SUBDIVISION OF CAPITAL ACCOUNT 



writing the entry under Loss and Gain account, in this 

 way: 



Rent 



1917 



Feb. 21 Cash.. $400 



Loss and Gain 



1917 



Feb. 28 Cash for rent . 



$400 



This process would give the result sought, namely, the 

 elimination of the $400 balance in Rent account, and its 

 transfer to the same (debit) side of Loss and Gain ac- 

 count. Bookkeeping principles, however, will not permit 

 the transfer to be made in the way just indicated. In fact, 

 it might be stated as a principle of bookkeeping, that an 

 item or balance in an account should never be crossed out 

 preparatory to its transfer to some other account. In or- 

 der to transfer an item or group of items from the debit 

 side of one account to the debit side of another, credit the 

 account from which the amount is transferred and debit 

 the account to which it is transferred. Thus, in the case of 

 Rent account under discussion, the correct transfer would 

 cause the accounts to appear as in Illustration 11. 



ILLUSTRATION 11 

 CLOSING RENT ACCOUNT INTO Loss AND GAIN ACCOUNT 



Rent 



1917 



Feb. 21 Cash 



$400 



1917 



Feb. 28 To Loss & Gain 



$400 



