a credit to the job to which the wages apply and a charge to Payroll account. The entry would be similar in form to Entry 8, Form 19, except that the explanation would be "unclaimed wages."

The payroll sheets can be either attached to the office entry, or filed in binders and arranged so that all payrolls on each individual operation are grouped together in chronological

order. The choice depends upon which method is the more convenient for reference purposes.

If any of the workmen appearing on the payroll perform work that is chargeable not to the cost of the operation but to a subcontractor or other firm, the amount represented by such labor is charged to the cost of the job and distributed to a special cost subdivision. The labor is billed to the party for whom the work was done and the invoice credited to this special subdivision.

The above outline covers the general accounting connected with field payrolls. The cost feature which allocates the earnings of workmen to the line of work on which they were engaged, such as excavation, brickwork, etc., is discussed in Chapter XXII.

INCOME TAX REPORTS. The federal and some state governments require a return of information at the source showing the earnings of workmen receiving total wages in excess of $1,000 in a calendar year. The back of the employment ticket can be printed so as to obtain, at the time of employment, a workman's address, whether he is married or single, and the number of his dependents. The total of his yearly earnings. is obtained from cards, on which his earnings have been posted at the end of each payroll period.

When workmen are employed in states having income tax laws, the contractor should immediately ascertain all its provisions, particularly as to withholding of tax that may be required of him.

Deliveries of Material

The accounting department should carefully examine all reports of delivery of materials to see that the job submits them promptly in accordance with instructions and that all reports are received in sequence of serial numbers. On cost

plus contracts, the approval of the owner's or architect's representative should be obtained on these reports so that he may have daily information as to deliveries being made at the job of materials which the contractor will later include in his statement of cost of the work.

VERIFICATION AND ENTRY OF INVOICES. The accounting department compares the material clerk's report of material received and the purchase order with the invoice rendered by the vendor. If the quantity reported received at the job and the prices shown on the purchase order agree with the invoice, the bill is approved for payment and filed for entry with the purchase order and report from the job attached. Entries should be made daily.

Discrepancies between invoices and purchase orders and job reports are investigated and adjusted. Whenever there is an error in an invoice, the accounting department should immediately advise the vendor of any correction made, giving its amount, the date of the invoice affected, and an explanation of the change. Vendors' invoices covering delivery of bulk material are similarly compared with the reports from the job. Prices are checked with copies of purchase agreements in the contract file. No paper, however, is attached to the entry, supporting the price on such invoice.

The accounting entry is a charge against the particular job for which the material was purchased and a credit to the vendor, the record being made on the purchase register (Form 19, Entry 1, page 131). From the purchase register the amount is posted to the creditors' ledger, which is explained in Chapter IX.

Return of Material, etc.

When, in accordance with procedure outlined in Chapter IV, shipping lists (Form 13, page 49) are received in the

office, they must be immediately checked to see that they are sent in daily and in order of serial numbers.

When shipments are made by freight or express, the bill of lading or express company's receipt is attached to the charge. These charge blanks (Form 20, page 137) are serially numbered before issue to job.

BILLING AND Entering RETURNS. When receiving the charge, the accounting department determines its amount by obtaining the purchase price from the purchase agreement or the purchase orders. The charge is then entered on the purchase register as a credit to the job and a charge to the vendor or other firm to whom the material or container was returned (Form 19, Entry 2). This entry is made prior to the receipt of the credit memorandum from the vendor, the purpose being to avoid overpayments to vendors through sending checks to them for invoices without taking into consideration the amount due for material or containers returned.

Materials Carried in Stock

It may be a contractor's policy to carry a stock of certain supplies and material, in addition to construction equipment. A bin ticket should then be used whenever practicable. An inventory stock sheet, giving both quantities and money values, is recommended. One reason for this is that when deliveries of such material are made to a job being constructed under a cost-plus contract, the charges against the job should be the actual cost paid for the material, except when there has been a pronounced drop in market prices subsequent to date of purchase, or the contract with the owner provides otherwise. Another reason is that the mathematical correctness of all charges for any particular item of material may be quickly verified by multiplying the quantity remaining on hand by the unit cost, the result being an amount that should equal the

money balance of the stock sheet. The money balance of all these stock sheets must equal the balance of the controlling inventory account on the general books.

DELIVERIES FROM STOCK. When deliveries of materials and supplies are made from stock carried by the contractor, charge slips are prepared. The slips are printed in sets, numbered serially before issue to shipping clerk. A set consists of:

1. Shipping ticket for shipping clerk's file.

2. Shipping ticket which accompanies load and is retained by receiver.

3. Shipping ticket which accompanies load, and which after being receipted by receiver is returned to shipping clerk.

4. Invoice used by accounting department.

5. Extra copy of invoice for submission to owner of cost-plus work.

The shipping clerk has charge of the sets and has one set typewritten for each shipment made in time to accompany the load. The shipping clerk files his own set in numerical order and must see that acknowledgment of delivery is obtained from the receiver of the material.

CONTROL OF SHIPMENTS. Periodically, the shipping clerk furnishes the accounting department with a statement of the shipments he has made. The statement gives the serial number of the shipment, its date and destination. A blank column is provided in which the value of the shipment can be placed by the accounting department. "Periodically" means daily, semiweekly, or weekly, or such other period as is necessary to assure prompt and adequate control, taking into consideration the number of shipments made daily.

This statement is accompanied by an unextended invoice, sheet 4 in the set referred to above.

The accounting department checks the statements when received from the shipping clerk to see that it has been fur