22 BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 
Where indebtedness is incurred an account should be opened with 
indebtedness or accounts payable, which will be credited with any 
obligation incurred and debited when it is paid. 
MERCHANDISE. 
Debit: Credit : 
(1) With the invoice price of supplies | (1) With amounts received for supplies 
bought. whether collected in advance or on 
(2) With freight and other direct handling delivery of supplies. 
charges, such as extra, labor, etc. 
If supplies of any kind are handled, an account should be opened 
with merchandise, which will be debited with the purchase price, 
freight, and any other direct costs incidental to the handling of 
such merchandise. The account will be credited with sales. When 
all of the merchandise has been sold the account will show either a 
gain or a loss, which should be transferred to the profit and loss 
account or prorated back to members at the end of the year. 
If a larger number of accounts is needed than space is provided 
for in the cash journal, a short sheet providing space for six to eight 
accounts may be inserted between the left-hand and the right-hand 
pages of the journal. However, where the number of accounts needed 
is relatively large, a ledger should be used and the form of the cash 
journal modified accordingly, 
ADVANCES TO SHIPPERS. 
Some associations regularly make advances to shippers, if re- 
quested, at the time of the delivery of live stock. Where this is done, 
one of the blank pairs of columns in the cash journal should be 
headed “ advances.” All advance checks should be recorded in the 
cash journal as all other checks are recorded, and the amounts 
charged to the advances account. Deductions for advances will 
then be made on the prorating sheet, the amount being entered, with 
an appropriate notation, in the membership column. The advances 
deducted in making settlement will appear as one of the deductions 
on the credit side of the home statement on the shipment record 
envelope. The advances account will be credited when the entry 
for the settlement is made in the cash journal. As advances do not 
affect the value of live stock or the expenses of shipping, no record 
of the advances need be made in the shipment summary record. 
SALES SUBJECT TO INSPECTION. 
Separate returns are usually rendered to cover animals sold 
subject to inspection, even though the terminal weight of such 
animals has been included in determining the expense rate on the 
remainder of the shipment. A separate prorating sheet should be 
filled out when the returns for such animals are received, and a 
separate entry made in the cash journal simialr to that made for 
regular settlements. AJ] the papers concerned in such sales should 
be pinned together and filed in the envelope with the other papers 
for the shipment. 
When animals sold subject to inspection are condemned it some- 
times happens that their tankage value does not cover the expenses. 
In such cases, the shipper owes the association the difference. As 
— sida Faia 
