18 BULLETIN 118, U. S. DEPAETMEXT OF AGEICULTURE. 



THE PROFIT AND LOSS STATEMENT. 



This statement presents in explanatory detail the gross profit 

 made during the year and the expenses and losses incurred, it being 

 a transcription of the " profit and loss " account on the ledger, and 

 discloses the way in which the " net profit "' or " net loss '' appearing 

 on the balance sheet is obtained. (Form II.) 



Form II. — Profit and loss statement. 



Merchandise gross profit $2. 255. 09 



Commission 3, 510. 00 



Expense (i>er itemized statement) $4,900.00 



Interest and discount 75. 00 



Eeserve for depreciation 190. 00 



Reserve for bad debts 60. 00 



Balance to surplus 540. 00 



5, 765. 00 5, 765. 09 

 THE EXPENSE STATEMENT. 



The monthly totals appearing under the different headings in 

 the expense book should be added and an itemized statement of 

 expenses made. This will give in detail the expenses incurred during 

 the 3^ear, (Form III.) 



FoKJi III. — Itemized statement of the expense account. 



Salaries -_— $2. 300. 00 



Labor 400. 00 



Traveling expenses //o. 09 



Taxes 29. 00 



Insurance IS. 00 



OfBce supplies and stationery 118.00 



Advertising 260.00 



Telegrams 460.00 



Telephone 320. 00 



Postage 246. 00 



Light, heat, water, and ice 162. 00 



Painting and repairs 230. 09 



Garage : 



Cartage 56. 00 



Directors' fees 110.00 



Auditors' salaries 100. 00 



Rent 



Miscellaneous 46. 00 



Total 4,900.00 



AUDITING. 



The purposes of an audit are for protection against fraud, for the 

 detection of errors and omissions, also to determine if the business 

 is conducted along the most economical lines and in accordance with 



