BOOKKEEPING T'OV! '(jRAIlsr ELEVATORS. 



19 



In alarge number of the instances where loas of ^rain results from leakage in transit 

 the elevator company has a legimatc claim against the transportation company. 

 When a claim for such a loss is made, an entry should be passed crediting the grain 

 account affected and debiting the Railroad Claims account. When cash is received 

 in full or partial settlement of the claim, the Cash account will be debited and llie 

 Railroad Claims account credited, with the amount collected. Any uncollectible 

 claims will be debited to the Leakage in Transit account and credited to the Rail- 

 road Claims account. At the end of the year unsettled claims, on which it is believed 

 recovery will be made, will be inventoried and carried to the following year. 



Since claims carried over from one year to the next may prove to be worthless, it 

 is suggested that a reserve account be set up to cover such possible losses rather than 

 to carry the claims over from one year to the next as an absolute asset. Where an 

 account, Reserve for Loss on Realization of Railroad Claims, is set up, it would be 

 debited with losses on any claims carried over from one year to the next. Such a 

 reserve would be created in the same manner as described under Loss from Bad Debts. 



F. CURRENT LIABILITIES. 



Notes Payable (Fl). 



Debit: 



Credit: 



1. With amounts paid on outstanding 



1. With the balance of outstanding 



notes. 



notes at the time of opening the 



2. With the unpaid portion of old notes 



books as shown by the balance 



canceled by renewal. 



sheet. 





2. With all new notes issued, including 





renewals of old notes. 



Accounts Payable (F2). 



Debit: 



Credit: 



1. With payments on account. 



1. With amounts due creditors on open 



2. With purchased goods returned for 



accounts at the time of opening 



credit. 



the books as shown by the balance 



3. With allowances and refunds on 



sheet. 



piu'chases. 



2. With the invoice value oi merchan- 





dise purchased on credit. 



Separate accounts should be opened for firms with which a credit business ia 

 conducted cm-rently. Miscellaneous accounts payable may be handled in one 

 account under the caption Miscellaneous Accounts Payable. 



Stock Dividend (FS). 



Debit: 



Credit: 



1. With the amount of the dividend 



1. With the dividend declaration when 



when it is paid. 



such dividend is expressed as a 





percentage of the capital stock. 



- 



(Debit Surplus.) 



Dividends should be numbered and so earmarked in the items column of the ledger 

 page. 



