DEVICES OF THE FUTURE
One of the successful devices which is being perfected at this time is a combination of an adding machine and a cylinder billing machine which can be operated as a combined machine or separately as two machines, and may be actually removed, one from another. The idea is to have a platen or roll which can act as shuttle between the typewriter and the adding machine. By pressing a button, the roll travels from the typewriter to the adding machine. This scheme has the same advantage as has the farmer who can operate his horses singly or in pairs.
The adding machine people have been experimenting and gradually increasing the printing capacity of their machines. They are now able to print the different months of the year and some other abbreviations for monthly statement work. Further developments can be expected along this line. Adding machines which list are a very important factor in office work and their capacity is so large for certain classes of work that space does not permit of detailed treatment here.
Fig. 29. Adding and Subtracting Machine Combined with Cylinder Billing Machine
Remington Typewriter Co.
While marvelous improvements have been made in the last decade, the next one promises equally well, especially in the adding-machine line.
REVIEW QUESTIONS.
PRACTICAL TEST QUESTIONS.
In the foregoing sections of this Cyclopedia numerous illustrative examples are worked out in detail in order to show the application of the various methods and principles. Accompanying these are examples for practice which will aid the reader in fixing the principles in mind.
In the following pages are given a large number of test questions and problems which afford a valuable means of testing the reader's knowledge of the subjects treated. They will be found excellent practice for those preparing for Civil Service Examinations. In some cases numerical answers are given as a further aid in this work.
REVIEW QUESTIONS
ON THE SUBJECT OF
COMMISSION AND STORAGE
1. What advantages are derived from a division of the ledger? Name the three most common subdivisions of the ledger.
2. What accounts are kept in the purchase ledger; in the sales ledger; in the general ledger? Under what circumstances should accounts with an individual be kept in both purchase and sales ledgers?
3. What is a controlling account? What do the balances of sales and purchase controlling accounts represent? From what sources are the debits and credits to these accounts derived?
4. When loose-leaf order blanks are used, what is the customary routine followed in filling and charging orders?
5. For what purposes are special distribution columns in a sales book used?
6. To what accounts in the general ledger are total purchases, as shown by the invoice register, posted? In what way are these two accounts distinguished?
7. Describe briefly the cash journal, and explain how it is used? What, if any, objection can be raised to making entries which do not involve an exchange of cash, or its equivalent, in the cash journal?
8. Why is the expense account divided? Name some of the accounts representing different classes of expense.
9. What is meant by petty cash, and how should the account with petty cash be handled?
10. The check of Martin Mason for $164.20 went to protest, and was returned by our bank with a protest fee of $2.50. What entry is necessary to record this on our books?
11. Prepare trading and profit and loss accounts representing the transactions listed in Art. 16, Pages 28 to 31, inclusive.
12. How can an order record be used as a sales record? Why is an abstract of sales used in connection with such sales records? Explain how this abstract is made up.
13. If goods are sold at f. o. b. prices, but the freight is prepaid as an accommodation to the customer, how should it be treated on the books? Why?
14. Name three or more subdivisions of sales expense, and explain what items are properly included in each.
15. Why are check registers taking the place of the old style check book? When a check register is used, how are the checks kept?
16. What is a cash received book, and for what purpose is it used?
17. Complete the exercise given at the end of Art. 29, Page 42.
18. What is your understanding of the meaning of the terms commission and brokerage? What is the distinction between a commission merchant and a merchandise broker?
19. What is a manufacturer's agent, and how does his business differ from that of a commission merchant or broker?
20. By what term is a consignment of goods to a broker known on the books of the shipper? In what name is an account opened to represent the consignment?
21. How is the above account made up? When is the account closed, and to what account is the balance transferred?
22. What is an account sales? When an account sales is received without a remittance, what account should be opened, and what does it represent?
23. When a broker receives a shipment of goods to be sold on commission, by what name is it known on his books? In what name is an account opened?
24. If a broker renders an account sales without a remittance, to what account should he credit the net proceeds? Why?
25. If a broker has on hand any unsold consignments when his books are closed, do the accounts represent assets or liabilities? How would you determine the broker's liabilities on account of consignments?
26. Name the books used by a produce shipper, and explain how each is used.
27. What is a shipment ledger account, and how is it made up? What is a profit and loss on shipments account?
28. In what way does the journal used by a shipper differ from the one used by the average merchant?
29. How is the trading account of a shipper made up?
30. Prepare trading and profit and loss accounts called for in Art. 48.
31. Name and describe the uses of the books used by a commission merchant.
32. Prepare trading and profit and loss accounts, and balance sheet called for in Art. 57.
33. What is a storage business, and for what purpose is it conducted?
34. What is a warehouse receipt, and what does it represent?
35. Explain what is meant by simple storage, and average storage.
REVIEW QUESTIONS
ON THE SUBJECT OF
SINGLE ENTRY—COMPARATIVE STATEMENTS
1. What is the distinctive feature of single entry bookkeeping? In what respect does single entry fail to fulfil the functions of bookkeeping?
2. What books are usually used in single entry? How does the single entry cash book differ from that used in double entry?
3. In posting, what features distinguish single entry from double entry?
4. How can the accuracy of single entry books be proved?
5. To determine the profits of a business whose books are kept by single entry, what steps are necessary? What are the steps in closing single entry books?
6. On a certain date the assets and liabilities of Henry Lamson are as follows:
| ASSETS | |
| Cash | $452.00 |
| Due from sundry debtors | 77.20 |
| Merchandise per inventory | 764.50 |
| LIABILITIES | |
| Due sundry creditors | 142.00 |
The following transactions are recorded:
| Sales to sundry persons on account | $46.71 |
| Bought from sundry persons on account | 339.54 |
| Sales for cash | 96.90 |
| Received cash on account | 64.00 |
| Paid cash on account | 133.50 |
| Paid cash for rent | 37.50 |
| Paid cash for clerk hire | 8.00 |
Record these transactions in single entry books; prepare proof of ledger and statements of assets and liabilities, the merchandise inventory at end of period being $983.75. Do the books show a profit or a loss, and how does it affect the account of the proprietor?
7. Explain, briefly, the necessary routine followed in changing single entry books to double entry.
8. H. P. Hayes established a small factory upon a borrowed capital of $10,000. The undertaking was a success, and at the close of the first year his financial condition was disclosed by the following particulars:
| Bills payable | $4,000.00 |
| Accounts payable | 6,574.50 |
| Cash | 1,752.50 |
| Accounts receivable | 12,694.18 |
| Inventory | 4,765.90 |
| Salaries | 3,500.00 |
| Sundry expenses | 435.50 |
| Manufacturing expenses | 11,759.50 |
Mr. Hayes kept his own books during his first year in business, but did not keep them by double entry. His sales for the year amounted to $35,643.25, and his total purchases amounted to $16,076.07. At this point Mr. Hayes admitted as a partner, A. B. Andrews, who contributed $10,000.00 to the partnership upon the agreement that the partners should share equally in the business. A bookkeeper was engaged to keep the books by the double entry system. From the particulars given, make a trial balance and the necessary journal entries to complete the change to the double entry method. Ascertain the interest of Mr. Hayes in the business, and credit his account with the same.
9. Foster, Harvey, and Morton—a copartnership—wish to change their method of bookkeeping from single to double entry. The partnership agreement provides that each partner shall share in the profits in proportion to his investment. Separate investment and withdrawal accounts have been kept with each partner. In the following statement of ledger accounts, partners' investment accounts show the same balances as at the last adjustment, no additional investments having been made:
| Foster, Investment | Credit Balance | $1,600.00 |
| Harvey, Investment | Credit Balance | 1,200.00 |
| Morton, Investment | Credit Balance | 1,200.00 |
| Personal Accounts | Credit Balance | 900.00 |
| Personal Accounts | Debit Balance | 1,900.00 |
| Foster, Withdrawals | Debit Balance | 315.00 |
| Harvey, Withdrawals | Debit Balance | 240.00 |
| Morton, Withdrawals | Debit Balance | 155.00 |
| Bank | Debit Balance | 2,050.00 |
| Cash in Office | 45.00 | |
An inventory shows merchandise $1,775.00, fixtures $300.00.
Show all entries necessary to make the partnership adjustment and change the books to double entry, indicating by check √ the accounts to be posted.
10. The books of the Star Coal Company, a corporation with a paid-up capital of $10,000.00, have been kept by single entry. The following facts are gathered from the books:
| Cash in Bank | $3,500.00 | |
| Personal Accounts | Debit Balances | 6,500.00 |
| Cash in Office | 200.00 | |
| Personal Accounts | Credit Balances | 2,500.00 |
An inventory results as follows:
| Coal | 3,750.00 |
| Horses and Wagons | 800.00 |
| Furniture and Fixtures | 300.00 |
Make necessary journal entries to change to double entry. Provide a reserve of 5% for uncollectible accounts, 10% for depreciation of horses and wagons, 10% for depreciation of furniture and fixtures. Declare a dividend of 10% and transfer balance of profits to surplus, making all journal entries to record these transactions.
11. Prepare a model trial balance of an imaginary business, or one with which you are familiar, giving special attention to the proper grouping of the accounts. Explain the benefits of your grouping of the accounts.
12. What is a working balance sheet? From the trial balance, which you have prepared, make up a working balance sheet, supplying such additional figures as may be necessary.
13. What are the fundamental advantages of comparative statements? On what basis should percentages be figured in on analysis of the manufacturing account? of the trading account?
14. To prove the accuracy of the ledger without a trial balance, what steps are necessary? What test is applied to determine whether the ledger balances?
15. What is meant by a book inventory? How can the receipts be determined? the disbursements or quantities sold?
16. What is the reverse or slip posting system? How is it operated?
17. Describe, briefly, the loose-leaf ledger. Describe the principal methods of indexing. Name some of the advantages of the loose-leaf ledger.
18. For what classes of accounts is the card ledger specially desirable? What are the principal methods of indexing the card ledger?
19. What is a tabular ledger? Describe the Boston Bank Ledger. Is a tabular ledger well adapted for commercial accounts?
20. What is meant by a balance ledger? What are its advantages?
21. Prepare a form of cash journal segregating administrative, selling, and manufacturing expense for an imaginary business, or one with which you are familiar.
22. Prepare a form of sales journal for a business having five departments.
REVIEW QUESTIONS
ON THE SUBJECT OF
TRUSTEES' ACCOUNTS; STOCK
BROKERS' ACCOUNTS
1. From an accounting standpoint, into what two classes can business be divided? What is the position of the trustee of an estate, as against the public?
2. Describe the essential features of the accounting of an executor.
3. In what two forms may an executor's accounts be kept? By what term are his accounts with properties known?
4. What are the proper classifications of an executor's accounts?
5. Two trustees collect in one year an income of $50,000.00 for a beneficiary, at an expense of $3,100.00. If each trustee receives an equal share, what commission should each receive, and what amount will be paid to the beneficiary, under the New York law? Prepare a complete solution of this problem.
6. Prepare a solution of the following: Four trustees collect and pay out of an estate the sum of $416,000.00, the total debts of the estate being $201,000.00. What commission will each trustee receive?
7. Prepare a statement of the executor's accounts—from the particulars given on Pages 17 and 18—showing the balance due each legatee.
8. What is a realization and liquidation account? How is it made up?
9. What is a statement of affairs? In what respect does it differ from a balance sheet?
10. How does a statement of affairs of a bankrupt differ from that of a going concern?
11. What is the purpose of a deficiency account?
12. Wm. Andrews, finding himself on July 1st unable to meet his obligations, asks you to make up his statement of affairs for submission to his creditors, and a deficiency account for his own information. You find from his books and other sources the following facts regarding his business:
| Unsecured creditors | $9,000.00 |
| Fully secured creditors | 2,300.00 |
| Holding securities of the value of $3,000.00 | |
| Partly secured creditors | 35,000.00 |
| Holding securities of the value of $20,000.00 | |
| Preferred claims | 800.00 |
| Bills payable | 20,000.00 |
| Accounts receivable, home office (good) | 1,000.00 |
| " " (doubtful) $200.00, estimated to | |
| realize | 75.00 |
| " " (bad) $300.00 | |
| Stock, Home Office, cost $1,500.00, estimated to | |
| realize | 1,200.00 |
| Stock and accounts receivable, less sundry liabilities, | |
| at branches | 36,000.00 |
| Of which it is estimated there will be a loss | |
| on realization of stock $6,000.00, of accounts | |
| receivable $9,000.00. | |
| Buildings and equipment at branches, cost $40,000.00, | |
| estimated to realize | 20,000.00 |
| Office furniture $300.00, estimated to realize | 200.00 |
| Cash in office | 4.00 |
| Cash in bank | 80.00 |
| Bonds held by fully secured creditors | 3,000.00 |
| Stocks held by partly secured creditors | 20,000.00 |
Six years ago Andrews' capital was $42,000.00. The profits for the first three years appear to have been $3,000.00, $4,000.00, and $5,284.00, and the losses for the three subsequent years $1,500.00, $2,500.00, and $3,000.00, after allowing $2,000.00 a year for interest on capital. His withdrawals have been at the rate of $4,000.00 a year. From these particulars, prepare a statement of affairs and a deficiency account.
13. What differences exist between a transaction for the purchase or sale of stock, and the purchase or sale of grain?
14. Explain a ring settlement.
15. What is necessary to post to the customer's ledger account, and from what sources do you post?
16. Show form of margin book and explain how it is kept.
17. In what cases should interest be charged? What is it charged for?
18. What should be entered in the general cash book?
19. Explain fully the handling of office cash.
20. If A bought 5,000 bushels of wheat at $1.20, and sold 12,000 bushels at $1.21, how much cash would he be obliged to deposit to secure the fulfillment of his orders?
21. What is the cash which he deposits called?
22. Write an order form for the sale of 25,000 bushels of corn @ 76¼c made upon the orders of Mr. D.
23. Show what acknowledgment must be made to Mr. D.
24. What is the daily record sheet? For what purpose is it used? Explain the entries in this book.
25. Explain how stock purchases should be handled, what records should be kept, and what information in regard to them is necessary.
26. What is the difference between a bull and a bear?
27. Explain the meaning of a buying order and state how it should be treated in the accounting department.
28. On July 5th James Robinson sold 25,000 bushels of September wheat at 1.04½; on July 10th he purchased 10,000 bushels wheat at 1.02¼, and on July 11th he purchased 15,000 bushels of wheat at 1.02. Make a statement of this account for Mr. Robinson.
29. What is the difference between listed and unlisted stock?
30. What is a debit or credit slip and for what purpose is it used?
31. Show the ruling of the stock ledger and explain the necessity of each column. Rule a sample page.
32. For what purpose is the journal used in connection with the brokerage business?
33. Explain the meaning of buyer's option.
34. Explain the meaning of carrying charges.
35. Explain the meaning of a put and a call.
REVIEW QUESTIONS
ON THE SUBJECT OF
BILLING AND ORDER RECORDING
1. Explain the difference in principle between the cylinder billing machine and the flat-bed billing machine.
2. Explain the meaning of manifolding.
3. Explain in your own language why the plan of copying invoices in tissue books with a letter press is inferior to the billing-machine method of typewriting the invoice and sales sheet simultaneously.
4. If an office boy mailed a pen-written invoice without copying same in the tissue book, what method would enable the firm to detect such oversight?
5. What is the difference between the style of invoice used on flat-bed machines and on cylinder machines?
6. When a concern uses two ledgers on account of having too many customers to be conveniently held in one ledger, what change is advisable in ruling the columns of the sales sheet?
7. What plan is used in classifying sales according to territory, salesmen, etc.; and what means is used to prove the footings of each page?
8. How much of the left side of the sales sheet do you understand is covered by the invoice when they are both in the machine for the purpose of making the bill and charge?
9. How do you classify with the machine the amounts of the bills in the columns to the right of the total column?
10. Name all of the reasons you can, whether included in the textbook or not, for making duplicate invoices.
11. Explain why some firms are enabled to make their invoices (and, of course, sales sheets) before the goods are shipped, and give reasons why other firms are forced to wait until after the order has been shipped, or at least partially shipped, before making invoices.
12. Explain what plan you would use to inform the packer of the description of the goods to be shipped, but prevent him from knowing the quantities, in order to further prevent him from double-checking the figures showing quantities and at the same time neglecting to count the articles.
13. Where the firm sells three or four classes of goods and wishes to keep a continuous record of the tonnage sold, that is, weight of the various classes of goods, how would you rule the invoice and sales sheet in order to shorten the billing?
14. If you were forced to substitute one size of an article in place of another size ordered (without injury to the customer), how would you design your forms in order to enable you to typewrite the size shipped and size ordered on the sales sheet, and size ordered, only, on the invoice?
15. If you wish to typewrite a requisition for goods ordered at the time the invoice and sales sheet are written, how would you arrange it?
16. What is the difference between the terms unit billing and condensed billing? Under what conditions would you recommend unit billing and when condensed billing?
17. What is the best plan of facilitating the filling of orders where there are a large number of floors or departments and where each day's orders are supposed to be filled upon the day the orders are received?
18. Why should a plan which is highly satisfactory in a small concern prove to be an absolute failure in a large one?
19. What is meant by split orders?
20. Describe the different forms of punched holes of loose-leaf sheets and why the closed-hole punching is not adapted for use with records which are to be removed and replaced in binders from time to time.
21. Describe the different forms of binders with which you are familiar.
22. In printing invoices what is the best plan of designing the headings in order to facilitate the execution of the invoice on billing machines? Would you pay any attention to the space between the lines of the heading and to the distance between the last line to be typewritten on the heading and the first line to be typewritten on the invoice?
23. Explain the mistakes made in using carbon paper, and under what conditions you would use the various weights of carbon paper.
24. Explain what is meant by a blind.
25. Explain what is meant by credit memoranda, and tell how to use them in connection with a sales book instead of having to use a separate credit sheet.
26. Explain the use of special characters on the billing machine, and what is meant by aligning them in order to prevent one abbreviation being printed over the top of another.
27. Explain the difference between a single-stop tabulator and a decimal-stop tabulator.
28. What is the advantage of having a billing operator on a platform on wheels in a wholesale dry goods house?
29. Under what conditions would you recommend the use of the separate billing machine and separate computing machine for the same work?
30. Explain the benefits to be derived from the use of the color scheme.
31. What is meant by compound forms, and under what conditions can they be used?
32. In what general way does retail dry goods billing differ from condensed billing and what is the difference in the general style of stationery used?
33. What is the best plan of filing the duplicate monthly retail dry goods bill?
34. What is the plan used in retail dry goods billing to prevent goods from being shipped out of the store without a charge being made?
35. What is the advantage of a subtracting device on the billing machine with adding attachment?