A record of the gross profits, resulting from the operation of each department, being desired, we have three manufacturing and three trading accounts.
The chart shows the accounts classified to exhibit detailed operations of each department. The number of accounts in this chart is 98. This is rather more than is required in the average business of this character, but the chart furnishes a good illustration of the possibility of segregating accounts of various classes.
Even so large a number of accounts, with the minute subdivisions here shown, does not present the difficulties that might appear at first glance. The principal requirement is a thorough knowledge of the items entering into each account; the actual keeping of the accounts is a matter of close attention to these details. When an elaborate chart of accounts is laid out, it should be accompanied by detailed explanations and instructions. Some large concerns issue printed instructions which are given to all officers and employes who may be called upon to determine, to what account an item should be charged.
CHART OF ACCOUNTS—HARNESS MANUFACTURING
Capital Accounts
Assets
1 Cash
2 Bills Receivable
3 Accounts Receivable
Inventories—Harness Department