The New Accounting; Bookkeeping Without Books of Original Entry by the Use of a Natural System of Double Entry Bookkeeping (Paperback)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: eral Ledger used by the old accounting. In the old accounting, at the end of the month, all the totals in the books of original entry are posted in the Internal Ledger, and after this posting is completed, it is possible to balance the accounts in the Internal Ledger and prepare a balance sheet and statement of profit and loss. The use of the Control Ledger as here recommended does away completely not only with the books of original entry but also with all the posting and balancing of the Internal Ledger necessary in the preparation of a financial statement. By taking the totals in the Control Ledger at any time, a complete financial statement is furnished. In order to determine the number of columns needed in the Control Ledger, it is necessary to ascertain the number of active accounts and to group the inactive accounts to be carried, as follows, (the figures refer to the Control Ledger of the Georgia Printing Company): (a) the number of active Asset accounts 4 (b) the inactive Asset accounts 1 (c) the number of active Expenditure accounts 5 (d) the inactive Expenditure accounts 1 (e) the number of active Liability accounts... 1 (f) the inactive Liability accounts 1 (g) the number of active Income accounts 3 (h) the inactive Income accounts 1 Total Columns 17 The distinction between active and inactive accounts should be based upon the number of transactions that have to be recorded, and a rough rule for determining this would be that an active account is one in which there are numerous transactions each month, while an inactive account is one in which there is only one, or at most only a few, transactions each month. For instance, the rent account in most businesses involves only one transaction monthly. Such an account would be an inactive expe...