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A SYSTEM OF ACCOUNTING FOR COTTON GINNERIES. 25 
F. CURRENT LIABILITIES. 
Notes PAYABLE (F1). 
Debit: Credit: 
1. With amounts paid on outstanding 1. With the balance of outstanding 
notes. notes as shown by the halance 
2. With the unpaid portion of old notes sheet at the time of opening the 
canceled by renewal. books. 
2. With all new notes issued, including 
renewals of old notes. 
Should a note be renewed, thus in effect giving a new note for the old note, debit 
this account for the face value of the old note, and credit the account with the amount 
of the new note. 
A careful record should be maintained of all notes given, showing date issued, to 
whom, due date, and rate of interest. 
ACCOUNTS PAYABLE (F2). 
Debit: Credit: 
1. With payments on account, 1. With amounts due creditors on open 
2. With purchased goods returned for accounts at the time of opening 
credit. the books as shown by the balance 
3. With allowances and refunds on sheet. 
purchases. 2. With the invoice value of merchan- 
dise purchased on credit. 
When the invoice has been credited to accounts payable the check given in bee 
ment of same must be charged to accounts payable. As the canceled check is 
sufficient receipt, it is suggested that invoices be stamped ‘‘Paid ...... M2 rad 
filed alphabetically for future reference. 
A method much to be preferred to that just described, especially for the larger 
organizations, is the use of a voucher payable register, description of which may ‘be 
_ found in most books on accounting. 
Care must be exercised when entering checks to ascertain whether they should be 
charged to accounts payable when coods are purchased on credit, or to an inventory 
or expense account when goods are purchased for cash. 
Separate accounts should be opened for firms with which a credit business is con- 
ducted currently. 
It is not the intention to carry individual ledger accounts with all the various 
creditors because in many cases only a single purchase will be made from one concern 
and practically all invoices will be paid during the period. 
DIVIDENDS PAYABLE (F93). 
Debit: Credit: 
1. At the time of payment with the 1. At the close of the period with the 
total of checks paid to the stock- annual dividend payable to the 
holders as dividends. stockholders. (Debit Surplus ac- 
count). 
