Some of our general accounts should be sub-divided in order to give us a better idea of what the business is doing. Take the Expense account, for example. It is usually desirable to classify our expenses as nearly as possible under the following headings:—
- Wages,
- Fuel and Lights,
- Insurance,
- Freight and Express on out-going goods,
- Printing and Stationery,
- Telephone and Telegraph,
- Office, including expendable supplies used and not distributed to departments.
Another example is Bills Payable, which is divided into Charge Accounts, Credit Coupons, Enlisted Men’s Laundry, etc., as circumstances dictate.
A complete list of the accounts in our ledger should run about as follows:—
- 1. Post Exchange (Synonyms:—Present Worth, Surplus, Net Worth, etc.).
- 2. Bills Receivable, Notes. (Entrance fees of incoming organizations.)
- 3. Bills Receivable, Charge Accounts.
- 4. Bills Receivable, Credit Coupons.
- 5. Bills Receivable, Enlisted Men’s Laundry.
- 6. Check Account. (Outstanding Coupons.)
- 7. Bills Payable, Mdse. (Or Creditors.)
- 8. Exchange Building. (If not a Government building.)
- 9. Laundry Building. (If owned by the Exchange.)
- 10. Exchange Fixtures.
- 11. Laundry Fixtures. (Including all machinery, tools, etc.)
- 12. Laundry. (A departmental account.)
- 13. Store. (Same. There should be an account for each department.)
- 14. Interest and Discount.
- 15. Insurance.
- 16. Fuel and Lights.
- 17. Freight and Express.
- 18. Printing and Stationery.
- 19. Telephone and Telegraph.
- 20. General Expense.
- 21. Depreciation. (If taken frequently.)
- 22. Lost Accounts.
- 23. Athletics.
- 24. Dividends.
- 25. Sick in Hospital.
- 26. Regimental Fund.
- 27. Wages.
- 28. Profit and Loss. (Or Loss and Gain.)
- 29. Maintenance.
Posting the Ledger.
It has been noticed that our Ledger is used but once a month or whenever our books are closed. At this time, each account in the ledger is brought down to date by entering the results obtained by summarizing the accounts contained in the subsidiary books. This operation is called “posting” and will be discussed with reference to each of the foregoing accounts. It will be assumed, in each case, that the balance from the previous month has been brought down correctly.
It will be of great assistance to remember that any account in the General Ledger represents one of the following:—
- 1. An asset; (Resource).
- 2. A liability.
- 3. A Loss.
- 4. A Profit or Gain.
a. Every account showing a debit balance is either an asset or a loss; a “Personal” account showing a debit balance is an asset, an “expense” account showing a debit balance is a loss.