A detailed examination of the book debts should be made periodically, notwithstanding the fact that the balances of the ledgers may agree with the total of the particular Ledger Account. This is especially to be borne in mind in the case of very large companies and where there are charges accrued and debited and frequently payments in round sums are made on account. When checking the schedules of balances, care should be taken to scrutinise these as to any prolonged period over which these have considerably increased, and if this has been the case, a full investigation of the accounts should be made, both as regards the Personal Accounts and the corresponding ” Charges Accrued” Account. Had this been done, the Millwall Dock Fraud would never have assumed the proportions which it did. At least a representative number of Ledger accounts should be scrutinised, especially as to the credit side, and authority should be produced for the writing off of bad debts and exceptionally large allowances and the making of transfers. In dealing with book debts, attention should be given to accounts where it is found that there are debit cash items with no corresponding credit, and in particular, where there are officials who have personal accounts in the books against which are charged, as frequently happens, items in respect of drawings, expenses incurred on the employer’s behalf, and often, amounts that have to be specially accounted for. All these debits require careful scrutiny, as defalcations sometimes are concealed in this manner. This is the case also in the Drawing Accounts of principals. These gentlemen are not always too careful over their personal affairs, and it may be a*n easy matter for charges to be made to them for money which they have never received. It is always desirable that they should periodically investigate the charges to their accounts, but there seems to be a somewhat general disinclination to do so. The verification of book debts of certain trading concerns requires special caution. In the majority of businesses, the debit entries are varying amounts, and usually a periodical settlement is made, but in the case of property companies, the debit entry for rent is usually the same, and in connection with these, care must be taken to see that one quarter’s rent is not used to make good a previous quarter’s rent previously misappropriated. For this reason the arrears of rents in a company of this nature should receive careful scrutiny. Again, in the case of breweries and distilleries, although the charges for goods continually vary, it is the custom for the tenant to pay a certain round sum each month, and frequently this is fixed when he enters upon his tenancy. For this reason the cash payments should be tested in order to see if any payments by the tenant are missed. It should be borne in mind that in the liquor trade it is customary to make payments on the basis of lunar months, thus making thirteen payments per annum. It is a growing practice with many large businesses to send out half-yearly ” rest ” statements, informing the customer of his balance and asking him to immediately communicate with the firm in the event of there being any inaccuracy in the same. It is unfortunate that this system is not more general, but in the case of a suspicion of fraud, it should always be acted upon at once, care being taken that some person having no connection whatever with the ledger clerk is deputed to send out the statements. In businesses where customers are supplied with Pass Books, it is well to have the Pass Books called in and examined with the Ledger Accounts at uncertain intervals, in order to see that they are in agreement therewith. One of the best checks upon the correctness of the stock of a business is the comparison of the gross profit and the percentage of each individual item comprised in -the Trading Account over a period of years, subject, of course, to any fluctuations due to increased cost of raw material, etc. In addition, the totals of the stocks at each balancing period should be compared to ascertain that the stock is not a continually increasing item, unless increased trade or special conditions justify it. Where possible it is also wise to fully trace a few invoices for goods received with the sales made in respect thereof, and see if the percentage of profit shown thereon is at all comparable with the percentage of gross profit shown in the Trading Account. Wherever possible Stock Books should be instituted, and these should be kept in as detailed a manner as possible, and should agree with the independent stock-taking made at the close of each financial period. The periodical stock-taking should, of course, be made by some person entirely independent of the stock-keeper, and then the figures checked with the amounts shown in the Stock-keeper’s Ledger, and any discrepancy should be most carefully gone into and explained. Although, after making allowances for small shorts, etc., the stock-taking may agree with the Stock Books, it is very important that the periodical schedule of stock should bear a certificate stating that ” The foregoing stock is all good, saleable stock, is the property of the company (or firm), and has been taken at cost price or under if necessary.” This certificate should be signed by the stock-taker, and also by the head of the business. The object of this certificate is to ensure as far as possible, in addition to the arithmetical accuracy of the quantity of the stock, that no old unsaleable stock is included, and also that, in the case of a business dealing in stocks which fluctuate considerably in value, that the stock has been taken either at cost price or at the market price of the day on which the accounts were closed, the lower of the two prices being the correct one to adopt for the accounts.

A Chicago Board of Trade term for grain out of

His engagements amount to $50,000, meaning his promises to pay or contracts to deliver call for that amount, or value.

A federal or state tax imposed upon the transfer of the net estate of any decedent. The Federal Act took effect Sept. 9, 1916. In some states it is called an Inheritance Tax.

When those who are long of the market are selling out, i. e. liquidating, at the same time that the shorts are purchasing to cover their contracts, so that both processes are going on simultaneously, it is called evening up. (See subjects in quotations.)

Without interest; coupon for interest just due and detached. This term is particularly used in reference to registered bonds, which, inasmuch as the interest is forwarded to the holder by check, are, to a certain extent, treated more or less from the standpoint of shares of stock. When the checks for interest are sent out to registered bondholders, they go forward to holders of record as of a certain date. Any sale of such a bond upon or immediately after a certain date, or, in other words, the closing of the books, would be sold exinterest; that is, the interest check would go ‘to the previous holder and the purchaser makes his transaction upon that understanding. There is at times a difference in the quotations between the registered and coupon bonds of the same issue, equal to the amount of the coupon. A registered 6% bond, for example, on which 2% (four months) interest has accumulated, might be quoted at 106, which would be the equivalent of the same bond in coupon form selling at 104 and interest. Registered bonds selling ex-interest are at that time quoted about equally in price, as 104 exinterest and 104 and interest are equal one to the other. A better understanding of this may be had from reading Registered Bond and Books Close.

(It is necessary to first understand Margin.) A fall in prices to a point where margins are wiped out

A gold coin of the United States of the value of $10, containing 232.20 grains of fine gold, and 25.80 grains of alloy.

A stock so quoted does not carry the privilege of rights, that is, it is ex-rights. (See those subjects.) Expert Accountant. See Auditor. Export Point of Gold. See Gold Export Point. Express Company Securities. Frank Haigh Dixon, professor of economics at Dartmouth College, in his article Publicity for Express Companies, x says, in substance, that the yearly receipts from this large transportation agency are nearly $75,000,000.2 There are six large companies, and a few of lesser magnitude. The four largest are the Adams, American, United States, and the Wells-Fargo. The first three named are organized under a New York law, granting them the right to issue transferable shares representing beneficial interests in the company, but every owner incurs all the liability of a partner. This is a fact to be considered in purchasing their shares.3 The Wells-Fargo is a Colorado corporation. Of the lesser companies, there are the Southern Express, the Pacific Express, the National, and two Canadian companies, besides numerous others organized by the railroads themselves, such as those operating over the Denver and Rio Grande, Great Northern, and Northern Pacific Lines. Besides all the above, there are, of course, many local companies doing a city or a city and suburban business. It is understood that the interests of the larger corporations are so interwoven one with the other, and that they are all on suclugood terms with the railroads, that competition is almost unheard of, and, as matters are at present, it does not seem necessary to consider this factor in connection with the large companies. One point deserving of consideration, however,. is the fact that the United States Government now operates a parcel post. The inauguration of this system has created an effective competition with the express companies. The dividend records until recent years were good and express company securities formerly stood well in the investment list. These corporations effectually concealed much information from the public, as they had not been accustomed to make reports themselves, nor had they been required so to do by the Government, but the enactment of the Railroad Rate Law classes express companies as common carriers, and brings them under the control of the Interstate Commerce Commission, and especially gives the Commission the power to demand annual reports.

A very uncertain condition of prices; first up and then downUnder these conditions the stock market is said to be erratic.

Meaning that a security is sold with all rights, such as dividend due, privilege to subscribe to new shares, and all such advantages, are reserved to the seller.

These letters stand for errors and omissions excepted, and often appear on a statement of an account, bo as to relieve the accountant from any personal liability for mistakes.

Among the Boston quotations, Edison Electric Illuminating Co. of Boston is understood; in Los Angeles, The Edison Electric Co. of Los Angeles; in Brooklyn, The Edison Electric Illuminating Co. of that city, and so on according to location.

Used in several ways, such as Exempt

Money paid by the buyer to the seller to bind the trade.

A London term for the ordinary stock of the Great Eastern Rwy.

Ex-Lake grain denotes the movement of grain from the eastern end of the Great Lakes by rail and canal, as distinguished from grain en route upon the Lakes.

Without interest; coupon already due, or about to become due, detached.

(First read Rights.) The sale of a stock upon which the privilege attached to its rights has been exercised or reserved. In any event, the purchaser obtains no privilege of that nature, and so understands it when making a purchase ex-rights.

A clearing-house (which see) expression indicating the amount of checks, drafts, etc.,settled through its mediumSame thing as clearingsAlso the English equivalent of our exchange as we use it in foreign exchange, for exampleThey use the plural, we the singular.

A number of shares of stocks evenly divisible by 100, as 700, 900, etc., share lots.

In time of sudden emergency, when money is needed for a temporary purpose, the British Government is authorized to issue negotiable, interest bearing, coupon bills of credit, due in five years; the interest being fixed each year but never to exceed 5$% per annum. This is a form of indebtedness for short time borrowing. These had their origin in 1696, but have been gradually superseded by Exchequer Bonds and Treasury Bills.

A bond of which the payment of the principal is put off to some future date; the issue ordinarily not being replaced by other bonds, but the same ones left in the hands of investors; the security behind them remains the same. In such an event, it is customary to attach sufficient new coupons to cover the interest for the time extended, or new bonds, coupons and all, may be given in exchange for the old. Most issues of this nature are extended at a lesser rate of interest than borne by the original ones. Extended bonds have stamped or printed thereon the essential facts of the extension, and, if there are old coupons which can be used, they are stamped or printed so as to show the lesser rate of interest.

Meaning the same as surplus reserve.