634- THE HOME, FARM AND BUSINESS CYCLOPEDIA. 



55. Directions for closing the Stock Account at the end of the year : 

 1st. According to Closing No. 1. Bring over from the respective 



Private accounts of each member of the firm the net private loss or rut 

 l>rlr<ttc. gain, as the case may be, and debit or credit the respective Stock 

 accounts for such loss or gain. (See 51 and 52.) 



2nd. According to Closing No. 2. Bring over from the Loss & Gain 

 account the share of the net business loss or net business gain, as the case 

 may be, and debit or credit the respective Stock accounts for such loss or 

 gain. (See 53 and 54.) Then bring over from the Private accounts of 

 the respective members the loss on such accounts, and debit the respective 

 Stock accounts for such losses. (See 63.) 



3rd. Now find the difference between the two sides of this account, and 

 write on the debit side " To Balance" in red ink ; entering this difference, 

 which will make the account balance. 



4th. Rule the closing lines in red ink, and enter the total amounts be- 

 tween these lines. (See 801 to 805.) 



5th. Bring down on the credit side of this account, below the closing 

 lines, in black ink, the difference as found in " 3rd " above, or the present 

 worth of the partner, writing the date beginning of the new year, " By 

 Present Worth," and the amount. 



56. EXPLANATION. "Stock" is a title used to represent the amount 

 invested in the business. There are several methods of treating this 

 account, among which are the following: 1st. To call the account 

 " Stock," and credit it for the entire investment of the firm (regardless of 

 how many members the firm may consist of), and debit it or credit it at 

 the end of the year for the entire net loss or entire net gain of the firm, 

 allowing the partnership contract to stipulate how much is by each mem- 

 ber invested, and what proportion or percentage of the gain or loss each 

 member is to share. 2. Some call the account " Capital," while others 

 use the firm name instead : as, " J. H. Goodwin & Co.," treating it the 

 same as " Stock," described in " 1st." 3. The most common and most 

 practical method, however, is to open a separate Stock account for each 

 member of the firm, and credit each for respective investment, as per 

 system shown in this book. (See 49.) When there is but a single pro- 

 prietor in the business, he may with propriety call the account " Stock," 

 and treat it the same as described in 49. 



