BUSINESS PRACTICE AND ACCOUNTS FOR COOPERATIVE STORES. 37 
3. Accounts receivable. — This account is used as a controlling 
account if a credit business is done. It shows a debit balance, if any, 
which equals the amounts due from customers as shown under the 
several accounts in the customers' ledger, or in the account file. It 
should be watched very closely, and under no circumstances should 
the manager allow any deviation from an exact balance between that 
account and the special accounts in the file. 
4. Reserve for bad debts.— A close check should be had upon the 
losses due to credit, and a definite rate established. When this is 
found, the amount should be deducted from the net profit, and 
credited to this account. Should this rate be found to be too large, 
the rate should be decreased; if too small, the rate should be increased 
from time to time. Credits to this account are offset by corresponding 
debits to the Loss and Gain account. Sometimes it is well to charge 
the entire balance of any account to Loss and Gain, and then if an 
amount is" collected enter it as a gain. 
5. Bills receivable. — This account shows a debit balance, if any, 
and represents signed obligations due the business, including notes, 
mortgages, drafts, and other negotiable papers. This account is used 
only where a credit business is done. 
6. Stock notes receivable. — This account shows a debit balance, if 
any, and represents the amount of stock notes due the business. The 
balance should be kept as low as possible, and care be taken to collect 
interest on every note. 
10. Furniture and fixtures. — This account represents the inventory 
value of the furniture and fixtures at the beginning of the period, 
together with all additions, but not renewals and repairs. Nothing 
intended for sale should be included in this account. 
14. Bills fay able. — This account shows a credit balance, rep- 
resenting the amount of signed obligations due others at the end of 
the period. 
16. Coupons outstanding. — This account shows a credit balance and 
represents the amount of coupons outstanding, or the difference 
between the amount sold and redeemed. Only one entry a year need 
be made in this account, at the end of the period. 
17. Capital stock. — This account shows a credit balance, and rep- 
resents the amount of stock outstanding. It is the controlling 
account of the Membership Ledger, and the balance must equal the 
amount of cash received for stock and stock notes, together with the 
stock notes on hand. 
18. Surplus. — This account shows a credit balance and represents 
the undivided profits of a concern. The net gain at the end of the 
year is entered in this account. 
21. Dividends paid. — When trade dividends are declared by the 
directors a journal entry is made, debiting Surplus, and crediting 
