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

Figure 20, (Reduced in size)

This proposition has previously been mentioned, but we purpose now to show in detail how such a transaction is effected. Let us suppose that the lunch room needs a ham, and it is desired to purchase same from the market department. Assume further that the selling price of this ham is $3.25. It is evident that we must first credit the market with this amount. This is done by means of a “turn-in-card”, Form 12, shown in Fig. 21. The card is filled out as shown, (the name of the article is not essential), is signed by the stock clerk and is given to the head of the market department as a credit for the ham, which is then issued to the lunch room man on a regular requisition. The requisition cards and the turn-in-cards are precisely alike, except that the latter are printed in red ink. With the exception of the signature, therefore, Fig. 21 is also a reproduction of the requisition upon which the ham is issued to the lunch room. These cards are of standard size, 3 × 5 inches, and are of various colors, depending upon the color scheme adopted as described under “Charge Sales”. Hence, we may assume that the market’s turn-in card was printed in red on a buff card and the lunch room’s requisition was printed in black on a salmon colored card. The cards can be bought cheaply with “horizontal ruling”, thus cutting down some of the bill for specially printing the cards. It costs less to have the turn-in cards printed in red than it would to have a special form of card printed, and they are better, besides.

Figure 21

In issuing the ham to the lunch room, the stock clerk should note on the requisition, “Cr. Market”. He then enters the transaction on Form 17 as shown in Fig. 20. In all such transfers, the sum of the credits on any line should, of course, equal the sum of the debits. It is not essential to number these requisitions and turn-in slips because the date stamped at the top is sufficient to enable us to identify any particular transaction. The market man would hand in his credit slip to the Steward with his daily report of sales. The stock clerk would hand in the requisition (receipted by the lunch room man) with his Form 17 for that day.

There is still another transaction for which we must provide and that is the operation of returning to our creditors goods which we have received from them. This may arise through some defect in the merchandise or through some other cause. Such a transaction is handled in exactly the same manner as before. See entry opposite No. 7343 in Fig. 20 where we have credited the store with $7.60. The goods were received on this invoice and deduction made on same for this amount. If this invoice pertains to an account already closed, we can make out an invoice of our own, give it any desired number and give the store credit as before.

Goods which are returned to us by our customers are credited to their accounts through the sales records as before described and do not affect the working of the stock records. Wastage, breakage, etc., is credited to departments by means of this same “turn-in” card; so, also, is discount given on goods sold in quantity, as a box of cigars, for example.

Since the whole operation of accounting for our goods on the basis of selling price is purely for the purpose of protecting our stock, and not for the purpose of calculating our monthly profit and loss sheets, it is seen that it is necessary to make out another copy of Form 17 daily, in order to record the same transfers, issues, etc., on a cost price basis. This will be discussed more fully later, but let it be stated here that this work is necessitated by the rule which requires us to base our statement of assets, insofar as merchandise is concerned, upon the cost price of same. This, for the reason that it is not sound practice to anticipate profits. Therefore, our inventories, when carried as assets, must be based on cost prices, and in order to secure a true statement of profits earned, we must record the cost price of all merchandise that has been purchased during the month and distribute this cost properly among the departments.

At the end of each day’s work, the stock clerk signs his Form 17 for that day and fastens to it all invoices, retained copies of orders (accomplished as previously described) and requisitions that are entered on said Form 17. These papers are really vouchers to this report and should remain with it until they have been checked against it. The whole bunch of papers is handed in to the Steward and Form 17 is checked as soon as possible. After this is completed, the invoices and the retained copies of our original orders which pertain to them are handled as described under Purchase Records; their function as a part of the system of stock records having ceased.