﻿LIVE-STOCK SHIPPING AHSOCfATlo.'.'S. 



15 



When settlement is made for a shipment of live slock severed ac 

 counts are affected. The debit and credits arising from shipment 



No. Ill are as follows (see Fig. 6) : 



DEBITS. 



CBEDIT8, 



Account. 



Amount. 



Account. 



Amount. 



Live stock 



W, 452. 73 





$1,480.03 



'J 54 





Manager's commission 







7 7H 





Local car expense 



4.00 





Dues-State federation 



50 





Undivided balance-gain 



.KH 











1,452.73 



1,452.73 



The entry to be made in the cash journal would appear as shown 

 in Figure 11. For the sake of clearness, the entry for the receipt of 

 the proceeds is also recorded. The two entries, however, represent 

 two separate and distinct transactions. 



The Live-stock account is debited, indicating that the gross amount 

 due shippers from the sale of live stock has been distributed. The 

 manager's commission account, the insurance fund account, the local 

 car expense account, and the federation dues account are each credited 

 with the amount deducted for each specific purpose. The amount 

 paid by checks is credited to the bank account. As complete dis- 

 tribution was not made, the undivided balance account is credited 

 with the 88 cents not distributed. 



TRANSACTIONS WHICH DO NOT INVOLVE THE CASH ACCOUNT. 



In the illustrations given above, cash was either received or dis- 

 bursed in each transaction. Although this is the case in the large 

 majority of transactions, it is occasionally necessary to record trans- 

 actions in which cash is neither received nor paid out. For illus- 

 trations see transactions (25) to (28) on page 50 and entries for these 

 transactions dated December 31 in Figure 8. 



ILLUSTRATIVE TRANSACTIONS. 



In order to illustrate further the operation of the cash journal, 

 the business of an imaginary shipping association for the months 

 of November and December, 1921, together with a summary of the 

 previous 10 months' business is recorded on the cash journal pages 

 illustrated in Figure 8. (A list of these transactions is given on 

 pages 47 to 51.) It will be noted that the first entry records the 

 accumulated debits and credits in the accounts resulting from the 

 business transacted previous to November 1, 1921. 5 This entry is 

 then followed by the entries for the business transacted during No- 

 vember. 



5 As the management is responsible for the condition of the business as revealed by 

 the books, the manager or secretary should insist that the statement upon which the 

 opening entry is based be approved by the board of directors. If the books of a previous 

 secretary or manager are taken over they should first be approved by the board of 

 directors. The books should be examined by an auditing committee at intervals of 

 from one to three months, and a thorough audit by a skilled accountant should be 

 made each year, or each time a change in management is made. Strict adherence to 

 this rule would not only be a protection to the management and to the membership but 

 it would tend to keep those responsible for the affairs of the association in intimate 

 contact with the business. 



