82 THE HOME, FARM AND BUSINESS CYCLOPAEDIA. 



268. CLOSING. This account is closed the same as "Salaries" account. 

 (See 202.) 



269. EXPLANATION. This account is kept in order to show, at the 

 end of the year, how much we have lost during the year in poor accounts 

 -and notes. During the year we debit this account for all absolute losses 

 on accounts and notes. 



270. ACCOUNTS. At the end of the year, before closing our books, we 

 take the Ledger, and beginning with the first account therein, go through 

 the entire book, carefully examining every account. It is wrong to take 

 in the trial-balance at the end of the year, as Resources, such accounts as 

 we know to be absolutely worthless, and such accounts for their full face 

 as we know to be worth only a small per cent, on the dollar ; therefore, 

 when we come to an account we consider entirely worthless, we credit 

 that account, in red ink, " By Lost Accounts and Notes " for the entire 

 amount, balance the account thus closed, and carry the amount to the 

 debit side of " Lost Accounts and Notes account," writing on the debit 

 side of that account the name of the person upon whom the amount was 

 lost. Such accounts as we think not entirely worthless we estimate the 

 value of, credit same, in red ink, " By Lost Accounts and Notes " for 

 amount considered worthless, and carry such amounts over to the debit 

 side of Lost Accounts and Notes account. The accounts in the hands of 

 attorneys are treated iu the same manner. 



271. NOTES. Having thus disposed of the accounts in the Ledger, we 

 take the notes on hand (Bills Receivable) and examine them closely. If 

 we find any we know to be worthless, we debit Lost Accounts and Notes 

 account, and, in red ink, credit Bills Receivable account for such amounts, 



putting all such notes in an envelope, on which we mark " Worthless 

 Notes." If we find a note which we think is not worth its full face, we 

 approximate the value thereof, and for the amount considered worthless 

 we debit Lost Accounts and Notes account, and, in red ink, credit Bills 

 Receivable account; after which we may write on a slip of paper, "$.... 

 thrown off as worthless," with date, pin the slip on the note, and put it 

 with the notes considered good. 



272. When we thus, at the end of the year, carry losses on accounts 

 and notes to this account, we do not transfer the amounts direct, as might 

 be inferred from reading thus far ; but we first make a journal entry, 

 with complete explanation accompanying, so that if we ever were obliged 

 to take our books into court to prove these accounts, they would in this 

 entry show what these credits were. The journal entry here referred to 

 may be made in something of this manner : First, write the date at the 



