



BOOKKEEPING BUSINESS TRANSACTIONS 9 



and what information is to be recorded concerning 

 each ? ) 

 2. Method of recording transactions. 



(How is the information to be recorded so that it can 

 be condensed as much as possible and still be specific 

 and easily utilized in preparing the annual state- 

 ments?) 



The second of these points (the method of recording 

 transactions) is the one that involves more of the art of 

 bookkeeping and science of accounting. It is discussed 

 in the next chapter on Ledger Accounts, and in the chap- 

 ter on Books of Original Entry. 



Briefly, the first point, the detail of analysis of trans- 

 actions, involves a decision as to what information is 

 wanted at the close of the year or other time. We might 

 decide that in our Statement of Resources and Liabilities 

 we want to show the value of binders, mowers, plows and 

 other implements separately instead of grouping all of 

 them under the head "equipment." If we do, it is only 

 necessary so to keep the records throughout the year that 

 this detailed information will be available. Likewise if 

 we want to show the income from sale of oats and corn 

 separately in the Loss and Gain Statement, we can do so 

 by keeping our records during the year with that idea in 

 mind. 



ILLUSTRATIVE PROBLEMS 



The following problems should be prepared on ledger paper 

 in neat form, using Illustration 2 as a guide for Statements of 

 Resources and Liabilities: 



1. Mr. Black, on March 1, 1916, has resources as follows: 

 Cash $600, swine $700, poultry $100, horses $1200, equipment 

 $400, and a promissory note signed by Mr. Peck for $200. His 

 only liability is $60 owing to Mr. Thomas, a neighbor who loaned 

 it without security. 



