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CLASSIFICATION. OF .LEDGER.ACCOUNTS FOR CREAMERIES. 31 
P. APPROPRIATION ACCOUNTS. 
DIVIDEND APPROPRIATION (P1). 
DEBIT: Creepin 5” 
1. At the close of the period with the 1. With the debit balance at the close 
proportion of annual dividend of the fiscal year. (Debit Loss 
chargeable to the period. (Credit and Gain.)? 
Reserve for Dividends Payable.) 
For further discussion, see Reserve for Dividends Payable, page 18. 
SINKING FuND APPROPRIATION (P 2). 
DEBIT: CREDIT: 
1. With the amounts deducted from | 1. With the debit balance at the close 
gross income as authorized by the of the fiscal year. (Debit Loss 
by-laws or by order of the Board of and Gain.)? 
Directors. (Credit Sinking Fund 
Reserve. ) | 
For further discussion, see Sinking Fund Reserve, page 19. 
TRIAL BALANCH. 
While the Trial Balance is not a financial statement, it serves to prove the postings 
.of the entries to the Ledger from the books of original entry. It is a summary of the 
various balances as they appear in the Ledger and should be drawn off before closing 
the Expense and Income accounts into the Loss and Gain account. If no mistake 
has been made in posting to the Ledger, the total of the debits will equal a total of the 
credits. A trial balance should always be taken at the end of every period and ail. 
errors should be located and corrected at once. | 
CLOSING THE BOOKS. 
Preparatory to closing the books, an inventory should be taken of ail supplies on 
hand and should be written up In permanent form. With it should be included a 
schedule of expense items, such as postage, stationery, and supplies on hand, and of 
the unconsumed balances of such accounts as Prepaid Insurance and Prepaid Taxes. 
The balances of alt Expense, Income, and Purchase accounts should be transferred 
to the Loss and Gain account in order to ascertain the net income or loss for the 
season’s operation. The accounts should then be ruled, and the balance brought 
down. This balance is the net income for the year. Against this net income should 
then be charged the balances of the Dividend Appropriation and Sinking Fund 
Appropriation aceounts. The balance of the Loss and Gain account should then be 
transierred to the Surplus account. 
After the books are closed and a post-closing Trial Balance has been taken to prove 
the mechanical accuracy of the work, the various flnancial statements are made up for 
presentation to the Board of Directors. 
2 Care should be exercised that this balance be transferred to Loss and Gain only after the net income 
has been determined, as shown by the form illustrated on page 35 and 36. 
