THE LEDGER 37 



15. Why is a $30 payment for labor expressed in the ledger as 



a credit to cash and a debit to the capital account? 



16. When Mr. Arnold receives cash for the sale of milk, why 



does he debit cash and credit his capital account? 



17. How is a decrease of capital shown in Mr. Arnold's capital 



account ? 



18. If all the property accounts, liability accounts and proprie- 



tor's capital account have exactly the same balance at the 

 close of the year as at the beginning, does it mean that 

 no changes have taken place during the year in any of 

 the accounts? Discuss. 



19. When does an account have a debit balance? A credit bal- 



ance? When is it in balance? 



20. If changes in capital have taken place during the year what 



financial statement shows the changes? 



21. Does a loss during a given year necessarily mean that there 



is less cash in the business at the close than at the be- 

 ginning of the year? Why? Does a gain mean there is 

 more cash in the business? Why? 



22. How were the figures obtained for the Loss and Gain State- 



ment in Illustration 7? 



23. What is the relation existing between a Statement of Re- 



sources and Liabilities as of February 28, 1917, and a 

 Loss and Gain Statement of the same business for the 

 year ending February 28, 1917? 



24. Study the transactions in connection with Illustration 5, and 



state the reason for each debit and credit recorded. Give 

 reasons for a decrease or increase in capital as the transac- 

 tions seem to indicate when recorded in Illustration 5. 



