Procedure Control Group This group includes accounts set up temporarily for the purpose of internal control. This account controls the purchases of new equipment. It insures all such purchases being taken into the Equipment Inventory accounts at established inventory prices and all equipment of the same type and character being uniformly priced. This account should never appear on a trial balance, but is to be adjusted before the books are closed for the month. DELIVERIES CONTROLLING ACCOUNT Pro Forma Account 34 Deliveries of equipment by yard during month as per journal (J.E. 24)........ $12,600 Monthly credit as per pur- $12,600 This account controls the bills prepared by the equipment. department for shipments of equipment; the charge is based on the department's reports of invoices prepared by it. The credit results from the entry of the individual bills on the purchase register as charges against the construction accounts for the operations to which the equipment is delivered. This account should never appear on a trial balance. A balance at the end of a month indicates that a bill prepared by the equipment department has either not been entered on the purchase register or has been incorrectly put through. This account controls the return of equipment by jobs. The credit is based on the equipment department's reports of credit memoranda issued. The charge results from entering the credit memoranda on the purchase registers for the jobs by which the returns were made. This account should never appear on a trial balance. A balance at the end of a month indicates that either a credit has not been entered at all on the purchase register or has been incorrectly put through. This account controls the rental charges for equipment placed on jobs at a fixed charge for a fixed period of time. Debit entries are based on the equipment department's reports of the total rental rolls for the month. Credit entries result from entering the rental rolls on the purchase register. This account should never appear on a trial balance. A balance indicates that a rental roll has either not been entered on the purchase register or has been incorrectly put through. This account controls all disbursements for weekly payrolls or for the reimbursement of disbursements made out of petty cash, the debit entries being the total of checks issued. The credits represent the total of the individual charges against operations for payrolls and petty cash disbursements put through the purchase register during the month. This account should never appear on a trial balance. A balance indicates that some disbursements have been made during the month and either not entered on the purchase register or put through incorrectly. TRANSFER ENTRY Pro Forma Account 38 Total monthly debit as per purchase Total monthly credit as per purchase register summary Journal entries for correction of regis ter sheet or summary distribution. (Can be either debit or credit.) register summary Errors are sometimes made in charging items to wrong accounts. As it is necessary that the cost analysis department First National Bank Building, Oakland, California Thompson-Starrett Company, Contractors L. Dutton, Architect be advised of construction charges and credits when placed on the accounting books, such errors should not be corrected by journal entries. Transfer Entries are prepared in duplicate, one copy being entered on the purchase register as a credit and the other as a debit to the operations affected. These entries. are extended on the purchase register in Transfer Entry columns. Then, as explained in Chapter X, these sheets are summarized monthly. If all transfers have been correctly made, the debits and credits to this account posted to the purchase register summary will offset each other and no net balance will appear in the Transfer Entry column on the summary when completed. If, however, an error has been made, or one side of the transfer entry has not been entered on the sheets, the register summary will have either a debit or credit to be posted to the general ledger. The posting is made to this account. SUNDRY TAXES Pro Forma Account 39 Payment of taxes to federal, Transfer of charge to individ- This account should be used only when tax payments are large in number and varied in kind. Its only purpose is to collect in one account all tax payments as an aid in preparing income tax reports. When tax payments are few in number, they can be charged to General Expense or other account and the same result obtained by keeping a tax subdivision in the account. The relation of this account to other accounts is as follows: When the amount of taxes due is determined, a credit is given to either a reserve account or to the tax official to whom the |