13 



Closing and Balancing Books. 



Take inventory. Subdivide expenses. 



Take preliminary trial balance (consisting of credit balances in 

 one column and debit balances in the other). This must take into 

 consideration the footing-s of your journal columns, except ledger 

 accounts' columns, as well as the ledger accounts. Footings of these 

 columns should be equal. 



Take into account bills payable and receivable. 



Post footings of journal columns, except ledger accounts' columns, 

 to the accounts in the ledger. 



Make entries (through the journal) of balances of department 

 accounts to profit and loss account. 



Pinal trial balance will now prove your books and show your 

 true standing. 



Reopening Entries. 



Bring file and cash accounts back to the journal. 



Reverse inventory and bills payable and receivable entries. 



Explanatory Entries. — Say land and buildings are worth $1,000 ; 

 cash on hand and in bank, $550,76; bills receivable, $83.60; bills 

 payable, $38,70 ; utensils and implements, $278,90. Inventory shows : 

 cows, $75; hens, $200; pigs, $35; sheep, $80; and produce, $40. 



Make entries as shown on accompanying pages. Capital account 

 now shows your assets. 



It is now necessary to reverse the bills payable entry so that when 

 you pay out money in this period, for bills contracted in the previous 

 one, your departments will have a credit to offset the charge against 

 them of cash paid out for the last period's business. 



Bills receivable entry is reversed that departments may have a 

 charge against them to offset money received this period that was 

 due to last period's business. 



Individual stock or pen records should be kept in order to keep 

 the departments up to their fullest capacity for business. 



Entries in the usual course of business may be made as follows : — 



George Jones buj's a can of cream, $8; you bring back from him 

 3 cans of skim milk for the pigs, value, 25 cents. Stable is credited 

 50 cents for hauling the cream. You exchange a case of eggs, $6, 

 for 4 bags of gTain worth $6.25, and pay 25 cents c^sh to the miller. 

 Charles Murphy pays $10 he owed for a pig sold previously to 

 starting your accounts. 



These explanations, by the changing of column or department 

 headings, are of use for any and all kinds of business. They are 

 not given with the intention of making you a bookkeeper. Stick to 

 your last (as the cobbler says), call in clerical assistance. It will 

 pay big. 



