16 BULLETIN 118, U. S. DEPARTMENT OF AGRICULTURE. 
names of the accounts are written on this extension and as it over- 
laps the second sheet the accounts have to be written but once a year. 
NECESSITY OF TAKING MONTHLY TRIAL BALANCE. 
Man}' organizations, due to the rush of business during the heavy 
selling season, fail to take the necessary trial balances. This is a 
practice which should be discouraged, for it is of the utmost im- 
portance that a trial balance be taken, and it should not be set aside 
until it balances. 
A discrepancy in the trial balance means one or more errors of 
unknown size. No office manager can afford to allow errors of any 
kind to run on from month to month in the hope that they will be 
found during a lull in business operations. If there are errors in 
the books, they can not be depended upon to show the true condition 
of the business. 
The greater the amount of business transacted, the more important 
the trial balance becomes. Errors should be hunted out immedi- 
ately if they are known to exist, and there is no quicker way to find 
mathematical errors than through the trial balance. 
SURPLUS. 
Surplus indicates a portion of the profits withheld from distribu- 
tion, or the accumulation by special assessments, for the purpose of 
establishing an addition to the working capital of the organiza- 
tion. It may be put to any use for which capital is needed. 
Cooperative organizations should make arrangements to set aside 
specific amounts, or a percentage of profits, for the increase of work- 
ing capital. As an organization grows, more capital is required to 
take care of the increase in business properly. The capital obtained 
at the outset in most cooperative organizations is barely enough to 
carry the business through from year to year. Frequently money is 
borrowed upon the security of directors to tide the organization over 
the busy periods when large amounts are required. The best way to 
put an organization on a sound financial basis is to secure a sufficient 
working capital to provide for ordinary working needs and thus free 
the organization from any necessity of managing on insufficient 
funds. 
After the organization has once been established on a sound finan- 
cial basis, loans, when needed, can be made on the credit of the or- 
ganization without compelling the directors to become personally 
liable. It can be said that with but few exceptions cooperative or- 
ganizations in this country do more business on less capital than any 
other class of business enterprises. This condition in many cases 
curtails the management to such an extent that it is impossible to 
secure the advantages for the members that could be obtained with 
