Post Exchange Methods / A Manual for Exchange Stewards, Exchange Officers, Members of Exchange Councils, Commanding Officers, Being an Exposition of a Simple and Efficient System of Accounting Which Is Applicable to Large and to Small Exchanges Alike.

by Paul D. Bunker

Note that the outstanding coupons are a liability, as they may be presented as a claim against the Exchange at any time. Of course, the receipts which the men have given us for these coupons, in other words, their notes promising to pay us for the coupons, are an asset and should be carried under Bills Receivable. Some Exchanges call such assets “Bills Receivable, Credit Coupons”, thus differentiating them from such as Bills Receivable, Charge Accounts or Bills Receivable, Laundry Coupons.

Paragraph 14 (c) and (e) translated into non-technical language simply means that when we issue coupon books of a certain value to the men, we must enter this amount on the left hand or debit side of our “Bills Receivable” account in the Ledger, thus charging up “Mr. Bills Receivable”, as it is sometimes explained, with a certain amount for which he must account. Now, as the Ledger is to be kept according to the double entry system, we must obey the fundamental principle of this system, which is, “for every account that is charged (debited) a certain amount we must credit some other account with the same amount”, hence the name, double entry. In view of these facts, therefore, we turn to our Check Account—or Outstanding Coupons, if you prefer to call it so, and credit this account with the same amount that we charged against Bills Receivable. When we receive the cash for the men’s notes at pay day, we credit “Mr. Bills Receivable” with the amount taken in, thus clearing him of this amount and making him no longer responsible for it. We have previously, of course, entered this amount on the debit side of the Cash Book, for the same reason noted above. When the coupons are presented by the men in payment for articles purchased by them, we credit “Merchandise” (or the proper department of the Exchange, if departments are used) with the amount taken in. This, for the reason that said department is no longer accountable for that amount of merchandise; we must, therefore credit that department with the proper amount and charge or debit it against the outstanding coupon or Check account. It must be remembered that outstanding coupons are a liability against us and are in the nature of bills payable—except that they are payable only in merchandise. Hence, if we consider this account as a living person—one of our creditors—it will appear more logical when we place to his credit everything we owe him, i. e., the coupons we have given him, and to charge him the value of the merchandise he has obtained from us in return.

The above prolix explanation will sound puerile to an experienced accountant; it is not written for him, but for the inexperienced man with little or no knowledge of scientific book-keeping, who is trying to work this system or one like it. The writer knows from bitter experience how hard it is to avoid some of the unexpected pit-falls of double entry.

Now we are in a position to describe the manner of handling our coupon sales, starting from the very beginning.

Issuing Coupons.

Figure 15. (Reduced in size)

The first thing to be done is to have the various organizations submit their lists of men who are entitled to credit at the Exchange. This is usually done a few days after pay day, it being the excellent custom in most Exchanges to issue no coupons until about five days after, in order to attract some of the cash that is apt to be plentiful for only a few days. One of the best forms for such a list known to the writer is Form 25, shown in Fig. 15. It measures 9 × 20 inches and may be punched to fit a loose leaf file. It is faint ruled horizontally six lines to the inch in order to fit typewriter spacing. The length of this form enables a whole company of 110 men to be entered on its face, without resorting to the necessity of turning a page. In garrisons where the organizations are uniformly smaller, the length of the form can be correspondingly reduced. Each organization fills out one of these sheets on a typewriter, entering the names of the men in pay roll order in column 3. In column 2 is entered the rank of each man, and in column 4 is entered the amount of credit he desires, which must not exceed one-third of his pay. The men sign their names in column 1 and in space A is printed the statement to which they subscribe—that they request credit to the amount of one-third of their pay and that they promise to pay for their coupons on the pay day after drawing same, etc. This list is then sent to the Exchange at the regular time, preferably a day or two before coupons are to be issued.