2. Ledger.—Form as usual in traders' offices. If the product manu factured be a single homogeneous article, e.g., gas or electric current, supplied to a large number of consumers, all of whose ledger aceounts contain practically a stereotyped set of items with but varying amounts, the use of a columnar ledger will facilitate working and reduce expense. The customers' names can be ranged down the page at the left-hand side, while the descriptive headings can be ranged across the page. Similar additional ledgers can be used for by-products if supplied on similar lines to the main product.
Where accounts of customers are numerous and of varying dimensions, the use of a loose leaf ledger, with careful precautions, will facilitate posting and reference.
It will usually be needful to keep a nominal or impersonal ledger, separate from the customers' or creditors ledgers; such ledgers will generally be of the regular form and ruling.
3. Journal.--Form as usual.
4. Bought Journal (purchase book, invoice book).—It is usually needful to employ a bought journal containing analysis columns for the classification of purchases according to their nature. The form appended is typical of this division.
Further analysis columns may be added for expenses incurred as well as commodities purchased, if such be convenient, and the book will then contain a complete record of ordinary business liabilities incurred.
Some businesses purchase for re-sale articles ready made, and conduct such departments concurrently with their manufacturing business proper. In such cases separate accounts will require to be kept, both in the ledger and in the statistical books, for purchases of raw materials and finished goods, and separate bought journals will require to be employed.
ti. Sold Journal (sales journal, day-book). The goods sold, whether they have been manufactured by the undertaking, or have been purchased ready made, will be passed through this book. The form should resemble the bought to the extent that analysis columns for classification purposes should be provided ; a typical illustration is appended.
Additional columns can be added as repuired by the nature of the business.
6. Returns Books (inwards and outwards).—The form of returns book employed should as far as possible be a replica of the sales (or purchases) journal, with such alterations in the wording of the headings as may be needful.
• 7. Petty Cash petty cash should be kept on the " imprest" system, and the book itself should be of the usual type with a number of analysis columns on the " expenditure" side. Separate columns must be provided for all ordinary classes of expenditure, payment of which is made through the petty cashier, and in addition columns will be needed for small purchases of raw material, small payments for occasional labour, and occa sional purchases of finished goods. The practice of paying the three forms of expenditure mentioned in detail out of the petty cash is to be discouraged as far as possible, as it offers opportunities for peculation. All accounts for purchases and all expenditure on wages should theoretically be satisfied through one channel only, but occasionally special needs will arise and render it impossible to adhere strictly to the rule.
The main body of the transactions requiring record on the books of a manufacturing undertaking will be of an ordinary commercial nature and need no special comment. The impersonal accounts, however, which con tribute towards the preparation of the statements of profit and loss, involve the employment of methods which are to a certain extent peculiar to the type of business under review, and such special matters require detailed consideration.
The stock of manufactured goods should actually be kept, and be regarded in the books as a separate matter from the stock of materials on hand, although the one may be the ultimate product made from the other, and at the same time purchases of any completed commodities for re-sale must be kept separate, both in the journals and in the ledger, from raw materials acquired.
A consideration of the form in which manufacturing profit and loss accounts are prepared will serve to show the necessity of such separations, and will incidentally show how many of the other impersonal accounts are finally dealt with. Many forms of manufacturing and trading accounts exist, but at the outset one general form may be considered.
The aim of every trading, revenue, or profit and loss account consists in the ascertainment of profit made, and this object is achieved by offsetting cost or expenses against gross returns; the operation may be spread over one or more statements of account, but the main principle, i.e. of debiting expenses and crediting gains, remains the same.