26 EIGHTEENTH REPORT. 



^P 



Ttntls and uU'iisils — replaeeiiuMits 

 Siipjilies and lvei)airs to stations . 



Fuel 



Barn expense 



Repairs to service 



Oftice expense 



Miscellaneous Repairs 



Insurance 



Miscellaneous exjjenses 



Reconstruction 



Pil)e extensions 



Tin];ro\enients to stations 



The difference between the receipts and disbursements is S2,56G, 

 that much more cash has been received than paid out. Has the 

 profit, therefore, been .|2,566? The fourth item sho^Ys that $2,500 

 was gotten by borrowing and you can not include that in your 

 profits. Money cannot be made simply by borrowing it. The 

 other items are probably revenues — that is, value that had accrued 

 to the department from the sale of its services for the period. They 

 are not, however, the entire value of the services rendered for some 

 of the water delivered during the year has not yet been paid for. 

 The department has a good claim against these people who have 

 not 3'et paid. It is an amount which was earned in this period 

 but which will not be paid until the future. Of course, if the city 

 wanted to, it could make all delinquent customers pay promptly 

 by turning off the water but they wull pay in a little while so why 

 resort to such measures. The point is that not all the revenue 

 earned in this period is in the form of cash; some of it is in the 

 form of accounts receivable. The cash receipts, here, probably 

 contain some collections of revenue earned in past periods and it 

 is assumed that the revenue earned in this period but still in the 

 shape of claims and therefore left out equals the items i)ut in 

 but not earned during this period. Assumptions are always danger- 

 ous and a good account system makes as few as ]>ossible. Here 

 there is no excuse for making one. In fact, a good accounting 

 system would get the amount of revenue outstanding as a by-product 

 in checking up bills outstanding. 



The next item about which there may be question is the city's 

 paj'ment for the use of water. This may equal the value of the 



