APPENDIX. 
[How to keep the necessary accounts, close the books at the end of the year, prepare the annual reports, etc.. 
LEDGER ACCOUNTS TO USE. 
No matter what forms are used in recording the transactions, unless 
‘the financial facts are recorded in a uniform manner, under uniform 
account-captions, a uniform system of accounting can not be said to 
exist. The use of a uniform system of accounting and reporting by 
the ginning industry as a whole makes possible the exchange of data 
regarding business operations which is of great value as a guide to 
efficient operation. Furthermore, the attitudes of banks toward the 
extension of credit is influenced by the clarity of the reports sub- 
mitted in support of an application for a loan, and by the ease with 
which the financial condition and progress of the organization can be 
ascertained from such reports. It is with the aim of assisting in this 
highly important work of unification that a classification of general 
ledger accounts is presented herein. 
On pages 21 to 35, following, is described the detail operation of the 
Seas ledger accounts which it is believed will be found desirable 
or use in the average cotton ginnery. Some organizations will not 
need all of these accounts, while others will wish to have additional 
ones to show certain special features of their operations. 
The accounts hereinafter described are so arranged that a monthly 
income and expense statement can be prepared with a minimum of 
work and without closing the books. The combination of letter and 
number shown at the right of the account title should be used as the 
number (page) of the account in the ledger. This plan of numbering 
permits the insertion of additional accounts without disturbing the 
relative position of those already in use. The plan is a decided aid 
to the preparation of monthly and annual statements. In the dis- 
cussion of ledger accounts the term “fiscal period’? means the financial 
or other operating period as distinguished from the calendar periods; 
the term “at the opening of the books’’ means the time of installation 
of a new system of accounts. 
OPENING THE BOOKS. 
In order to open the accounts, it is necessary to take a physical 
inventory of all assets and to take into consideration all liabilities of 
the concern. These should be arranged in the form known as a 
balance sheet, with assets on the left and liabilities on the right. 
(See illustration on page 4.) The difference between the total 
assets and total ROD will represent the net worth, either as 
capital stock, surplus, or deficit. These accounts are described at 
length under their respective captions.. The assets should be arranged 
in the order of their probable cash realization and the liabilities in the 
order of their pfohainte priority as to liquidation. . 
The items appearing in the balance sheet should then be entered in 
the cash journal, the amount of each item being posted from the cash 
journal to the proper ledger account. As succeeding transactions are 
classified, entered in the journal, and posted to the proper ledger 
accounts, the ledger will contain a summary of the financial facts 
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