18 BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 
Each of these accounts is described and illustrated fully on the 
following pages. 
DESCRIPTION OF THE ACCOUNTS. 
THE BANK ACCOUNT. 
It is good practice to handle all funds through the bank. All 
receipts of cash from whatever source will accordingly be entered in 
the “ deposits” (debit) column and as checks are issued the amounts 
will be entered in the “checks” (credit) column. A debit balance 
indicates the amount of available funds in the bank and is an asset. 
A credit balance indicates an overdraft and is a liability. 
Debit : Credit : 
(1) With the available balance of cash in | (1) With an overdraft, if any, at time of 
the bank as shown by the balance opening the books. 
sheet at the time of opening the (2) With the amounts of all checks drawn. 
books. The checks issued to shippers will 
(2) With all checks, drafts, and currency be entered in total for each ship- 
received from live stock and other ment. 
sources, as well as proceeds of notes 
given for loans, as these items are 
deposited. ~ 
All cash should be recorded in one bank account in the cash jour- 
nal, even though the cash is divided into different funds at the bank 
or is carried in more than one bank. Where it is desired to divide 
the business between two banks it is preferable to change banks once 
or twice a year rather than to carry funds in both banks at the same 
time. 
LIVE STOCK. 
Debit: Credit: 
(1) With net proceeds prorated at the | (1) With the net proceeds received from 
time of the settlement for each ship- commission firms for live stock 
ment. ship 3 
(2) With the purchase price of live stock | (2) With the amounts received for live 
purchased outright. stock sold locally. 
A credit balance in this acount usually represent proceeds which 
have not yet been prorated to shippers and is a lability. However, 
if live stock is bought outright the account will show a gain if the 
credits exceed the debits, and a loss if the debits exceed the credits. 
At the end of the fiscal year any such gain or loss will be closed to 
the loss and gain account. ! 
MANAGER’S COMMISSION. 
Debit: Credit : 
(1) With amounts of salary or commis- (1) With commission earned at the time 
sion aS payments are made. settlement is made for shipment of 
(2) With amounts paid manager in reim- live stock. 
bursement of amounts advanced by (2) With amounts advanced by manager 
him. for association expenses. for association expenses at the time 
the advances were made. 
Where the manager is paid on the commission basis, the account 
will balance if he has been paid in full. A credit balance represents 
the amount of unpaid commission due the manager. If the man- 
ager is paid on a salary basis, the debit balance will represent the 
amount of expense due to manager’s salary, which will be closed to 
the loss and gain account at the end of the year. 
INSURANCE FUND. 
Debit: Credit: 
(1) With payments to shippers for losses. (1) With amount deducted from the pro- 
(2) With payments of attorney’s fees for ceeds of each shipment as the in- 
collecting claims when such fees are 
1 surance charge. 
paid by ah association check. 
(2) With amounts received in settlement 
of railroad claims. 
