LIVE-STOCK SHIPPING ASSOCIATIONS. 15 
When settlement is made for a shipment of live stock several ac- 
counts are affected. The debit and credits arising from shipment 
No. 111 are as follows (see Fig. 6): 
DEBITS. CREDITS. 
Account. Amount. Account. Amount, 
IVG SUGG re oer k ont sea e ease Osta SL Ab2K7o0 |) BANK A. coche en tade coats to sla ae eee $1, 430. 03 
Manager’s commission. .................- 9, 54 
Tnsurance funds ot see ee ee eee 7.78 
Mocalicar'expense sitesi Shes. chs 4.00 
Dues-State federation...............-.-.-. . 50 
Undivided balance-gain.................. - 88 
1, 452. 73 1, 452. 73 
The entry to be made in the cash journal would appear as shown 
in Figure 11. For the sake of clearness, the entry for the receipt of 
the proceeds is also recorded. The two entries, however, represent 
two separate and distinct transactions. 
The Live-stock account is debited, indicating that the gross amount 
due shippers from the sale of live stock has been distributed. The 
manager’s commission account, the insurance fund account, the local 
car expense account, and the federation dues account are each credited 
with the amount deducted for each specific purpose. The amount 
paid by checks is credited to the bank account. As complete dis- 
tribution was not made, the undivided balance account is credited 
with the 88 cents not distributed. 
TRANSACTIONS WHICH DO NOT INVOLVE THE CASH ACCOUNT. 
In the illustrations given above, cash was either received or dis- 
bursed in each transaction. Although this is the case in the large 
majority of transactions, it is occasionally necessary to record trans- 
actions in which cash is neither received nor paid out. For illus- 
trations see transactions (25) to (28) on page 50 and entries for these 
transactions dated December 31 in Figure 8. 
ILLUSTRATIVE TRANSACTIONS. 
In order to illustrate further the operation of the cash journal, 
the business of an imaginary shipping association for the months 
of November and December, 1921, together with a summary of the 
previous 10 months’ business is recorded on the cash journal pages 
illustrated in Figure 8. (A list of these transactions is given on 
pages 47 to 51.) It will be noted that the first entry records the 
accumulated debits and credits in the accounts resulting from the 
business transacted previous to November 1, 1921.5 This entry is 
then followed by the entries for the business transacted during No- 
vember. 
5As the management is responsible for the condition of the business as revealed by 
the books, the manager or secretary should insist that the statement upon which the 
opening entry is based be approved by the board of directors. If the books of a previous 
secretary or manager are taken over they should first be approved by the board of 
directors. The books should be examined by an auditing committee at intervals of 
from one to three months, and a thorough audit by a skilled accountant should be 
made each year, or each time a change in management is made. Strict adherence to 
this rule would not only be a protection to the management and to the membership but 
it would tend to keep those responsible for the affairs of the association in intimate 
contact with the business, 
