SUBDIVISION OF CAPITAL ACCOUNT 51 



cellaneous Income respectively are transferred at the close 

 of the year to the credit of Loss and Gain account. The 

 result of these transfers is that the accounts in which the 

 various expenses and incomes are tabulated during the 

 year are closed and ruled off at the close of the year, while 

 the Loss and Gain account is created. This newly created 

 Loss and Gain account contains the essential financial in- 

 formation of all the accounts closed into it. It shows the 

 total expense for rent, labor and general items. It shows 

 the total income from milk, corn, oats and miscellaneous 

 sources. Any details concerning these expenses or in- 

 comes can be found by reference to the several accounts 

 closed. The essential financial information is the total ex- 

 pense and income of each class. 



By bringing these figures together the net gain is easily 

 determined, since it is found by subtracting the total ex- 

 penses from the total income. In the account under im- 

 mediate discussion, the Loss and Gain account of Illus- 

 tration 10, the total income is $2000, while the total ex- 

 penses amount to $1000, the latter being the sum of the 

 first three debit items of the account. 



Closing Loss and Gain into Proprietor's Capital. The 

 Loss and Gain account has been defined as an account cru- 

 ated temporarily at the close of a year to serve as a sunj- 

 mary for expenses and incomes. Its temporary nature is 

 quite evident when it is learned that Mr. Arnold 's Loss and 

 Gain account is closed into Mr. Arnold's Capital account 

 almost as soon as it has received all its entries from other 

 accounts. The closing of the Loss and Gain account brings 

 up a point that was not raised in connection with the clos- 

 ing of the several expense and income accounts. In their 

 cases any specific account had entries on only one side, at 

 the time of closing it. In the Loss and Gain account there 

 are entries on both the debit and credit sides. However, 

 only, one entry is made in the Loss and Gain account to 



