SYSTEM OF ACCOUNTING FOR COOPERATIVE! ASSOCIATIONS. 17 
The excess of assets over liabilities and capital will be shown in the 
statement on the credit side under the caption "Surplus." The 
excess of liabilities and capital over the assets, however, indicates the 
reverse of the above condition; namely, that a deficit exists. This 
amount will be shown in the statement on the debit side under the 
caption ''Deficit." 1 
•The statement of assets and liabilities is transferred to the journal 
and forms the opening entry displaying the financial position of the 
business— that is, the assets, liabilities, and capital. 
WHAT ACCOUNTS TO KEEP. 
The following accounts are usually needed in an organization of this 
kind. Further nominal accounts may be found necessary and can 
be opened as desired, but in the main the list here given will be found 
sufficiently comprehensive to cover all needs. 
Capital stock. — The credit balance appearing on this account meas- 
ures the amount of stock fully paid up, for which certificates of stock 
are issued and outstanding. 
Land. — The debit balance appearing on this account measures the 
cost of the land owned by the organization. 
Building. — The debit balance appearing on this account measures 
the cost of the building. If the organization owns more than one 
building, it will be found preferable to carry a separate account with 
each building. 
Office equipment — The debit balance on this account measures the 
cost of all office furniture and equipment on hand. This includes all 
the heavier articles, but does not include the smaller, such as ink wells, 
pencils, daters, etc., which have to be renewed frequently. These 
should be charged to expense direct, under the distribution of office 
supplies. 
Fixtures. — The debit balance on this account measures the cost of 
warehouse and platform fixtures on hand, such as shelving, counter 
scales, and trucks. 
Cash. — Many bookkeepers do not carry a cash account in the 
ledger, but in taking a trial balance refer back to the cash book for 
the balance of cash on hand. Others transfer the balance as per cash 
book to the cash account in the ledger, ruling this account off arbi- 
trarily at the end of the month. It is often desirable to show at a 
glance the total receipts and total disbursements for each month in 
order to make comparisons. The cash account in the ledger is there- 
1 Deficit is not an asset and should it be necessary to display this fact on a statement for distribution among 
the members, this item either should be shown in red ink on the credit side of the statement in the same 
position as Surplus, or it should be deducted from Capital Stock in order to show the impairment of capital. 
It would be shown in the above statement on the asset side, as this statement is the basis of the opening 
entry made in the journal. 
