16 BULLETIN 559, U. S. DEPARTMENT OF AGRICULTURE. 



tories of manufactured goods, should be derived from the monthly 

 balances of accounts, as shown in the ledger. By means of this 

 arrangement the trial balance will afford a complete check upon the 

 monthly operating statement which could not be attained if the 

 ledger were ruled oil each month. At the end of the year when the 

 ledger is closed, the net balance of transactions for the complete year 

 should agree with the undistributed balance for the last month of 

 operation, as shown by that month's operating statement. 



CASH AND PETTY CASH. 



In order that a complete trial balance may be taken from the ledger 

 it is advisable to carry a "Cash" account, representing the net balance 

 of available cash in the bank at the end of each month. But one 

 entry a month is necessary to this account, this being the difference 

 between the totals of the "Bank deposits" column and the ''Bank 

 withdrawals" column as shown in the cash journal. If the total of 

 the "Bank withdrawals" column should exceed that of the "Bank 

 deposits" column, this account will show a credit balance. Because 

 of the fact that the entries to this account represent balances, it is 

 not necessary to accumulate the items in the ledger from month to 

 month. 



For convenience in paying out small sums of money in the form of 

 cash for daily expenses and for making change, a petty cash fund 

 should be established in a sufficient amount to take care of these items. 

 In order to establish this fund, a check should be drawn, crediting 

 cash and debiting petty cash. The fund can then be used as needed. 

 Vouchers for payments of petty cash should be kept on file until the 

 end of the month, when an entry can be made in the cash journal 

 debiting the proper expense accounts for which the payments were 

 made and crediting petty cash. In some creameries it is the custom 

 to use shipping tickets for the transportation of certain products, and 

 in such cases it will be found convenient to purchase a supply of these 

 tickets with the petty cash fund and to treat the tickets as petty cash 

 on hand. This will save a considerable amount of posting of small 

 entries to the "Shipping ticket" account, as a summary of the expendi- 

 tures of this nature can be made at the end of the month and posted 

 as one item. 1 



INVENTORY AND EXPENSE ACCOUNTS. 



Accounts covering all inventoriable supplies, such as coal, salt, and 

 tubs, should be carried in the general ledger, together with their cor- 

 responding expense accounts. As such goods are purchased the 

 "Inventory" account should be charged. The usage, as shown by 

 the physical inventory, should be credited to the "Inventory" ac- 



i For further discussion of petty cash see U. S. Department of Agriculture Bulletin 178, Cooperative 

 Organization Business Mel 



