BUSINESS PKACTICE AND ACCOUNTS FOR COOPERATIVE STORES. 15 



mation shauld not be met promptly. The reports usually required 

 are: (1) The Manager's Financial Report; (2) the Auditor's Report, 

 and (3) the President's Report. 



MANAGER'S REPORT. 



The Manager's Report is the foundation of the operating record. 

 It should constitute a complete summary of the financial operations 

 of the past year, month, or other period, as the case may require. 

 Once its form is determined and what information it is to contain, 

 the records must be shaped so 'as to yield the information with the 

 least labor and liabiUty of error. It should be based entirely on the 

 permanent and balanced records, and on the actual inventory, or on 

 the estimated inventory based on known percentages as explained 

 below under "Inventory." 



This impHes that the manager must not undertake to prepare his 

 report until the books are completely balanced. It behooves the 

 board, therefore, to allow a sufficient time between the close of the 

 fiscal period and the meeting of the board or members to enable the 

 bookkeeper, the manager, and the auditor to fulfill these conditions. 

 Two weeks will not be found excessive. 



The form of the report is very important, since upon this to a large 

 extent depends its value to the directors and stockholders. Form 7 

 will be found satisfactory. It consists of three parts, viz: 



Part I. The Balance Sheet, showing the Resources and Liabilities. 

 Part II. The Income Sheet, showing: 



(a) The Trading Statement, and 



(6) the General Losses and Gains. 

 Part III. The Supporting Exhibits, showing the details of the items in I and II. 



INVENTORY. 



At this point it seems fitting to add a word of caution regarding 

 the inventory. Once or, if time permits, twice a year stock should 

 be taken and the actual market value of the merchandise and the 

 replacement value of the fixtures ascertained. The utmost care 

 should be exercised in takjng the inventory, sigice a difference of sev- 

 eral hundred dollars may be found in the Income Sheet hy careless- 

 ness in measures, prices, and extensions. There are several excellent 

 stock forms of inventory blanks on the market. A conservative 

 allowance for depreciation of goods, due to age or changes in style, 

 price, etc., should be made, so that the inventory stands for the actual 

 market value of the stock. Form 9 will be found satisfactory. 



If an audit is made monthly or at any other time between the actual 

 inventories, an approximate value of the goods may be found by the 

 following formula : The last actual inventory (27) ,^ plus the merchandise 

 cost (32), minus the net cost of the sales (35). The latter is found 



1 Numbers refer to same items in Manager's Report, page 10. 



