MASTER NEGATIVE NO. 94 COPYRIGHT STATEMENT The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted materials including foreign works under certain conditions. In addition, the United States extends protection to foreign works by means of various international conventions, bilateral agreements, and proclamations. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specified conditions Is that the photocopy or reproduction is not to be "used for any purpose other than private study, scholarship, or research." If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of "fair use," that user may be liable for copyright infringement. The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: Newton, Roy Lee Title: A system of accounts for cotton warehouses Place: Washington, D.C. Date: 1917 MASTER NEGATIVE * COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD ;rcu.:j^ 360 N487 ynluOWERT Newton, Roy Lee. A system of accounts for cotton warehouses. By Roy L. Newton ... and John R. Humphrey ... Washington, Govt, print, off., 1917. cover-title, 31, ilj p. 2Z^. (U. S. Dept. of agriculture. Bulletin no. Contribution from the Office of markets and rural organization. 1. Bookkeeping. 2. Cotton— tStoragei 3. Warehouses. i. Humphrey, hn Refirester. mint anthnr tt Tifl« — » . ^* John Regester, joint author, ii. Title. Library, U S. Dept. of Agr 17-609 Agriculture lAg84B no. 520 ^*lrsi« RESTRICTIONS ON USE; TECHNICAL MICROFORM DATA RLM SIZE: TJT^m REDUCTION RATIO: il)L IMAGE PLACEMENT: lA @ IB IIB DATE FILMED: \o\u> ^ INITIALS: TRACKING # : MSH 0?S767^ FILMED BY PRESERVATION RESOURCES, BETHLEHEM. PA. ^, »A w ^^. ^^^ ^^^7^ CJl 3 3 O > N C/J cob:::: CXI CT>X OOM vo O 3 3 > CD o m (DO (TO ^ o O X < N X -j^. 'j^. '^: o o 3 3 o 3 3 J^^' (n A* a^ O O 3 3 O N3 00 a* 0° b Kis 1.0 mm 1.5 mm 2.0 mm ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghi|klmnopqrstuvwxyzl234 567890 ABCDEFGH I JKLMNOPQRSTUVWXYZ abcdefshiiklmnopqrstuvwxyzl234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ „ _ abcdefghijklmnopqrstuvwxyz 2.5 mm 1234567890 X^ ^ fo 31 O q IV . '^/^ .V ^^^ ^o <^ ^p ^ ■^. CJl 3 3 o 3 3 5.0 -I << JO fS IS 3 r- § 8 r J MEWTOM SYSTEM OF flCCnUMTS FOR COTTDh WRREHOUSES ^srs^os LIBRARY ^cfiool of ^us^intsifi W^t iHontgomerp %ihxwc^ of SUtouniatup MAY 9 1927 ;L UNITED STATES DEPARTMENT OF AGRICtJLTURE BULLETIN No. 520 Gontribution from the Office of Markets and Rural Organization ^ " CHARLES J. BRAND. Chief Washington, D. C. June 26, 1917 ii.t i ^ A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES LIBRARY SCHOOL O*" BUSINESS ROY L. NEWTON, Assistant in Warehouse Investigations and JOHN R. HUMPHREY, Investigator in Market Business Practice CONTENTS Introduction . •. . . . Description of the System Operation of the System Page 1 2 , 11 ^ Page Arrangement of Bales in tlie Warelumse 13 Conclusion. ..o*a..ae.* U WASHINGTON GOVERNMENT PRINTING OFFICE 1917 ^ UNITED STATES DEPARTMENT OF AGRICULTURE BULLETIN No. 520 Contribution from the Office of Markets and Rural Orsanization, CHARLES J. BRAND, Chief Washington, D. C. June 26, 1917 A SYSTEM OF ACCOUNTS FOR COTTON WARE HOUSES. By Roy L. Newton, Assistant in Warehouse Investigations, and John R. Humphrey, Investigator in Market Bitsiness Practice. CONTENTS. rage. Introduction l Description of the system 2 The tag 2 The certificate of inspection 3 The warehouse receipt 4 The consecutive tag record 7 The individual account record 7 The location book 8 The out-turn order 8 Page. Description of the system— Continued. The daily report 9 Cash journal 9 Cash disbursement ticket 11 Cash receipt ticket 11 Sale ticket 11 Operation of the system 11 Arrangement of bales in the warehouse 13 Conclusion 13 m\ f . INTRODUCTION. The warehouse receives cotton for the account of another party, provides the owner with a proper place for conserving his product, and gives its receipt as evidence that the cotton has been stored. Upon the integrity and financial standing of the warehouse which issues this receipt depends the value of the receipt, and it should be the desire and aim of every warehouseman to give his receipt its utmost value. The efficiency of a cotton warehouse depends in a very lai^e degree upon its methods of keeping accoxmts and records of its transactions. The general use of a simple, concise system of accounts, compre- hensive enough to fill the needs of the larger as well as of the small warehouse, would be a step toward the adoption of a standardized system of cotton-warehouse accounting. To attempt to fill the need for a satisfactory system of accoxmts capable of general use, to suggest forms of warehouse receipts which Note.— This bulletin should be of special interest to all cotton warehousemen and of g^ieral interest to their patrons and to those who are concerned in the reliability of warehouse receipts. 72961'— BuU. 520—17 1 I 1 2 BULLETIN 520, U. S. DEPAETMENT OF AGBICULTUBE. can be recommended for the use of cotton warehouses, and to promote the general use of uniform receipts are the aims of tWs bulletin It describes a simple system of accounts for the use of cotton ware- houses, which will be found comprehensive enough to meet the reqmremonts of any organization which does only a cotton ware- housmg business.' A complete set of forms is shown and their use explained. Jlore complex organizations, such as compresses which conduct a warehouse business or warehouses that mamtain various other departments, of necessity will be compeUed to enlarge upon a system of this character, but an effort has been made to have the pnmary ideas practicable even for such oi^anizations. The best fea- tures of the systems afready in use have been combined into this system which has been tried out under commercial conditions bunphcity m any system of accounts is desirable, so that rapidity m handhng maybe attained without sacrificing accuracy and the plan must be such that any data desired are quickly avaUable Information may be needed in regard to a certain lot of cotton or a certam outstanding receipt; about a specific bale in a remote comer of the warehouse or the exact number of bales a certain patron may have m storage. The records should be such that any one or aU of these mqumes may be answered immediately. All of the forms used should be mterlocking, so that if one fact is known full particu- lars may be obtamed by a reference to that fact. DESCRIPTION OF THE SYSTEM. As this bulletin is mtended to be sufficiently complete to enable a warehouseman to install the system, a detaOed description of the forms comprising it is essential. The complete system includes the foUowmg twelve forms, which will be described in the order of their use: (1) The tag; (2) the certificate of inspection; (3) A, B C D or E), the warehouse receipt; (4) the consecutive tag record'- (5) the mdmdual account record; (6) the location book; (7) the outturn order; (8) the daUy report; (9) the cash journal; (10) the cash dis- bursement ticket; (11) the cash receipt ticket; (12) the sale ticket. THE TAG. Various methods are in use in cotton warehouses for the identifi- cation of the bales, but by far the most successful, and the one most generaUy used, is that of the numbered tag, supplemented by a record of the owner^s private mark. Form 1 (page 14) shows a form of tag that IS recommended. In every instance the tag should be made of reasonably heavy waterproof paper or of linen. Double eyelets with JMaiiy warehousemen doing a small business find it convenient and profitable to deal in various com ^^l^ ^^^ *.^'f '^' ^'^ ''"""^^^' ^'*^«° *^«^« i^ ^^«1« ^^^^^ for storage For th^ i^^n ' "1" sion has been made for this class of business in the system of accounts described hefeta ^ A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 3 an extra reinforcement strip are desirable, and a double flexible wire, preferably copper, for attaching the tag will give the best results. The tags should be numbered consecutively and used in numerical sequence throughout the season. The selection of the tag to be used should be made with great care, as it is to become the principal means of identification of the cotton when the bale is in the warehouse. A tag of poor quahty, improperly fastened to the bale with a single small steel wire, may be easily pulled or rubbed' off the bale in handling or lost by the rusting of the wire. Numerous instances have occurred where the tag, even when securely fastened to the bale with a single small steel wire, has been twisted off bv the action of the wind. Much trouble is caused by such a loss, especially if more than one bale is affected. In order to provide against this contingency it is recommended to the warehouseman that he invariably take an accurate record of the customer's private marks that appear on the bale. This record wiU be of great assistance when it becomes necessary to estabHsh the identity of the cotton. Attention is called to the double eyelets and the extra reinforcing strip on the tag. These features make it especially desirable, for it is possible to tear the greater part of the tag away and still leave be- tween the wires this strip which contains the number and thus serves the chief purpose of the tag. It is advisable to have the tag made with the detachable coupon (see Form 1), especially when the warehouse furnishes a sample from the bale, as the coupon, which should be numbered to agree with the tag, may then be torn off, and placed inside the sample to identify it. Some warehousemen furnish a sample to the customer, and retain one at the warehouse. Where this is done the tag should have two coupons. THE CERTIFICATE OF INSPECTION. The certificate of inspection, (Form 2, page 15,) is a signed certificate from the weigher and grader, showing that he has tagged, weighed, graded, and inspected the bale or bales of cotton. On it is to be detailed the following data : (1) The depositor's name and address; (2) the tag number; (3) the owner's marks; (4) the weight; (5) the grade; (6) the standard of classification used; (7) the length of staple; (8) the condition of the cotton; (9) the signature of the weigher and grader. The sheets should be arranged in pads in order that a carbon copy of each certificate may be made. The lines of the forms in the "tag no." column may be nxmibered in advance with at least the last numeral of the tag numbers, in consecutive order. This wiU f acihtate the filling in of the tag numbers and will secure numerical sequence. Attention is here called to the fact that the certificate is not the ware- house receipt, and should not be used as such. However, it may be 4 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTURE. given to the depositor, in addition to the receipt, as iiis private memo- randum. Often it is not possible to weigh or grade the cotton imme- diately upon its arrival at the warehouse, and the owner may be imwilling to wait for his receipt until this is done. In this event the certificate may be issued subsequently, and the original attached to the receipt. The carbon copy of the certificate is to be used only as a record of the warehouse, and is for the information of the ofl&cer writ- ing the receipt, who after noting upon it^ in the place provided for that purpose, the nimibers of the receipts which cover the cotton listed upon it, files it away, in numerical order. A convenient size for the certificate is 7 by 9 f inches with J -inch ruling. THE WAREHOUSE RECEIPT. Many forms of receipts are in use in cotton warehouses, and no attempt is made to give forms here that would conform to the ideas of all warehousemen. The receipts shown embody all of the require- ments of the United States warehouse Act, which is especially de- signed to increase the value of the warehouse receipt as collateral, with the exception of the statement that the receipt is issued subject to the United States warehouse Act and other special terms or con- ditions which might be required by the Secretary of Agriculture for the purposes of that act, which would of course be required only on receipts issued by warehouses hcensed thereunder. The terms and conditions of receipts required by the Uniform Warehouse Receipts Act, which has been adopted by 32 States, Alaska, the District of Columbia, and the Philippine Islands, are substantially the same as those of the United States warehouse Act, except that the latter adds somewhat to the requirements embodied in the former. The following data are required in the issuance of warehouse receipts, xmder the United States warehouse Act and must be embodied within the written or printed terms of such receipts, as set out in section 18 of the act : (a) The location of the warehouse in which the agricultural products are stored. (6) The date of issue of the receipt. (c) The consecutive number of the receipt. (d) A statement whether the agricultural products received will be delivered to the bearer, to a specified person, or to a specified person or his order. (e) The rate of storage charges. (/) A description of the agricultural products received, showing the quantity thereof, or, in case of agricultural products customarily put up in bales or packages, a description of such bales or packages by marks, numbers, or other means of iden* tification, and the weight of such bales or packages. (g) The grade or other class of the agricultural products received and the stand- ard or description in accordance with which such classification has been made: Pro- vided, That such grade or other class shall be stated according to the official standard of the United States applicable to such agricultural products as the same may be fixed and promulgated imder authority of law. A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 5 '!i) A statement that the receipt is issued subject to the United States warehouse Act and the rules and regulations prescribed thereunder. (i) If the receipt be issued for agricultural products of which the warehouseman is owner, either solely or jointly or in conunon with others, the fact of such ownership. (j) A statement of the amount of advances made and of liabilities incurred for which the warehouseman claims a lien: Provided, That if the precise amount of such advances made or of such liabilities inciured be at the time of the issue of the receipt unknown to the warehouseman or his agent who issues it, a stateipient of the fact that advances have been made or liabilities incurred and the purpose thereof shall be sufficient. {k) Such other terms and conditions within the limitations of this act as may be required by the Secretary of Agriculture. (l) The signature of the warehouseman, which may be made by his authorized agent: Provided, That unless otherwise required by the law of the State in which the warehouse is located, when requested by the depositor of other than fungible agricultiual products, a receipt omitting compliance with subdivision (g) of this section may be issued if it have plainly and conspicuously embodied in its written or printed terms a provision that such receipt is not negotiable. Compliance with all of the conditions of receipts issued xmder the United States warehouse Act is not obhgatory unless warehousemen operate imder that law. Either a negotiable or a nonnegotiable receipt may be issued and it may be well to explain the two types. A negotiable receipt must state either that the goods received will be dehvered to the bearer, or that they will be dehvered to a specified person or his order. A receipt in which it is stated, either that the goods received will be dehvered to the depositor only, or that they will be dehvered only to a specified person named in the receipt, is not negotiable. A nonnegotiable receipt should always bear the words ''Non- negotiable" or ''Not negotiable" written or printed upon its face. Form 3D (page 21) shows a form of nonnegotiable receipt. In the case of a lost or stolen receipt, if another is issued, the word "Duphcate" should always be marked across its face, and usually a bond is required in order to protect the warehouseman from loss in case of the reappearance of the original receipt. The practice in this and other transactions in connection with the receipt necessarily must vary in accordance with the State laws on the subject, and every warehouseman must be careful to comply with the apphcable law of the State or other jurisdiction in which he operates. There is a wide variance of opinion among warehousemen as to the relative merits of the one-bale and the multiple-bale forms of warehouse receipts. The tendency in many of the well-organized warehouses seems to be toward the use of the one-bale receipt, and in most cases this form seems to be preferable to the multiple-bale form. There are arguments both for and against this form. The fact that the one-bale type requires more work in its issuance is bal- anced by its desirabihty in the event that a person desires to sell or transfer only one or a few bales out of a lot that would otherwise be 6 BULLETIN 520, U. S. DEPAETMEKT OF AGEICULTUEE. i covered by a single receipt. Also the issuance of a separate receipt for each and every bale stored gives less opportimityfor altering the receipt. Form 3C (page 19) shows a form of multiple-bale receipt. There are occasions when this form is the more desu-able than the one-bale type of receipt. When this multiple-bale form of receipt is used the original certificate of inspection is to be attached. Form 3E shows another form of multiple-bale receipt, in which the description of the bales is shown on the face of the receipt rather than on the attached certificate of inspection. The wording of the receipt in regard to the guaranty of the grades, weights, and lengths of staple may be altered to fit the practices and policies of the various warehouses by which they are issued. How- ever, the nearer the wording approximates an absolute guarantee of these quahties by the warehouse, the greater will be the value of the receipt. While it is true that warehouses in many instances attempt to disclaim responsibihty for the descriptions they have given on the receipt it must be remembered that the persons to whom the re- ceipts may be transferred should be protected in accepting these descriptions. Many warehousemen guarantee their descriptions at least within reasonable variations, while some guarantee them to be absolutely correct. By so doing, these warehousemen furnish a receipt which is most acceptable as collateral. In some instances, a special charge is made for this guaranty, usually one-sixteenth of a cent per pound on the cotton, while in others the service is given without additional charge. All receipts should be bound in book form, preferably 100 to the book, numbered consecutively, and arranged so as to allow the making of a carbon copy. This carbon copy should be plainly so marked, and should be used only for the purpose of record in the office. Some warehousemen require the depositor to give written acknowledgment of receipt for all original warehouse receipts issued. The form of the acknowledgment may be printed on the face of the carbon copy of the warehouse receipt. In case a large number of warehouse receipts are issued to one person, some other method of acknowledging receipt may be used, so as to avoid the inconvenience of a large number of signatures. Form 3B (page 18) shows a form for the carbon copy of the nego- tiable receipt, one-bale type. Upon the return of the warehouse receipts and the delivery of the cotton, the receipt should be plainly marked "Canceled" across its face. Canceled receipts should be safely filed away by a system that will make it easy to refer to them if necessary. Some ware- housemen paste them back into their original places in the books, which makes them readily accessible. Others place them, with all A SYSTEM OF ACCOUNTS FOR COTTON WABEHOUSES. 7 papers in connection with the lot of cotton they represent, in an envelope, which is filed. Either of these methods is satisfactory, or the warehouseman may select any convenient method. THE CONSECUTIVE TAG RECORD. After the receipt is written, the next step in the operation of the system is the posting of the desired data in the consecutive tag record. (See Form 4, page 24.) This form is printed on sheets to be filed in a loose-leaf binder. The fines are numbered to agree with the tag numbers used by the warehouse, in consecutive order through- out. Thus it will be seen that when this book is posted from the data shown on the carbon copy of the receipt, a record of each bale is immediately available, because of the consecutive numbering of the individual bales as identified by the tag numbers. The size of the sheets should be 8 by 15 inches with J-inch ruling. The following information is given in the consecutive tag record: (1) The tag number; (2) the marks of the bale; (3) the name of depositor; (4) the date received; (5) the receipt number; (6) the location in the warehouse; (7) the date of dehvery. As the date ot the dehvery of the cotton out of the warehouse is always posted in the '^Date-of-delivery" column, it is apparent at all times just which bales remain in storage. THE INDIVIDUAL ACCOUNT RECORD. It is advisable to have an account with each depositor, and this arrangement will be found to be useful in various ways as explained below. The individual account record (see Form 5, page 25) also is to be used in a loose-leaf binder. The accoimts are filed alphabet- ically by the names of the depositors, alphabetical index sheets being used in the book, and the data for posting are obtained either from the carbon copies of the receipts or from the filed copies of the certifi- cates of inspection. The sheets should be 8 by 15 inches in size with l-inch ruling and should provide for the following data: (1) The date of receipt; (2) the receipt number; (3) the weight; (4) the grade; (5) the length of staple; (6) the tag number; (7) the date of dehvery; (8) the number of months in storage; (9) the amounts of different charges; (10) totals; (11) accrued charges. The principal advantage to be gained by the use of this form is that the record of each depositor's cotton is concentrated at one place on the books, and the number of bales on hand is readily apparent. This point will be appreciated by the warehouseman who deals with a large number of customers who are constantly requesting information in regard to small lots of cotton belonging to them. If the record is not in this form it is necessary to look over the entire tag record, with the attendant possibihty of mistakes. In addi- tion to this point, if the totals of accrued charges are brought up to date 8 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTUKE. in the "Accrued charges" column, the monthly earnings of the warehouse are always in view. It is customary for the warehouse company to carry all charges until the cotton is taken from the ware- house. Nevertheless the company is earning revenue during the entire time that the cotton is in store, and monthly earnings should be ascertained. With all of the other charges stated, it is necessary only to compute the storage and insurance from the basis rate, to total the amoimts, and to enter the sum in the colmnn reserved for the month desired, which accoimts for all of the recorded cotton remaining at the time on the page, in one operation. The five forms described above comprise the essentials of a system of cotton-warehouse records, but the location book and the other forms described below will be found to be of great value when used in conjunction as auxiliary forms. THE LOCATION BOOK. The location book, a page of which is shown herewith (see Form 6, page 26), is designed to show the exact location of each bale in the warehouse, and its use will greatly facilitate the handling of cotton. Warehouses which are composed of several compartments will find its use especially beneficial, and it is essential in the smaller ware- houses having a large number of customers. In houses of the latter class there are frequent requests to locate cotton either for the purpose of procuring samples or for turning out of the warehouse. When the bales are placed in the compartment in no regular order, and no record is kept of their location, this service usually entails long search, with loss of valuable time, while with a properly kept location book the difliculty is entirely eUminated. If a tag has been lost from a bale in a compartment, the book will aid in identifying the bale. A reference to the book will show what bales are in the compartment or row, and by checking and ehminating the bales foxmd with tags it is a comparatively easy matter to determine the identity of the bale from which the tag has disappeared. All changes in the location must be recorded, and it is advisable to have the book of such shape (a convenient size is 4 by 9J inches) that it may be carried by the '^outside" man at all times. The hues in the book are niunbered consecutively throughout according to the tag niunbers in use by the warehouse, and the sheets are ruled to show, besides the tag number, the exact location as to house, sec- tion, and tier, and the date of removal. An extra column is provided for any change which may be made in location THE OUT-TURN ORDER. The out-turn order (Form 7, page 27) is a signed order from the office to the "outside" man to turn out and dehver from the ware- A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 9 house certain bales of cotton. This order is not written until the return and cancellation of the receipt and the apphcation of the depositor or the holder of the receipt for dehvery of his cotton. The tag numbers and marks of the bales to be deUvered are hsted upon the order, which serves as a checking hst by which the ''out- side" man may check put the cotton. A form of receipt, to be signed by the party receiving the cotton from the warehouse, is also provided. After checking out the cotton and obtaining the signature to the receipt, the "outside" man signs the statement that the work has been done as ordered and returns the order to the office. The accumulated orders should be held until the close of the day in order to determine the number of bales delivered from the ware- house on that date for use in making out the daily report, after which they may be filed in date order for future reference. A convenient size for these sheets is 6 by 8J inches, and they should be arranged in gummed pads. THE BAILY REPORT. Form 8 (page 28) is a form of daily report for the use of managers of warehouses. By keeping this record properly an accurate knowl- edge of the conditions and activities of the warehouse will be main- tained, and the manager will have at his disposal a great deal of information that will enable him to conduct the business more intelhgently. He will know from day to day the amoimt of cotton in store, the amoimt of insurance that it is necessary to carry, the cost of labor, the per-bale cost of handling, the daily expenditures, and the cash receipts. In making this report the number of bales received by the ware- house is determined by reference to the "consecutive tag record," arid the "out-turn" orders of each day's business should not be filed until after the report is made, so that the number of bales turned out of the warehouse may be ascertained. If the totals are carried forward from day to day, the difference between the in and out col- umns should be the number of bales in the warehouse, any excep- tions being provided for. The insurance report and the labor, col- lections and disbursements records are self-explanatory. A convenient size for the daily report sheet is 8 by lOJ inches. CASH JOURNAL. The cash journal (Form 9, pages 29 and 30) is provided for the pur- pose of recording the charges and credits which are later to be posted to the various accounts in the ledger. This form is used as a double page, the charges being in columns to the left of " Items" column and the credits in columns to the right. 72961°— BulL 520—17 2 10 BULLETIN 520. U. S. DEPARTMENT OF AGRICULTUBE. The debit columns of this form are designated as follows: Folio. Cash. Bank deposits. General ledger. Accounts receivable. Miscellaneous expenses. Grading. Weighing. Insurance^ In the "cash'' column are recorded all the receipts of cash as they occur. The total is deposited when convenient and entered in the "bank deposits'' column in the exact amount of the deposits made. At the end of the month the "bank deposits" column will furnish an itemized statement of the deposits and will give a record of the total receipts for the period. The deposits plus the cash balance from the previous month, which should be entered at the head of the "bank deposits" column, constitute the total debit to cash for the month. The most satisfactory method is to require a statement of accoimt from the bank at the end of each month and to reconcile the cash to that statement. When it is necessary to pay small items of expense in cash, a check should be drawn to "petty cash" in order to establish a fund out of which such payments can be made. This amount should be charged to "petty cash" account in the ledger. At the end of the month the total amoimt of such expenditures should be credited to "petty cash," and be charged to the proper expense accoimts. At the beginning of the next month the fund can be renewed by drawing a check to "petty cash" for the amount of the previous month's expenditures. All entries of general accounts not classified under separate head- ings should be carried in the "general ledger" column and should be posted to their respective accounts in the ledger from that column. Charges to customers for services or material should be entered in the "accoimts receivable" column and be posted to the customers' accounts in the ledger. Under "Miscellaneous expenses" should be entered all items not otherwise classified. In order that the warehouse may know its position in regard to weighing, grading, and insurance, these items are carried imder separate headings and the totals are posted to these accounts at the end of each month. The credit columns are designated as follows: Folio. Check No. Bank withdrawals. General ledger. Accounts receivabh?. Weighing. Grading. Storage. Insurance. Miscellaneous. A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 11 All checks issued should be listed by their numbers in the "check no." ooliman and the amounts entered in the "bank withdrawals" column. The difference between the totals of the "bank deposits" column and the " bank withdrawals " column is the available balance of cash in bank. The "general ledger" column is used for the purpose of crediting the accounts debited through the "general ledger" debit colunm. All payments on accounts receivable are entered in the " accounts receivable" column and from there posted to the credit of the proper individual accoimts in the ledger. The columns headed "weighing," "grading," "storage," and "in- surance" receive credits to these accounts, the totals for the month or other period being posted to the respective accounts in the ledger. Miscellaneous credits are entered in and posted from the " miscella- neous" column, and sales of material can be credited in the blank columns at the right under their appropriate headings. The monthly totals of these columns are then posted to their respective accounts in the ledger. The size of this form should be 11 by 14 inches with i-inch ruling. THE CASH DISBURSEMENT TICKET. All expenditures of petty cash should be recorded on "cash dis- bursement" tickets (Form 10, page 31) which should be kept as petty cash vouchers. THE CASH RECEIPT TICKET. All receipts of money other than checks should be recorded upon a "cash receipt" ticket (Form 11, page 31). The practice of receiv- ing scrip or coin without making a record of the transaction at the time of receipt often leads to discrepancies which are difficult to account for later. THE SALE TICKET. In warehouses handhng suppUes, all sales should be recorded on duplicate sale tickets, the originals being given to the customers and the duphcates retained for record in the books of account. These sale tickets are similar to those used in any merchandising business and can be either printed specially or secured in stock form. Form 12 (page 31), is a form of sale ticket suitable for general use. OPERATION OF THE SYSTEM. In order to explain fully the operation of the system it may be well to follow the various steps as they occur in the process of ware- housing a lot of cotton. 't !l BULLETIN 520, XJ. S. DEPARTMENT OF AGRICULTUBE. A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 13 When the cotton arrives at the warehouse the weigher and grader first tags the bales with consecutively-numbered tags in the series then current. He then weighs, grades, and staples each bale, exam- ines it for moisture or damage, and records the data upon the "certificate of inspection," making an original and one carbon copy. Both original and copy are then sent to the office, where the receipt is written from the data on the certificate. The orig- inal certificate is attached to the receipt only in case the form of receipt shown in Form 3B is used. If any of the other forms of receipt is issued the original certificate may be given to the storer. In every case the carbon copy of the certificate of inspection is filed in the consecutive order of the numbers on the tags, after there has been noted upon it the numbers of the receipts covering the cotton listed on it. The receipt is now issued, and a full entry of the details required is posted to the "consecutive tag record" from the carbon copy of the receipt, against the corresponding tag nimibers. Then the "individual accoimt record" is posted from the carbon copy of the receipt, and given its alphabetical position in the binder. The amounts of the various fixed charges are posted in their respective columns. In the meantime the cotton has been removed to its proper place in the warehouse and its location has been recorded in the location book. At some time during the day this book is taken to the office so that a proper entry of the location of the cotton may be made in the colmnn provided for it in the consecutive tag record. The operation is now completed except for the making of the daily report and the monthly determination of the amoimt earned on the lot of cotton while in storage. Later, when the receipt is presented for delivery of the cotton, and it is foimd that the receipt is properly indorsed, and that a tender of all charges and advances has been made, the out-turn order is made out and delivered to the "outside" man. By referring to the location book the cotton is readily located. The bales are checked out and delivered according to the order, and a receipt is taken which shows to whom dehvery was made. The "outside" man then signs the statement that the work has been performed as ordered, and the order is returned to the office. The date of dehvery is then recorded in the columns provided for it. (See Forms 4 and 5.) The returned receipt is conspicuously marked "Canceled" across its face and filed away. The accumulated out-turn orders are held until the close of the day, when they are used in determining the number of bales delivered from the warehouse. Proper entries are made on the tickets provided for the purpose, of the money received lor storage and other charges, and of disbiu^ements, and the necessary entries are made on the cash journal and posted to the ledger, as explained above. ARRANGEMENT OF BALES IN THE WAREHOUSE. The ideal arrangement from the standpoint of economy in hand- ling, as well as insurance, is to stand the bales on end one bale deep. This arrangement necessitates a much larger floor space than is usually available; in case floor space sufficient for this arrangement is not available, stacking becomes necessary. In storing the bales, it is always advisable to arrange them so that the tag on each bale will be in sight. If the bales are stacked, they may be arranged in "workway" formation, that is, beginning at one side a row should be placed, then a space should be left for a narrow aisle; then a double row and an aisle; another double row, and an aisle; and so on. When cotton is stored on dirt floors, and even on brick or concrete floors, it is always advisable to stack the bales on wooden skids or stringers in order to raise the cotton from the floor and thus allow a circulation of air. Murch damage may be avoided by this practice, especially when the cotton is placed in the warehouse while not absolutely dry or where the proper care is not taken to provide per- fect drainage. CONCLUSION. The various operations necessary in using the Office of Markets and Rural Organization cotton warehouse accounting system have been outlined very briefly in the foregoing pages. The adoption of a uni- form system of accounting for cotton warehouses should be of great benefit to warehousemen and to the pubhc who utiUze storage facili- ties. The system herein outlined will present to the warehouseman at aU times a true and concise record of the operations of the warehouse, and the simplicity of its arrangement makes this record immediately available. The depositor has in his receipt every item of information in regard to his cotton that the warehouseman retains on his records, and this should enable the parties to avoid all misimderstandings in this respect. The negotiable receipts shown in this system have been devised after careful study, and their requirements and conditions are designed to increase negotiabihty. Lack of uniformity, especially in receipts, under present conditions makes it impossible for the small warehouse of moderate means to issue a receipt that will be readily acceptable as collateral for loans outside of a limited local field. The main purpose of the United States warehouse Act enacted August 11, 1916, is to give to the warehouse receipt the greatest possible value as collateral. The form of receipt shown here embodies the prin- 14 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTURE. cipal requirements of this act and it also conforms to the essential features of the Uniform Warehouse Receipts Act, which has been adopted by 32 States, Alaska, the District of Columbia, and the PhiUppine Islands. For the convenience of those interested in the system described in this bulletin and for those who desire to have the various forms printed, the Department of Agriculture, through the Office of Markets and Rural Organization, wiU supply, without cost, printers' copies of the several forms used in this system. Warehouses installing the system may refer to this office any questions regarding its installation or operation. When it is possible to do so, the Office of Markets and Rural Organization will render such assistance as may be required in making minor changes in the receipt or in other forms, to meet local conditions. 39771 o 39771 o DOE WAREHOUSE I ! Doe Warehouse (Town) (SUt.) 0. M. i I. 0. Caltn WarthMsc Systca. Fwa Nt. 1 a m f A SYSTEM OF ACCOUNTS FOE COTTON WAREHOUSES. 15 m P O a o o CQ p o n •8 O Oi o I— I H O « 5 QQ o < ■ -g o I > d « ^ X o §1 CJ- M CQ 44 o ;z bo el (N CO •^J^ lO o 00 16 BULLETIN 520, U. S. DEPARTMENT OF AGBICULTUEE. o o o GQ M o a H O Q CQ o Oh o O Pi < I i o 2 o ■a S » a z H 3 3^ 8 O w i"^ 55 O Q O S3 O ,^ O) (» o ^ © >^ I I •<^ CO kl O d o o o 0) >^ &i -3 d--4 © © -*a eiJ ^ O ^ ° 2 S 00 * *3 •> ®" _d *- o, . '© © -2 3) O-^ fcO ©'O'd ^ 08 ^ o © -Js d'S r; .®.o8 $ ^ S £2 5 &*» ^o : o I « ^ III 'I 2-^ • S S $1 Sbfl fia« ©-no* I'S. §1 ^2 "2 s>" d .a :e3Q £ . o o o S'S.9 ^OoQ^;:^;:^ fl^ A SYSTEM OF ACCOUNTS FOB COTTON WABEHOUSES. 17 INDOKSEMENTS. STATEMENT OF LIENS. I hereby certify that, other than the following, there are no hens or mortgages against the cotton described on the face of this receipt. {| (Signed) Id Witness: Reverse side Form No. 3A. 18 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTURE. A SYSTEM OF ACCOUNTS FOE COTTON WAREHOUSES. 19 O J2; m O Pi < o o H a QQ O So oiz; Ph H O p ■ O W pi] H Q hi ^ I 00 .^ O CG -4-3 •"^ OT .S ^ ^ m fl ® o O O -TH -^ « o -^^ GO 0) ^ CO -4-3 O o o3 03 •l-s o3 '•^ O V I— I a ® ^H^ 53 ^ 03 . © •J S c ^ go- ^ V i (I4 a 03 -^3 ^ a-H a o « o I QQ to a « 03 ^-^ OQ , OQ S ' tS ® C 'oj fl 03 o ® -S E-t O t- ® ^ +3 *** 08 O '-'^ • O CO 00 §1 CD ® ppa S 20 BULLETIN 520, U. S. DEPARTMENT OF AGEICULTtTRE, INDORSEMENTS. STATEMENT OF LIENS. I hereby certify that, other than the following, there are no liens or mortgages against the cotton described in the attached certificate. (Signed) - Witness: — Bftvene aide Form No. 80. A SYSTEM OF ACCOUNTS FOB COTTON WAREHOUSES. 21 !t 22 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTURE. Oi O 1^ o g o 5 O Q 5 Ph O n O I 00 d O a o c8T3 « Slc3 5 op o ^-3 o 03 C o • «^ ^^ ft t-ojg « ® « 1% "^ O) go ^ ©tS 3 08 "TS '*:^ O ©IS o : 5 . o •2 i-i^ o8 ^ d d «.i •15 Wl c -2 .f5 a s 03 4: 'V H d ^ m o W) « - Coo •^ >» o o ^ O C 08 ^ O ^ ^^ S «-d d_- +a Oiot- d i^ o ^*a a ss-gS.S-.S §:3£.|"SS ■^ -r 08 »H d O '^ ^ d ® &• ^ *'3 O Q A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 28 ^ > o d ^ a o) a P '.3 SPS'-M '"^ d*^ 08 02 •d t^C-Sfio O o o g M O m •nonipaoQ }0^^^3^»J •op«JO :Hl3l»ii •S^iBH •J9a -uinu 8bx Tionipuoo 'dpuo •»ll3pii •s^WH •joq -miin 3«x INDORSEMENTS, • "^ -: ' it ^ 3 • O y ^^ OD S M C •".2.2 5 -rt .d ^ * d'S 5 " £.d i •'72 08 *i .9.3 J 6 gTJ P « STATEMENT OF LIENS. I hereby certify that, other than the following, there are no liens or mortgages against the cotton described on the face of this receipt. (Signed) Witness Reverse side Form No. 3E. 24 BULLETIN 520, V. S. DEPABTMENT OF AGEICULTUEE. § o o o < > H 8 a CQ H < • S Pi To «fe — : — ! — ? — ::::::•..... Dat deliv S :: i : i i i ! i i :::::::: : :": : : *^ :::::::::::::::•::::::: Re- ceipt No. ♦" r^ : : '— . . '. : p| : : : : 1 : i : i : : i i : : : i : : : : i j Depositor. Marks. 1& ; i i i ; i i i : ; ; i i i i i ; ! i i i ; • ■5 > : : : : : ^ — : — ; — : — : — ; — ; — : — ■ — - 08 a .,....'''''• • . I * o| i j j i j j j i i : : : : : ! : ! : : i : : i S i : i i i ::!!! i i i : i ::::::: : ^ i i i i i : : : : i i i : ! i i i : i : ; : : i i i :::::: i : i i i i i ::::::: : Re- ceipt No. ••S i i i : i i i : ! ! ! j ^ i i i i i i i i i : ■" •> '- — • : ; c8 .2 . — ; ; : : 1^ ^ Depositor. O Marks. O 1 *2; A SYSTEM OP ACCOUNTS FOR COTTON WAREHOUSES. 25 < January February... April May July September. . November. . December. . . i Ad- vances. IDUAL ACCOUNT RECORE Address Turn- ing out. : Weigh- ing. ■-7- — Insur- ance. CQ "~ Months in storage. Date of delivery. D'l-ION WAREHOUSE SYSTEM FORM NO. 5 INDIV • «5' Length staple. 1 I — O ' 1 •1 2 « Re- ceipt No. Date received. O. M. Stor 26 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTUEE. O. M. & R. O. Cotton Wabehouse System, Form No. 6. LOCATION. Original. 1 j Traasfer. Out. No. House. Section Tier. House. Section . Tier. 1 2 3 4 ft 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 . <* ••••••.••«• A SYSTEM OF ACCOUNTS FOB COTTON WAREHOUSES. 27 0. M. AND B. 0. Cotton Warehouse System Form No. 7. OUTTURN ORDER. Date Turn out of the warehouse and dehver to -\.B/C as described by the following tag numbers and marks: Tag No. Marks. K Tag , No. Harks. y Tag 1 No. Marks. 'V V (SiffDftd^ \KJ±^l.f ._ — , _ _ — _ — Work done f\B ordered 19-. Received for from the above checked b/o (Signed).-. Per._- the Doe Warehouse i 28 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTURE. O. M. & R. O. Cotton Warehouse System. Form No. 8. DAILY REPORT OF OPERATION DOE WAREHOUSE, — cfissr (State.) Date.. COTTON IN Received previous to date Received to-day OUT ..b/c -b/c Turned out previous to date. Turned out to-day b/c b/c Total Exceptions Previously carried New policies Canceled Total to-night Paid out for labor this JJJ,^ Number bales handled i. — Cost per bale ( cents) CASH RECEIPTS b/c b/c Number of bales on hand . b/c b/c INSURANCE s. %. I. Premiums Premiums Return premiums. N«t S. $. I. LABOR CASH DISBURSEMENTS Previously reported — Received to-day Balance. toNo S. . t. Previously reported Paid out to-day • • • w» ••«•••• Total This report includes — Cash receipts No Total $ REMAI^KS - Cash disbursements No to No. Duplicate checks No to No. . . . Warehouseman. A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 29 PQ H 09 >* CQ H 03 !3 C » !^ * 2^ m O < Ph o o 1 0-* 3 § I I r 30 BULLETIN 520, U. S. DEPARTMENT OF AGRICULTUEE. O. M. & R. O. Cotton Wareuoubs System, CREDIT, Form No. 9. CASH JOURNAL. Miscella- neous. , - 8 CO ■ • 1 2-1 o g General ledger. Bank withdrawals. Check No. • a I A SYSTEM OF ACCOUNTS FOR COTTON WAREHOUSES. 31 0. M. & R. 0. Cotton Warehouse System. Form No. 10. CASH DISBURSEMENT TICKET. No Bv ■*-*j Paid to Date ..,191-. Amount. 0. M. & R. 0. Cotton Warehouse System. Form No. 11. CASH RECEIPT TICKET. No. Bv Received from .1 Date .-,191.. Amount. 0. M. & R. 0. Cotton Warehouse System. Form No. 12. SALE TICKET. Date Sold to Bv - i^ J --- TOTAT. SALTIS • • * " ' 1 1 PUBUCATIONS OF U. S. DEPARTMENT OF AGRICULTURE RELATING TO MARKETING OF COTTON. AVAILABLE FOR FREE DISTRffiUTION BY THE DEPARTMENT. Studies of Primary Cotton Market Conditions in Oklahoma. (Department Bulletin 36.) Relation of Cotton Buying to Cotton Growing. (Department Bulletin 60.) Economic Conditions in Sea Island Cotton Industry. (Department Bulletin 146.) Cotton Warehouses: Storage Facilities now Available in the South. (Department Bulletin 216.) Cotton Warehouse Construction. (Department Bulletin 277.) Disadvantages of Selling Cotton in the Seed. (Department Bulletin 375.) Relation Between Primary Market Prices and Qualities of Cotton. (Department Bulletin 457.) A Study of Cotton Market Conditions in North Carolina with a View to Their Improve- ment. (Department Bulletin 476.) Cotton Ginning Information for Farmers. (Farmers' Bulletin 764.) Losses from Selling Cotton in the Seed. (Farmers' Bulletin 775.) Cotton Improvement on a Community Basis. (Separate 579 from Yearbook 1911.) Improved Methods of Handling and Marketing Cotton. (Separate 605 from Year- book 1912.) FOR SALE BY THE SUPERINTENDENT OF DOCUMENTS, GOVERNMENT PRINTING OFFICE, WASHINGTON, D. C. Cotton, the Greatest of Cash Crops. (Office of the Secretary Circular 32.) Price 5 cents. Controlling the Boll Weevil in Cotton Seed and at Ginneries. (Farmers' Bulletin 209.) Price 5 cents. A Profitable Cotton Farm. (Fanners' Bulletin 364.) Price 5 cents. // ADDITIONAL COPIES OF THIS PUBLICATION HAT BE PROCX7RED rBOH THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTINO OFFICE WASHINOTON, D. C. AT 6 CENTS PER COPY Date Due 9 2>(«»C>'^ Newton •o^rewjuuv N4*1 ■^ A system of accounts f or^cotton i=war©houses "" '"'"" ' ^jt^ I 1 (1925 MAY 9 >7'V^J i •"EB 2 6 193 82 r^ MJt^Wk m COLUMBIA UNIVERSITY LIBRARIES 0041418506 ^' «. % ^ END OF TITLE