MONTHLY STATEMENTS.
General.
The primary object of the monthly statement is to give the Exchange Council and the Commanding Officer a clear and concise understanding of the operations and financial standing of the Exchange. The statement, therefore, should be so simple in construction that it can be understood at a glance by anybody, regardless of their knowledge of book-keeping. Most statements submitted to Exchange Councils either show nothing or lead to a waste of time, due to the necessity for asking for explanations of obscure items. The statement should also contain such information as will be required by the Inspector. The form of statement here shown fulfils all of the above requirements and is a form approved by certified public accountants. It is divided into three parts, which will be discussed in their relative order.
General Balance Sheet.
This, Form 32, is shown in Fig. 31 and is almost self explanatory. Attention is invited to the scheme of segregating different classes of assets and of liabilities. A stock form of this nature would do for all Exchanges, regardless of their size, as there are sufficient blank lines to suit all requirements, but perhaps better satisfaction would be obtained if the form here shown be merely taken as a model and only those items be used as apply to the particular case in hand. Pains have been taken, in this form, to insert a sufficient number of entries to show clearly how any ordinary item should be handled.
Of course, the item, “Exchange building”, should be omitted if the building belongs to the Government and not to the Exchange. The item, “Cash Reserve”, covers the amount required by regulations to be set aside before dividends can be declared. Under the liabilities, there will ordinarily be no entries under “Funded Debt”; this entry merely shows how such items should be handled in case any should exist. “Commissions due” is the amount we owe for goods already sold on consignment; the same item under the assets refers to the amount due us for goods sold on consignment or commission. A declared dividend is a liability until it is paid. Outstanding coupons are also a liability. Under the deferred liabilities come any amounts that are payable at some future date, but are meanwhile bona fide debts owed by the Exchange. The term “Total Surplus” refers to the surplus at the end of the month in question, and, while not really a liability, it is put in this place in order to properly balance the account.
