c. Closing the Ledger. On a loose sheet of ledger paper copy the following accounts; allow ten lines for each account. Inventories: Merchandise Expense Open a Loss and Gain account; close the ledger. II JAMES R. TURNER, PROPRIETOR $275.20 22.50 The model for closing the Interest account is on page 54. REVIEW QUESTIONS 1. What is a business transaction? 2. In how many ways does a business transaction affect the business? 3. Define merchandise. 4. B, a dry-goods merchant, bought 3 T. coal for heating his store. Should this purchase be recorded under merchandise? Why? What is the name of the purchase to the merchant who sold it? 5. Define cash. 6. Define expense. 7. Who is a debtor? a creditor? 8. Define debit; credit. 9. What is an account? 10. Name the two sides of an account. 11. What are personal accounts? 12. Define a negotiable promissory note. 13. What is meant by journalizing? 14. Define bookkeeping. 15. What is the object of bookkeeping? 16. Name the two methods of bookkeeping. 17. What is the purpose of the journal? 18. Whạt is posting? 19. What is the purpose of the ledger? 20. What is a trial balance? From what is it taken? 21. What facts are set forth in the trial balance? 22. What is an inventory, and how is it found? 23. When is merchandise debited? when credited? 24. When is expense debited? 25. When are personal accounts debited? when credited? 26. When are bills receivable debited? when credited? 27. When are bills payable debited? when credited? 28. What is a gain? a loss? 29. What are resources or assets? liabilities? 30. Define net gain; net loss. 31. Define capital; insolvency. 32. Name the two general classes of accounts. 33. Name the class to which each of the following accounts belong: cash; merchandise; personal accounts; expense; interest; discount; bills receivable; bills payable. 34. On which side of the ledger are losses found? gains? resources? liabilities? 35. What is the object of making business and financial statements? 36. What is meant by closing an account? 37. When are resource and liability accounts closed in business? loss and gain accounts? 38. Explain the process of closing a loss and gain account. 39. The accounts showing loss and gain are closed into what account? 40. The loss and gain account is closed into what account? 41. How is the proprietor's account closed when there is a net gain? when there is a net loss? 42. Which side of the cash account must always be the larger when there is any difference? of the bills receivable account? of the bills payable account? 43. What is an entry? 44. What is the difference between interest and discount? 45. When is interest or discount debited? when credited? 46. When does a personal account show a resource? a liability? SET II. WHOLESALE CARPET BUSINESS This set is separate from Set I, but the character of the work is similar. The books used are the same as in Set I. Directions and Suggestions. Observe the following directions: 1. First journalize on a loose sheet of journal paper. 2. James R. Denison is represented as the proprietor. MEMORANDA OF TRANSACTIONS FOR FEBRUARY Feb. 1. James R. Denison, Boston, Mass., began the Wholesale Carpet business with the following resources: cash, $500; merchandise, $2595.50; fixtures, $200; coal, for heating the store, $15; the note on page 52. The following is the opening journal entry for this set: Expense Bills Rec. On hand In stock Fixtures 200" Coal is 259550 215 E.B. Jackson's note 300 Jas. R. Denison Total resources 361 2. Paid Lee & Crane cash for the following expense items: stamps, $1.50; stationery, $3; office books, $3.50. 3. Paid George R. Daniels cash, for rent of the store for 1 mo., February, $75. 4. Bought of W. B. Mason & Co., Philadelphia, on account, invoice of carpets amounting to $572.50. 5. Bought of A. R. Prescott & Co., New York, on account, invoice of carpets amounting to $612.95. $3000 the order of Ten days Boston, Mass., Feb. 4, 19 after date promise to pay to James R. Denison. Three Hundred 1/100= a his office, with interest at 6%% Value received No. 17 Due 2/11 Dollars Ernest B Jackson Feb. 6. Sold W. F. Pratt, Springfield, on account: 9. Sold M. F. Newbury, Providence, on account: 100 yd. Wilton 10. Remitted A. R. Prescott & Co. at 6%, in full for the invoice of Feb. 5. 120 yd. Axminster a note at 10 da., with interest 11. Received of Ernest B. Jackson cash for his note and interest due to-day; face of note, $300; interest, 50¢; total, $300.50. 12. Received of W. F. Pratt his note at 10 da., with interest at 6%, $250, and the balance of the invoice of Feb. 6 in cash. 13. Sold Geo. S. Rollins, City, for cash: 15. Bought of A. R. Prescott & Co., New York, on account, invoice of carpets amounting to $172.50. 16. Sold W. F. Pratt, Springfield, on account: 20. The First National Bank presented for payment the note in favor of A. R. Prescott & Co., due to-day. Paid the note and interest in cash; face of the note, $612.95; interest, $1.02; total, $613.97. |