38 BULLETIN 381. U. S. DEPAETMEXT OF AGEICULrURE. 
Dividends Declared. TVhen the latter are paid, Dividends Declared 
are debited, and Cash, credited, through the Cash Payment Book 
(18). This account should balance at the end of the year, since 
no unpaid dividends should be reported. 
24. Gross sales. — This account represents the gross sales of mer- 
chandise, and contains only credit items. At the end of the period 
this amount is credited to the trading account, which contains exactly 
the same items, in account form, as the Trading Statement. 
25. Returns and allowances on sales. — This account represents the 
returned goods and allowances on merchandise sold. It may be kept 
also on the debit side of the Sales account. If a separate account is 
kept, it will contain only debit entries until the end of the year. 
28. Merchandise purchases. — This account is charged with all cash 
purchases of both merchandise and produce, as shown in columns 
4 and 5 of the Cash Payments, which should be entered only once a 
year. At the end of the year the unpaid bills are also charged to this 
account. Merchandise returned may be entered either under a 
separate heading, or it may be entered on the credit side of Mer- 
chandise Purchases Account. 
30. Accounts payable. — This account is not used at all unless 
regular creditors' accounts are kept as stated on page 48. In that 
case, only one entry need be made at the end of the year, showing 
the unpaid bills. This balance should be checked with the creditors' 
statements. (See Auditing, p. 5CU 
31. Freight, express, and cartage. — All charges for freight, express, 
and cartage on incoming goods intended for sale are entered in this 
account. At the end of the period they' are charged to the Trading 
Account. 
35. Turnover, or net cost of merchandise sold. — This is defined as the 
prune cost of sales. It may be estimated at any time by subtracting 
the given percentage of gross profit from the gross sales. Thus, if the 
sales are 1 12. 000 and the average rate of gross profits is 20 per cent, 
the turnover is 812.000 less 82,400, or 89,600. 
38. Merchandise discount. — The discounts taken on merchandise 
are accumulated in column 2 in the Cash Payments, and are entered 
in this account only once a year. It represents a credit balance. 
39. Interest. — This account shows a debit or credit balance, 
according as more interest has been received or paid, and it shows 
the amount of interest received on notes due the business and inter- 
est paid on notes due others. Only one entry for the period is made 
for the year on each side of this account, being the totals of column 9 
in the Cash Receipts and column 14 in the Cash Payments. 
41. Sahries and labor. — The salaries and wages are entered in 
column 8 in the Cash Payments Book as payments are made, and the 
