A SYSTEM OF ACCOUNTING FOR COTTON GINNERIES. ot 
Great care must be exercised in inventorying these items as the 
value of the income and expense statement and the balance sheet 
depends upon the accuracy of the inventories. This work should 
always be conducted, or at least directly supervised, by a competent 
committee of the board of directors if the business is incorporated. 
When the above schedules have been completed, extensions made 
and verified, the following journal entries should be made. The 
figures in the schedules will be those used for the entries. 
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Debit. Credit. 
000 Inventory. 
Seed COLO Pumehasessss shore cee Ce ee tte Sa dee 000 
Comoncsecd spurchaseste ata ar se hee ee te ee soe ier 000 
WontanwpUnchasessen ste e seni ke remanet Neck ase ghar eyo) 000 
ibaccime and Ges purchases wakes oye ses oe fos ee 000 
To place the inventories on the books as an asset. 
Debit. Credit. 
000 Insurance. 
Pra pamcleimistmatnces. wee errr: Met erent e enn etn i a te 000 
To enter in the expense account the amount of insurance premiums expired during 
the year, and reduce the asset of prepaid insurance to the amount of premiums yet 
to be exhausted. 
(3) 
000 Rent. 
000 Taxes. 
INCCLUCE MENG AN GALAKERs eel aus ew Ce Ve Sve de ales 000 
To set up as expense the portion of these items which apply to the period, and are 
still unpaid. 
a, (4) 
000 Depreciation. 
Reserve for depreciation, Buildings.................... 000 
Machinery and equipment... 000 
Office furniture and equip- 
yO S123 0 Re Nc OE AT eee ni ll 000 
To set up the expense for depreciation, and created reserve. 
(5) 
000 Loss from bad accounts. 
Reserve;ior doubtiul accounts. 224-1... sehied. Jeol ne 000 
To set up as expense the estimated loss from bad accounts for the current period, 
and to create a reserve. 
(6) 
000 Custom ginning income. 
000 Cottonseed sales. 
000 Cotton sales. 
000 Bagging and ties sales. 
000 Cash discount on purchases. 
Wosmandreaimeye meer serene se oC FO tn ear ee 000 
To close the income accounts and transfer gross gains to Loss and gain account. 
