ucts. In estimating the total losses all these items must be considered, but the remainder of this paper will be confined to an accounting scheme for keeping record of the machinery and appliances necessary to carry on the manufacturing, reserving for the next issue the handling of the goods accounts.

The values of machinery and equipment at any time, in a building may be expressed by the following formula:

(Original Cost of Machinery and Equipment New Additions) (Depreciation + Superseded Equipment and Machinery) Present Value of Machinery and Equipment.

=

The cost of repairs, renewals and maintenance in general do not properly figure into the accounts because such items are introduced to keep the value of the machinery and equipment up to its initiatory basis. They do not properly add to the assets of the concern and should not be so recorded.

It is evident the problem of keeping accurate record of these assets can be most readily solved by adopting an accounting system which will suit the requirements of the above formula.

Within recent years a number of important concerns, especially in the textiles industries, have adopted an inventory scheme which is exceedingly effective. A plan is made of every department of the establishment, and on the sheet is indicated every machine or piece of equipment within the section so drawn. All pieces in the department are numbered, no matter how small, and shown in the drawing. In addition a separate record is kept containing their descriptions, which includes, besides an accurate description of the machines, information relating to their prices, dates of purchase, rates of depreciation, from whom purchased, by what power driven, when and how disposed of, and the amount realized in their disposal. The figure on page 448 is taken from a part of such a drawing of a well known textile plant in Philadelphia.

The drawings below reveal considerable information. They show the dimensions of the plant or department, and indicate the exact placing of every piece of equipment. In addition, on the same sheet, with the drawing is tabulated a brief description of the machines, the number of each, the methods of driving them, and a description of the motive power. A more detailed statement of these items is entered on typewritten sheets which give full descriptions of the inventory.

accurate indication of the new conditions within the plant.
the descriptive part of the record is corrected, in order to give
altered, the table is corrected to correspond with the change, and
Whenever a change is made in the equipment the drawing is

Accuracy and fairness in keeping these inventory records are

essential. Insurance companies prefer, at times may even insist, that they be kept by disinterested appraising firms in order to guarantee absolute trustworthiness. It is not, however, an imperative necessity for an outsider to keep such records, because, if their reliability should be questioned, fallacies will be detected from internal evidence.

Save in unusual cases machinery is acquired by purchase and a bill of sale is always given with such transactions. In addition the machine manufacturing companies keep their sales records. In case of any dispute the insurance companies can refer to these records, and thus, by making proper depreciation allowances, obtain a close approximation of the value of the machinery from an independent source.

The inventory record described possesses a number of advantages. Aside from its advantages in case of fire it keeps the firm carrying it thoroughly informed as to the exact status of all its possessions within the plant. The true value of the equipment, both in total and in individual items, is never obscured. In case of fire this absolute record of its possessions enables the firm to recover its losses with a minimum amount of controversy. Disputes can hardly arise if the records are accurately kept, because in such a case they show all that was owned. The loss entailed is bound to be the difference between the original value and the value of the ruins.

Even if the records are not accurately kept they serve as a convenient basis for the tracing out of the original value. It frequently happens the assured will, after a fire, unless he possesses such a record, be unable to tell just what his losses are. Many times he overlooks important items in his loss statements to the insurance companies. In this way he loses by not recovering amounts to which he is justly entitled.

Insurance companies feel quite justified in paring down claims whenever their validity is in any doubt. As a result, after a fire, there is constant opportunity for disagreement where no such record is kept. Seldom indeed, after large conflagrations, are adjustments made without entailing friction and always at the expenditure of considerable sums of money. These sums far exceed the entire cost of installing a proper fire inventory system in the first place, and, in addition, the after expenditure never proves so satisfactory.

Accounting Literature.

BY LEO GREENDLINGER, B. C. S.

Instructor of Accounting in New York University School of Commerce, Accounts and Finance.

As explained in the first installment of this article, which appeared in the February issue, the books described are classified as follows:

PART I, treats of those volumes which deal with one or more special forms of accounts. In the case of each volume, it will be noted, as far as possible, for what grade of students it is best adapted. The part is subdivided into Section A, containing the first series of volumes of the Accountants' Library from Vol. I to Vol. XX, and Section B, containing the second series of volumes. PART II, treats of other accounting literature, and is subdivided into three sections, viz.:

SECTION A, to contain a description of the books adapted best for the elementary study of accounting.

SECTION B, to contain a description of the books suitable for intermediate study.

SECTION C, to contain a description of books adapted to the advanced study of accounting.

PART I (Section B).

Vol. XXI. Municipal Accounts, by John Allock, F. S. A. A. While the book does not treat the subject in general, but as applied to England, yet on account of the great number of forms (61) it is at least a good guide in the introduction of a system of accounts for municipalities.

Vol. XXII. Underwriters' Accounts, by Spicer and Pegler, A. C. A. Like other volumes of the Accountants' Library this book treats of the forms and books, as well as accounts incidental to underwriters' accounts.

Vol. XXIII. Jewelers' Accounts, by Allen Edwards, F. C. A. The book treats of the account and book forms incidental to jewelers', silversmiths' and kindred traders' accounts. It gives a list of all books required for properly recording transactions, as well as determining the cost of articles produced, etc. It is especially valuable for the chapter on the prevention of fraud, theft, embezzlements, losses, etc.

Vol. XXIV. Multiple Shop Accounts, by J. Hazelip, F. C. I. S. Though this volume is especially adapted to England, yet it gives a general description of the working of shops and introduces various forms

of books and accounts. It also gives a Pro-Forma Ledger, with explanatory text.

Vol. XXV. Building Societies' Accounts, by W. Collin GrantSmith, LL. B., A. C. A. This book is especially adapted to permanent societies. It takes up the nature and constitution of building societies, and gives the bookkeeping, forms and tables for this class of accounts.

Vol. XXVI. Depreciation, Reserves, and Reserve Funds, by Lawrence R. Dicksee, M. Com., F. C. A. The author, in his introduction, acknowledges that he is fully aware that he is discussing some of the most vexed questions in relation to accounts, and for that reason he has throughout the book endeavored, as far as possible, to separate matters of mere opinion from matters of fact. The book gives all the methods by which depreciation may be covered, showing by different tables how the results should be arrived at.

It further treats of Reserve Funds, Secret Reserves, Sinking Funds. The book devotes also one chapter to the Double-Account System.

Vol. XXVII. Quarry and Stone Merchants' Accounts, by A. E. J. G. P. Ibotson, A. C. A. This book, perhaps more than any other of the Accountants' Library volumes, is for the accountant student rather than for the owner or manager of a quarry.

Vol. XXVIII. Friendly Societies' and Trade Unions' Accounts, by E. Furnival Jones, A. S. A. This is a purely local (English) book and treats only of ordinary friendly societies, branches of registered orders, and of trade unions. It gives all forms, a standard general ledger, and final accounts, concluding with the audit of friendly societies. It may, perhaps, be of interest to note that under the name "Friendly Societies," the Chief Registry Office in England includes: ordinary friendly societies, branches of registered orders, collecting friendly societies, benevolent societies, workingmen's clubs, specially authorized societies, and all the insurance societies.

Vol. XXIX. Electric Lighting Accounting, by George Johnson, F. S. S., F. C. I. S. The book gives the principles and forms for the various books of account, as well as statistical books, and a set of ProForma transactions.

Vol. XXX. Fraud in Accounts, by The Editor of The Accountants' Library. The book discloses how frauds are exercised, resulting in misappropriation of money or goods, and gives special instructions how to detect them. It further gives systems for a proper internal check. Vol. XXXI. Drapers', Dressmakers', and Milliners' Accounts, by George H. Richardson, F. S. S., F. C. I. S. This volume is purely local (English) and gives forms of books and accounts incidental to this industry.

Vol. XXXII. Wine and Spirit Merchants' Accounts, by A. Sabin. The author, in the introduction, traces fully the wine industry, giving various tables, and states that "the object of this volume is to set forth simply and clearly a system of accounts which may be considered necessary to enable a wine and spirit merchant to ascertain his position at the end of his trading period as regards his stock in hand, sales, and