« ՆախորդըՇարունակել »
There should be a memorandum-blank of the same size as the check and bearing the same number, on which should be entered all the data of the check necessary to make it a posting ticket. The tickets and the checks should alternate in the same pad, the ticket always above its check, so that it would be impossible to “forget ” to make the entry, and this plan would be at least as effectiv as the stub.
394. The bank account would be kept as part of the ledger. on its own card or its own leaves. The check memorandum would be posted to the credit of the account and likewise to the debit of some other account and then filed.
395. This method is not always applicable, as there are certain circumstances which seem to demand the existence of a check-book; but it seems to me to be very nearly the ultimatum of directness and simplicity.
396. A modification, using carbon duplication, may be used when numerous checks are drawn in succession and the typewriter is used for filling them in. The checks will be on a long strip with perforations between (instead of being padded) and a similar strip will be behind it with the carbon between. This strip, taking the place of the memorandum tickets, gives a facsimile of all the filling. It may or may not have printed matter so as to interpret its contents.
This plan has been used with great success for pay-roll checks drawn on a bank which is used for this sole purpose and where a deposit is made of the exact total of each set of checks, which total is obtained by adding the carbon strip. In this case, the strips are not torn off and used as posting tickets, since no individual accounts need to be kept with the payee; the total is posted in bulk to the Labor account.
397. In whatever form the account of cash is kept, its verification or “balancing the cash " cannot be neglected. Cash on hand should invariably be verified daily, because the difficulty of tracing an error increases with the lapse of time. With cash on deposit, which is less liquid, the error is generally in calculation only, and a daily proof, tho not so necessary as in cash on hand, is still desirable.
398. It is unnecessary, and generally undesirable, to break the columns of a cash account by the insertion and carrying forward of a balance. A memorandum in the margin, showing that
the difference between the two totals is exactly accounted for by the values found, is just as effectiv for this purpose and the totals themselves generally have a certain utility.
399. The bank account as exhibited in the check-book should be made to tally with that rendered by the bank itself in the passbook or the monthly statement. This is a most valuable corroboration as it is furnisht by a person outside of the concern. Hence in any suspected case of fraud, and even in any ordinary case, the accountant will seize upon the pass-book and checkbook as among the most valuable bases for his examination.
400. In case of audit, it has been claimed by some that the verification of the cash balance is no part of the duty of the auditor. From a practical standpoint, I should be disposed to question this dictum, and an actual instance may be adduced to the contrary. A trust company, as receiver of a hotel, employed a cashier and general bookkeeper, dishonest and afterwards a convict. The trust company retained a firm of public accountants to make a monthly audit of the accounts, which they did, and passed them as correct. The actual cash balance, however, was very different from that shown in the books, which was fictitious. The cash on hand consisted, in addition to the real money needed, of a large amount of memorandums, worthless checks, etc. This would have made the balance on hand appear absurdly large, but the embezzler, to conceal this, overdrew the bank account constantly, but held back, unissued, checks to dealers in supplies, which had been regularly signed, and the amount charged to the dealer's accounts. The cash balance of, say,
was composed of worthless paper less overdraft at bank
$10,000 The auditors paid no attention to this on the ground that it was not their duty to verify the cash balance. How they could neglect the balance of the check-book does not appear, for it was the posting medium for the dealers' ledger. They contented themselves with the nominal net balance, without inquiring into its components; they do not appear to have even inquired why the bookkeeper did not fill out a printed form appearing at the
end of each month in the general cash-book which called for a detailed statement of the items composing the cash. It seems to me that an audit which does not probe the bank account is almost worthless. *
401. In the verification of the bank balance, it seldom happens that the same result is shown in our account and in the account rendered by the bank. The cause of this is that, as in other accounts of indebtedness, there is an interval of time between the payment on the one hand and the receipt on the other, so that the transaction is for a time in transit, and necessarily appears under one date in one account and under another in the other. Where deposits are made by mail, this is often the case. Where checks are issued, they do not ordinarily reach the bank on the same day and frequently are “outstanding " for many days. It is therefore necessary to make a reconciliation between the two balances and this should be made a permanent record, so as to facilitate the next following reconciliation.
402. I would recommend that the balance of our account be first brought down and made the basis of the reconciliation, a total of the checks being inserted above the balance, as in Figure 11. Next the deposit side is examined. This is composed of the previous balance which was adjusted and the deposits since made. If these are all in, the totals of the left-hand side should agree. Next, the checks actually canceled and returned should be compared with the list accompanying them, after which they should be reassorted by serial numbers into the order in which they were originally drawn. A list of the missing checks should then be made up. The total of this list should exactly equal the difference between the two aggregate of checks, as drawn and as paid.
Having thus reconciled each side of the account, we are prepared to record the results. The general principle to be followed is that we must bring the balance on our books into conformity with the bank's statement for a moment, so that in the next reconciliation, if there is no variance, one side will be identical. If the variance is caused by delay only, and not by actual error on either side, we restore our account to its original status.
*I have no intention to assert, nor do I believe, that any such view is usual among American certified public accountants; but I am emphasizing the point that this is poor auditing. Possibly the contract for auditing expressly excluded verification of cash; in that case the Trust Company was to blame.
403. Suppose that there are 5 deposits and 5 checks, giving on our books the following result: Deposits
Checks $633.34 No. 1 $200.00 522.19
329.14 Total...... $1,236.87
Balance.... 925.63 $2,162.50
$2,162.50 Balance...... $925.63
If all the deposits have reacht the bank and all the checks have been paid, the figures $2,162.50, $1,236.87, and $925.63 will coincide and no adjustment will be necessary. But we will now suppose that checks No. 2 and No. 4 are outstanding; also that the last deposit, $250, had not yet been credited by the bank; therefore the balance as rendered by the bank is $1,183.63, the difference between $1,912.50 and $728.87. The checks outstanding are re-entered on both sides of our account; the deposit in transit is subtracted from the balance, which then agrees on the debit side with the bank statement; but the deposit, as it will reach the bank before the next reconciliation, is restored to its place.
404. An audit involving checks outstanding can only be regarded as provisional and is not complete until those checks have been paid and their amounts re-examined.
405. One of the most important points to be considered in the inauguration of a system of accounts is the method of handling the cash and its record in the cash account, whether kept in the ledger, in a cash-book, or in a check-book.
The Use of Charts in Accountancy. A Description of a New Method of Presenting the Salient
Points of an Accounting System.
By Max TEICHMANN, C. P. A. The professional accountant or systematizer who is called upon to devise a proper and adequate system of accounting or costkeeping stands relatively in the same position as an architect preparing plans for a new structure. The system is the foundation upon which the accounting of a business, if not the business itself, is being built. If that foundation has not been carefully and properly laid, the result will not only be unsatisfactory and misleading, but injurious and, perhaps, disastrous.
If well laid, with all of the necessary details and workings fully considered, but with the explanations and instructions either too vague or too lengthy, the result will invariably be the same. Errors of judgment or principle are possible, for one thing, and, for another, time is generally considered too valuable to spend on reading instruction sheets or text-books. Besides, misinterpretations of such instructions may be expected. As a result, there will be fluctuations shown in the different groups of cost, which in reality do not exist, and comparisons are rendered impossible or valueless without some analytical work.
By the use of charts these difficulties will be met. There are other obvious and valid reasons why charts should prove preferable to written instructions. With the chart before him the bookkeeper is better able to do correct and uniform accounting, because the chart serves him at once as an infallible guide, key, and index. A mere glance at the chart will give him all the information needed. The director or business manager, without having any knowledge either of accounting with its intricacies or of any particular system, can, by taking the chart as a guide, obtain any data or facts desired in the shortest possible time. He can make comparisons, detect excessive expenditures, leakages or waste, and in time will be able to apply proper remedies. The professional accountant can better explain, instruct and supervise with the assistance of charts, and, in case of an explanation or