CLASSIFICATION OF LEDGER ACCOUNTS FOR CREAMERIES. 



23 



During the year it is frequently found that errors or omissions were made in the 

 work of closing the books for the previous year. These corrections should not be 

 made through the Loss and Gain account but by making the adjustments direct to 

 the Surplus account or to a Surplus Adjustment account. Any unusual item of 

 profit or loss, such as might arise from a sale of land, buildings, etc., must not be 

 entered in the Loss and Gain account, but must be entered in the Surplus account. 



By referring to the illustration on page 35, it will be seen that the result of the 

 Income and Expense Statement is the, showing of Net Profit. This is the balance 

 of the Loss and Gain account. It is now desirable to show what disposition is made 

 of the net income, and this is effected by the last section of the statement, captioned 

 Distribution of Net Profit. This is sometimes accomplished by the use of another 

 account called Undivided Profits. However, it seems that the same results may be 

 accomplished by the method here shown, without opening the additional account in 

 the Ledger. 



INCOME ACCOUNTS. 



J. SALES. 



Butter Sales (J 1). 



Debit: 



1. With the sale value of any butter 

 that may be returned by a customer. 



2. With the balance at the close of the 

 fiscal year. (Credit Loss and Gain. 



Credit: 



1. At the close of each period with the 

 total sales during the period. 



Cream Sales (J 2). 



Debit: 



1. With the sale value of any cream 

 that may be returned by a customer. 



2. With the balance at the close of the 

 fiscal year. (Credit Loss and Gain.) 



Credit: 



1. At the close of the period with the 

 total sales during the period. 



Milk Sales («T 3). 



Debit: 



Credit: 



1. With the sale value of any milk that 



1. At the close of the period, with the 



may be returned by a customer. 



total sales during the period. 



2. With the balance at the close of the 





fiscal year. (Credit Loss and 





Gain.) 





Cheese Sales (J 4). 



Debit: 



1. With the sale value of any cheese 



that may be returned by a cus- 

 tomer. 



2. With the balance at the close of the 



fiscal year. (Credit Loss and Gain. ) 



Credit: 



1. At the close of the period, with the 

 total sales during the period. 



