INDEX

Footnotes:

[1] The student should note the manner of showing depreciation reserves in the comparative balance sheet. This is done solely for the purpose of eliminating the detail column in the assets needed to handle the subtraction item. This method of showing is countenanced only in comparative statements where saving of space is a chief consideration.

[2] The 72 days are arrived at as follows:

[3] The items in italics in this chart are to be handled as subtraction items from the account below which they are placed or from the group in which they appear.

[4] Light, heat, and power expense should in strict theory be distributed over the departments using it; the selling department to be charged with its share and the general administrative with its share. Where such procedure is difficult or undesirable, the expense is best classified as above.

[5] These items are sometimes distributed partly to Selling and partly to General Administrative where an equitable basis for distribution can be determined.

[6] These items are sometimes distributed partly to Selling and partly to General Administrative where an equitable basis for distribution can be determined.

[7] Whatever agreement is made by the partners for interest adjustments governs. In practice the usual procedure in a case of this kind would be to allow C interest on the $890 cash advanced by him for expenses from date of advance to date of settlement, and to charge him with interest on all moneys received by him from dates of the various sales to date of settlement. To simplify calculations, it is assumed in the illustration that C’s use of funds received from sales during the first five months approximately compensates him for the $890 advanced by him.

Transcriber’s Notes:

The cover image was created by the transcriber, and is in the public domain.

The illustrations have been moved so that they do not break up paragraphs and so that they are next to the text they illustrate.

Typographical and punctuation errors have been silently corrected.