40 BULLETIN 381, U. S. DEPARTMENT OF AGRICULTURE. 
Form 21.— CONTINUOUS TRIAL BALANCE, 1915. 
Account. 
Capital Stock. 
Cash 
Totals 
Ace. 
No. 
October. 
Dr. 
70, 360 80 
120,62315 
Cr. 
15,010\... 
69,26o\j,0 
120,623\15 
November. 
Dr. 
80, 369 25 
131,240 60 
Cr. 
15,225\ 
72, 394 20 
131,240 
December. 
Dr. 
89, 208 .... 
142, 180 
Cr. 
15, 350 
85,818 
142,180 
20 
Trial Balance. 
As is evident from an examination of Form 19, debits are equal to 
the credits, hence a balance should exist between the two sides of the 
Ledger when the posting is completed. (See Form 21.) This may 
be taken monthly, or as often as desired. Since there are only a few 
fixed accounts, this should be a very easy matter if the work is done 
correctly. It is suggested that the totals of each side of the 
account be used rather than the balances, since experience has proved 
that this method obviates many chances for mistakes. The Trial 
Balance of the totals is also a convenient summary of the business for 
the year. 
Closing the Ledger. 
The expression " closing the ledger" is used because of time-honored 
custom, though it is realty a misnomer. The process consists merely 
of transferring the balances of accounts showing losses or gains to a 
summary Loss and Gain account which will then show either a net 
gain or loss. The net gain is reported to the board of directors, which 
orders its distribution into Dividend, Reserves, Surplus, etc. The 
loss and gain accounts will then balance, and only resources and 
liabilities will be shown in the ledger, including, of course, the liabili- 
ties to the stockholders; that is, Capital Stock, Dividends, Reserves, 
and Surplus. In other words, each fiscal period will start without 
any open loss and gain accounts, which have served their purpose 
at the end of each period in showing the sources of profits or losses. 
It is assumed that the bookkeeper is familiar with the method of 
closing the ledger. 
Before the ledger can be closed, however, certain adjustments must 
be made in the loss and gain accounts. Accounts representing 
property must be credited with the value of the stock in hand, and 
accounts showing rates and allowances must be adjusted for un- 
settled claims. All such lists of property or claims are called inven- 
tories. The customary loose method of making these adjustments 
in red ink directly into the ledger is not recommended. Every change 
of whatever nature in the general ledger should first be entered in the 
