BUSIISrESS PEACTICE AND ACCOUlSrTS FOE COOPEEATIVE BTOEES. 53 



checking the notes on hand at the last audit and those received and 

 paid during the period. 



Real estate. — The real estate should be valued at the conservative 

 market value, and sometimes it is advisable to examine deeds, mort- 

 gages, letters, etc. 



Capital stock. — The capital stock must balance with the credit 

 side of the Capital Stock Account in the Membership Ledger. 



Bills payable. — A register is kept of Bills Payable if the business is 

 extensive enough to warrant it (Form 24), and no entry is permitted 

 in this book without the approval of the manager. The amounts 

 not marked ''Paid" must equal the total shown in the General 

 Ledger. 



Accounts payahle. — The fact that the total balances in the Creditors' 

 Ledger equals the controlling account balance in the General Ledger 

 is generally taken as evidence of the correctness of the items. That 

 this is not sufficient is evident from the fact that if a deferred item 

 were either intentionally or accidentally omitted from the books 

 or schedules, the amount would be a liability still, but the account 

 would be short by that amount. Tlie only satisfactory metJiod of 

 proving creditors' balances is hy the creditors' own monthly statements. 

 This is a precaution which is too often overlooked. 



Surplus, — The surplus is made up of the several entries from 

 the Journal at the close of each balance period. 



There is a difference of opinion as to whether a single auditor or a 

 committee should be employed. In most cases it is found that a sin- 

 gle auditor is more satisfactory. In the average community, really 

 competent accountants are scarce, and the greatest care must be. 

 exercised to avoid careless and perfunctory audits. It will be impos- 

 sible to retain competent auditors without fair compensation; and 

 the resources of the average cooperative association are such that 

 the expense of an auditor will not be excessive. If the business war- 

 rants it, a certified public accountant should be employed. Gen- 

 erally, it should be a matter of indifference whether or not the audi- 

 tor is a member of the association. In most cases, however, it is 

 better if he is a nonm ember. Perhaps the best "results are obtained 

 if the membership elect an auditing committee at the annual meet- 

 ing, with the understanding that this committee employ a competent 

 auditor. 



OFFICE EQUIPMENT. 



Too much attention can not be given to proper office equipment. 

 Nothing discredits the store more quickly in th^ opinion of dis- 

 criminating trade than slovenly appearance of the premises, and 

 particularly an office littered with all kinds of rubbish, devoid of every 

 convenience and comfort. Too often the opinion exists that a farm- 



