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BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 



Where indebtedness is incurred an account should be opened with 

 indebtedness or accounts payable, which will be credited with any 

 obligation incurred and debited when it is paid. 



MERCHANDISE. 



(1) With amounts received for supplies 

 whether collected in advance or on 

 delivery of supplies. 



Debit : Credit : 



(1) With the invoice price of supplies 



bought. 



(2) With freight and other direct handling 



charges, such as extra labor, etc. 



If supplies of any kind are handled, an account should be opened 

 with merchandise, which will be debited with the purchase price, 

 freight, and any other direct costs incidental to the handling of 

 such merchandise. The account will be credited with sales. When 

 all of the merchandise has been sold the account will show either a 

 gain or a loss, which should be transferred to the profit and loss 

 account or prorated back to members at the end of the year. 



If a larger number of accounts is needed than space is provided 

 for in the cash journal, a short sheet providing space for six to eight 

 accounts may be inserted between the left-hand and the right-hand 

 pages of the journal. However, where the number of accounts needed 

 is relatively large, a ledger should be used and the form of the cash 

 journal modified accordingly, 



ADVANCES TO SHIPPERS. 



Some associations regularly make advances to shippers, if re- 

 quested, at the time of the delivery of live stock. Where this is done, 

 one of the blank pairs of columns in the cash journal should be 

 headed " advances." All advance checks should be recorded in the 

 cash journal as all other checks are recorded, and the amounts 

 charged to the advances account. Deductions for advances will 

 then be made on the prorating sheet, the amount being entered, with 

 an appropriate notation, in the membership column. The advances 

 deducted in making settlement will appear as one of the deductions 

 on the credit side of the home statement on the shipment record 

 envelope. The advances account will be credited when the entry 

 for the settlement is made in the cash journal. As advances do not 

 affect the value of live stock or the expenses of shipping, no record 

 of the advances need be made in the shipment summary record. 



SALES SUBJECT TO INSPECTION. 



Separate returns are usually rendered to cover animals sold 

 subject to inspection, even though the terminal weight of such 

 animals has been included in determining the expense rate on the 

 remainder of the shipment. A separate prorating sheet should be 

 filled out when the returns for such animals are received, and a 

 separate entry made in the cash journal simialr to that made for 

 regular settlements. All the papers concerned in such sales should 

 be pinned together and filed in the envelope with the other papers 

 for the shipment. 



When animals sold subject to inspection are condemned it some- 

 times happens that their tankage value does not cover the expenses. 

 In such cases, the shipper owes the association the difference. As 



