40 BULLETIN 381^ U. S. DEPARTMENT OF AGEICULTUEE. 



Form 2L— CONTINUOUS TRIAL BALANCE, 1915. 



Accoimt. 



Aec. 



No. 



October. 



November. 



December. 



Dr. 



Cr. 



Dr. 



Cr. 



Dr. 



Cr. 



Capital StocTc 



Cash 



1 

 2 







15,010 

 69,260 



120, 623 









15,225 

 72,394 



131,240 









15,360 

 85,818 



142,180 



20 



70,360 

 120,623 



80 

 15 



40 

 15 



80,369 

 131,240 



25 

 60 



20 

 60 



89,208 

 142, 180 



20 



Totals 







Trial Balance. 



As is evident from an examination of Form 19, debits are equal to 

 the credits, hence a balance should exist between the two sides of the 

 Ledger when the posting is completed. (See Form 21.) This may- 

 be taken monthly, or as often as desired. Since there are only a few 

 fixed accounts, this should be a very easy matter if the work is done 

 correctly. It is suggested that the totals of each side of the 

 account be tised rather than the balances, since experience has proved 

 that this method obviates many chances for mistakes. The Trial 

 Balance of the totals is also a convenient summary of the business for 

 the year. 



Closing the Ledger. 



The expression " closing the ledger" is used because of time-honored 

 custom, though it is really a misnomer. The process consists merely 

 of transferring the balances of accounts showing losses or gains to a 

 summary Loss and Gain account which will then show either a net 

 gain or loss. The net gain is reported to the board of directors^ which 

 orders its distribution into Dividend, Reserves, Surplus, etc. The 

 loss and gain accounts will then balance, and only resources and 

 liabilities wiU be shown in the ledger, including, of course, the liabili- 

 ties to the stockholders; that is, Capital Stock, Dividends, Reserves, 

 and Surplus. In other words, each fiscal period will start without 

 any open loss and gam accounts, which have served their purpose 

 at the end of each period in showing the sources of profits or losses. 

 It is assumed that the bookkeeper is famiUar with the method of 

 closing the ledger. 



Before the ledger can be closed, however, certain adjustments must 

 be made in the loss and gain accounts. Accounts representing 

 property must be credited with the value of the stock in hand, and 

 accounts showmg rates and allowances must be adjusted for un- 

 settled claims. All such lists of property or claims are called inven- 

 tories. The customary loose method of making these adjustments 

 in red ink directly into the ledger is not recommended. Every change 

 of whatever nature in the general ledger should first be entered in the 



