

75

Real Estate -

100

 

*Pupil's Net Gain -

988

65

 

 

 

 

1210

I   40

 

1210

40

(b) SUMMARY OF PUPIL'S ACCOUNT.

*Net Capital    

(   5388

65

Net Credit

4400

 

 

 

 

"   Gain   -

988

65

65

 

5388

65

5388

(c) STATEMENT OF ASSETS AND LIABILITIES.

Assets.

 

 

Liabilities.

 

T. Musson   -

510

25

R. Palmer -

404

60

Bills Receivable

330

 

Bills Payable   -

250

 

Cash   -   -

1633

 

Expense, salary due

30

 

Merchandise   -

1500

-75

Interest Payable accrued

3

25

Real Estate   -   -   -

2100

 

Pupil's Net Capital   -

5388

65

Interest Receirable accrued

2

50

 

 

 

 

6076

50

 

6076

50

Remarks :

  1. The Loss and Gain Statement is made from the loss and gain accounts marked thus (x) in the Trial Balance ; add the Inventories to the proper side (See Sec. 91), and then take the difference ; a Dr. difference is a loss and a Cr. difference is a gain. The Asset and Liability statement is made from the asset and liability accounts in the Trial Balance ; a Dr. difference is an asset and a Cr. difference is a liability ; an Asset Inventory is also an asset, and a Liability Inventory is also a liability ; Pupil's' Net Capital, from the " Summary," is a liability, of the business, and when placed on the liability side of the statement, will balance it.

  2. Notice that the Loss and Gain Statement is the same as the Loss and Gain Account in the Ledger. The bookkeeper hands the statements to the proprietor, and then closes the loss and gain accounts, and the proprietor's account, in the Ledger so as to separate the gains and losses of one year from the succeeding one.

  3. Since the purpose of closing the books is to determine the Net Gain or the Net Loss, and the Net Worth or the Net Insolvency, there is no necessity for closing any of the asset and liability accounts in the Ledger, unless it be Cash and Bank Accounts. Cash Account is closed because the Cash Book is closed periodically, as a check on the cash drawer ; Bank Account is closed as a check on the Bank Pass Book, which is balanced monthly. These accounts are not usually entered in the Ledger ; the Cash Book is made to answer for the Cash Account, and Bank Account may be kept as indicated in Sections 113 and 114.


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