14 BULLETIN" 236, U. S. DEPARTMENT OF AGRICULTURE. 



ink and deducted in the addition of the items in the column. The 

 several columns of the expense account may be headed "Salaries;" 

 "Telephone, telegraph, and electric light;" "Taxes;" "Gasoline;" 

 "Repairs;" and "Miscellaneous," or similar headings suitable to the 

 nature of the expenses incurred. 



An account should be provided showing the capital stock outstand- 

 ing or the portion of the net capital which is used or is available for 

 the working of the business. 



Separate accounts should be opened for each kind of grain handled, 

 showing the amount and value of grain purchased on the debit, and 

 the amount and value of grain sold on the credit. At the end of the 

 year, by crediting these accounts with the inventory of the kind of 

 grain specified, the net profit on each kind of grain may be deter- 

 mined. In the case of local sales of grain, it is advisable to open 

 separate accounts so that a clear record may be kept of the amount 

 of grain sold locally, as well as in car lots. These local sales accounts 

 should be closed into the general grain accounts at the end of the year. 



During the course of a shipping season a considerable number of 

 claims will arise against railroads for losses of grain in transit. Two 

 accounts should be opened to accommodate this condition: A debit 

 account — claims against railroads for leakage in transit, and a credit 

 account — loss and recovery on grain leakage in transit. These 

 accounts operate after the following manner : When a car is reported 

 short a certain number of bushels under that recorded by the elevator's 

 automatic scale, a charge is put through against the railroad respon- 

 sible in the first-named account, and a corresponding credit is carried 

 to the latter account. When recovery is received by remittance 

 from the railroad company, the company is credited with the amount 

 of the check. If the check does not cover the full amount of the 

 claim, and no further action is to be taken looking toward its collec- 

 tion, then a journal entry for the remainder should be passed, credit- 

 ing the account of the railroad in the claims account and debiting 

 loss and recovery on grain leakage in transit. This latter account 

 constitutes an income account and may be written off direct to profit 

 and loss; or if the composition of the account is known, the specific 

 items applying to certain kinds of grain may be credited to the grain 

 accounts. 



The following entries in the cash, journal, purchase, and sales 

 record will serve to illustrate the method of accounting for loss and 

 recovery on grain leakage in transit. When 'the grain is reported lost, 

 the first entry to be made is as follows : 



Debit Claims (B. & M. Railroad) 25. 00 



Credit Loss and recovery on grain leakage in transit 25. 00 



After negotiations with the railroad, assume that settlement by 

 an allowance of $15.00 is received by check. Entry would then be 



