152 CONSTRUCTION AND MANAGEMENT OF SMALL GASWORKS. 



Profit and Loss. 



" Capital " and " Profit and Loss " are always open and 

 running accounts, but there is this difference that whereas 

 the capital account is never reduced, except under such 

 circumstances as the sale of the whole or of a part of the 

 plant, the profit and loss is reduced each year by a payment 

 of dividend, made out of the profits for the preceding year. 

 Early in 1910, for example, the general meeting of share- 

 holders was held, and a 5 per cent, dividend was declared, 

 and paid out of the balance shown in the 1909 accounts 

 ^237, is. 2d. The interest due on debentures was paid, 

 or reckoned as an item in the expenditure, and, therefore, 

 need not be considered. After paying the dividend, a 

 balance of ^49, us. 2d. remains. To this is added the 

 balance from revenue, and after paying debenture interest, 

 there is a balance of .278, is. 7d. available for dividend. 

 This, it should be noted, is not the profit earned during 

 the year, but also includes the balance from the previous 

 year. The balance of revenue account, ^268, los. 5d., 

 is the actual amount earned for the year 1910. If there 

 should happen to be an overdraft at the bank on which 

 interest is charged, this interest must be paid in addition to 

 the interest on debentures, and entered below it. 



Balances and Stocks, Form IV^ (p. 169). 



The necessity for this item is due to the fact that it is 

 impossible to run each year as an independent transaction. 

 If we could definitely settle up everything on each 3ist 

 December, there would be no occasion for it. But it is 

 impracticable to use up every pound of coal in stock, and 

 therefore a quantity remains, and it will be used in the 

 following year. The balance available for dividend is 



