38 BULLETIN 381^ U. S. DEPARTMENT OF AGRICULTURE. 



Dividends Declared. Wheii the latter are paid, Dividends Declared 

 are debited, and Cash credited, through the Cash Payment Book 

 (18). This account should balance at the end of the year, since 

 no unpaid dividends should be reported. 



24. Gross sales. — This account represents the gross sales of mer- 

 chandise, and contains only credit items. At the end of the period 

 this amount is credited to the trading account, which contains exactly 

 the same items, in account form, as the Trading Statement. 



25. Returns and allowances on sales. — This account represents the 

 returned goods and allowances on merchandise sold. It may be kept 

 also on the debit side of the Sales account. If a separate account is 

 kept, it will contain only debit entries until the end of the year. 



28. Merchandise purchases. — This account is charged with all cash 

 purchases of both merchandise and produce, as shown in columns 

 4 and 5 of the Cash Payments, which should be entered only once a 

 year. At the end of the year the unpaid bills are also charged to this 

 account. Merchandise returned may be entered either under a 

 separate heading, or it may be entered on the credit side of Mer- 

 chandise Purchases Account. 



30. Accounts payable. — This account is not used at aU unless 

 regular creditors' accounts are kept as stated on page 48. In that 

 case, only one entry need be made at the end of the year, showing 

 the unpaid bills. This balance should be checked with the creditors' 

 statements. (See Auditing, p. 50.) 



31. Freight, express, and cartage. — ^All charges for freight, express, 

 and cartage on incoming goods intended for sale are entered in this 

 account. At the end of the period they are charged to the Trading 

 Account. 



35. Turnover, or net cost of merchandise sold. — This is defined as the 

 prime cost of sales. It may be estimated at any time by subtracting 

 the given percentage of gross profit from the gross sales. Thus, if the 

 sales are $12,000 and the average rate of gross profits is 20 per cent, 

 the turnover is $12,000 less $2,400, or $9,600. 



38. Merchandise discount. — The discounts taken on merchandise 

 are accumulated in column 2 in the Qash Payments, and are entered 

 in this account only once a year. It represents a credit balance. 



39. Interest. — This account shows a debit or credit balance, 

 according as more interest has been received or paid, and it shows 

 the amount of interest received on notes due the business and inter- 

 est paid on notes due others. Only one entry for the period is made 

 for the year on each side of this account, being the totals of column 9 

 in the Cash Receipts and column 14 in the Cash Payments. 



41. Salaries and labor. — The salaries and wages are entered in 

 column 8 in the Cash Payments Book as payments are made, and the 



