A SYSTEM OF ACCOUNTING FOB COTTON GINNERIES. 39 



REOPENING THE BOOKS. 



After having prepared the balance sheet and Income and expense 

 statement, it is necessary to make certain journal entries in order 

 that the accounts for the succeeding fiscal period may show the true 

 results of the operations. These are as follows: 



Debit. Credit. 



000 Seed-cotton purchases. 

 000 Cottonseed purchases. 

 000 Cotton purchases. 

 000 Bagging and ties purchases. 



Inventory 000 



To transfer the inventories on hand to the purchase accounts and close the inventory 

 account. 



(2) 

 000 Accrued rent and taxes. 



Rent 000 



Taxes 000 



To close the accrued account and adjust the debits to the expense accounts. 



It will now be possible to proceed with the entries for the new 

 period, and the books will then reflect the correct results of the new 

 period operations. 



