CLASSIFICATION OF LEDGER ACCOUNTS FOR CREAMERIES. 



27 



M. OPERATING EXPENSE. 



Labor (Ml).' 



Debit: 



Credit: 



1. With the amount actually earned 



1. With the debit balance at the close 



for the period by all factory em- 



of the fiscal year. (Debit Loss 



ployees as shown by the time 



and Gain.) 



sheet. (Credit Payroll account.) 





It will be noticed that this account is not charged with advances to employees nor 

 with the amount paid to employees, but with the amount actually earned during the 

 period. All payments, of whatever nature, are charged to Payroll account. (See 

 p. 16.) 



Power and Refrigeration (M 2). 



Debit: ^ 



Credit: 



1. With the cost of all material of any 



1. 



With the debit balance at the end of 



nature used as fuel in producing 





the fiscal period. (Debit Loss and 



power. 





Gain.) 



2. With the cost of electricity used for 







light and power. 







3. With the cost of water. 







4. With cost of all materials used in 







refrigerating machines or ice boxes 







(such as ammonia, calcium, ice, 







etc.). 







In those organizations which desire detailed information relative to the cost of power 

 and refrigeration, this account should be replaced by others which will give the de- 

 gired detail. 



Manufacturing Supplies (M 3). 



Debit: 



Credit: 



1. With the cost of all materials used 



1. With debit balance at the end of the 



in the process of manufacturing, 



fiscal period. (Debit Loss and 



such as packages and liners, salt, 



Gain.) 



butter color, starter, etc. 





Repairs on Plant (M 4). 



Debit: 

 1. With the total amount expended for 

 repairs to buildings, machinery, 

 and equipment, as shown by in- 

 voice or other vouchers. 



Credit: 

 1. With the debit balance at the close 

 of the fiscal year. (Debit Loss and 

 Gain.) 



Considerable care must be exercised in determining what should be charged to this 

 account. These charges should include repairs of all sorts but should not include 

 charges for replacement of entire units. The various invoices covering such ex- 

 penditures should be carefully analyzed and treated individually. 



