18 BULLETIN 178, U. S. DEPARTMENT OF AGRICULTURE. 
THE PROFIT AND LOSS STATEMENT. 
This statement presents in explanatory detail the gross profit 
made during the year and the expenses and losses incurred, it being 
a transcription of the " profit and loss " account on the ledger, and 
discloses the way in which the " net profit " or " net loss " appearing 
on the balance sheet is obtained. (Form II.) 
Form II. — Profit and loss statement. 
Merchandise gross profit $2, 255. 00 
Commission 3. 510. 00 
Expense (per itemized statement) $4,900.00 
Interest and discount '75. 00 
Reserve for depreciation 190. 00 
Reserve for bad debts 60. 00 
Balance to surplus 5^0.00 
5. 765. 00 5, 765. 00 
THE EXPENSE STATEMENT. 
The monthly totals appearing under the different headings in 
the expense book should be added and an itemized statement of 
expenses made. This will give in detail the expenses incurred during 
the year. (Form III.) 
Form I If. — Itemized statement of the expense account. 
Salaries $2, 300. 00 
Labor J f 00. 00 
Traveling expenses ',5. 00 
Taxes 29. 00 
Insurance . 18. 00 
Office supplies and stationery 11R.00 
Advertising 260. 00 
Telegrams .',60.00 
Telephone 320. 00 
Postage 2J,6. 00 
Light, heat, water, and ice 162. 00 
Painting and repairs 230.00 
Garage 
Cartage 56. 00 
Directors' fees 110. 00 
Auditors' salaries 100.00 
Pent 
Miscellaneous J t 6. 00 
Total J h 900. 00 
AUDITING. 
The purposes of an audit are for protection against fraud, for the 
detection of errors and omissions, also to determine if the business 
is conducted along the most economical lines and in accordance witii 
