CLASSIFICATION OF LEDGER ACCOUNTS FOR CREAMERIES. O 



never recognized an accounting system as a vital assistance to the 

 management. The real purpose of accounting is not only to show the 

 board of directors, or proprietor, that the business has been conducted 

 at a profit or loss, and that no fraud has been committed, but also to 

 present facts concerning the business in such a manner that the man- 

 agement m&y direct the operations intelligently. 



In securing the very best benefits possible from an adequate account- 

 ing system, nothing can take. the place of an independent audit by a 

 reputable firm of public accountants. Some of the advantages to 

 be derived from such an audit may be summarized as follows: 



(1) An impartial and disinterested opinion of the general policy 

 and administration of the business is secured. 



(2) The financial records are carefully examined, and reports 

 presented in the best possible form. 



(3) Opinion is rendered as to whether the methods in use could be 

 improved and whether or not adequate reserves are being accumulated 

 to care for depreciation, bad accounts, etc. 



The cost of such an audit may seem prohibitive to some of the 

 smaller organizations. However, this expense may be somewhat 

 reduced by the formation of a cooperative auditing association, such 

 as is now in existence in some sections of the country. It is strongly 

 recommended that an audit of the kind referred to above should be 

 made at the, close of the fiscal year. 



Probably some organizations will not require all of the accounts 

 shown in this classification. For instance, in a creamery holding 

 no notes, neither the Notes Receivable account nor the Notes Receiv- 

 able Discounted accounts would be used. Also, in small concerns it 

 might be unnecessary to carry separate accounts for factory labor 

 and office salaries, and other similar items. Some organizations may 

 require additional accounts. The discussion in this bulletin should 

 enable any creamery bookkeeper to set up intelligently a complete 

 set of accounts. 



By comparison with U. S. Department of Agriculture Bulletin No. 

 559, it will be noted that some of the procedure outlined therein 

 differs from that described in this publication. These changes have 

 been found desirable after observation of actual operations extending 

 over a period of several years. 



