LIVE-STOCK SHIPPING ASSOCIATIONS. 11 
OPERATING THE CASH JOURNAL. 
The operation of the cash journal is best illustrated by examples. 
Figure 9 shows how the following receipts of cash should be recorded. 
The numbers in parentheses correspond to the number of the illus- 
trative transactions on pages 48 to 950. 
(3) November 2. Received check for $1,452.73 from Cooperative Commission 
Co., representing proceeds of shipment No. 111. 
(17) December 1. Received $40 in cash, representing membership fees paid 
by 40 new members. 
(21) December 6. Borrowed $100 at the State Bank and gave a 90-day note. 
bearing 7 per cent interest. 
In transaction (3) live stock was exchanged for cash; in transac- 
tion (17) the privileges of membership were exchanged for cash; in 
transaction (21) an obligation to pay $100 in 90 days was exchanged 
for cash. In each case the bank account is debited with the amount 
of cash received and deposited, and in each case that account which 
produced or parted with the value exchanged for the cash is credited.* 
Entries for the following cash disbursements are shown in figure 
10. 
(2) November 1. Paid the Jones Feed Store for 8 bushels of corn for ship- 
ment No. 111; check No. 101 for $4. 
(5) November 2. Paid Eureka Printing Co. for cash journal binder, $5 and 
stationery $5; check No. 103 for $10. 
(8) November 4. Paid note at State Bank for $200 with interest $16; check 
No. 105 for $216. 
(18) December 2. Paid John Clark, manager, commission on shipment No. 
112; check No. 111, for $10.11. 
In recording the disbursements the procedure is similar to that in- 
volved in recording the receipts, except that in this case the bank ac- 
count is credited and the accounts representing the value received in 
exchange are debited. In transaction (2) the local car expense ac- 
count is debited with the value (corn) received for the $4 cash ex- 
pended. In transaction (5) personal property and office supplies 
were received; the cash journal binder, being a permanent piece of 
equipment, is debited to the yard and office equipment account, but 
the stationery, which will be used up in a relatively short time, is 
debited to general expense. In transaction (8) an obligation to pay 
was received (canceled) to the extent of $200, hence the debit to the 
indebtedness account. Interest expense was incurred to the extent 
of $16, which is debited to general expense under loss and gain. 
In transaction (18) expense was incurred for manager’s services, 
hence the debit to the manager’s commission account. 
It should be noted that each transaction is entered on a separate 
line and that at least two accounts are affected. It will also be noted 
that the debits and credits arising from each transaction are equal. 
Every transaction is an exchange of equivalent values, something 
of value is received and something of equal value is exchanged for 
it. According to a simple rule, an account is debited when value of 
the particular kind it represents is received, and it is credited when 
the same kind of value is parted with. 
As membership fees are usually used for general expenses, they are recorded in the 
loss and gain account as income. For exceptions, see discussion of “ Loss and gain”’ 
account on page 20, 
