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BULLETIN 865, IT. S. DEPARTMENT OF AGRICULTURE. 



Interest (N7). 



Debit: 



Credit: 



1. At the close of the period with the 



1. At the close of the period with the 



interest accrued during the period 



interest accrued during the period 



on Notes Payable. (Credit In- 



on notes receivable. 



terest Accrued.) 





2. With the discount charged on notes 





receivable discounted. 





The debits or credits offsetting the entries of interest accrued will be made to the 

 Interest Accrued account. At the close of the fiscal year the debits of this account 

 should be transferred to the debit of the Loss and Gain account, and the credits should 

 be transferred to the credit of Loss and Gain account. 



The above method is advisable for small concerns. However, in case both interest 

 paid and interest earned be considerable, it is suggested that separate accounts be 

 opened for Interest Expense and Interest Earned. 



Loss from Bad Accounts (N8). 



Debit: 



1. At the close of the period with the 



proportion of the estimated annual 



loss through bad accounts. (Credit 



Reserve for Doubtful Accounts.) 



Credit: 



1. With the debit balance at the close 

 of the fiscal year. (Debit Loss 

 .and Gain.) 



Miscellaneous Expense (N9). 



Debit: 



Credit: 



1 . With the cost of any items of expense 



1. With the debit balance at the close 



not chargeable to any of the fore- 



of the fiscal year. (Debit Loss 



going accounts. 



and Gain.) 



To this account should be charged donations to charitable organizations and any 

 other expense that can not be charged to any of the other accounts. 



O. PURCHASES. 



Merchandlse Purchases (01). 



Debit: 



1. With the cost of all merchandise 

 purchased for direct salo during 

 the period. 



Credit: 



1. With the debit balance at the close 

 oi the fiscal year. (Debit Loss 

 and Gain.) 



