Relation Between Cost and General Books Edward P. Moxey

relation of cost books commercial books, 1919

in order understand diagram , illustrate operation of books, can presumed sum of money disbursed purchase of materials, labor, , other supplies , services connected production of goods. this, in ordinary journal form, represented entry, whereby materials, labor, and/or indirect expense directed cash. entry accounts costing business value debited, , account has produced value, viz., cash, credited.

now moxey explained, in days in small business method of accomplishing result might satisfactory. in large business, however, there numerous transactions involving these accounts occur every business day. if these separately recorded in journal, work required , expense involved out of proportion results obtained. avoid labor, transactions of similar nature, when there many of them, brought in 1 subsidiary record, , totals posted ledger. there book devoted detailed recording of cash receipts , payments, while general ledger cash account concerned merely totals. likewise stores ledger contains number of accounts kept upon cards convenience in handling, or else in loose-leaf books totals appear in general ledger stores account. if, then, amount of money should paid out purchase of stores, cash book entry expressing such transaction.

both stores item , cash item find way general ledger in totals. stores item appears in stores ledger in detail, being taken original purchase invoices. when stores purchased, after having been received , placed in storeroom,

are requisitioned , delivered producing departments, there must credit stores account value of quantity delivered, etc.