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9 A. B. Smith has been keeping his records by single entry. lie maintains accounts in his ledger with cash, customers and creditors. He desires to change his records from single entry to double entry, but intends to use the same ledger as before. Explain what would be necessary in making the entries to change his records from single entry to double entry in order to avoid a duplication of the accounts with cash, customers and creditors. 10 Explain how single entry records may be of value in gathering information for statistical purposes. INDEX Account, 61, 239 Purpoae of, 61 Cohstruction of, 62 Illustration of, 63 Balance of, 64 Meaning of Balance, 65 Information Desired with Reference to, 75 Closing, 124, 126 Balancing, 125 Transferring, 128 Classification of, 410, 419 Departmental Analysis in, 424 Accounting, Meaning of, 11 Information provided by, 12 Purpose of, 13 Method, 14 Defined, 16 Process, 238, 242 Accounting for Consignments, 396 Accounting for C. O. D. Sales, 402 Accounting for Trade Acceptances, 359 Accounts with Cash, 75; Debtors, 76, 77, 322,325; Notes Receivable, 76; Creditors, 78, 79, 326-327 ; Notes Payable, 79 ; Fixed Assets, 80; Proprietor, 81, 297; Merchandise, 89, 298; Ex- penses, 91, 307, 373; Profit and Loss, 121; Real Estate, 295-297; Delivery and Drayage Expenses, 309; Interest, 311312; Merchan- dise Discount. 313. Account Sales, 395 Accounts Payable, 79 Accounts Receivable, 77 Accruals and Deferred Items, 367 Accrued Income, 367 Accrued Expenses, 369 Deferred Charges to Expense, 371 Prepaid Insurnnce, 372 Office Supplies, 373 Accrued Expenses, 369 Accrued Income, 367 Adjusting Entries, 117, 101, 381 Need of, 117, 379 Merchandise Inventory, 118 Administrative Expenses Account, 91, 310 Advantages of Controlling Accounts, 330 Advantages of Consignments, 395 Advantages of Graphic Method, 493 Analytical Statements, 469 Articles of Copartnership, 254 Arrangements of Accounts in Ledger, 98 Ascertainment of Proprietorship, 26 Assets. 24, 268-270 B Balance of an Account, 64 Balance Sheet, 32, 264, 384, 467, 470 Purpose of, 32, 264 Nature of Information, 265 Form of, 33, 271 Debts Due from Customers, 34 Merchandise on Hand, 35 Debts Owed to Cretlitors, 35 Heading or Title, 36 Subtitles, 37 Illustrations, 38, 39, 233, 271. 384, 471 Manager's Use of, 52 Comparative, 470 ( laHsification of Balance Sheet lt<>mR, 266-268 Proprietorship, 268 Relation of Current Assets to Cur- rent Liabilities, 268 Balancing an Account, 125 Rank SUtement, 221 Basis of Business Management, 2S Bill of Uding. 216 Bookkeeping and Accounting. 16 60ft 506 Index Books of Original Entry, 134, 240, 335, 425 Journal, 134 Sales Journal, 159, 428 Cash Book, 177 Purchases Journal, 153, 426 Buildings Account, 296 Business Practice and Procedure, Method of Handling Purchases, 351 Method of Handling Sales, 353 Shipping or Delivering Merchandise, 354 Method of Handling Cash Eeceipts, 354 Method of Handling Cash Payments, 355 Method of Handling Notes Receiv- able and Payable, 356 Business Vouchers and Forms, 198, 240 Purpose, 198 Classification, 199 Invoice, 199 Sales Ticket, 201 Negotiable Instruments, 202-209 Miscellaneous Forms, 216 Bank Forms, 220-223 Buying Expenses Account, 308 Cash Account, 75 Cash Book, 177 Form, 178 Nature, 179 Posting, 180 Cash Disbursement Journal, 176 Cashier's Check, 209 Cash Receipts Journal, 173 Cash Record, 171-177 Cash iSales, 340 Check, 202, 222 Classification of Accounts, 410, 410 Classification of Balance Sheet Items, Assets, 266 Liabilities; 267 Proprietorship, 268 Classification of Business Vouchers, 199 Classification of Expenses, 49 Classification of Items on Statement of Profit and Loss, 279 Operating Income. 280 Returns from Sales, 280 Sales Deductions, 281 Cost of Goods Sold, 282 Operating Expenses, 284 Non-operating Income, 286 Non-operating Expenses, 287 Closing an Account, 124, 126 Closing Entries, 120, 192, 384 Purpose of, 120 Gross Profit on iSales, 121 Net Operating Profit, 122 Comparative Balance Sheet, 470 Comparative Statement of Profit and (Loss, 473 Consignments, 393-400 C. O. D. Shipments, Wholesale, 400 Retail, 402 Accounting for, 402 Consignee's Inventory, 399 Consignee's Lien on Consigned Goods, 394 Consignee's Record, 398, 399 Consignor's Inventory, 398 Consignor's Record, 396, 397 Cost of Merchandise Sold, 48, 282 Construction of the Account, 62, 295 Controlling Accounts, Purpose, 321 Proving, 329 Advantages, 330 Current Entries, 188 Debits and Credits, Relation to the Account, 66 Method of Determining, 69 Equality of, 69 Debts Due from Customers, 34 Debts Owed to Creditors, 35 Deferred Charges to Expense, 371 Delivery and Drayage Expenses Ac- count, 309 Delivery Equipment, 81 Departmental Analysis in Account, 424 Departmental Analysis in Books of Original Entry, 425 Index 507 Departmental Analysis in Reports, 441-447 Departmental Revenue Accounts, 423 Depreciation, Necessity for, 228 Nature of, 228 Method of Showing Depreciation on Balance Sheet, 229; in Accounts, 230 Entries Necessary for, 232 Deposit Ticket, 220 Dissolution of Partnership, 258 Draft, 205 Bank, 206 Commercial, 206, 207 Accepted, 208 E Effect of Special Journals on General Journal, 186 Endorsement of Negotiable Instru- ments, 214-216 Entries Necessary to Record Deprecia- tion, 232 Equality of Account Debits and Gred- iU, 69 Essential Characteristics of a Partner- ship, 251 Exhibits, 468 Express Money Order, 209 Financial Reports, Definition and Purpose, 467 Conventional Reports, 467 ExhibiU. 408 Schedule, 468 Analytical Statements, 469 Comparative Balance Sheet, 470-475 Statement of Receipts and Disburse- ments, 476 Freight Express and Cartage, 429-433 Freight in Account, 302 Formation of Partnership, 253 Form of Balance Sheet, 33 Form of Proprietorship, 27 Form of Statement of Profit and Lom, 47 I-A Forms Used in Bank Transactions, 219 Deposit Ticket, 220 Signature Card, 221 Pass Book, 221 Bank Statement, 221 Check, 222 Fundamental Classification of Ac- counts, 411 Property Accounts, 412 Proprietorship Accounts, 413 Revenue Accounts, 414 Furniture and Fixtures, 80 Graphical Method of Presenting ~2i- counting Facts, 481 Need of, 481 Use of, 482 Illustrated, 484-492 Advantages of Graphic Method, 493 Limitations of Graphic Method, 493 Gross Profit on Sales. 49, 120 Important Consideration in Figuring Percentages, 459 Important Percentages, 461 Insurance, 372 Interest, 311 Interest Paid Account, 1 312 Interest Received Account, 312 Inventory Account, 90, 118, 302 Invoice, 190 Journal, Defined, 134 OsHandard Form, 135 Illustrated. 136-139 Posting, 140 Mmiern I'se. 186-193 ^ibdivisions. 335 Kinds of Negotiable Instrumenta, 508 Index Land Account, 297 Ledger, Defined, 66 Illustrated, 94-97, 141-143 Arrangement of Accounts, 98 Relation to Balance Sheet and Statements, 97 Liabilities, 24 Limitations of Graphic Method, 493 M Meaning of Account Balances, 65 Meaning of Accounting, 11 Meaning and Importance of Turnover, 462 Merchandise Discount, 313 Merchandise on Hand, 35, 118 Method of Calculating Percentages, 459 Method of Calculating Turnover, 463 Method of Determining Debits and Credits to Accounts, 69 Method of Determining Value of Cer- tain Assets, 269 Method of Determining Percentages, 456 Method of Handling Cash Payments, 355 Method of Handling Cash Receipts, 354 Method of Handling Notes Receivable and Payable, 356 Method of Handling Purchases, 351 Method of Handling Sales, 353 Method of Showing Depreciation on Balance iSheet, 229; on Accounts, 230 Method of Showing Percentages, 461 Method of Taking a Trial Balance, 106 Miscellaneous Business Forms, 216 Modern Use of General Journal, 186 Opening Entries, 187 Current Entries, 188 Adjusting Entries, 191 Closing Entries, 192 I-A N Nature of Books of Original Entry, 134 Nature of Depreciation, 228 Nature of Information Provided by Accounting, 12 Nature of Information Provided on Balance Sheet, 265 Nature of Proprietorship, 25 Necessity for Considering Depreciation, 228 Need of Adjusting Entries, 117 Need of Departmental Revenue Ac- counts, 423 Negotiable Instruments, Requisites, 204 Kinds, 205 Check, 202 Note, 203 Drafts, 205 Cashier's Check, 209 Express Money Order, 209 Postal Money Order, 209 Endorsements, 214-216 Net Operating Profit, 122 Non-operating Expenses, 50, 287, 311 Non-operating Income, 286, 311 Note, 203 Notes Payable Account, 79 Notes Receivable Account, 76 Notes Receivable and Payable Book, 356 Numbering Accounts, 416, 419 Opening Entries, 187 Operating Expenses, 50, 284 Operating Income, 280 Operation of a Partnership, 257 Paging, 140 Partnership, 251 Essential Characteristics, 251 Relation to Accounting, 253 Formation, 253 Operation, 257 Dissolution, 258 Partner's Capital Account, 298 Index 509 Partner's Personal Account, 298 Pass Book, 221 Percentage, 455 Use and Value, 455 Method of Determining, 456 Argument for Using Sale Price as Basis, 457 Important Consideration, 459 Methods of Calculating, 459 Important Percentages, 461 Method of Showing Percentages, 461 Postal Money Order, 209 Post Closing Entries, 385 Post Closing Trial Balance, 386 Posting from the Cash Book, 180, 342 Purchases Journal, 153-157, 426 Posting, 158, 339 Posting from Purchases Journal, 158, 339 Posting from Sales Journal, 164 Practice Sets, No. 1, 212 Xo. 2, 245 No. 3, 345 Prepaid Insurance Account, 372 Profit and ILoss Account, 121 Proprietorship, 24, 251 Nature of, 25 Ascertainment of. 26 Form of, 27 Accounts. 81, 297, 413 Propertjk' Accounts, 412 Proving Customers* and Creditors* led- gers, 329 Purchases Account. 89, .301 Purchases Discount Account, 314 Purchases Returns Account, 301 Purchases Returns and Allowances Journal, 427 Pur|)ose of Account-keeping, 410 Purpose of Accounting. 13 Purpo«e of the Account, 61 Purpose of Balance Sheet. 32. 264 Purpose of Closing Kntrios, 120 Purpose of the Trial Balance, 106 Purpose of the Statement of Profit and f .- *f\. 279 R Real Estete Accounts, 295-297 Receipt, 219 Recording Cash Payments, 174, 341 Recording Cash Purchases, 338 Recording Cash Receipts, 171, 341 Recording Cash Sales, 340 Recording Purchases, 153, 337 Recording Sales, 159, 339 Relation of Accounts to Reports, 295 Relation of the Business Transaction to the Account, 67 Relation of Consignor and Consignee, 393 Relation of Current Assets to Current Liabilities, 268 Relation of Debit and Credit to tlie Account, 66 Relation of Ledger to Statements. 97 Relation of Partnership to Accounting, 253 Requisites of Negotiable Instruments, 204 Reserve for Depreciation of Delivery Equipment, 231: Furniture and Fixtures, 231 Retail C. O. D. Sales, 402 Returns from Sales. 280 Revenue Accounts. 414 Ruling Personal and Note Accounts, 127 Sales Account, 90, 299 Sales Allowances Account, 300 Sales Deduction, 281 Sales Discount Account. 314 Sales Journal, 159-163, 42S Posting. 164. 341 Sales Record, 153 Sales Returns Account. 300 Salea Returns and Allowances Journal, 428 Sales Ticket, 201 Schedules. 468 Selling Expenses Account. 91, 308 l-A 510 Index Separate Columns in Books of Original Entry, 336 Shipping or Delivering Merchandise, 354 Signature Card, 221 Single Entry, 496-503 Source of the Ledger Entries, 133 Statement of Accounts, 218 Statement of Profit and Loss, 46, 279, 383, 447, 467 Purpose of, 46, 279 Form of, 47, 288 Cost of Merchandise Sold, 48, 282 Gross Profit on Sales, 49 Classification of Expenses, 49 Operating and Non-operating Ex- penses, 50, 280, 284, 286, 287 Classification of Items, 279 Title, 50 Subtitles, 51 Illustration, 51, 289, 383, 447, 462, 474 I j Manager's use of, 52 Showing Departmental Analysis, 447 'Showing Percentages, 462 Comparative, 473 Statement of Receipts and Disburse- ments, 476 Subdivision of the Journal, 335 Subtitles of Balance Sheet, 37 Title of Balance Sheet, 36 Title of 'Statement of Profit and Loss, 50 Trade Acceptance, 358 Accounting for Trade Acceptances, 358 Transferring an Account, 128 Trial Balance, Purpose of, 106 Method of Taking, 106 Illustrated, 107-111 Post Closing, 386 Turnover, Meaning and Importance of, 462 Metliod of Calculating, 463 Use of Reports by Owner or Manager ^ of Business, 52 Use and Value of Percentages, 455 Use of (Statistical Methods, 482 W Wholesale C. O. D. Sales, 400 Working Sheet, 379 I-A LIST OF ILLUSTRATIONS 1. Balance Sheet, Report Form .' 38 2. Balance Sheet, Account Form 39 3. Statement of Profit and Loss 51 4. The Account 63 5. Ledger .' 94-97 6. Trial Balance Ill 7. Journal 137-139 8. Ledger 141-143 9. Purchases Journal 157 10. Sales Journal 163 11. Debit Side of Cash Book 180 12. Credit Side of Cash Book 181 13. Invoice 200 14. Sales Ticket 201 15. Check 202 16. Note 203 17. Bank Draft 206 18. Commercial Draft 206 19. Commercial Draft 207 20. Accepted Draft 208 21. Cashier's Check 209 22. Position of Endorsement 215 23. Bill of Lading 217 24. Statement of Account 218 25. Receipt 219 26. Deposit Ticket 220 27. Bank Statement 222 28. Check Book 223 29. Balance Sheet 271 30. Statement of Profit and Loss 289 31. Purchases Journal 338 32. Sales Journal 339 33. Debit Side of Cash Book 340 34. Credit Side of Cash Book 341 35. Purchases Requisition 852 36. Notes Receivable Book 357-368 37. Notes Payable Book 367-358 38. Trade Acceptance 358 39. Insurance Policy Record 372-373 40. Working Sheet 382 41. Account Sales 896 42. 