16 BULLETIi^ US, U. S. DEPAETMEI^J^T OF AGEICULTTJEE. 



names of the accounts are Avritten on this extension and as it over- 

 laps the second sheet the accounts have to be written but once a year. 



NECESSITY OF TAKING MONTHLY TRIAL BALANCE. 



Many organizations, due to the rush of business during the heavy 

 selling season, fail to take the necessary trial balances. This is a 

 practice which should be discouraged, for it is of the utmost im- 

 portance that a trial balance be taken, and it should not be set aside 

 until it balances. 



A discrepanc}^ in the trial balance means one or more errors of 

 unknown size. No office- manager can afford to allow errors of any 

 kind to run on from month to month in the hope that they will be 

 found during a lull in business operations. If there are errors in 

 the books, they can not be depended upon to show the true condition 

 of the business. 



The greater the amount of business transacted, the more important 

 the trial balance becomes. Errors should be hunted out immedi- 

 ately if they are known to exist, and there is no quicker way to find 

 mathematical errors than through the trial balance. 



SURPLUS. 



Surplus indicates a portion of the profits withheld from distribu- 

 tion, or the accumulation by special assessments, for the purpose of 

 establishing an addition to the working capital of the organiza- 

 tion. It may be put to any use for which capital is needed. 



Cooperative organizations should make arrangements to set aside 

 specific amounts, or a percentage of profits, for the increase of work- 

 ing capital. As an organization grows, more capital is required to 

 take care of the increase in business properly. The capital obtained 

 at the outset in most cooperative organizations is barely enough to 

 carry the business through from jear to year. Frequently money is 

 borrowed upon the securitj^ of directors to tide the organization over 

 the busy periods when large amounts are recjuired. The best way to 

 put an organization on a sound financial basis is to secure a sufficient 

 working capital to provide for ordinary working needs and thus free 

 the organization from any necessity of managing on insufficient 

 funds. 



After the organization has once been established on a sound finan- 

 cial basis, loans, when needed, can be made on the credit of the or- 

 ganization without compelling the directors to become personally 

 liable. It can be said that with but few exceptions cooperative or- 

 ganizations in this country do more business on less capital than any 

 other class of business enterprises. This condition in many cases 

 curtails the management to such an extent that it is impossible to 

 secure the advantages for the members that could be obtained with 



