036 



THE HOME, FARM AND BUSINESS CYCLOPAEDIA. 



5th. If, on the other hand, we find the debit side of this account to be 

 the larger, we write on the credit side, in red ink, " By J. H. Goodwin, 

 Stock account," and enter the difference in the credit column : then ru)e 

 the closing lines, and carry the difference (net private loss) to the " J. H. 

 Goodwin Stock account," in black ink. (See nl.) 



CLOSING No. 2. According to closing No. 2, we do not bring over from 

 the Loss and Gain account the net business loss or gain at the end of the 

 _year; but we simply find the difference between the two sides, and trans- 

 fer that difference to the " J. H. Goodwin Stock account." We then pro- 

 ceed to close the account the same as per instructions in 2nd, 3rd, 4th, 

 and 5th of Closing No. 1, above, except that the phrases " net private 

 gain " and " net private loss," enclosed in parentheses in 4th and 5th, do 

 not apply here ; for here it would be either a loss on private account or a 

 credit by private account. 



60. EXPLANATION. We open a Private account in the Ledger for each 

 member of the firm, and treat it as per instructions above. It is the 

 custom of some firms to allow the respective members each a salary, 

 against which each for himself may draw for his personal use. When 

 this is done they are credited for the salary monthly or yearly, as they 

 prefer ; and at the end of the year the account is closed the same as though 

 no salary had been allowed, the business losses showing so much more on 

 account of the increase in the " Salaries account," and the " Private 

 account " of each showing so much more private gain ; so the business is 

 not in the least affected by so doing. 



MERCHANDISE. 



66. Debit, at commencement of 

 business, "To Inventory" for amount 

 of Mdse. on hand, as shown by the 

 Inventory or Account of Stock. 



67. Debit for all Mdse. we buy. 

 69. Debit for all Mdse. returned 



to us after we have sold it. 



68. Credit for all Mdse we sell. 

 7O. Credit for all Mdse. we re- 

 turn to other parties after we have 



bought it. 



71. Directions for closing the Mdse. account at the end of the year: 

 1st. Write on credit side, " By Inventory," in red ink, for the amount 

 of Mdse. now on hand, as shown in the inventory. 



