Stock Book to be Kept by Corporations and Transfer Agents
(New York Form Prescribed by Comptroller)
Stock Ledger
The stock ledger is a subsidiary ledger controlled by the Capital Stock account or accounts on the general ledger. It may, of course, be made self-balancing just as any other subsidiary ledger. There has been some controversy as to whether the stock ledger is normally a credit or a debit balance ledger. In some concerns the stockholder is debited with the shares owned, and in others he is credited. Theoretically, in accordance with the principle of all other controlling accounts, the subsidiary ledger—in this case, the stock ledger—merely carries the detail of the controlling account. If, then, the controlling account is a credit balance account, the accounts on the subsidiary ledger must similarly have credit balances. Accordingly, the stockholder should be credited with his net holdings. Practically it makes little or no difference because the subsidiary ledger is no integral part of the debit and credit scheme of the general ledger. Of course, unless practical difficulties prevent, practice should always follow the theoretically correct method. No difficulty need be experienced, however, in accommodating oneself to either method of record on a subsidiary ledger. In the stock ledger the record of holdings is kept in terms of the number of shares owned rather than by the par value of the holdings.
Minute Book
Before leaving the subject of the records peculiar to a corporation, it is desired again to call attention to the keeping of a careful record in the minute book. This book should contain first a copy or duplicate of the corporation’s charter. Following this should be the by-laws of the corporation. Sufficient blank space should be left at the end of each of these documents to make record of any amendments to charter or by-laws. There should follow a complete record of the deliberations and authorizations of the board of directors as affecting the management and control of the corporation’s policy. The minute book is often the source of authority for many of the most important entries made on the books of account, and great care must be used to make the record full, complete, and accurate. Such matters as leases, purchase and sale of properties, bond issues, dividends, and other similar items should have very careful record.
Conclusion
Other features of the corporation from the accounting point of view are treated under their respective heads in later chapters. These include such items as bond issues, sinking and other funds, reserves and surplus, scrip and stock dividends and other dividend considerations.
It is proposed in the next two chapters to discuss the corporation from the manufacturing viewpoint, types of accounting records sometimes used therefor, and the elements of manufacturing costs. After that the problem of the balance sheet and the principles of valuation applicable to it will claim attention.
CHAPTER II
THE VOUCHER SYSTEM
Purchasing for the Manufacturing Business