BUSINESS PEACTICE AND ACCOUNTS FOE COOPERATIVE STORES. 15 
mation should not be met promptly. The reports usually required 
are: (1) The Manager's Financial Keport; (2) the Auditor's Report, 
and (3) the President's Report. 
MANAGER'S REPORT. 
The Manager's Report is the foundation of the operating record. 
It should constitute a complete summary of the financial operations 
of the past year, month, or other period, as the case may require. 
Once its form is determined and what information it is to contain, 
the records must be shaped so as to yield the information with the 
least labor and liability of error. It should be based entirely on the 
permanent and balanced records, and on the actual inventory, or on 
the estimated inventory based on known percentages as explained 
below under " Inventory." 
This implies that the manager must not undertake to prepare his 
report until the books are completely balanced. It behooves the 
board, therefore, to allow a sufficient time between the close of the 
fiscal period and the meeting of the board or members to enable the 
bookkeeper, the manager, and the auditor to fulfill these conditions. 
Two weeks will not be found excessive. 
The form of the report is very important, since upon this to a large 
extent depends its value to the directors and stockholders. Form 7 
will be found satisfactory. It consists of three parts, viz: 
Part I. The Balance Sheet, showing the Resources and Liabilities. 
Part II. The Income Sheet, showing: 
(a) The Trading Statement, and 
(6) the General Losses and Gains. 
Part III. The Supporting Exhibits, showing the details of the items in I and II. 
INVENTORY. 
At this point it seems fitting to add a word of caution regarding 
the inventory. Once or, if time permits, twice a year stock should 
be taken and the actual market value of the merchandise and the 
replacement value of the fixtures ascertained. The utmost care 
should be exercised in taking the inventory, since a difference of sev- 
eral hundred dollars may be found in the Income Sheet bj careless- 
ness in measures, prices, and extensions. There are several excellent 
stock forms of inventory blanks on the market. A conservative 
allowance for depreciation of goods, due to age or changes in style, 
price, etc., should be made, so that the inventory stands for the actual 
market value of the stock. Form 9 will be found satisfactory. 
If an audit is made monthly or at any other time between the actual 
inventories, an approximate value of the goods may be found by the 
following formula : The last actual inventory (27) * plus the merchandise 
cost (32), minus the net cost of the sales (35). The latter is found 
i Numbers refer to same items in Manager's Report, page 10. 
