74 The Farmer's Business Handbook 



and credited 1901 Wheat Field with "wheat on the 

 ground," $52.50, and J. Bryant "by balance due," 

 $87.80, and balanced John Smith's account by 

 entering on the debit side of it "to balance un- 

 paid," $25.75, we are ready to close all accounts 

 and determine gain and loss in detail. All of these 

 balances have been placed in bold-faced type, 

 that the student may the better follow, step by 

 step, the various operations necessary to balance 

 and close the books. 



The accounts are closed by entering either on 

 the debit or credit side, as the case may be, the 

 difference between them. To illustrate, the credit 

 to Teams (p. 62), including both inventory entries, 

 exceeds the debits by $153.22; therefore the fol- 

 lowing entry is made in the ledger, "To balance," 

 $153.22. Note just what the statement means 

 and what it says — that in order to make the 

 debit side of Teams account equal to the credit 

 side $153.22 has been arbitrarily entered. This 

 amount did not come from the work report, nor 

 the blotter, nor from any actual transaction, but 

 was placed there for the single purpose of bal- 

 ancing the account with Teams. In like manner, 

 enter such amounts as may be necessary in the 

 other accounts to make their debits and credits 

 equal, that is, balance. If the balance falls on 

 the debit side it is written, "To balance," if on 

 the credit side, "By balance." These entries are 



