Am.  Tour.  Pharm. 
Oct.,  1918. 
Correspondence. 
737 
pense.  It  is  of  the  utmost  importance,  therefore,  that  every  con- 
cern in  business,  large  or  small,  whether  corporation,  partnership 
or  individual,  shall  maintain  an  exact  record  of  its  receipts'  and 
expenses — in  other  words,  keep  accurate  accounts.  Taxes  should 
be  considered  as  an  expense  of  the  year  for  which  they  are  assessed 
rather  than  for  the  year  in  which  they  are  actually  paid  and  the 
necessary  reserves  should  be  provided  for  at  once. 
Because  of  the  large  amounts  to  be  collected,  the  Bureau  of  In- 
ternal Revenue  will  be  compelled  to  check  the  income  tax  returns 
filed  by  taxpayers  more  closely  than  heretofore.  The  retail  mer- 
chant who  is  able  to  place  before  the  Internal  Revenue  Inspector 
book  records  showing  exactly  how  he  arrived  at  his  statement  of 
net  income  will  greatly  facilitate  the  government's  task  of  collecting 
the  war  revenues  and  save  himself  annoyance  and  expense. 
No  special  system  of  accounts  is  prescribed  by  the  Internal  Reve- 
nue Bureau  but  the  books  should  show  in  detail  inventories,  pur- 
chases, sales,  capital  investments,  depreciation,  and  similar  items  re- 
quired in  making  up  the  income  tax  return.  Every  merchant  should 
study  the  income  tax  law  and  regulations  and  see  to  it  that  his  ac- 
counts are  kept  in  a  manner  that  will  enable  him  to  determine  his 
net  income  for  taxation  purposes. 
Aside  from  the  necessity  of  keeping  systematic  accounts  in  order 
to  comply  with  the  government's  requirements,  every  progressive 
merchant  should  adopt  an  approved  accounting  system  for  the  good 
of  his  own  business.  In  no  other  way  can  he  further  his  financial 
interests  more  effectively.  It  has  been  proven  time  and  time  again 
that  accurate  accounts  are  absolutely  essential  to  success  in  business. 
The  merchant  who  has  a  good  accounting  system  is  able  to  eliminate 
waste  and  unnecessary  expense  and  can  so  control  his  purchases  and 
his  credits  as  to  greatly  lessen  the  chance  of  failure.  The  inven- 
tory, which  cannot  be  taken  without  some  form  of  accounts,  is  the 
compass  of  a  business.  Without  it  the  direction  in  which  the  busi- 
ness is  heading  either  for  success  or  failure  cannot  be  determined. 
In  the  complexities  of  modern  business  costs  must  be  calculated 
with  certainty  in  order  to  determine  what  the  selling  price  of  an 
article  should  be  in  order  to  yield  a  reasonable  profit.  This  is  im- 
possible without  books  of  account. 
The  profits  of  a  business  or  the  losses  of  a  business  cannot  be 
determined  without  book  records ;  and  now  that  the  nation  requires 
every  citizen  to  contribute  to  the  war  budget  within  his  means  and 
