SPECIAL ACCOUNTS AND ENTRIES 139 



the year so that instead of selling $500 worth and having 

 \|J300 worth left at the close of the year, as in Illustration 

 25, the owner sold only $200 worth and had $100 worth 

 at the close. Under these conditions there would be a loss, 

 and the account would appear as in Illustration 26 after 

 closing it and bringing down the inventory. The inventory 

 entry is made in the same w r ay whether the account shows 

 a gain or a loss. When the account shows a loss, it is nec- 

 essary to credit such account and debit Loss and Gain 

 account. 



ILLUSTRATION 26 



INVENTORY ENTRIES IN AN ACCOUNT SHOWING A Loss 

 Swine 



1916 



Mar. 1 Inventory $400 



$400 



1916 



Nov. 5 Cash $200 



1917 



Feb. 28 Inventory 100 



Feb. 28 Loss & Gain. . 100 



$400 



1917 



Mar. 1 Inventory $100 



If an account does not have any debit or credit entries 

 after the inventory at the beginning of a given year, and 

 if the physical inventory at the close of the year agrees 

 with the balance of the account, no entry is necessary for 

 the inventory. For example, if Horses account has a bal- 

 ance on Mar. 1, 1916 ? of $1200 and at time of closing on 

 Feb. 28, 1917, there are 110 other entries in the account, 

 and the inventory of horses taken at that date is $1200, 

 the account is left exactly as it was. It shows the true 

 condition of affairs and there is no loss or gain to transfer. 



Taking and Recording the Inventory. The physical in- 



