with a machine control record. This record is a simple form, horizontally ruled. A column is provided at the left for the inventory value of each piece of equipment, a blank space for a description of each piece, and a series of narrow columns for several rental periods.

Each horizontal line is used for the description of some rental piece of equipment. As equipment is moved from one location to another, the date of its delivery or return is noted in pencil in the column for the period during which the movement took place. This notation acts as a check on the date when rental should first appear on a rental roll or as the date when rental should cease.

Each column represents a rental period. As each rental roll is approved by the equipment department, a notation is made in the column allotted to the rental period and on the line assigned to each piece of equipment for which a rental charge is included in the roll.

The total rentals shown by all rental rolls for all jobs are listed on a rental report, showing the rental chargeable to each job for each rental period. The report is journalized. The total of the report is credited to the Equipment Price Adjustment account and charged to the Machine Rental account. The rental rolls are entered on purchase registers as charges to the jobs on which the equipment is located and credits to the Machine Rental account.

Petty Cash Disbursements

Entries covering payments out of petty cash follow the same general procedure as that mentioned for payrolls. An office entry (Form 16, page 96) is prepared, receipts and supporting papers attached, and the entry made similar to Entry 4, Form 19. The information for Form 18 is taken from the cost symbols indicated on the papers supporting the entry.

Subcontractors' Work

All phases of the accounting in connection with work sublet appear in Chapter XI dealing with the contract ledgers.

Service Charges

Invoices for service charges, such as hauling, telephones, and all miscellaneous expenditures are entered in the same manner as bills for material and should be supported by reports from employees certifying to the furnishing of the services.

Transportation Charges

Transportation charges affect shipments made by subcontractors and material dealers. Those arising out of shipments made by subcontractors involve very simple accounting, but those connected with shipments from material dealers require greater consideration. The accounting connected with transportation charges is therefore discussed in Chapter IX, dealing with the creditors' ledger, which is the ledger containing the accounts with material dealers.

CHAPTER IX

THE ACCOUNTING SYSTEM

Books of Account

Some of the books of account and records which, because of their construction or the importance of the details attendant upon keeping them will be described in separate chapters, are the purchase register, the owner's contract ledger, the subcontractors' contract ledger, and the general ledger.

A brief description of these books and records will be given before taking up those which are kept in the same manner as in other industries. This applies to the creditors' ledger, accounts receivable ledger, cash book, journal, notes receivable record, and notes payable record.

Purchase Register

The purchase register is the book of original entry. All payrolls, material invoices, subcontractors' applications, and other charges forming part of the cost of construction are entered in it. The register is also used for recording the detailed expenditures applying to general accounts appearing on the general ledger, such as general expenses, equipment operating expenses, etc.

Owner's Contract Ledger

This ledger contains all accounts with the owners of the different jobs under construction. These accounts indicate the amount of the contract with the owner, extra orders issued by him, bills rendered by the contractor for work done, and payments made to him.

Subcontractors' Contract Ledger

The subcontractors' contract ledger is used for the accounts with all subcontractors. The accounts contain a record of contracts given and extra orders issued to the subcontractors. They also show the bills rendered to the contractor for work done and the payments made by him to the subcon

tractors.

General Ledger

The general ledger is principally a ledger controlling all the subsidiary general accounting ledgers and the individual cost accounting ledgers. The general ledger also contains expense and income accounts and asset and liability accounts.

CREDITORS' LEDGER

Description

The accounts with material dealers and supply houses for the purchase of miscellaneous supplies, services, etc., are kept in this ledger. It corresponds to the accounts payable ledger generally in use.

It is not called the accounts payable ledger because it does not contain all accounts payable accounts. The accounts representing the contractor's largest liabilities, namely, those incurred for labor performed and material furnished by subcontractors, appear in a separate ledger. A few liability accounts appear in the general ledger, such as accruals for taxes, interest, etc.

Ledger Accounting

Two-column sheets are used in the creditors' ledger. The credits to vendors for purchases are posted from the purchase register (Form 19) and the debits for cash payments are taken from the cash book. Contra charges for freight and other items are entered from the purchase register.

The bookkeeping required on this ledger does not differ from that followed in the ordinary usage of an accounts payable ledger. When numerous purchases for different jobs are made from the same supply house or material dealer, separate accounts are sometimes kept for the transactions on each operation. The convenience in obtaining information more than offsets the extra work caused by having additional accounts. The total of the trial balance of the accounts in this ledger must equal the balance of the creditors' controlling account on the general ledger.

Purchase Agreements

As this ledger contains the accounts with all material dealers, the ledger-keeper should have the custody of all purchase agreements for brick, sand, cement, and other material. He should enter the principal features of each agreement on the sheets of the account with the material dealer.

DEFAULT BY MATERIAL DEALER. The ledger-keeper should be thoroughly familiar with the terms of all purchase agreements. A default might occur which would cause the contractor to pay sums properly chargeable to a material dealer.

A purchase agreement might provide for buying common brick from William Reilly at $18 per M. An invoice for common brick at $20 per M might be received from John Jones for deliveries to the operation covered by the Reilly $18 contract. This might indicate that the purchase from Jones was necessitated by Reilly's default. If his failure to deliver brick arose from causes for which he was responsible, he would be liable for the excess $2 per M paid to Jones, unless there were clauses in Reilly's contract relieving him from such liability.

CASH AND QUANTITY DISCOUNTS. The ledger-keeper should be thoroughly acquainted with the cash discounts allowed for prompt payment. He and the purchasing agent