Balancing the Ledger.
It has been stated above, that all “Expense” accounts are balanced monthly and posted to Profit and Loss, and that after a trial balance has proved the Ledger to be in balance, the balance of the Profit and Loss account is transferred to the “Post Exchange” account. The remaining accounts, Nos. 1-11, inclusive, etc., represent assets and liabilities and are not transferred at all, although they are balanced every month.
We now come to the book-keepers’ bug-a-boo, the “Trial Balance”. This is a simple thing (to describe), consisting merely going through our ledger, taking the total of all the totals on the credit side of all our ledger accounts and seeing if this equals the total of all the totals on the debit side. If these totals do not agree, the book-keeper must run down the error and correct it. There are no rules for this procedure that would be of practical benefit. This trial balance does not necessarily mean that the ledger is correct, it simply proves that for every debit item entered a corresponding credit entry has been made; it does not prove that these entries have been made in the proper accounts.
A sample trial balance sheet, worked out by Mr. Parker, cashier of the Fort Slocum Exchange, is shown herewith.
After the ledger is balanced, we proceed to get out our monthly statement. If it is a case of an inspector, we can get all the data he needs by simply taking our statements since his last visit and combining the results shown by same.
| ACCOUNTS | Trial Balance | Balance of Balances | Loss & Gain | Assets and Liabilities | Cash Statement | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | |
| Post Exchange | 336.50 | |||||||||
| Cash | 555.60 | 372.00 | 183.50 | 183.50 | ||||||
| Bills Rec. Charge Accts | 11.62 | 1.62 | 10.00 | 10.00 | ||||||
| ” ” E. M. Laundry | 16.00 | 16.00 | 16.00 | |||||||
| ” ” Credit Coupons | 100.00 | 100.00 | 100.00 | |||||||
| Bills Pay Merchandise | 4.00 | 4.00 | 4.00 | |||||||
| ” ” Check Account | 90.00 | 100.00 | 10.00 | 10.00 | ||||||
| Stock Room | .50 | .50 | ||||||||
| Athletics | 20.00 | 20.00 | 20.00 | 20.00 | ||||||
| Fixtures | 21.00 | 21.00 | 21.00 | 21.00 | ||||||
| Store | 11.50 | 280.55 | 269.05 | 269.05 | 250.00 | 11.00 | ||||
| Lunch | 67.72 | 211.27 | 204.55 | 204.55 | 170.00 | 6.00 | ||||
| Pool | 50.00 | 9.00 | 41.00 | 41.00 | 8.00 | 50.00 | ||||
| Barber | 67.00 | 17.00 | 50.00 | 50.00 | 14.00 | 67.00 | ||||
| Tailor | 46.65 | 59.00 | 12.35 | 12.35 | 46.00 | 43.00 | ||||
| Shoeshop | 35.75 | 35.00 | .50 | .05 | 29.00 | 35.00 | ||||
| Soda Fountain | 37.00 | 3.00 | 34.00 | 34.00 | 3.00 | 37.00 | ||||
| Skating | 14.50 | 4.60 | 9.00 | 9.90 | 4.60 | 14.00 | ||||
| Moving Pictures | 10.00 | 31.00 | 21.00 | 21.00 | 31.00 | 10.00 | ||||
| Laundry | 29.00 | 22.00 | 7.00 | 7.00 | 29.00 | |||||
| Interest and Discount | 17.60 | 17.60 | 17.60 | 17.00 | ||||||
| Office | 11.00 | 11.00 | 11.00 | 11.00 | ||||||
| Loss and gain | 336.50 | |||||||||
| TOTALS | 1151.44 | 1151.44 | 521.00 | 521.00 | 507.00 | 507.00 | 350.50 | 350.50 | 555.60 | 372.10 |
| 183.50 | ||||||||||
| Balance | 555.60 | 555.60 | ||||||||