MASTER NEGATIVE NO. 94-821 38 COPYRIGHT STATEMENT The copyright law of the United States (Title 17, United States Code) governs the mal Q) DO ABC bcdef. o m qiQ o Q.~n ^m CD O do"! 3 X *~^ ^ ^T t\>=-^ cn3 ^ ?^ a>:3 Z 5 o ^5 O < "U N en RST stuv ^^ ^ c CT>X X < OOISJ N < O X ISI a; ^: a ;^ A^ ,.- ."?•■ ^, a^ '^%^^ v^ ^-i» Ul o i .^/ in a^ S 3 3 Ol o^ 00 b in 1.0 mm 1.5 mm 2.0 mm ■ t c d»%>ii|ia m «iopor ii m>«»y/l?: ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1 234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 12345678^0 ABCDEFGHIJKLMNOPQRSTUVWXYZ ^ r- abcdefghijklmnopqrstuvwxyz 2.5 mm 1234567890 ^^ f^ m H O O ■o m -o OLl"o I TJ ^ r^O CO m 39 O m e 4^ '4^ !-• N> Ol O 3 3 3 3 01 o- o> a- ^o <5.o f8 3.m ^S 3x 3l 5^ IJKLMN nopqrst lOPQR uvwxy Kc M C/> o»5 r^c o»x OJ^ >4-< 00 IM 8 O^X >si-C CJOfM UD O J^^. Accoantingr Bulletin Ko. 11 INTERPRETATIONS OF ACCOUNTING CLASSIFICATIONS EMBODIED IN THE UNIFORM SYSTEMS OF ACCOUNTS FOR TELEPHONE COMPANIES (CLASSES A. B, AND C) PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN AOOORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE Effective on July 1, 1916 SCilC. . Of B 'SINCSS UBHARY \ WASHINGTON GOVERNMENT PRINTING OFFICE 1916 eUHOOL OF BUSINESS COLUMBIA UNIVERSITY I ■"^•.»i^. Columbia ^Bniberfiittp intfieCitpofiBetogorfe LIBRARY School of Business ( Accounting: Bulletin No. 11 INTERPRETATIONS OP ACCOUNTING CLASSIFICATIONS EMBODIED IN THE UNIFORM SYSTEMS OF ACCOUNTS FOR TELEPHONE COMPANIES (CLASSES A. B, AND C) PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE Effective on July 1, 1916 WASHINGTON GOVERNMENT PRINTING OFFICE 1916 ^ THE INTERSTATE COMMERCE COMMISSION. Balthasar H. Meyer. JuDSON C. Clements. Edgar E. Clark. James S. Harlan. Charles C. McChord. Henry C. Hall. WiNTHROP M. Daniels. George B. McGinty, Secretary, (2) I oi-C^^j ^ ORDER. At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C, on the 26th day of June, A. D. 1916. The subject of a Uniform System of Accomits to be prescribed for and kept by telephone companies being under consideration, the following order was entered : It is ordered^ That the interpretations of the accounting classifi- cations for telephone companies, prepared under the direction of this Commission and embodied in printed form to be hereafter known as Accounting Bulletin No. 11, and now before this Commission, be, and the same are hereby, approved ; that a copy of said bulletin duly authenticated by the Secretary of the Commission be filed in its archives, and a second copy thereof, in like manner authenticated, in the office of the Division of Carriers' Accounts ; and that each of said copies so authenticated and filed shall be deemed an original record thereof. It is further ordered, That the accounting methods directed in the interpretations contained in the said Accounting Bulletin No. 11 be, and they are hereby, prescribed for the use of telephone com- panies having annual operating revenues exceeding $10,000, and subject to the provisions of the Act to Regulate Commerce, as amended, in the keeping and recording of their accounts. It is further ordered, That July 1, 1916, be, and it is hereby, fixed as the date on which the said Accounting Bulletin No. 11 shall become effective, the same to remain in effect until otherwise ordered by the Commission. By the Commission. [seal.] George B. McGintt, /Secretary. (3) > INTRODUCTORY LETTER. Interstate Commerce Commission, Division of Carriers' Accounts, ^ Washington^ June 26, 1916, To Telephone Companies (Classes A, B, and C) : Systems of accounts for telephone companies subject to the juris- diction of the Interstate Commerce Commission have been issued under the authority contained in section 20 of the Act to regulate commerce. The Uniform System of Accounts for Class A and Class B Telephone Companies became effective January 1, 1913, and a sup- plement thereto became effective on January 1, 1915. The Uniform System of Accounts for Class C Telephone Companions became effect- ive on January 1, 1915. This accounting bulletin contains answers to accounting questions which have been raised since the issuance ^ of the systems of accounts and is published in order that uniformity may be had in the application of the rules laid down in the systems of accounts. It is supplementary to, and should be used in con- junction with, the systems of accounts prescribed for Class A, Class B, and Class C companies. In the preparation of this bulletin the Commission has had the cooperation of a joint accounting committee representing practically all of the large telephone companies and a large number of the small companies. This bulletin was submitted in tentative form to the commissions of the several States having supervision of telephone companies and criticisms and suggestions were invited. Those received have been given careful consideration in the completion of g the bulletin as now issued. Fred W. Swenet, Chief Exarmner of Accounts. (6) r INTERSTATE COMMERCE COMMISSION ACCOUNTING BULLETIN NO. 11. ^T'JJI^^.^iTJ''''^ ""^ ACCOUNTING CLASSIFICATIONS EMBODIED IN THL UNIFORM SYSTEMS OF ACCOUNTS FOR TELEPHONE COM- PANIES. Note.— In the answers to cases references are usually made to the aass A and Class C accounts. Where the accounts shown are for Class A companies and the same accounts are not prescribed for Class B companies in the Uniform System of Accounts. Class B companies should interpret the answers as ap- P y ng to their particular account of which the Class A account is a sub- division. Where no reference Is given to specific accounts the case applies to all three classes of companies unless it specifically indicates otherwise. Case 1. Query. Is it required that the titles of the accounts carried on the company's books correspond with the titles of accounts in the Uniform Systems of Accounts v .on.TTK ^.?.^ ^''*^'''*'" ^^'^^'"^ **^ Accounts prescribed by the Commission conta n the titles and texts of the various accounts and require that companies keep their accounts in conformity therewith. Balance-sheet accounts which are clearly summaries of other accounts are not required to be set up on the books of the company (see sec. 3. p. 13. of the Uniform System of Accounts for Class A and B companies). All accounts kept on the company's books shall conform in titles to those prescribed by the Commission except as follows • (1 ) Subaccounts as provided in se^rtlon 1, page 9. of the Uniform Svstems of Accounts and such subdivisions of prescribed balance-sheet accounts as are irermltted (see sec. 3. p. 13. of the Uniform System of Accounts for Class A and B companies). All such subaccounts or subdivisions shall give reference by title, number, or both, to the accounts of which they are subdivisions. When such subaccounts or subdivisions are maintained, it is not required that the main account of which they are subdivisions shall be kept on the company's general books. "^ In Ihi ^^^^["'f ^f^ *>»• temporary accounts for which special provision is made .^f ^™°ji««»o°'« orders on page 6 of the Uniform Systems of Accounts. (3) Clearing accounts (other than those provided for Class A and B com- panics) necessary in making the proper distribution of items to appropriate primary accounts. appiuprmie Case 2. Query To what extent should detailed information be shown in the general books of telephone companies? general thf rr* '^^^^f^^^^^^ «»^^" ^ kept with sufficient particularity to show fullv the facts pertaining to all entries made in the accounts. Where the full Infor mation is not recorded in the general books, the entries therein shall be su^ ported by other records in which the full details shall be shown. Such gen^ eral book entries shall contain sufficient reference to the detail records to per- 34286'— 16 2 (7) ^ 8 mlt ready identification of the latter, and the detail records shall be kept In such manner as to be readily accessible when required for examination by representatives of the Interstate Commerce Commission. Case 3. Query. What is the significance of the term " balance sheet," as used In sec- tion 5, page 13, of the Uniform System of Accounts for Class A and B companies? Answer. The balance sheet referred to In section 5 is the balance sheet con- tained in the reports requireil by the Interstate Commerce Commission. Case 4. Query. May account No. 102, " Reserve for accrued depreciation — Cr." (Class C, account No. 185), be subdivided between the amount applicable to fixed capital (or plant and equipment) installed prior to the effective date of the system of accounts and that Installed since that date? Answer. Yes; but the subdivision is not required. Section 1, page 9, of the Uniform Systems of Accounts for Class A, B, ane the accounting for pay station and other signs? Answer. Signs shall be classified and accounted for as follows : (1) General company signs, usually showing name of company and of a some- what permanent character — (a) Cut in stone or painted on buildings or general equipment : If in con- nection with company-owned buildings or equipment, charge appropriate fixed capital (or plant and equipment) account for buildings, general equip- ment, etc. (6) Metal or wooden signs : Class as general equipment and charge appro- priate fixed capital (or plant and equipment) account. (c) Repairs and replacements shall be treated in the same manner as repairs and replacements of other telephone plant. (2) Departmental signs, usually placed on doors, windows, or walls for the guidance of the public, but not for the purpose of attracting traffic, and generally of relatively short life: Charge appropriate expense account of particular de- partment involved, except for the first cost of signs in a new company-owned building, which should be treated as part of the cost of the building. (3) Public signs, installed to attract traffic and for guidance to public pay stations — (a) If of relatively large value and long life, e. g., large electric signs, class as general equipment and charge appropriate fixed capital (or plant and equipment) account. Expenses In connection with such signs shall be charged to account No. 642, "Advertising " (Class C, No. 680). (6) If of small value or short life, e. g., metal, glass, paper, cardboard, or decalcomania devices, charge the cost to account No. 642 (Class C, No. 680). Case 45. Query. To what account should be charged the cost of a retaining wall built on a company-owned lot? Answer. Account No. 212, " Buildings " (Class C, account No. 210). Case 46. Query. Should account No. 212, "Buildings" (CHass C, account No. 210), in- clude all items classified in the definition of this account without regard to the amount involved? 18 Answer. No. When single additions to or replacements In buildings are of small amount (for example, less than $5), the expenditure may be charged direct to the operating expense accounts or through the clearing accounts. (See Case 25.) Case 47. Query. How should company-owned telephone equipment, installed and main- tained by a railroad company or by other lessee, be carried in the asset accounts? Answer. Charge the cost to the telephone company of such Items to account No. 220, " Central office equipment," or account No. 230, " Station equipment " or the subaccounts thereunder (Class C, account No. 220 or No. 230) as may be appropriate. ' Case 48. Query. To what account should be charged the cost of protectors installed in connection with central-office telephone equipment? Answer. Such protectors when installed within a central-office building whether mounted on the main distributing frame, or on racks, or in a box at' tached to the interior building wall, shall l)e charged to account No 221 " Cen- tral-office telephone equipment " (Class C, account No. 220) . If mounteil outside the building, the charge shall be made to the appropriate cable or wire account Case 49. Query. To what account should be charged the cost of creating phantom circuits? Answer. Account No. 221, "Central office telephone equipment" (Class C, ac- count No. 220), and the appropriate cable or wire accounts (exchange or toll) according to the class of plant worked upon. Case 50. Query. To what account should be charged the cost of a balcony built to reach the upper part of the main frame? Answer. Account No. 221, "Central office telephone equipment" (Class C account No. 220). v oo v., Case 51. Query. To what account should be charged the cost of loading coils installed on poles, or in test stations and central offices? Answer. Loading coils designed primarily for use on poles should be charged to the same account as is charged the circuit of which they are a part even though such loading coils may occasionally be used in central offices or test stations. Loading coils designed primarily for use in central offices should be charged to account No. 221, "Central office telephone equipment" (Class C account No. 220). ' Case 52. Query. To what account should be charged the Initial cost of furniture and fixtures and the cost of repairs and replacements thereof? 19 Answer. (1) The first cost of furniture and fixtures shall be charged to the fixed capital accounts as follows: I Class A and B companies charge to — No. 222. "Other equipment of central offices."— Furniture and fixtures in the operating and terminal rooms of central offices, In operators' schools and in rest and lunch rooms. No. 235. "Booths and special fittings."— Furniture and fixtures at public pay stations. No. 261. " Office furniture and fixtures."— Furniture and fixtures In general offices, division offices, and plant, traffic and commercial offices. No. 262. " General shop equipment."- Furniture and fixtures in shops. No. 263. " Gleneral store equipment."— Furniture and fixtures in storerooms ^^ and storehouses. No. 264. " General stable and garage equipment"— Furniture and fixtures in stables and garages. Class C companies charge to — No. 220. " Ontral office equipment."- Furniture and fixtures In the operat- ing and terminal rooms of central offices. In operators' schools and in rest and lunch rooms. No. 260. " General equipment"— Other furniture and fixtures. (2) The cost of repairs of furniture and fixtures, and of replacements when provision for replacements has not been made in the depreciation reserve shall be charged to the operating expense and clearing accounts, as follows: Class A and B companies charge to — No. 604. " Repairs of central office equipment."— The expense on furniture and fixtures carried in account No. 222. i No. 605. "Repairs of station equipment"— The expense on furniture and fixtures carried In account No. 235. No. 666. " Other general office supplies and expenses."— The expense on furniture and fixtures carried in account No. 261, except where separate offices are maintained for the plant, traffic, or com- mercial forces, in which case the expenses should be charged to accounts Nos. 706, 621 to 633. Inclusive, or 640 to 650, inclusive, respectively. No. 701. " Shop expense."— The expense on furniture and fixtures in shops. No. 702. " Stable and garage expense."— The expense on furniture and fix- tures in stables and garages. No. 704. " Supply expense."— The expense on furniture and fixtures in store- rooms and storehouses. Class C companies charge to — f No. 610. " Repairs of equipment."- The expense on furniture and fixtures carried in account No. 220. No. 680. " Other general expenses."— The expense on furniture and fixtures carried In account No. 260. (3) The cost of replacements of furniture and fixtures, when provision for the replacements has been made In the Depreciation Reserve, shall be handled through the fixed capital (or plant and equipment) accounts; that Is, the cost of the property retired or replaced shall be credited to the appropriate fixed capital (or plant and equipment) accounts and the new property shall be charged thereto. (4) Inventories or appraisals of the furniture and fixtures In use should, from time to time (preferably annually), be made at cost prices (estimated, if not known) and the fixed capital (plant and equipment) accounts shall be 20 adjusted to the Inventoried or appraised figures by charging or crediting the appropriate expense accounts or the depreciaUon reserve, If the latter account is affected. (5) Companies whose investment ^in furniture and fixtures is not set up In accordance with the foregoing paragraphs may, upon obtaining special authority from the Commission, malce the necessary adjustments in their fixed capital (plant and equipment) accounts. (6) When furniture Is used Jointly by two or more departments, the prin- cipal function for which it is used should determine the fixed capital (plant and equipment) account to which the initial costs should be charged. Repairs and replacements of such furniture should be charged to the particular account under (2) or (3) above, in conformity with the plant account to which the cost of the furniture was charged. Case 53. Query. What should be the accounting for the cost of awnings, door and window screens, window shades, and analogous items when InstaUed In owned buildings? Answer. These items are classed as furniture and fixtures and the initial cost, the cost of replacements, and the cost of repairs shall be accounted for in the same manner as for furniture and fixtures. (See Case 52.) However, when a building is occupied by several departments of a telephone company, the cost of awnings, door and window screens, window shades, and analogous items, wherever installed, may at the option of the accounting com- pany be charged to account No. 261, " Ofllce furniture and fixtures " (Class C. account No. 260) ; In such cases, the maintenance expenses shall be charged to account No. 707, " House service expense " (Class C, account No. 640). Oass 54. Query. What accounts should be charged with the cost of chemical fire extinguishers? Answer. Such equipment should be classed as furniture and fixtures and charged accordingly. (See Case 52.) Case 55. Query. To what account should be charged the cost of •• order table systems " Installed for the use of department stores or other subscribers? Answer. The cost of the order table, including the table wiring, equipment, table telephone sets and cost of installation, shall be charged to account No. 234, "Private branch exchanges " (Class C, account No. 230). Case 56. Query. To what account should be charged the cost of pumping water out of manholes and of cleaning manholes and ducts to permit installation of new cable or for repair work on existing cables? Answer. The expense of necessary pumping or cleaning in connection with the maintenance or operation of the plant shall be charged to account No. 603, " Repairs of underground plant " (Class C, account No. 600). The cost of any pumping or cleaning In connection with new construction and not necessary in the maintenance or operation of the plant shall be charged to the appropriate fixed capital (plant and equipment) accounts. .f 21 Case 57. Query. To what account should be charged the installation cost of bridle- wire cables used to connect open- wire circuits with cable circuits or with central ofllce equipment? Ansu>er. When used to connect open-wire circuits with cable circuits, charge aerial, underground, or submarine cable, toll or exchange, in accordance with the classification of the cable connected. When used to connect open-wire circuits with central-office equipment, charge aerial or underground cable, toll or exchange, in accordance with the nature of the run to the central office, and the classification of the circuits on the pole line. Case 58. Query. To what account should be charged the cost of electrolytic surveys made to ascertain the cable protection needed against electrolysis? Answer. The original cost shall be charged to the cable construction account or accounts Involved. Later surveys made during the life of such cable shall be charged to the repair accounts. Case 59. Query. A type of cable Is inclosetl in a sheath of oakum and steel and Is used underground without conduit or concrete. To what account should be charged the cost in place of such cable, including the cost of trench digging? Answer. Account No. 245, " Exchange underground cable," or No. 255, " Toll underground cable " (Class C, accounts Nos. 240 or 250), as may be appropriate. Case 60." Query. To what account should be charged the cost of a bond or negative return attached to the cable sheath, together with an electrolysis bond opener connected therein, and of plant to carry such apparatus? Answer. Charge the cost of the bond or negative return and the bond opener to the same account as the cable protected. Charge the cost of the ducts, cross arms, poles, right of way, etc., used to carry such apparatus (or any portion thereof paid for by the accounting company) to the regular fixed capital (or plant and equipment) accounts. Attachment rentals paid to other companies for such privileges shall be charged account No. 332, "Rent deductions for conduits, poles and other supports " (Class C, account No. 680). Case 61. Query. To what account should be charged the expense of special protection at a high potential line crossing? Answer. Whether Installed on the company's telephone lines or on the high potential line, charge account No. 241, "Exchange pole lines," or account No. 251, "Toll pole lines" (Class C. account No. 240 or No. 250), as may be appropriate with the original cost of the protective work, and charge any sub- sequent repairs thereon to account No. 602, " Repairs of aerial plant " (Class C, account No. 600). Case 62. Query. Is it permissible to adjust the fixed capital accounts for general equip- ment upon the basis of periodical inventories to correct discrepancies arising during the year? 22 Answer. Yes. Adjustments to correct discrepanles arising during the current year may be made in accounts Nos. 260 to 265, inclusive (Ciass C, account No. 260). Concurrent charges or credits should be made to the appropriate expense accounts or to the depreciation reserve account, if the latter is affected. (See Case 52), Case 63. Query. To what account should be charged the cost of cabinets, frames, and plates used with addressing machines? Answer. The cabinets shall be charged to account No. 261, " Office furniture and fixtures" (Class C, account No. 260). The frames, plates (or cards), and similar material, when purchased for revenue accounting purposes, should be charged to account No. 646, " Revenue accounting," otherwise to the appropriate expense account for printing and sta- tionery (Class C, account No. 680). Cass 64. Query Is it permissible to charge to account No. 268, " Interest during con- struction" (Class C, account No. 270) interest on the company's working funds used in construction work? If so, to what account should such interest be credited? Answer. Account No. 268, " Interest during construction " (CJlass C, account No. 270) may be charged with interest accruing on the company's working funds used in construction work. If this is done a subaccount under account No. 313, "Interest revenues" (Class C, account No, 320) shall be credited. Cask 65. Query. To what account should be charged insurance premiums paid on construction material or on equipment or structures under construction? Answer. Insurance premiums paid on construction material or on equipment or structures under construction shall be charged to specific plant accounts when direct allocation to such plant accounts is possible. When such allocation is not possible, apportion the cost of premiums over the appropriate plant accounts or charge to account No. 274, "Miscellaneous construction exi)enditures " (Class C, account No. 270). Case 66. Query. What should be the accounting for premiums on liability insurance covering accidents to persons or damages to the property of others during con- struction or operations? Answer. Charge the cost of premiums to account No. 668, " Insurance " (Class C, account No. 680), Subsequently, the proportion of the premiums applicable to construction shall be, credited to account No. 668 (Class C, (JSO) and charged to the particular plant accounts where direct allocation is possible. When such allocation is not possible, apportion the cost of premiums over the appro- priate plant accounts or charge to account No. 274, " Miscellaneous construction expenditures" (Class C, account No. 270). Premiums Incident to construction work only shall be charged direct to the plant accounts affected or to account No. 274 (CUass C, No. 270). vl. 23 Case 67. Query. When funded debt securities which mature serially are sold in one lot at a flat discount rate upon the entire par value, how should the discount be amortized? Answer. The discount and expense shall be charged to account No, 135, " Un- amortized debt discount and expense" (Class C, account 150) and amortized through charges to account No. 338, "Amortization of debt discount and ex- pense" (Class C, account 370) in such manner that the ratio between the amortization charges and the principal of the securities outstanding will be uniform for all fiscal periods. For example: A company issues five $1,000 bonds, one maturing each year. The debt discount and expense on the issue are $450. The distribution of the discount and expense should be as follows : First year, principal outstanding, $5,000; amortization charge (rate, 3 per cent), $150. Second year, principal outstanding, $4,000; amortization charge (rate, 3 per cent), $120. Third year, principal outstanding, $3,000; amortization charge (rate, 3 per cent), $90. Fourth year, principal outstanding, $2,000; amortization charge (rate, 3 per cent), $60, Fifth year, principal outstanding, $1,000; amortization charge (rate, 3 per cent). $30. Case 68. Query. To what account should be charged the cost of printing handbooks contain- ing plant-accoirnting instructions and the cost of badges furnished plant department employees? Answer. Account No. 706, "Plant supervision expense" (Class C, account No. 640). Case 69. Query. To what account should be charged the expense of an examination of titles of real property and other matters affecting the validity of an issue of bonds? Answer. If such expense is incurred in connection with the issuance of bonds It shall be charged to account No. 135, "Unamortized debt discount and ex- pense" (Class C, account No. 150) and written off by charges to account No, S38, "Amortization of debt discount and expense" (Class C, account No. 370). If the exi)ense has been Incurred in a suit to test the validity of the bond Issue it shall be charged to account No. 667, " General law expenses " (Class C, account No. 680). Cask 70. Query. How should the phrase " include as nearly as may be possible the total amount of the taxes in the period to which they apply," given In section 16, page 47, of the Uniform System of Accounts for Class A and B companies, be applied? Answer. (1) Tax assessments for the Federal Income tax, State gross revenue taxes and other large and important taxes pertaining to definite and known fiscal periods of the Federal Government, State or other large taxing districts, should be accrued through the months of the fiscal period to which the tax applies. At the end of a company's fiscal year, the sum of the monthly 34286°— 16 4 { 24 accruals should equal the estimated liability of the company as of that date for this class of taxes and, at the end of the period for which any tax U as- sessed, the accruals should equal the total of the tax assessment (2) Tax assessments, such as for school taxes, property taxes, poll taxes, wire mileage taxes, etc. (comprising the major portion of tax items), usually assessed by local authorities and covering fiscal periods more or less uncertain, may be accrued through the months of the fiscal period in which they must be paid. At the end of the company's fiscal year, the monthly accruals made during the year should equal payments. In making accruals. It is unnecessary to consider each tax separately, but rather the whole class should be consid- ered by means of general comparisons with similar periods of preceding years, exi)ected changes, etc Case 71. Query. What should be the accounting for taxes on materials and supplies carried In stock? Answer. Taxes on materials and supplies carried In stock should, as a general rule, be charged to account No. 305, " Taxes assignable to operations *' (Class C, account No. 350). In specific cases, however, where materials and supplies are definitely assigned to be used In construction work, the proportion of taxes applicable to such materials and supplies may be allocated to the appropriate plant accounts or charged to account No, 273, "Taxes during construction'* (Class C, account No. 270). Cass 72. Query. When the expenses of a State utilities commission are borne by the utilities and apportioned among them, to what account should be charged a company's proportion of such exi)enses? Answer. Account No. 305, " Taxes assignable to operations " (Class O, No. 350). Case 73. Query. To what accounts should be charged the cost, when borne by the com- pany, of internal revenue stamps required under the act. entitled "An act to Increase the internal revenue, and for other purposes," approved October 22. 1914? Answer. The cost of internal revenue stamps purchased directly from the Government or its agents should, as a general rule, be charged to account No. 305, "Taxes assignable to operations" (Class C, account No. 350). In im- portant and exceptional cases other appropriate accounts shall be charged ; e. g., the expense of stamps in connection with new Issues of capital stock shall be charged to account No. 201, "Organization" (Class C, account No. 200) ; the expense of stamps in connection with new construction work shall be charged to the appropriate fixed capital (plant and equipment) accounts, and the ex- pense of stamps in connection with the Issuance of funded debt shall be charged to account No. 135, "Unamortized debt discount and expense" (Class 0, ac- count No. 150) and amortized over the life of the debt. Indirect expenditures for internal revenue stamps shall be charged to the appropriate departmental or other accounts; e. g., when an express company aflfixes stamps to bills of lading and transfers the charge to the telephone com- pany the cost should be included as a part of the cost of transportaUon. wl 25 Case 74. Query. To what account should franchise taxes paid periodically be charged? Answer. Account No. 305, "Taxes assignable to operations" (Class C, ac- count No. 350). Case 75. Query. To what account should be credited rentals from Instruments leased to connecting companies? Answer. Account No. 311, " Miscellaneous rent revenues " (Class C, account No. 320). This does not apply to the case where Instruments and general supervision are furnished under an agreement for apportioning the revenues of the licensee. In this case, account No. 526, " Licensee revenue— Cr." (Class C, account No. 530) shall be credited. Case 76. Query. When in connection with collateral trust bonds, the trustee holds certain securities against the contingency of default by the debtor company, the income on such collateral being the property of the debtor company, to what account should such income be credited? Answer. Account No. 312, " Dividend revenues " or account No. 313, " Interest revenues " (Class C, account No. 320) as may be appropriate. Case 77. Query. What is the significance of the phrase " if the fund is required to be represented by a reserve " in Note B under Class A and B account No. 314, " Sinking and other reserve fund accretions"? Answer. The phrase refers to the provision of the deed of trust or other contract, or to the policy of the company, and not to any requirement of the Uniform System of Accounts. Case 78. Query. The text of accounts No. 335, " Interest deductions for funded debt " (Class C, account No. 360), and No. 314, " Sinking and other reserve fund ac- cretions," excludes Interest on securities Issued or assumed by the company. A company has In a sinking fund both securities of its own issue and securities assumed by It, the Interest on which under the terms of the mortgage is to accumulate in the fund. What should be the accounting for such interest? Answer. If the deed of trust or policy of the company requires that the Interest eccrulng on such securities accumulate to the sinking fund, the accounting for the interest shall be as follows: (1) Class A and B companies shall charge amounts equal to such interest to account No. 350, "Appropriations of Income to sinking and other reserve funds," and credit similar amounts to account No. 172, " Surplus invested in sinking funds." When the cash is turned over to the trustees, or to the fund, charge account No. 125, "Sinking fund assets," and credit account No. 113, " Cash." If no reserve is to be set up to cover the fund the charge to account No. 350 and credit to account No. 172 should be omitted. (2) Class C companies shall charge amounts equal to such Interest to account No. 370, "Miscellaneous charges to Income," and credit a subaccount under account No. 195, entitled " Surplus invested in sinking funds." When the cash is turned over to the trustees or to the fund, charge account No. 140, " Special 26 funds," and credit account No. 115, " Cash." If no reserve Is to be set up to cover the fund, the charge to account No. 370 and credit to account No. 195 should be omitted. Case 79. Query. To what account sliould be cliarged the amounts of bills covering the sale of small quantities of supplies or the cost of work done for others, which have proved to be uncollectible? Answer. Account No. 323, "Uncollectible nonoperating revenues" (Class C, account No. 680). Charges to subscribers for moves and changes of telephone equipment which have been credited to account No. 607, " Station removals and changes" (Class C, account No. (J20), in anticipation of collection, and which have proved to be uncollectible, shall be charged to account No. 607 (Class C, No. 620). Case 80. Query. What should be the accounting for maintenance and operating ex- penses in connection with, and rents received from, space leased to others in buildings partly occupied by the telephone company? Answer. If the expenses of maintaining and operating the rented portion can be separated accurately from the expenses on the portion used by the company, such expense shall be charged to account No. 320, "Rent expense" (Class C, account No. 320), and the rent received shall be credited to account No. 311, " Miscellaneous rent revenues " (Class C, account No. 320). The expense on the portion of building used by the company shall be charged to the appropriate operating expense accounts. If the expense on the rented portion can not be separated accurately, the entire expense shall be charged to the operating expense accounts, and the rent received shall be credited to account No. 505, " Minor rents of exchange plant " (Class C, account No. 500) If building is used by the company ex- clusively for exchange purposes, to account No. 515, " Minor rents of toll plant " (Class C, account No. 510) if building is used exclusively for toll purposes, or to account No. 524, " Rents from other operating property " (Class C, account No. 520) if building is used for both exchange and toll purposes. In the case of a large property, where the company uses only a minor portion and the expenses can be apportioned on an equitable basis, it is desirable to use accounts Nos .311 and 320 (Class C, No; 320). Case 81. Query. What should be the accounting when a lessee company pays Interest or dividends on the securities of a lessor company In accordance with the terms of the rental agreement between them? Answer. The amounts so paid shall be charged by the lessee to account No. 330, " Rent deductions for lease of telephone plant " (Class C, account No. 370), and credited by the lessor to account No. 310, "Rent revenues from lease of telephone plant " (Class C, account No. 320). Case 82. Query. To what account should be charged the cost of minor work done In lieu of cash payments for pole locations, poles, and other supports, e. g., main- 27 tenance of telegraph lines of a railroad company In return for right-of-way privileges? Answer. Account No. 602, " Repairs of aerial plant " (Class C, account No. 600). Case 83. Query. To what account should be charged amounts paid periodically to a railroad company for permission to cross Its right of way, the right being reserved to revoke the permission at pleasure? Answer. Account No. 334, " Miscellaneous rent deductions " (Class C, ac- count No. 680). Case 84. Query. To what account should be charged rents paid for pole locations? Answer. Account No. 332, " Rent deductions for conduits, poles, and otJier supports" (Class C, account No. 680). Case 85. Query. To what account should be charged rents paid for the use of cir- cuits? Answer. Account No. 334, " Miscellaneous rent deductions " (Class C, ac- count No. 680). Case 86. Query. What should be the accounting when property leased by the account- ing company Is subleased, In whole or in part, to others? Answer. Property subleased to others shall be accounted for as if the ac- counting company were leasing Its own property. If, however, the accounting company acts only In the capacity of an agent without profit In leasing property for others, the receipts from lessee and the payments to lessor may be applied to the same primary account or cleared through a suspense account. Case 87. Query. The coupons on certain securities contain a stipulation that If not paid on date of maturity the coupons shall bear Interest from that date. To what account should the Interest on the coupons be charged? Answer. Account No. 336, "Other Interest deductions" (Class C, account No. 360). Case 88. Query. A company sells short-term notes because the money market does not warrant the sale of the bonds which are deposited as collateral for the notes. Is It permissible to spread the discount on the notes over the life of the bonds, treating the sale and retirement of both notes and bonds as one transaction? Answer. The sale and retirement of the notes shall be separately considered and the discount suffered on the notes shall be charged to account No. 336, "Other interest deductions" (Class C, account No. 360). 28 Case 89. Query. To what account should be charged Interest paid on taxes overdue and unpaid? Answer. Account No. 336, "Other interest deductions" (Class C, account No. 360). Case 90. Query. What should be the accounting treatment in connection with delayed items of revenue, expense, or income? Answer. Delayed items of revenue, expense, or income shall be credited or charged to the same account as would have been credited or charged if the items had been taken up in the period to which they pertained. If, however, the amounts involved are deemed sufficient to impair comparisons unduly and the company does not desire to charge them to the current accounts, adjust- ments may be made through the surplus or deficit accounts (Class A and B, accounts Nos. 401 and 417; Class C, account No. 195) upon obtaining si^ecial authority from the Interstate Commerce Commission. Case 91. Query. What should be the accounting treatment In connection with adjust- ments of errors in the revenue, expense, and income accounts of a prior fiscal year? Answer. Errors In the revenue, expense, and Income accounts of a prior fiscal year should be adjusted through the revenue, expense, and income accounts, respectively, of the year In which the errors are discovered. If, however, the amounts Involved are deemed sufficient to Impair comparisons unduly and the company does not desire to charge them to the current accounts, adjustments may be made through the surplus or deficit accounts (Class A and B, accounts Nos. 401 and 417; Class C^ account No. 195) upon obtaining special authority from the Interstate Commerce Ck)mml8slon. Case 92. Query. To what account should be credltetl an amount received for the sur- render of an unexpireil lease on property? Answer. Account No. 401, "Miscellaneous additions to surplus" (CHass C, account No. 195). Case 93. Query. When the securlt'es of a telephone company are reacquired, and then resold at a price other than par, what should be the accounting for the difference between the sale price and the par value? Answer. Credit any profit to account No. 401, "Miscellaneous additions to surplus" (Class C, account No. 195), and debit any loss to account No. 417, "Other deductions from surplus" (Class C, account No. 195). The discount and premium accounts referred to In section 6, "Discount and premium on capital stock," and section 7, " Discount, expense and premium on funded debt/* In the Uniform System of Accounts (Class C, accounts Nos. 150 and 190), are provided only for the initial sales of securities and are not applicable to the class of transaction under consideration. 29 Case 94. Query. What should be the accounting for funds on deposit with a bank which has failed? Answer. Pending the determination of the actual loss, such amounts shall be carried in account No. 136, "Other suspense " (Class C, account No. 150). When determined, the amount lost shall be charged to account No. 675, " Other gen- eral expenses" (Class C, No. 680); amounts recovered thereafter shall be credited to account No. 675 (Class C, No. 680). Case 95. Query. What should be the accounting for amounts billed subscribers under the following conditions: (1) When the bill is rendered in gross amount and a discount allowed for payment within a specified period. (2) When the bill Is rendered In net amount and an additional amount is charged to subscribers who do not make settlement within a specified period. Answer. (1) Either the gross or net amount of the bills may be recorded on the subscribers' ledger at the time the bills are rendered. (c) If the gross amount of the bills is recorded on the subscribers* ledger, such discounts as are taken by subscril>ers shall be credited to their accounts and charged to account No. 500, " Subscribers' station revenues ** (Class C, account No.- 500), or other account to which the gross amount of the bill was previously credited. (&) If the net amount of the bills is recorded on the subscribers' ledger, discounts neglected shall be entered against the appropriate subscribers' accounts at the end of the discount period and credited to account No. 500, "Subscribers' station revenues" (Class C, account No. 500), or other account to which the net amount of the bill was previously credited. (2) The net amount of the bill shall be recorded on the subscribers' ledger. When the specified time for payment expires, the additional amount charged shall be entered against the accounts of such subscribers as have not made settlement and credited to account No. 500, " Subscribers' station revenues " (Class C, account No. 500), or other account to which the net amount of the bin was previously credited. Case 96. Query. The text of Class A and B account No. 304 permits companies to carry a subaccount under account No. 118, " Due from subscribers and agents," comprising a reserve for uncollectible revenue accounts. If this subaccount Is kept, should It be closed out at the end of each year or may a balance be carried forward to the succeeding year? Answer, If this method of accounting for uncollectible operating revenues is followed, there should be carried forward In this subaccount to the succeed- ing year a balance representing as nearly as possible that proportion which will prove to be uncollectible of the total amount of outstanding bills for operating revenues. If Class C companies desire to set up a reserve for uncollectible operating revenues, monthly charges should be made to account No. 370, " Miscellaneous charges to income," and concurrent credits to a subaccount under account No. 125, "Due from subscribers and agents." The balance in this subaccount at the end of the year should be treated as provided in the above paragraph. {See Case 97,) 30 31 Case 97. Query. What should be the accounting for operating revenues charged off as uncollectible but recovered later upon resumption of service or otherwise? Answer. Credit the subaccount comprising the reserve for uncollectible ac- counts under account No. 118, " Due from subscribers and agents " (Class C, accounts No. 125), if such subaccount is kept; otherwise credit account No. 304, " Uncollectible operating revenues " (Class C, account No. 370). (See Case 96.) Case 98. Query. To what account should be charged permit fees paid to municipalities, counties, and other governmental bodies In connection with the initial location of poles or conduits? Answer. Account No. 207, " Right of way " (Class C. accounts Nos. 240 or 250, as may be appropriate). Case 99. Query. To what account should be credited amounts received from other tele- phone companies as compensation for the terminal handling of toll messages? Answer. Account No. 510, "Message Tolls" (Class C, account No. 510). In general, message toll revenue includes (1) the revenue from messages trans- mitted entirely over the company's own toll lines, (2) the company's propor- tion of revenue (usually termed "prorate" or "mileage") from messages transmitted partly over the company's own toll lines and partly over the toll lines of other companies, (3) amounts received as compensation for switch- ing messages between the toll lines of other companies, and (4) commissions or amounts representing a division of revenue received as compensation for origi- nating or terminating toll messages of other companies. Case 100. Query. What should be the accounting for slugs, etc., and for counterfeit or mutilated coins coUectetl from coin box stations? Ansicer. Any necessary adjustment for such Items shall he made through the Operating Revenue accounts since these shall Include In such cases only the face value of the legal tender coin collected. Case 101. Query. To what account should be charged amounts paid subscribers for directory or traffic service errors affecting telephone service? Answer. Abatements of charges billed subscribers when allowed for directory or traffic service errors affecting telephone service shall be charged to the oper- ating revenue account or accounts previously credited with respect to the par- ticular service. (See sec. 19. p. 60, for CUass A and B companies; accounts 500 and 510 for Class C companies.) Any additional payments resulting from such errors shall be charged to account No. 669, "Accidents and damages" (Class C, account No. 680). « to t m t 7 J t Case 102. Query. To what account should be charged amounts paid In connection with errors in directory advertising? Answer, Abatements of charges allowed for directory advertising errors shall be charged to account No. 523, "Advertising and directory " (Class C, account No. 520). Any additional payments resulting from such errors shall be charged to account No. 669, "Accidents and damages" (Class C, account No. 680). Case 103. Query. What should be the accounting w^hen telephone service is given at other than standard rates? Answer. (1) If given to employees, ministers, charitable institutions, etc., credit the revenue accounts with the actual amounts. If any, charged for the service. No adjustment shall be made between the revenue and other accounts for the reduction from standard rates. (2) If given in accordance with specific franchise requirements, including service given to nmnlclpalitles for right of way, pole location, etc., charge the standard rates for such .service to account No. 673, " Telephone franchise re- quirements" and credit similar amounts to account No. 676", "Telephone franchise requirements— Cr." (Class C, companies shall not Include such items in either the revenue or expense accounts). (See Case ^2.) (3) If given for specific return other than to municipalities, e. g., for rights of way, advertising, etc., credit the revenue accounts at the standard rates for such service. Any reduction from standard rates shall be charged to the appropriate expense or income deduction account. Case 104. Query. To what accounts should the exchange revenue from hotel or department store contracts and from guarantee coin box exchange service be credited? Answer. 1. When such service Is established specifically for general public use, the revenue shall be credited to account No. 501, "Public pay station revenues" (Class C, account No. 500) as follows: (a) The total amount of the exchange service revenue billed under con- tract, or the amount collected with respect to exchange service from the coin box If equal to or In excess of the guarantee. Any commission or amount retained by or paid to the guarantor shall be charged account No. 648, "Pay station commissions" (Class C, account No. 680). (D) The full amount of the guarantee If the amount collected from the coin box with respect to exchange service Is less than the guarantee. (2) When such service is not established specifically for general public use, the exchange service revenue billed or the full amount of the guarantee, plus whatever net additional amount Is due the telephone company, shall be credited to account No. 500, " Subscribers' station revenues" (Class C, account No. 500). (3) In exceptional cases when a telephone system, owned by a hotel, store, or other establishment, receives central-office service from the company, the revenue shall be credited to account No. 503, "Service stations" (Class C, account No. 500). Case 105. Query. What is the proper accounting for messenger service receipts and disbursements which are Incident to delivering messages and notifying persons of calls at telephone stations? Ilfc 32 Answer. Messenger service revenue from subscribers and other telephone companies shall be credited to account No. 520, " Messenger service " (Class O, account No. 520). The salaries paid to messengers who are in the company's employ shall be charged to account No. 630, "Messenger service" (Class C, account No. 660). Amounts paid to messengers who are not in the company's employ and amounts collected for and paid to other telephone companies for messenger service shall be charged to account No. 520, " Messenger service" ((^ass C, account No. •520). Case 106. Query. To what account should be credited the rent received for rooms leased to the local manager for personal ( nonofflclal ) use In a building rented by the telephone company for central office purposes? Anstcer. Account No. 505, " Minor rents of exchange plant " (Class C, ac- count No. 500) If building Is used by the company exclusively for exchange purposes, to account No. 515, "Minor rents of toll plant" (Class C, account No. 510) If building Is used exclusively for toll purposes, or to account No. 524, " Rents from other operating property " (Class C, account No. 520) If building Is used for both exchange and toll purposes. Case 107. Query. To what account should be credited unclaimed refunds on telephone service? Answer. Account No. 525, "Other miscellaneous revenue" (CUass C, account No. 520). Case 108. Query. To what account should be credited unclalmcvl Lubscrlbers' deposits, dividends, and wages? Answer. Such Items should be carried under the appropriate accounts pay- able until the expiration of the company's liability. At the end oif a fiscal year, or more frequently If advisable, Items which have been carried for the required period shall be credited to account No. 401, " Miscellaneous additions to surplus" (Class C, account No. 195). Case 109. Query. To what account should be credited revenue received from "battery taps," I. e., electrical power furnished others from the central office batteries? Answer. Account No. 525, "Other miscellaneous revenue" (Class C, account No. 520). Case 110. Query. When the duties of employees are varied and a small amount of time is spent on each duty, thus affecting a number of accounts. Is It required that their pay and expense be distributed on the basis of the actual time spent? Answer. The pay and expenses of employees shall be distributed to the ac- counts as nearly as may be possible on basis of the time actually spent on each class of work. However, If the time Is so split up as to make such a distribution Impracticable, and If the emploj^ee does the same classes of work from day to day, his pay and expenses may be distributed by the use of percentages based on a study of the time actually spent In a representative period, such percent- ages being corrected from time to time as the facts warrant. • > 33 Case 111. Query. When one department performs services or prepares data for anoth^ department, should any transfer of expense be made in the accounts? Answer. When, In the ordinary conduct of business. It Is necessary that one department perform services for or furnish data to another department, no transfer of expense Is required. Where the employees of one department perform an extensive service which is the function of another department, the expense shall be transferred to such department and charged to the accounts affected; but no transfer of expense Is required to be made for Incidental services performed for one depart- ment by another. For example, if the traffic department rates and sorts toll tickets, makes check ledger entries, and prepares reports to facilitate the work of the department performing the function of revenue accounting, such service being Incidental to the work of the traffic department, the expense may be borne by the traffic department Case 112. Query. To what account should be charged the pay and expenses of man- agers at small exchanges who are engaged In constructing and maintaining the plant and In traffic and commercial operations? Answer. Construction and maintenance costs shall be charged to the appro- priate fixed capital (plant and equipment) and maintenance accounts, respec- tively, and the remainder shall be distributed to the appropriate traffic and com- mercial expense accounts. If It Is impracticable to distribute the charges to the traffic and commercial expense accounts on the basis of actual time spent, the distribution may be made on a percentage basis. Case 113. Query. To what account should be charged the commissions paid to exchange agents or managers in lieu of salary, operating expenses, etc.? Answer. Any construction or maintenance costs having been first deducted and charged to appropriate accounts, the remainder shall be divided between Traffic and Commercial Expenses by means of percentages agreed upon by these departments. Class C companies, after charging construction and maintenance accounts according to fact, shall charge the remainder to account No. 670, " Gen- eral office salaries." Case 114. Query. To what account should be charged the pay and exi)enses of foremen and subforemen of repair gangs? Answer. Their pay and expenses shall be distributed over the various main- tenance accounts In the same manner as that of employees under their super- vision. The repair accounts shall Include the cost of direct supervision such as that of the foremen and subforemen while the cost of general maintenance supervision such as that of the general, divisional, and district plant superin- tendents shall be charged to account No. 601, " Supervision of maintenance " (Class C, account No. 670). 34 Case 115. Query. To what account should be charged the pay and expenses of trouble- men engaged to some extent in traffic worlc? Answer. The pay and expenses of troublemen shall be distributed to the sev- eral maintenance, traffic, or other accounts involved in their work. (See Cotes 110 and 111.) Case 116. Query. To what account should be charged the pay and expenses of wire chiefs? Answer. The pay and exi)enses of wire chiefs shall be distributed to the sev- eral maintenance, traffic, or other accounts involved in their work. (See Ctises 110 and 111.) Case 117. Query. Must specific authorization be obtained from the Interstate CJom- merce Commission whenever It is desired to spread over a period large items of expense due to Judgments, fires, accidents, strikes, etc.? An8tcer. Such items may be spread over two or more months of a single calendar year without specific authority from the Commission. If Class A and B companies desire to extend into the succeeding year charges provided for in section 24, page 68, of the Uniform System of Accounts, and If Class C companies desire to spread similar expense over succeeding years, spe- cial authorization must be obtained. Case 118. Query. What should be the accounting for additional pay allowed employees for loyal service and overtime work during a strike? Answer. Charge the accounts to which the regular pay of the employees Is chargeable. Case 119. Query. A company Is required by a city ordinance to cut and replace over- head wires when it is necessary to move a building across or along the street To what account shall such expense be charge $ f « 35 Answer. No. If substitution of new plant for existing plant is not involved, charge account No. 602, " Repairs of aerial plant " (Class C, No. 600), unless the expense Is relatively large and provision therefor has been made in the deprecia- tion reserve, in which case treat as "extraordinary repairs" (Class C, "recon- struction"). If substitution of new plant for existing plant is involved, the substitution not amounting to a practical replacement, treat as "extraordinary repairs" (Class C, " reconstructloa "). Otherwise, treat through the plant accounts, I. e., credit the appropriate plant accounts with the cost of the property retired and charge the appropriate plant accounts with the cost of the new property. Case 122. Query. What should be the accounting when. In connection with street or road- way improvements, a telephone company is required to move Its pole line at Its expense? Answer, If substitution of new plant for existing plant is not involved, charge account No. 602, "Repairs of aerial plant" (Class C, No. 600), unless the expense is relatively large and provision therefor has been made in the depreciation reserve, In which case treat as " extraordinary repairs " (Class C, " reconstruc- tion"). If substitution of new plant for existing plant is involved, the substitution not amounting to a practical replacement, treat as "extraordinary repairs" (Class C, "reconstruction"). Otherwise, treat through the plant accounts, i. e., credit the appropriate plant accounts with the cost of the property retired and charge the appropriate plant accounts with the cost of the new property. Case 123. « Query. To what account should be charged the exi)ense of pole butt rein- forcements to make good the deterioration of the pole? Answer. Ordinarily, this work should be classed as ordinary repairs and the cost thereof charged to the primary repair accounts. However, If provision for such work has been made In the depreciation reserve, the work should be treated by Class A and B companies as " extraordinary repairs," and by Class C companies as "reconstruction." Case 124. Query. What should be the accounting for the following Items In connection with schools conducted by the company for the instruction of plant department employees? (1) Equipment Installed and used in such schools. (2) Maintenance of above (if done independently of school work). (3) Salaries of men during attendance. (4) Salaries and expenses of instructors, materials consumed in connection with such work, rent, and house service, etc. Answer. (1) Charge the fixed capital (or plant and equipment) accounts for the classes of plant involved. (2) Charge the maintenance accounts for the classes of plant involved. (3) Consider as nonproductive time and distribute over productive time of the men engaged on the kinds of work covered by the school ; e. g., time of the men studying the work of an installer should be distributed over productive time of the installation force. (4) Apportion, on an equitable percentage basis, to the accounts covering the several types of work covered by the school. 36 37 Case 125. Query. To what account should be charge^ the pay and expenses of students while engaged in learning the work of switchmen in automatic central offices? Answer. Account No. 604, "Repairs of central office equipment" (Class C. account No. 610). Case 126. Query. To what account should be charged the expense of temporarily dis- connecting subscribers' lines in the central office for periods of nonuse or be- cause of nonpayment of bills? Answer. Account No. 604, " Repairs of central office equipment " (Class C, account No. 610). Case 127. Query. To what account should be charged the wages of switchmen in auto- matic central offices? Answer. Account No. 604, " Repairs of central office equipment " (Class C, account No. 610), except for time spent in operating the power plant, which should be charged account No. 628, " Transmission power " (Class C, accound No. 660). Case 128. Query. What should be the accounting when a component part of a station (not a complete station) is replaced; e. g., when occasionally a desk set or bell is substituted for one worn out or requiring repairs? Answer. The substitution of a component part of a station set being a minor replacement as defined in section 21, page 66, of the Uniform System of Ac- counts (Class C, sec. 14, p. 12) the cost thereof shall be charged to account No 605 "Repairs of station equipment" (Class C, account No. 610). The part removed shall be credited to account No. 605 (Class C, No. 610) at salvage value. Case 129. Query. To what account should be charged repairs to rented buildings made by the accounting company? Answer. Account No. 606, "Repairs of buildings and grounds" (Class C, account No 640), unless the rent paid for the building Is charge L Case 141. Query. When a telephone company oi)erates a private-branch exchange for company (official) business, should any transfer be made from traffic expenses to the expense accounts of the departments served? Answer. No. The cost of operating such private branch exchanges shall be charged to the various accounts under traffic expenses. Case 142. Query. Should any portion of supply expense and plant supervision expense be applied on plant department charges to Class A and B, account No. 628, "Transmission power," and account No. 673, "Telephone franchise require- ments?" Anstoer. Yes. The appropriate portion of such expenses may be charged to account No. 628 and account No. 673 In the usual manner. Case 143. Query. To what account should be charged amounts refunded to connecting companies for postage on toll tickets and reports forwarded? Answer. Account No. 629, "Central office stationery and printing" (Class C, account No. 660). Case 114. Query. To what account should be charged the cost (i. e., postage and other transportation charges) of forwarding toll tickets: (1) From central offices to revenue accounting offices. • (2) From revenue accounting offices to local collection offices. Answer. (1) Account No. (529, "Central office stationery and printing" (Class C, No. 660). (2) Account No. 646, "Revenue accounting" (Class C, No. 680). Case 145. Query. To what account should be charged the cost of covers, chains, and locks used in connection with directories at pay stations? Answer. Account No. 632, " Pay station expenses " (Class C, account No. 660). Case 140. Query. What Is the general distinction between items of expense account of pay stations which are chargeable to account No. 632, " Pay station exx)enses " (Class C, account No. 660), and those which are chargeable to account No. 048, "Pay station commissions" (Class C, account No. 680)? Answer. Account No. (532, "Pay station expenses" (Class C, No. 660), shall be charged only with the costs of speeiflc items of traffic exx)ense, such as are classable under that account. Items chargeable to this account usually occur in connection with pay stations which are attende 53, 131 General Instructions. 1. Telephone companies divided into two claases 1, 4 3. Balance-sheet accounts 1 5. Reacquired securities 3, 5, 6 50 Case. 6. Discount and premium on capital stock 93 7. Discount, expense, and premium on funded debt 93 9. Fixed capital defined 25,172 10. Costs to be actual money costs 30 11. Interest accruing during construction period 64 13. Plant and equipment and other property purchased 26, 27, 28, 29, 30 14. Fixed capital withdrawn or retired 31, 32, 37 16. Taxes , 70 19. Deductions from revenues 101 21. Repairs defined 121, 122, 123, 128, 132, 133 24. Extraordinarj'^ casualties and unanticipated reconstruction 117 INDEX BY ACCOUNTS. Class C Companies. 105. 110. 115. 120. 125. 130. 135. 140. 145. 150. 160. 165. 185. 190. 195. 200. 210. 220. 230. 240. 250. 260. 270. 320. 340. 350. 360. 370, 500, 510 520 b30 Balance Sheet. Other property 8, 10, 11, 12 Securities Q,7,n Cash 22,78 Notes receivable Due from subscribers and agents 96, 97 Accounts receivable Materials and supplies 17, 18, 133 Special funds ^^'^^ Prepayments. 34, 152 Other debit accounts 7,21,22,67,69,73,93,94,172 Capital stock Funded debt ^'^3 Depreciation reserve ^ Other credit accounts 8, 21, 24, 93, 160 Surplus 13,21,33,36,78,90,91,92,93,108,172 Plant and Equipment. Intangibles 41,42,73 Land and buildings 11,43,45,46 Central office equipment 47,48,49,50,51,52 Station equipment 47, 55 Exchange lines 59, 61, 98 Toll lines 35,59,61,98 General equipment 25, 52, 53, 62, 63 Undistributed construction expenditures 38, 64, 65, 66, 71, 161, 176 Income. Miscellaneous income 12, 20, 64, 75, 76, 80, 81 Other operating expenses 8 Taxes 71,72,73,74 Interest accrued .- 18, 78, 87, 88, 89 Miscellaneous charges to income 67, 69, 78, 81, 96, 97 Operating Revenues. Exchange revenues 80, 95, 101, 104, 106 Toll revenues 80,99,101,106 Miscellaneous revenues 80, 102, 105, 106, 107, 109, 139, 148, 153 , Licensee revenues — Cr ^^ (51) I 52 Operatino Expenses. Ctuae. 600. Repairs of wire plant 56,61,82,119,120,121,122,131 610. Repairs of equipment 52, 120, 125, 126, 127, 128, 131 620. Station removals and changes 32, 79, 130, 131 640. Other maintenance expenses 34, 53, 68, 129, 131, 157, 173, 175, 176 650. Operators' wages 139, 140 660. Other traffic expenses 105, 127, 136, 137, 138, 143, 144, 145, 146, 148 670. General office salaries 113, 114, 136, 150, 155, 157, 158 680. Other general expenses 42, 44, 52, 60, 63, 66, 69, 79, 83, 84, 85, 94, 101, 102, 104, 136, 144, 146, 147, 149, 151, 152, 153, 154, 156, 158, 159, 160, 161, 162, 163, 164, 165, 167, 168, 169, 172, 174 General Instructions. 1. Telephone companies divided into four classes 1,4 12. Reconstruction 121, 122, 123, 132, 133 13. Plant and equipment retired 32, 37 14. Repairs 128 INDEX BY TOPICS. Class A, B, and C Companies. A. Case. Accounts, clearing ^ temporary ^ titles of, on company's books 1 Addressing machine supplies ^^ Adjustment of furniture and fixtures costs 52 of general equipment costs 62 of revenue, expense, and income items 91 Appraisal of furniture and fixtures 52 of going plant purchased 27, 29 of plant 27,29,172 Associations, telephone, expenses of 1^4 Attachments to plant, inspection of ^'^^ Attorneys, temporary, pay and expenses of 41, 159 Audit of books ^^"^ Auditor of receipts and clerks 1^0 Automatic equipment, students 125 equipment, switchmen 125, 127 Awnings ^^'^^ B. Balance sheet ^ Balance-sheet accounts ^ Balcony on main frame ^ Bank failure ^^ Battery taps, receipts from ^^ Bills against subscribers ^^ Bond, given in construction or maintenance work 164 judicial, in damage suit 1^3 Bond or negative return ^0 Bonds, examination of validity of issue of 69 maturing serially, discount on 67 Bonus paid contractor Booths and special fittings retired ^2 Bridle wire cables Brokers' fees and commissions CO Buildings, appurtenances to improvements on leased ^^ minor additions or replacements '*6 not used in telephone operations 10, 11 rented, repairs of ^^ (53) 54 c. Cable, terminals, changes in 120 underground, without conduit 59 Cash, distinguished from special deposits 14 Certificates of deposit 14 Check, loss account of forged 169 Circuits, rent of 85 Clearing accounts 1, 25, 46 Coin-box service revenue IO4 shortages 100 Commission, at pay stations 14g brokers* 9 in lieu of salary II3 on securities purchased 9 on toll messages 99 State, expense of 72 State, reports to I57 Connecting company, operating performed by 148 repairs to lines of 134 Construction, interest during 64 Contract, payment for abn^ation of 33 Contractor's penalties for delay 33 Contributions made I49 Custom work 20 D. Deductions from pay for hospitals 24 Delayed items of revenue, expense, and income 90 Departmental expense, transfer of Ill Department store contract revenue 104 Deposits, certificates of 14 special, distinguished from cash 14 special, for dividends 15, 16 subscribers', imclaimed 108 time 14 with municipalities 22 Depreciation on improvements on leased buildings 34 on physical property (not telephone) 8 reserve, subdivision of 4 Direct<»ies, covers, chains, and locks 145 sale of old 153 sal v£^e on old 153 special editions of 152 Directory advertising errors 102 errors 101 Disconnecting subscribers' lines 126 subscribers* stations 130 Discount on bills for materials and supplies 18 bonds maturing serially 67 reacquired securities 93 short-term notes 88 subscribers* bills 95 Distribution of pay and expenses of employees 110 55 Case, Dividends paid as part of rent 81 special deposits for 15 unclaimed 1^8 Donations received ^^ E. Electrolysis bond opener 60 Electrolytic surveys 58 Employees, distribution of expenses of HO Employees engaged in operation and construction 40 Equipment, general, adjustment of costs 62 maintained by lessees 47 order table systems 55 overhauling and repairing 175 {See also Plant and Equipment.) Examination of titles of real estate 69 Exchange of services 103 Expense items, adjustment of 91 delayed 90 spread over subsequent periods 117 Experimental accounts 1 F. Farmer lines, repairs to 134 . Fees, brokers' 9 for pole and conduit locations 98 Fire extinguishers 54 First-aid kits 171 Foremen of repair gangs 114 Franchise, free or reduced-rate service under 103 plant and supplies furnished under 42 taxes 74 Franks 168 Free telephone service 103 Furniture and fixtures, cost, repairs, and replacements 52, 53 repairs to 133 O. Gramisheed wages, loss account of 170 Governments, expense of making reports to 157 expense of testifying before 157 H. Handbooks for plant department 68 Hospital funds 24 Hotel contract revenue 104 I. Improvements on leased buildings 34 income items, adjustment of 91 delayed 90 Information, detailed, in records 2 Inspection of attachments to j^oles 173 56 C&se. Insurance, liability W on construction 65, 161 on materials and supplies 161 on telephone earnings and receipts 162 reserve 160 Intangible capital, term of life 26 Interest on bills for materials and supplies 18 on funds used in construction 64 on securities held by trustees 76, 78 on unpaid bond coupons 87 on unpaid taxes 89 paid as part of rent 81 special deposits for 16 Interstate Commerce Commission, authority of, necessary 52, 90, 91, 117 reports to 3, 6, 157 Inventory of furniture and fixtures 52 general equipment 62 going plant purchased 29 plant 172 L. Land held for future operations 11 not used in telephone operations 10 rent of, for storage of material 176 Lease, surrender of unexpired 92 Leased buildings, improvements on 34 Liability insurance 66 Loading coils 51 Loss on account of bank failure 94 account of forged check 169 account of gamisheed wages 170 Main frame balcony * 50 Manager, at small exchange 112, 113 general, pay and expenses of 155 shortage in account 154 Manholes, cleaning 56 Material, defective, in construction 33 Materials and supplies, charged out directly 17 discount on bills for 18 insurance on 65, 161 interest on bills for 18 purchased from another company 30 recovered from plant 132 rent of land for 176 taxes on 71 Messenger services 105 Meters, expense of reading 138 Mileage on toll messages 99 Morse leased lines 140 Moves and changes, uncollectible bills for 79 of plant account street improvements 122 of plant by public requirement 121 57 Case. Moving an employee 1^^ Municipalities, bonds given to 1^ deposits with 22 fees paid for pole or conduit location 98 free or reduced-rate service for 103 maintenance and operation of plant leased to 42 plant and supplies furnished to 42 replacements and moves required by 121 N. Newspaper, company, expense of 165 Notes becoming due serially 23 payment defaulted '^ short-term, issued in lieu of bonds 88 0. Operating expenses, property of small value charged to 25, 46 performed by connecting company 148 Operators, joint 1'^^ private branch exchange 139 Options 21 Order table systems 55 Overhead wires, damage to, account moving building 119 P. Party lines, reassociation of 120 Patents c ^^ Pay-station expenses and commissions 1^6 Penalties, contractors, for delay ^ Phantom circuits ^^ Plant and equipment, inventory of purchased plant 29 items of small value .' 25, 46 purchase of going plant 27, 30 purchased, intangibles 26 retired, original cost 31 sale of portion 37 structural value 28 under construction, insurance on 65 {See also Equipment.) Plant department expense other thkn repairs 131 hand books 68 Plant supervision expense 1^2 Pole butt reinforcements 123 lines, moves of 121» 122 locations, rent for 84 Postage on subscribers' bills 151 toll reports l'*^ toll tickets 143,144 Premium on reacquired securities 93 Private branch exchange for company business 141 operators 139 retired 32 58 Property of others, expenditures on 35 Property rights,pennanent, granted 38 temporary, granted 39 Protection from high-potential line 61 Protectors 48 R. Rates, expense of board of arbitrators on -. 166 expense of figuring 136 Reassociation of party lines 120 Receivers, pay and expenses of 158 Reconstruction 121, 122, 123, 132, 133 Reduced-rate telephone service 103 Reinsurance 160 Rent, interest and dividends paid as 81 of buildings 80 of circuits 85 of instruments 75 of land for storage of material 176 of physical property (not telephone) 12 of pole locations 84 of property sublet 86 of rooms used by manager 106 Rented property, expenses on 12, 34, 80 repairs of 12, 34, 80, 129 Replacement of component part of subscriber's station 128 furniture and fixtures 62 plant 121,122 Reports to governmental bodies 157 Interstate Commerce Commission 3, 6, 157 Reserve for depreciation 4 insurance 160 uncollectible bills 96 Retaining wall 45 Revenue items, adjustment of 91 delayed 90 Right, permanent, sale or purchase of 38 temporary, sale or purchase of 39 to cross right of way 83 Route book 136 S. Schools, automatic equipment 125 plant department 124 Screens, door and window 34, 53 Seciuities held by trustees 76, 78 of other companies, profits and loss on 13 purchased, commissions on 9 reacquired 5, 93 treasury 6 Serial notes 23 Services, exchange of 103 of one department for another Ill 59 Case. Shades, window 34, 53 Shortage in manager's account 154 Sidewalks, cost of - ^^ Signs ^ Sinking funds 19,77,78 Spreading large items of expense 117 Stamps, internal-revenue 73 postage, on subscribers' bills 151 toll reports 143 toll tickets 143,144 Stationery and printing " 147 Strike, additional pay account of 118 Structural value of plant 27, 28 Students, automatic exchange 125 plant department 124 Subaccounts, titles of 1 Subforemen of repair gangs 114 Subscribers' ledger charges ^5 Subsidiary records 2 Superintendent, pay and expenses 114, 155 Supervision of employees 114 Supply expense 142 Switching toll messages ^ Switchman in automatic exchanges 127 T. Tariff books 136 Tax reports, expense of preparing 157 Taxes , accrual of 70 franchise 74 on materials and supplies 71 unpaid, interest on 8^ Temporary accoimts 1 Testifying before governmental bodies 157 Toll messages defined ^ mileage on 99 switching of ^^ •Trafl5c errors 1^1 inspectors 137 Transfer of expense between departments HI Troublemen, pay and expenses of 115 Trucks, overhauling and repairing 175 Trustees, sum paid to, for unmatured interest 16 U. Unclaimed deposits, dividends, and wages 108 refunds on service 107 Uncollectible bills for revenue 96, 97 supplies 79 work performed 79 Unit costs, use of, in retiring property. 31 Use-and-occupancy insurance 162 60 V. Case. Valuation of plant expenses 172 W. Wages unclaimed 108 Wall, retaining 45 Window shades 34, 53 Wire chief, pay and expenses of 116, 140 Work for others in exchange for privilege 82 performed for others 20 O . UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES OL..A.SS C PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE ISSUE OF 1915 EiTBcnvE ON January 1, 1915 WASHINGTON GOVERNMENT PRINTING OFPICSE 1914 OOLUMaiA UNIVERSITY UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES CI c PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE ISSUE OF 1915 Effective on January 1, 1915 '^^^:W/m'M WASHINGTON GOVERNMENT PRINTING OFFICE 1914 t.* THE INTERSTATE COMMERCE COMMISSION. James S. Harlan, of Illinois. JuDSON C. Clements, of Georgia. Edgar E. Clark, of Iowa. Charles C. McChord, of Kentucky. Balthasar H. Meyer, of Wisconsin. Henry C. Hall, of Colorado. WiNTHROP M. Daniels, of New Jersey. George B. McGinty, Secretary. (2) i CONTENTS. Page. Order of the Commweion 5 Introductory'- letter 7 General inptructionfl: Telephone companies divided into four classes 9 Clasfiiiicationfl of accoiinta -, 9 Separation of excliange and toll systems 9 Balance sheet defined 10 Plant and equipment accounts defined 10 Income accounts defined 10 Operating revenues defined 10 Operating expenses defined 10 Cost of plant and equipment 10 Plant and equipment in service .lanuary 1 , 1915 11 New construction H Reconstruction H Plant and equipment retired 12 Repairs 12 Cost of repairs 12 Depreciation 12 list of accounts: Balance-sheet accounts 15 Plant and equipment accounts 15 Income accounts 16 Operating revenue accounts 16 Operating expense accounts 16 Text of accounts: Balance-sheet accounts 17 Plant and equipment accounts 21 Income accounts 23 Operating revenue accounts 25 Operating expense accounts 27 Index to system of accounts 29 APPENDIX. Bookkeeping HysUMii for small companies 'A (3) ' ORDER. At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C, on the 13th day of October. 1914. The subject of a Uniform System of Accounts to be prescribed for and kept by t^^lephone companies being under consideration, the following order was entered : It is ordered, That the Uniform System of Accounts for Telephone Companies, Class C, with the text pertaining thereto, embodied in printed form to be hereafter known as Issue of 1915, a copy of which is now before this Commission, be, and the same is hereby, approved; that a copy thereof duly authenticated by the Secretary of the Com- mission be filed in its archives, and a second copy thereof, in like manner authenticated, in the office of the Division of Carriers' Accounts; and that each of said copies so authenticated and filed shall be deemed an original record thereof. It is further ordered^ That the said Uniform System of Accounts for Telephone Companies, Class C, with the text pertaining thereto, be, and the same is hereby, prt>scribed for the use of Class C telephone companies (those having annual operating revenues exceeding $10,000 but not more than $50,000) , subject to the provisions of the Act to Regulate Commerce as amended, in the keeping and recording of their accounts; that each and every such carrier and each and every receiver or operating trustee of any such carrier l)e required to keep all accounts in conformity therewith; and that a copy of the said issue be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier. It is further ordered, That any such carrier or any receiver or operating trustee of any such carrier may subdivide any primary accoimt in the said issue (as permitted in the general instructions con- tained therein); or may make assignment of the amount charged to any such primary account to operating divisions, to its individual lines, or to Stat-es: Provided, however, That such subprimary accounts set up or such assignments made by any such carrier or by any receiver or operating trustee of any such carrier do not impair the integrity of the accounts hereby prescribed. It is further ordered. That in order that the basis of comparison with previous years be not destroyed, any such carrier or any receiver (5) or operating trustee of any such carrier may, during the twelve months ending December 31, 1915, keep and maintain, in addition to the accounts hereby prescribed, such portion or portions of its present accounts as may be deemed desirable by any such carrier, or by any receiver or operating trustee thereof, for the purpose of such comparison; or, during the same period, may maintain such groupings of the primary accounts hereby prescribed as may be desired for that purpose. It is further ordered^ That any such carrier or any receiver or oper- ating trustee of any such carrier, in addition to the accounts hereby prescribed, may, unless otherwise ordered, keep any temporary- or experimental accounts the purpose of which is to develop the effi- ciency of operation: Provided j however, That such temporary or ex- perimental accounts shall not impair the integrity of any primary iiccoimt hereby prescribed. It is further ordered, That January 1 , 1915, be, and is hereby, fixed as the date on which the said issue of the Uniform System of Ac- counts for Telephone Companies, Class C, shall become effective. By the Commission: (Seal) Gfx>ror B. MoGinty, Secretary. i i INTRODUCTORY LETTER. Interstate Commerce Commission, Division of Carriers' Accounts, Washington, October IS, 1914- To C^ss C Telephone Companies: This Uniform System of Accounts for Telephone Companies, Class C, is that approved and prescribed in the order of the Interstate Commerce Commission, the text of which immediately precedes this letter. The Act to Regulate Commerce as amended invests the Com- mission with authority to prescribe the forms of accounts to be kept by telephone companies subject to the act, and prohibits the use of any accounts other than those prescribed by the Commission. The observance of the rules and regulations stated in this system of accounts therefore becomes obUgatory upon persons having direct charge of the accounts of the companies concerned, and such persons will be held responsible for their proper appUcation. To enable telephon^^companies to determine their status under the Act to Regulate Commerce, the following conference ruling of the Commission, promulgated March 13, 1911, is quoted: No. 305. Application of thb Amended Act to Telegraph and Telephone Companies: (a) Each and every telegraph and telephone company which transmits messages over its line or lines from a point in one State, territory, or district of the United States to any other State, territory, or district of the United States, or to any foreign country, is subject to the provisions of the act. (6) If a telegraph or telephone company, the line of which is wholly within a single State, territory, or district of the United States, receives a message within such State, Territory, or District of the United States, for transmission to a point without the State, territory, or district of the United States, which it transmits over its line to another point in the same State, territory, or district of the United States and there delivers it to an interstate line for transmission to destination, the first- named company by virtue of its participation in this transaction, is not made subject to the provisions of the act, unless there be an arrangement between that company and its connection for through continuous transmission of such messages, in which latter case all of the participating companies in such through continuous transmission are subject to the provisions of the act, (c) If two or more lines are connected so that a person within one State, Territory, or District of the United States talks with a person at a point without such State, Territory, or District of the United States, or so that a message is transmitted directly from a point within a State, Territory, or District of the United States to a point without the same, the transmission of messages in this maimer constitutes interstate commerce and brings all of the participating lines within the purview of the act. {d) It follows that telegraph and telephone companies subject to the act, as above indicated, must conform to the provision of section 1 thereof requiring that all of their rates and charges for the transmission of interstate messages eliall be reasonable 35819°— 14 2 (7) and just, and that such companies may lawfully issue franks covering free interstate service or may grant free interstate service to the same extent, and subject to the same limitations as other common carriers under the provisions of said section. (e) Such telegraph and telephone companies subject to the act are also governed by the provisions of section 3 forbidding any undue or unreasonable preference or advantage by rebates or otherwise, or any imdue or imreasonable prejudice or disad- vantage in any respect whatsoever, and are subject to the lawful orders of the Com- mission made pursuant to the provisions of section 15 of the act, and also of section 20 thereof respecting the keeping of accounts and memoranda and the making of roporta to the CJommission. Although the Imes of a company may be entirely within one State, if it handles interstate messages for long-distance companies on a commission basis or otherwise handles interstate messages under the conditions named in paragraph c of the ruling, it is subject to the Act to Regulate Commerce. The system of accoimts prescribed herein apphes only to Class C companies (those having annual operating revenues exceeding $10,000 but not over $50,000). The system for the larger companies has been in effect since January 1, 1913, and is contained in a separate pubhcation. It has been the aim, in preparing the system of accoimts, to make it as simple as possible, and at the same time furnish such infor- mation as is needed by the Commission and is useful to the compa- nies. It is believed that this system of accounts will be sufficient to meet the requirements of Class C companies and will not be difficult of application. If, however, any Class C companies desire to keep their accounts in greater detail, they may subdivide any of the accounts prescribed herein, or may adopt the system prescribed for Class A or Class B companies. In formulating this system of accounts it has been the endeavor to enlist the cooperation of the telephone companies and of the various State commissions having supervision of telephone com- panies. For that purpose the system of accounts in tentative form has been submitted for criticisms and suggestions, and due consid- eration has been given to all responses received. Accounting officers are invited to correspond with this office should question arise with regard to the correct interpretation of any ac- count or rule prescribed in the system of accoimts, in order that uniformity may be secured in the apphcation of its provisions. As an aid to the smaller telephone companies in the keeping of their accoimts, there is contained in the appendix a bookkeeping system for small telephone companies. This form of bookkeeping is suggestive only, and it is not required that the companies make use of it either in whole or in part. The companies may for the pres- ent adopt any bookkeeping system they desire, so long as the one adopted will produce the results required by the system of accoimts herein prescribed, Fred \V. Sweney, Chief Examiner of Accounts, ! GENERAL INSTRUCTIONS. The records of telephone companies shall be kept with sufficient particularity to show fully the facts pertaining to all entries made in the accounts provided herein. Where the full information is not recorded in the general books, the entries therein shall be supported • by other records in which the full details shall be shown. Such general book entries shall contain sufficient reference to the detail records to permit ready identification of the latter, and the detail records shall be filed in such manner as to be readily accessible for examination by representatives of the Interstate Commerce Com- mission. 1. Telephone companies divided into four classes. — For the purposes of the systems of accounts prescribed by the Interstate Commerce Commission telephone companies are divided into four classes, as follows: Claas A. Companies having average annual operating revenues exceeding $250,000. Claae B. Companies having average annual operating revenues exceeding $50,000, but not more than $250,000. A Class C. Companies having average annual operating revenues exceeding $10,000, ^ but not more than $50,000. Class D. Companies having average annual operating revenues of $10,000 or less. The system of accounts contained herein applies to Class C companies and shall be observed by all Class C companies (as defined above) that are subject to the Act to Regulate Conmierce. Class C companies which desire more detailed accounting may subdivide the accounts prescribed herein, or they may adopt in whole or in part the classifications prescribed for Class A or for Class B companies. The classi- fications for Class A and Class B companies are contained in a separate publication. No detailed classifications of accounts are at present prescribed for Class D com- panies. 2. Classlflcations of accounts. — The system prescribed herein for Class C com- panies contains the following general classifications of accoimts: (a) Balance-sheet accounts. (h) Plant and equipment accounts. ^ \e) Income accounts. (a) Operating revenue accounts. (<) Operating expense accounts. 3. Separation of exchange and toll systems. — If a company operates two or more exchange systems or toll systems the accounts for the plant and equipment, operating revenues, and operating expenses shall be kept in such manner a;3 will indicate the items wliich pertain solely to any one exchange system or any one toll system. The items pertaining to two or more systems shall be designated as comirKm, It is not required that the companies keep separate sets of accounts for each exchange or toll system, although this may be done if desired. It is only necessary that the items be noted to indicate the exchange or toll system to which they pertain, or be noted common to show that they are applicable to the entire property. (9) 10 By an exchange system is meant the property devoted to telephone service within the area referred to and usually described in contracts with subscribers as that within which local service is furnished at rates specified in such contracts. An exchange eystem may include one or more central oflBces. By a toll system is meant the property devoted to the operation of long-distance or toll lines which connect different exchange systems where a charge is made for the use of such lines separate and apart from the charge for exchange service. Ueually a company would have one toll system only. 4. Balance sheet defined. — The balance sheet is a statement of theajssets, liabilities, and surplus or deficit of a business at a given time. It contains a statement of the ledger balances after the accounts covering the revenues, expenses, and other income items liave been closed into " Surplus." 5. Plant and equipment accounts defined. — The plant and equipment accounts, some- times termed fixed capital or construction accounts, are the accounts which show the investment in property, both tangible and intangible, used in the telephone opera- tions and in operations incident thereto. Ten primary plant and equipment ac- counts (Noe. 200 to 290) are provided. The investment in plant and equipment shall be distributed over these accounts in accordance with the texts of the accounts. 6. Income accounts defined. — The income accounts are the accounts which show the amounts of money that the company has received or becomes entitled to receive for services rendered during a given period, the return accruing during the period upon investments, and the disbursements and obligations incurred that affect the disposition of the amounts so received or accrued. The balances in these accounts shall be drawn together annually in a ledger account or in a statement form which will give the net income (or net loss) for the year. Thia balance shall then be transferred to the account ** Surplus," which shows the ac- cumulated undivided profits (or deficit) of the company. 7. Operating revenues defined. — By operating revenues are meant all moneys which the company receives or becomes entitled to receive for telephone service and for serv- ices incident thereto. Credits to the revenue accounts shall be based upon the gross charges made for the service rendered by the company. The totals of the pri- mary operating revenue accounts shall be transferred annually to the Income Account under title of account No. 300, "Telephone operating revenues." 8. Operating expenses defined. — By operating expenses are meant the expenses of maintaining the property devoted to telephone operations, the expenses of conducting the telephone operations and services incident thereto, the expenses of collecting revenues and of accounting, and the general and supervisional expenses in connection with the foregoing. The totals of the primary operating expense accounts shall be transferred annually to the Income Account under title of account No. 330, "Tele- phone operating expenses." 9. Cost of plant and equipment.— The term cost as used in the plant and equipment (construction ") accounts means the actual cost in money of labor and materials used in construction, the actual cost in money of property acquired after construction, or, if the consideration given is other than money, the actual money value of such other consideration at the time of the purchase. Cost of labor includes not only wages, salaries, and fees paid employees, but also personal expenses of such employees when borne by the company. Cost of materials and supplies consumed in construction is their cost at the places where they enter into constniction, including cost of transpor- tation and inspection. If officers and employees of an operating company are specially assigned to con- struction work, an equitable proportion of their salaries and expenses shall be cluirged to Plant and Equipment. No charges, however, shall be made to plant and equipment 11 accounts for merely incidental services of officers and employees whose time is regu- larly devoted to the operation and maintenance of the plant. 10. Plant and equipment in service January 1, 1915. — The cost or ledger value of plant and equipment on hand January 1, 1915, shall be charged to primary plant and equip- ment accounts Noe. 200 to 270, if such distribution can be acciuately made. If not possible to make such distribution, the entire cost or ledger value, or that portion which can not be distributed, shall be charged to account No. 290, "Plant and equipment in service January 1, 1915," until such time as the distribution may be possible. 11 . New construction. — When any new plant and equipment is constructed or other- wise acquired, the cost thereof shall be charged to the various primary plant and equipment accounts (Nos. 200 to 280) in accordance with the text of the accounts. 12. Ecconstruction. — Reconstniction (or extraordinary repairs) includes the fol- lowing: ^• (a) Restoring to an efficient or proper condition buildings, structures, or other units of property which have deteriorated. (6) Substituting, in order to maintain normal efficiency, new parts for old parts of continuous structures, such as pole lines, cables, wires, and cond,uits. (c) Restoring the condition of property damaged by storm, flood, fire, or other casualty. (d) Recovering salvage and removing retired or abandoned property in connection with above-mentioned work. Reconstruction should be taken into consideration in arriving at a rate of depre- ciation as explained in section 16. Care should be taken to see that ordinary current repairs as defined in section 14 are not handled as reconstruction. When plant and equipment is reconstructed and the property as reconstructed is of no greater use or capacity than was the original property the cost of reconstruction shall be treated as follows: Debit — To account No. 185, "Depreciation reserve," the amount carried there- in with respect to such property. To account No. 135, '^Materials and supplies," the value of salvage re- covered from original property. To accounts for operating expenses (Nos. 600, 610, or 640), the remain- der of the cost of reconstruction. Credit — To account No. 115, "Cash," or to other appropriate accounts, the cost of reconstruction. If the property as reconstructed is more useful or of greater capacity than was the original property the cost of reconstruction shall be treated as follows: Debit — To accounts for plant and equipment (Nos. 200 to 270). the excess cost of the property as reconstructed over the cost or ledger value of the origi- nal property. . To account No. 185, " Depreciation reserve, " the amount earned there- in with respect to the property reconstructed. To account No. 135, "Materials and supplies," the value of salvage recovered from original property. To accounts for operating expenses (Nos. 600, 610, or 640), the remain- der of the cost of reconstruction. Credit — To account No. 115, "Cash," or other appropriate accounts, the cost of reconstruction. When it is necessary substantially to reconstruct or to replace a major portion of any unit of property or any important section of a continuous structure, the cost shall be handled through the plant and equipment accounts; that is, the cost of the property removed or replaced shall be credited to the appropriate plant and equipment accounts and the new property shall be charged thereto. (See section 13, following. ) 12 13. Plant and equipment retired. — When any plant and equipment is destroyed, withdrawn, or otherwise retired from service for any cauee, the coet or ledger value of the property retired shall be written off as follows: Debit- To account No. 185, "Depreciation reserve,'* the amoimt carried therein with respect to the property retired. To account No. 135, "Materials and supplies," the value of salvage recovered from property . To account No. 640, ^' Other maintenance expenses," the remainder of the cost or ledger value of property and the expense of retirt^mont. In case an important piece of property or a considerable length of line is destroyed, withdrawn, or otherwise retired and not replaceart- necship, or association, accounts No. 160, "Capital stock," and No. 195, "Surplus," shall be omitted, •nd in lieu thereof an account entitled " Proprietor's account" shall be substituted. i It \ . , • ^ \ TEXT OF PLANT AND EQUIPMENT ACCOUNTS. For Class C Companies. Gkneral Note Appucable to all Plant and Equipment Accounts.— Articles of small value or of short life, or articles that are likely to be lost or stolen, shall not be charged to the plant and equip- ment accounts but shall be charged to the appropriate operating expense accounts. 200. Intangibles. Charge to this account the expense of organizing the company, the cost of franchises and patent rights, and the cost of other intangibles obtained by the company and used or useful in the operations of the company. 210. Land and Buildings. Chaige to tliis account the cost of land (other than right of way) and buildings used in telephone operations and operations incident thereto, and the cost of all permanent fixtures to such buildings. 220. Central Office Equipment. Charge to tliis account the cost of local and toll switchboards and appurtenances, main and intermediate frames, relay and coil racks, interior wires and cables, power apparatus, telephone sets used in the operating and terminal rooms, and other apparatus in the operating and terminal rooms; also the cost of furniture and fixtures in the operating and terminal rooms. 230. Station Equipment. Charge to this account the cost of equipment and apparatus on the premises of subscribers, patrons, and others. This account shall include telephone sets, private branch exchanges, booths and fixtures, inside wiring, and other apparatus, and the cost of installation. This account shall include the cost of telephone sets used by company's em- ployees, other than those in the operating and terminal rooms of central offices. 240. Exchange Lines. Charge to this account the cost of wire plant between the central office and the premises of subscribers, between central offices and pay stations, and between two central offices in the same exchange area. This account shall include the cost of right of way, poles, underground conduits, manholes, wires, cables, and fixtures. Note.— If lines are used for both exchange and toll service, the cost shall be charged to either account No. 240 (»- account No. 250, according to the principal use made of the lines. 250. Toll Lines. Charge to this account the cost of wire plant used in the transmission of toll messages between offices in different exchange areas. This account shall include the cost of right of way, poles, underground con- duits, manholes, wires, cables, and fixtures. Note.— If lines are used for both exchange and toll service, the cost shall be charged to either account No. 240 at account No. 250, according to the principal use made of the lines. (21) 22 260. General Equipment. Charge to this account the cost of automobiles, wagons, horses, shop machinery, toola and implements, ofl&ce furniture and fixtures (other than in operating rooms and terminal rooms), and other equipment of the company not covered by accounts Noe. 220 and 230. 270. Undistributed Construction Expenditures. Charge to this account expenditures made in the construction oi^cquisition of plant and equipment when such expenditures can not be assigned to anv of the accounts Nos. 200 to 260. This account includes expenditures made during the construction period for engineering and law expenses, taxes, insurance, interest, and other incidental construction items which can not properly be charged to any other plant and equipment account. When any such expenditure can be assigned to any spe- cific item of plant or equipment it shall be charged to the account appropriate for such specific item. 280. Plant and Equipment Purchased. When a going or completed telephone plant is purchased or constructed under contract, the cost thereof shall be charged to this account until such time as a basis may be determined upon for distribution of the cost over accounts Nos 200 to 270. 290. Plant and Equipment in Service January 1, 1915. To this account shall be charged the amounts carried in the company's books on January 1, 1915, representing the plant and equipment installed prior to and iu service on that date, until such time as it is possible to distribute such amounta over accounts Nos. 200 to 270. 1 ' « i TEXT OF INCOME ACCOUNTS. For Class C Companies. 300. Telephone Operating Revenues. This account shall include the total operating revenues derived from the tele- phone operations for the year. To this account shall be credited the total of amounts carried in the priraar>' o]>erating revenue accounts (Nos. 500 to 540). 310, Other Operating Revenues. If the company conducts operations other than telephone operations, such as lighting, water, power, or manufacturing plants, the revenues accruing from such operations shall be credited to this account. This account includes the revenues from property the investment in which is carried in account No. 105, ** Other property." 320. Miscellaneous Income. Credit to this account all revenues accruing to the company other than those obtained through telephone or other operations. This account shall include— Interest receivable from others on mortgages, bonds, notes etc Dividends receivable from other companies on securities owned Rents receivable from plant leased to others and not used in part by the com- pany in Its telephone operations, such as an entire exchange system, an important secUon of pole lines, etc. e .y » * Other similar items of income. Charge to this account any expenses incurred that are directly assignable to the revenues which are credited to this account, such as expense of maintenance of plant leased to others, expense of procuring interest and dividends and similar charges. ' 330. Telephone Operating Expenses. This account shall include the total operating expenses of the telephone opera- tions for the year. To this account shall be charged the total amounts carried in the primary operating expense accounts (Nos. 600 to 680). 340. Other Operating Expenses. If the company conducts operations other than telephone operations, such as Ughtmg, water, power, or manufacturing plants, the expense of maintenance and operation shall be charged to this account. This account includes the expenses of and taxes on property the investment in which is carried in account No. 105, "Other property." 350. Taxes. Charge this account with the amount of all taxes assessed against the telephone property, operations, or privileges of the company. Taxes paid in advance of the period to which they apply shall be charged to account No. 145, "Prepay- naents/' and as the term expires for which the taxes apply this account shall be charged and account No. 145 shall be credited. Taxes accrued in advance of their actual payment shall be charged to this account and credited to account No. 180, "Accrued liabilities not due " When payments become due the latter account shall be charged and the cash or other accounts affected shall be credited. (23) Ill> 24 360. Interest Accrued. Charge to this account interest on bonds, mortgagee, notes, and other interest- bearing obligations, and interest on open accounts. No interest shall be charged on securities issued or assumed by the company and held by or for it. 370. Miscellaneous Charges to Income. Charge to this account all expenses accrued or payments made which apply to the transactions of the year and which are not chargeable to Operating Expenses or to the preceding income debit accounts. This account shall include — Rents payable for plant and equipment leased, such as an entire exchange sys- tem, an imj)ortant section of pole lines, etc., but not including minor rents which are provided for in account No. 680. Losses not properly chargeable as operating expense. Uncollectible bills. Other similar items. 380. Dividends Declared. Charge this account with the amounts of dividends declared on outstanding capital stock of the company. If a dividend is payable in anything other than money, such tiling shall be fully described in the entrj-. No dividends shall be charged on capital stock issued by the company and held by or for it. TEXT OF OPERATING REVENUE ACCOUNTS. For Class C Companies. i 600. Exchange Revenues. Credit to this account all revenues accrued from the transmission of local mes- sages within the same exchange area. An exchange area is the area referred to and usually described in contracts with subscribers as that within which local service is fiuniished at rates specified in such contracts. This account shall include — Rentals from subscribers for local and rural service. Rentals from private branch exchanges. Charges for extension stations and extension bells. Chaises for extra mileage in circuits to subscribers' stations. Chaises for extra directory insertions. Installation and cancellation charges when billed against subscribers. Revenues from public pay stations for calls within the exchange area. Charges for switching calls for farmer lines. Rents from attachments to exchange poles, and other rents for exchange property. Otner revenues accruing from exchange operations. Charge to this account discounts allowed to subscribers for prompt payment, corrections of overcharges, authorized refunds on account of failures in transmis- sion, and other corrections affecting exchange revenues. 510. Toll Revenues. Credit to this account all revenues derived from the transmission of messages between points in different exchange areas. This account shall include — Revenues from messages transmitted wholly over the company's lines be- tween points in different exchange areas, whether from subscribers or pay stations. Company's proportion of revenues on messages transmitted partly over the company's Imes and partly over lines of other companies (sometimes termed mileage). Commissions allowed the company by others for switching or handling toll messages within the exchange area or for originating such messages. R^nts from toll lines leased to brokers or others, including telegraph com- panies. Rents from attachments to toll poles, and other rents from toll property. Other revenues accruing from toll-line operations. Charge to this account corrections of overcharges, authorized refunds on account of failures in transmission, and other corrections affecting toll revenue. 620. Miscellaneous Revenues. Credit to this accoimt all revenues accrued from telephone operations other than those provided for in accounts No. 500, "Exchange revenues,'* and No. 510, . ' ' Toll revenues . ' ' This account shall include— Revenues from messenger service. Revenues from advertisements in directories. Charges to telegraph companies for making collections and for other services (not transmission charees). Rents from propertv used in part in the company's telephone operations other than tbbse provided for in accounts Nos. 500 and 510, such as rent of offices, storerooms, and teams. Profit on sales of materials and supplies. Other miscellaneous operating revenues. (25) I 26 530. Licensee Revenues — Cr. Wlien a telephone company grants to another telephone company the use of its patents or furnishes instruments and equipment and general supervision under an agreement for apportioning the revenues of the licensee, the proportion accru- ing to the licensor shall be credited by the licensor in this account. 540. Licensee Revenues — Dr. When a telephone company is granted by another telephone company the UM of its patents, or is furnished instruments and equipment and general supervision under an agreement for apportioning the revenues of the licensee, the proportion accruing to the licensor shall be charged by the licensee in this account. f ► f 1 TEXT OF OPERATING EXPENSE ACCOUNTS. For Class C Companies. 600. Repairs of Wire Plant. Charge to this account the cost of repairs of all exchange wire plant and toll wire plant, such as poles, conduits, manholes, wires, cables, and fixtures. (See section 14, page 12.) 610. Repairs of Equipment. Charge to this account the cost of repairs of central office equipment and station equipment, whether in the central office operating rooms and terminal rooms or on subscribers' premises, such as switchboards, main and intermediate frames, relay and coil racks, interior wires and cables, power apparatus, telephone sets, private branch exchanges, and booths and fixtures; also furniture and fixtures in central office operating and terminal rooms. (See section 14, page 12.) (J20. Station Removals and Changes. Charge to this account the cost of removing or changing the location of station equipment. When stations are removed (not merely changed in location) the original cost of the instruments and the cost of installation (estimated if not known) shall be credited to account No. 230, *' Station equipment"; the value of the instruments and other material recovered shall be charged to accoimt No. 135, " Materials and supplies"; and the cost of removing, the original installation cost, and any loss of material, such as the cost of interior wire not recovered, shall be charged to this account. When stations are clianged from one location to another, charge this account with the cost of moving. Credit this account with amounts charged to sub- scribers for moves and changes. 630. Depreciation of Plant and Equipment. Charge to this account monthly or annually the estimated amount of deprecia- tion accruing in the plant and equipment. (See section 16, page 12.) 640. Other Maintenance Expenses. Charge to this account the cost of repairs of land, buildings and fixtures, auto- mobiles, wagons, tools and implements, and office furniture and fixtures; also other maintenance expense not provided for in the repair accounts. (See section 14, page 12.) WTien any plant or equipment is destroyed, withdrawn, or otherwise retired from service for any cause this account shall be charged with such portion of the cost or ledger value of such property (less salvage) as has not been provided for in account No. 185, *' Depreciation reserve." (See section 13, page 12.) 650. Operators' Wages. Charge to this account the pay of chief operators, supervisoss, local and toll switchboard operators, information operators, and all other operators employed in central offices; also pay of operators at pay stations. (27) 28 660. Other Traffic Expenses. Charge to this account the cost of power purchased, cost of labor and supplies iu operating power plant, cost of renewing batteries, pay and expenses of messen- gers, and other expenses in connection with the operations of central offices and public pay stations. 670. General Office Salaries. Charge to this account the salaries of general officers of the company and the salaries of other officers and employees whose salaries are not chargeable to any of the preceding expense accounts. 680. Other General Expenses. Chaise to this account all general expenses other than general office salaries. This account shall include the cost of — Office supplies and exj)en8e8. Stationery and printing (including postage). Traveling and incidental expenses of general officers and employees of gen- eral ofhces. Advertising. Preparing, printing, and distributing directories. Pay station commissions. Rents for general offices and central offices, pole attachments, and other minor rents, not including those paid for lease of entire telephone plants. (See account No. 370.) Insurance. Law expenses. Accidents and damages. Other general expenses. Note.— The entries in this account shall be made in siitflcient detail tu permit an analysis in th« reports to the Interstate Commerce Commission. ^ • INDEX TO THE SYSTEM OF ACCOUNTS. Roman numerals refer to the general instructions; Arabic numerals to the several accounts. Abandoned property. (See Retired property.) Accidents, expense due to, 680. (See also Casual- ties.) Accounting expense, viii. Accounts; accounts receivable balances, 130; inter- est receivable on, 130; accounts payable balances, 175; interest payable on, 360. Accrued liabilities not due; liability balances, 180; tax credits and charges, 3^. Adjustments of balance-sheet accounts, 195. Advances. (See Prepayments.) AdvMtising; revenue from directory advertising, 620; expense for, 680. Agents, balances due from, 125. Attachments to poles; rent receivable from, 500, 510; rent payable for, 680. Automobiles; investment, 260; repair expense, 640. Balance sheet; definition, iv; account8, 100-195. Bank deposits, asset balances of, 115. Battery renewal expense, 660. Bells, extension, revenue from, 500. Bills; accounts receivable balances, 130; accounts peyable balances, 175; income charges for uncol- lectible bills, 370. Bonds; asset balances for bonds owned, 110; bond discount balances, 150; funded debt liability, 165; bond premium balances, 190; interest receivable on, 320; interest payable on, 360. Booths and fixtures; investment, 230; repair expense, 610. Brokers' leased lines, rents receivable from, 510. Buildings; cost of restoration when deteriorated, xii; investment not used for telephone op«-a- tlons, 105; investment used for telephone opera- tk>ns, 210; repair expense. 640. Cables; reoonstructk>n costs, xii; interior cable investment, 220; outside cable investment, 240, 250; outside cable repairs, 600; interior cable repairs, 610. CanceUatfon charges, revenue from, 500. Capital stock; disooant balances on, 150; liability balances, 160. Guh; current balances, 115; cash in special funds, 140. Ossualties; reoonstructbn costs due to, xii; repair costs due to, xiv; depreciatk>n charges due to, xvi. Central offices; equipment investment, 220; equip- ment repairs, 610; pay of operators, 650; other trafBo exposes, 660; rents payable for, 680. Changes; of plant location, xiv; of subscribers sta- tions, 620. Chief operators, pay of, 650. Circuit rearrangements included in repairs, xiv. | (29) Classes of telephone companies, i. Classifications of accovmts; application of, i; list of,ii. Cleaning apparatus, repair charges for, xiv. Clearing line troubles, repair charges for, xiv. Coil racks; investment, 220; repair expense, 610. Collections; expense for revenue collection, viii; revenue from telegraph collections, 520. Commissions; received from switching and handling toll messages, 510; paid in connection with pay stations, 680. Conunon stock liability, 160. Conduits; reconstruction costs, xii; investment, 240, 250; repair expense, 600. Construction. (See Plant and equipment.) Cost, definitions of, ix, xv. Cross arms, repair charges for straightening, xiv. Damages; charges assignable to reconstruction, xii; charges assignable to operating expense, 080. Debt. (See Accounts, Funded debt, Notes.) Deficit from operations, 195. Deposits; current and special deposit balances, 115; interest receivable on, 130; subscribers' deposit balances, 190. Depreciation; definition and accounting, xvi; de- preciation fund assets, 140; depreciation reserse liability, 185; charges to operating expense, 630. Directories; prepaid expense balance, 145; revenue from extra insertions, 500; revenue from adver- tisements, 520; preparing, printing, and distrib- uting, 680. Discoimts; asset balances on securities sold, 150; allowances to subscribers for prompt pajTnent, 500. Distributing frames, repair charges for work on, xiv. Dividends; deposits to meet payments, 115; imcol- lected balances of dividends receivable, 130; un- paid balances of dividends declared, 175; incomi credits for dividends receivable and debits for collection expense, 320; income debits for divi- dends declared, 380; dividends disallowed on company stock owned, 380. Drafts; drafts receivable balances, 120; drafts pay- able balances, 170. Employees. (See Pay, Personal expenses.) Engineering expenses assignable to investment, 270. Equipment; repair charges for minor replacements, xiv; investment for central offices, 220; invest- ment for stations, 230; general equipment invest- ment, 260; revenue credits and debits for use by licensee, 530, 540; repair expense for central offices and stations, 610; repair expense for general equip- ment, 640. (See also Plant and equipment.) 30 1 Exchange area; definition of, 500; revenue from ex- change service in, 500; revenue from toll switching and handling in, 510. Exchange lines; investment, 240, 240 note; repair expense, 600. Exchange revenues, credits and debits to, 500. Exchange systems; allocation of items to, ill; defi- nition of, ili; rents receivable from lease, 320; rents payable for lease, 370. Expenses. (See Operating expenses. Personal ex- penses.) Extension stations and bells, revenue from, 500. Extraordinary repairs considered as reconstruc- tion, xii. Fanner lines, revenue from switching for, 500. Fees; inclusion in cost of labor, ix; inclusion in cost of repairs, xv. Fire damage, reconstruction charges to cover, xii. Fixed capital accounts. (See Plant and equip- ment.) Fixtures; buildings fixtures, 210, 640; operating and terminal room fixtures, 220, 610; booth fixtures, 230, 610; line fixtures, 240, 250, 600; office fixtures, 260, 640. Flood damage, reconstruction charges to cover, xii; depreciation charges for, xvi. Foremen of repair gangs, pay of, xv. Frames; repair charges for work on distributing frames, xiv; investment in main and Intermediate frames, 220; repair expense on main and interme- diate frames, 610. Franchise costs assignable to investment, 200. Fimded debt; liability, 165; interest payable on, 360. Fimds; special depreciation funds unrequired, xvi; advances for working funds, 130; special ftmd balances, 140. Furniture; in operating and terminal rooms, 230, 610; in offices, 260, 640. General equipment; investment, 260; repair ex- pense, 640. General expenses; for salaries, 670; other than for salaries, 680. General officers; i>ay of, 670; traveling and incidental expenses of, 680. General offices; pay of office force, 670; supplies and expenses, 680; traveling and incidental expenses of office force, 680; rents payable for, 680. Guys and guy stubs, repair charges for work on, xiv. Horses; investment in, 260; revenues from rent of teams, 520. Implements. (See Tools.) Inadequacy, depreciation charges due to, xvi. Income; deflinition of accoimts, vi; annual closing of accounts, vi; accrued income balances not due, 150; accrued income charges not due, 180; net in- come closed into surplus, lyS; operating income, 300, 310; miscellaneous income, 320; charges against income, 330-380. Information operator, pay of, 650. Inspection cost included in cost of matMiab and supplies, ix. Installation of stations; costs charged to investment, 230; revenue credits, 5'{ce revenue, 520; pay and expenses, UiO. 31 I .» i lOlsage; charges for siibscribers' extra mileage, 500; mileage payments from other companies, 510, MisceUaneoas chaiges to Income, 370. Miscellaneous Income, 320. lOaoeUaneous revenues, 520. Mortgagoe; asset balances for mortgages owned, IIC; interest raoeivable on, 130, 320; mortgage liabil- ity, 165; interest payable on, 360. Notes; asset balances for notes owned, 110, 120; note liability, 165, 170; interest receivable on, 320; interest payable on, 360. Obsolescence, depreciation due to, xvi. Officers; pay, 670; traveling and incidental ex- penses, 680. Offices; ftimiture and fixtures investment, 260; revenue from rents of, 520; furniture and fixtures repairs, 640; supplies and expenses, 680; rents payable for, 680. (See also Central offices.) Operating exi>enses ; allocation of items to exchange and toll service, iii; definition, viii; transfer of totals to income, viii; charges prepaid, 145; diarges representing accrued liability, 180; charges for minor articles of plant and equipment, general note (p. 21); income debits for expenses, 330, 340; maintenance expense, 600-640; traffic expense, 6iX), 660; general expaise, 670, 680. Operating revenues; allocation of items to exchange and toll service, iii; definition, vii; transfer of totals to income, vii; due from agents and others, 125; income credits for revenues, 300, 310; mes- sage revenue, 500, 510; miscellaneous revenue, 620; licensee revenue, 630,540. Operating room equipment; investment, 220; re- pair expense, 610. Operators* wi^es, 650. Organization expense included in investment, 200. Other property; asset balances, 105; revenues from, 310; expenses for, 340. Overcharge corrections, 500. 510. Patents; costs charged to investment, 200; revenue debits and credits for use by licensees, 530, 540. Pay; of operating officers and employees assigned to construction, ix; inclusion in cost of repairs, XV ; of central office and pay station operators <160; of general and other officers and employees, •70. Pay stations; revenue from, 600; pay of operators, WO; other traffic expenses, 660; commissions in connection with, 680. Personal expenses; Inclusion in Investment cost of labor, Ix; Inclusion in cost of repairs, xv; assign- able to general opo^ting expense, 680. Plant and equipment; allocation of items to ex- change and toll service, iii; definition of accounts, v; definitions of plant and equipment costs, Ix; accounting for property In service Jan. 1, 1915, x' 290; charges for new property, xi; accounting for reconstruction, xii; accounting for retirements, xUi; asset balances, 100; exclusion of minor prop- erty items, general note (p. 21); distributed ex- penditures, 200-260; undistributed expenditures, 270; clearing accounts, 280, 290; depreciation charges, 630. Pole line; reconstruction costs, xii; rent receivable for leased portions, 320; rent payable for leased portions, 370. (See also Lines.) Poles; repair charges for straightening, xiv; invest- ment, 240, 250; rents receivable from attach- ments, 500, 510; repair expense. 600; rents paya- ble for attachments, 680. Postage included in general operating expense, 680. Power plant (not for telephone operation); invest- ment, 105; revenues, 310; maintenance and opera- tion, 340. Power plant (telephone operation); power appara- tus investment, 220; power apparatus repairs, 610; cost of power purchased, 660; cost of power plant operation, 660. Preferred stock liability, 160. Premium on securities sold, liability for, 190. Prepayments; asset balances, 145; tax charges and credits, 350. Printing included in general operating expense, 680. Private branch exchanges; investment, 230; reve- nue from rentals, 500; repair expense, 610. Privileges, taxes on, 350. Profit and loss. (See Surplus account.) Property. (See Other property, Plant and equip- ment.) Proprietor's account in balance sheet, 160 note, 195 note. Purchased plant and equipment, 280. Purchased power, cost of, 660. Racks, relay and coil; investment, 220; repair ex- pense, 610. Rearrangement of plant, repair charges for, xiv. Reassociation of party lines, repair charges for, xiv. Receivers' certificates, liability for, 165. Reconstruction; definition and accounting, xii; charges against depreciation^reserve, xvi, 185; special funds, xvi. Refunds; of exchange revenues, 500; of toll reve- nues, 510. Relay racks; investment, 220; repair expense, 610. Relocation of plant; inclusion in repair expense, xiv; changes of stations, 620. Rentals from exchange service, 500. Rents (payable); asset balances of prepayments, 145; unpaid accrual balances, 180; for plant leased from others, 370; included in operating expense 680. Rents (receivable); from plant leased to others, 320; from pole attachments, 500, 610; from exchange property, 500; from toU property, 510; from offi- ces, storerooms, teams, etc., 520. Repairs; extraordinary repairs classed as recon- struction, xii; accounting for current repairs, xiv; definition of repair costs, xv; wire plant repairs, 600; equipment repairs, 610; repairs of land, buUdlngs, and general equipment, 640. Replacements; of major or important portions of property, xii; of minor parts, xiv. Reserve fimds; reconstruction funds unrequired xvi; fund assets, 140. Reserves; charges to depreciation reserve at recon- struction, xii; charges to depreciation reserve at retirements, xiii; depreciation reserve liability xvi, 185; reserve liability other than for deprecia- tion, 190. 32 !| Retired property; cost of removal for reconstruc- tion, xii; accounting for retirement, xiil; cost of removal for repairs, xtv; charges to depreciation reserve, 185; charges to operating expense, 640. Revenues . ( See Operat tag revenues . ) Right of way tavestment; for exchange Itaes, 240; for toU Imes, 250. Rural service, revenue from, 500. Salaries. (See Pay.) Salvage; recovery cost at reconstruction, xii; debits to materials and supplies at reconstruction, xii; debits to materials and supplies at retirements, xiii, 135; recovery cost at repairtag, xiv; salvage deduction from cost of repairs, xv. Securities owned; asset balances for securities owned, 110; interest receivable on, 130; asset balances for securities m special funds, 140; in- come from securities owned, 320; taterest dis- allowed on company securities owned, 3fiO; divi- dends disallowed on company stock owned, 380. Service billed in advance, liability for, 190. Shop machmery, tavestment ta, 260. Smktag funds. (See Reserve funds.) Special deposits, cash balances ta, 115. Special funds; depreciation fund unrequired, xvi; fund assets, 140. Stationery tacluded ta general operating expense, 680. Stations; tavestment ta station equipment, 230; exchange revenue from, 500; repair expense, 610; removals and changes, 620. (See also Instru- ments, Telephone sets.) Stocks; asset balances for stocks owned, 110; stock discount balances, 150; capital stock liability, 160; stock premium balances, 190; dividends receiv- able on, 320; dividends payable on, 380. Storerooms, revenue from rent of, 520. Storm damage, reconstruction cliarges to oover, xii; depreciation charges for, xvi Subscribers; balances due from, 125; liability for deposits of, 190; tavestment ta subscribers' sta- tion equipment, 230; revenue from rentals and charges paid by, 500; repcdrs to subscribers' sta- tion equipment, 610. Supertatendents of repair gangs, pay of, xv. Supervision; taclusion ta operating expenses, viii; taclusion ta cost of repairs, xv; services covered by licensee agreements, 530, 540; pay of supervisor operators, 650. Supplies; for power plant operation, 660; for offices, 680. (See also Materials and supplies.) Surplus account, balances ta, 195. Switchboaids; inTwtnunt, 230; repair expouM, 610; wages of operaton, 65a Switching revenues; exchange switching for fanner Itaes, 500; Bwitchtag of toll messages, 510. Taxes; asset balances of prepayments, 145; unpaid accrual balances, 180; taxes assignable to invest- ment, 270; on property not used tn telephone (^teratioDs, 340; on telephcoe property, opera- tions, and privileges, 350. Teams, revenue from rent of, 520. Telegraph companies; rents from lines leased to^ 510; charges for coUaotiflBa made for, 520. Telephone seta; inveatmant In central office sets, 220; investment in station sets, 230; repair ex- pense, 610. (See also Instruments, Stations.) Termtaal room equipment; investment, 220; repair expense, 610. Testing for troubles, repair charges for, xiv. Toll lines; investment, 250, 250 note; rents from lease of, 510; repair expense, 000. ToU systems; allocation of items to. Hi; definitioa of, ill; revenue Mm, 510. Tools; invebtment, 260; repair expenaa, (M. Traffic expense, AfiO, 660. Transportation ooats; inclusion in cost of materlala and supplies, ix, 135; indosion in cost of repaiia, XV. Traveling arpansea of gwaral ofAoers and em- ployees, 680. Tree trimming, repair charges for, xiv. Troubles, repair charges for correcting, xiv. Uncollectible biUs, income charges for, 370. Undistributed conatmotion expenditures, 270. Vouchers audited, liability balances for, 175. Wages. (See Pay.) Wagons; investmeont, 260; repair exjMnse, 640. Water plants not used in telephone operations; in- vestment, 106; revenues, 310; maintcnanoa and operatian, 340. Wear and tear, depreciation charges for, xvL Wire plant; reconstructioD costs for, xii; exchange plant investment, 240; t<^ plant Investment, 250; repair txpmmt, 600. Wires; repair (diarges for correcting troubles, xiv; repair charges for rearranging, xiv ; interior wiring investment, 220, 230; outride wiring investment, 240, 250; repair of outside wiring, 600; repair of taterior wiring, 610; interior wire abandoned in removals, 620. Working fund asset balances, 130. A1»I»E]VI>IX:. ♦ BOOKKEEPING SYSTEM. Suggested for Small Telephone Companies. The bookkeeping system here described is suggested for the use of small telephone companies. It is offered as an aid in the keeping of a set of books that will meet the accounting needs of such companies, and that, in the case of those companies subject to the jurisdiction of the Interstate Conmierce Conmiission, will .comply with the requirements contained in the Uniform System of Accounts prescribed for them by the Ck)mmis8ion. The use of this bookkeeping system, in whole or in part, is not obligatory, and companies may adopt, for the present, any other bookkeeping system desired by them if the one chosen will produce the results required by the System of Accounts. GENERAL INSTRUCTIONS. Double entry.— The double-entry method should be used in keeping the accounts of a company. The essential principle of double-entry bookkeeping is that for ever>' debit there must be a corresponding credit. Care should be taken to distinguish between debits and credits representing assets and liabilities and those representing revenues and expenses. The former are called balance-sheet accounts, and, taken together, present a statement of the condition of a company's business at any given time. The latter cover the operations of a company and at the end of the year are closed through the income accounts into balance-sheet account No. 195, "Surplus." ACCOUNTING FORMS. Becord forms. — ^Printed forms of several kinds are suggested for use in keeping accounting records. The use of each form is explained separately under its proper head and model forms are given with certain entries thereon to indicate further their use. The full list of suggested forms is as follows: Form 1. — General ledger. Form 2. — Subscribers ledger. Form 3. — Cash-journal. Form 4. — Voucher record. Form 5. — Voucher. Form 6. — Subvoucher. Form 7.— Check. Form 8.— Subscriber's bill. Form 9. — Daily work report. Form 10.— Payroll. Form 11. — Stock record. The copies of the recommended forms, as given herewith in reduced size, show the headings and arrangement of columns. Italic letters to indicate specific columns are inserted to permit reference thereto in the explanatory text, but these letters form no necessary part of the forms. The forms here described are considered necessary for proper accounting by small companies. It may be desirable to use additional forms or expand the forms here suggested, in order to provide additional information or to meet local conditions. It may be said also that the forms here suggested are intended merely for the account- ing needs of the companies, and that other forms will probably be needed to show location and kinds of plant, records of traffic conditions, employees' records, and other statistical information. Oeneial ledger (Porm 1).— The ledger is a general record in which items are assem- bled in the respective accounts to which they relate. It presents a summary of all (33) 1. 34 business transactions classified under appropriate heads. For each debit made to an account in the ledger a corresponding credit should be made to some other account, and for each credit entry a corresponding debit should be made. All entries made in the general ledger should come from the cash-joiuiial. Ijcdger accounts should be provided for each of the balance-sheet accounts which may be applicable to the company's business. WTiere the title and definition of a balance- sheet account clearly indicate that it is a summary of other ledger accounts it is not necessary that a distinct ledger account be provided for the summary. For example, account No. 100, " Plant and equipment," is a summary of accounts Nos. 200 to 290, inclusive; therefore, since ledger accounts are provided for accounts Nos. 200 to 290, it is not necessary to provide on the books an account for No. 100. Ledger accounts should be similarly provided for each of the plant and equipment, income, operating revenue, and operating expense accounts in so far as the business requires. Subscribers ledger (Form 2). — ^The subscribers ledger is a book of original entry. It should contain a complete record of all revenues accruing from subscribers and other patrons for services, as well as a record of collections made. When a telephone is installed the information called for by columns a to f and column g should be entered immediately. The revenue due for each month should be entered monthly in columns i to ib and the total extended to column /. At the end of the month the columns i to / should be footed and an entry should be made in the cash- journal to cover (see entry No. 2) the totals of columns i, j, and k. As the collections are made they should be posted in colimins m and n. The total of such collections for each day, or for the period for which settlements are made with collectors, should be covered by an entry in the cash-journal (see entry No. 3). If any allowances are made on account of failures in service, or for any other lawful reasons, the amount allowed in each case should be entered in coliman o, "Allow- ances." The total of such allowances for each month should be charged by entry in the cash-journal to the revenue account (No. 500, 510, or 520) to which they relate and credited to account No. 125, "Due from subscribers and agents." (See entry No. 4.) When service is paid for in advance the full amount of the payment should be entered in column n, "Paid— Amount," and the balance applicable to future months should be carried forward in red ink to the next succeeding month in column p, "Balance due." If this balance, as brought forward, is more than enough to cover the month's bill, a red-ink entry should be made of the amount due subscriber in column I, "Total due," and a like amount carried to column p of the next month and so on until the pre- payment is exhausted. (See fifth item on Form 2.) Great care should be exercised in posting the subscribers ledger, and the totals should be drawn off each month and proved. This may be done by taking off the totals as follows: Debit balance at beginning of month (black-ink entries in column h). $26. 75 Exchange (column t) 24. 00 Tolls (column j) 6.00 Miscellaneous (column k) 1. 00 Total 57.75 Less: Credit balance at beginning of month (total of red-ink entries in column h) $7. 00 Amount paid (column tj) 32. 45 Allowances (column o) 3. 25 Total 42.70 Difference 15.05 I 35 The difference should equal the difference between the total debits and total credits carried forward in column p for the next month. The form of subscribers ledger is designed for companies assessing and collecting revenues monthly. If revenues are assessed quarterly or by any period other than monthly the ledger may be prepared to fit the particular case. Cash-journal (Form 3). — The cash-journal is a combination of the cash book and the journal and in it are recorded all the transactions which are later posted to the general ledger. The first three colimuis (a, 6, and c) are intended for debits and the last three col- umns (d, e, and,/} are intended for credits. Following the principle of double-entry bookkeeping, for each debit entered in any one or all of the first three columns there should be an equal credit entry in any one or all of the last three columns. In column a, * * Cash, ' ' should be entered the amount of all cash received . This may be done for each item of cash received, or, if a proper supplementary record is kept, it may be posted by totals. F'or example, if the collections as received are posted in the subscribers ledger, the collections for the day, or other period for which settlement is made with collector, may be posted in one entry in the cash-journal. In column 6, "Accounts payable," should be entered the amounts of checks issued in payment of vouchers, a corresponding credit entry being made in colimm /, "Cash." Such items may be entered individually or by days or other periods. In column c, "Sundries," should be entered all other debits. This will include the debit side of adjusting entries, and other entries not covered by cash or vouchers, such as depreciation charges, accruals of taxes, accruals of interest, etc. The column marked \/ is the posting column. In it should be entered the nimiber of the page in the general ledger in which the item is posted, or a check mark should be made to show that nothing has been omitted, as in the case of posting from totals of columns a, 6, e, and/. In column headed "Particulars" should be entered suffi- cient detail to explain fully every transaction. In column d, "Sundries." should be entered all credits excepting those provided for by columns e and /. In the usual cases these entries will be the corresponding credits for the debits entered in column c. In column e, "Due from subscribers and agents." should be entered all amounts collected on accounts carried in the subscribers ledger (Form 2), corresponding debits being entered in column a, "Cash." These items may be entered individually, but it is preferable that they be entered daily or for some other period. For the purpose of accounting for the collections by days or other periods, stubs to the subscribers' bills or daily or periodical statements of collections may be used. The items in columns c and d, "Sundries," should l)e posted indiyidually to the debit or credit of the general ledger accounts affected. They may be posted from time to time during the month, or at the end of the month. The totals of columns a and /should be posted monthly to the debit and credit sides, respectively, of general ledger account No. 1 15, "Cash." The total of column 6, "Accounts payable," should be debited monthly to general ledger account No. 175, "Accounts payable." The total of column e, "Due from subscribers and agents," should be credited monthly to general ledger account No. 125, "Due from sub- scribers and agents. ' ' The entries in the cash-journal are to be made daily in the order in which they occur. The cash-journal is to be footed and closed out at the end of each month and started anew at the beginning of the next month. If the books have not heretofore been kept by the double-entry system and if a more correct record is not at hand an appraisal should be made of all the assets and 1 labilities, including the plant and equipment. A statement based on the assets and liabilities should be prepared from such appraisals or records obtainable and the difference between the total assets and the total liabilities should be carried to account No. 195, 36 'Surplus." An opening entry should be made in the cash-journal based on such statement. Entry No. 1 on the cash-journal is given as an example of such an entry. Voucher record (Form 4). — The voucher record is designed for the keeping of a com- plete record of all obligations incurred and of disbursements made, without the keeping of a separate ledger account with each creditor. It also provides an easy method of making charges to the accounts ai'fected. All vouchers should be entered on the voucher record in numerical order in the month in which the voucher is made, regardless of whether it is the intention to pay them during the month or at a later date. The total amount of the voucher should be included in column * * Amount of voucher ** and distributed over the various columns according to the headings of the columns. Separate columns are provided for the operating expense accounts, the plant and equipment accounts, and other accounts which may be used frequently. A mis- cellaneous column is provided for entries to accounts which are not often used. The voucher record should be footed monthly and an entry should be made in the cash-journal (see entry No. 5). As checks are issued in payment of vouchers they should be entered in the voucher record in the column "Paid. " As the total of vouchers issued u'ill be posted through the cash-journal to the credit of account No. 175, "Accounts payable," and as the total of the checks issued are debited to the same account, the balance in this account in the general ledger should show, when the postings are made, the amount of vouch- ers unpaid. A possible exception to the foregoing may be the amounts carried to account No. 175 when the books of the company are opened, for which amounts no vouchers may have been issued (see entry No. 1 on Form 3). Voucher (Form 5). — Vouchers should be made to cover all expenditures of moneys. They should be prepared as soon as purchases are made or expenses are incurred. TTie voucher should show all the information called for on the form. In the column headed " Particulars" should be entered sufficient detail to explain fully the purpose for which the voucher is is8ueended. Check (Form 7). — The check is in the form of the usual commercial bank check. A special form may be adopted but the usual form of check will answer the purpose. <^ i, 37 The vouchers are issued and put through the books as soon as any bill or exi)ense accrues. Checks should be issued as the vouchers are paid. A separate check may be issued for each voucher or, when two or more vouchers are issued for the same person, one check may be issued for the total amount of the vouchers. If employees are paid by check, the requisite number of checks may be issued for the one voucher covering the payroll. An entry covering the checks issued should be made in the cash- journal, charging account No. 175, "Accounts payable," and crediting account No. 115, "Cash." Sep- arate entries maybe made for each check, or entries maybe made for the totals by days or other periods. (See entry No. 6 on Form 3.) Subscriber's biU (Form 8).— This is a form of bill to be made to subscribers show- ing charges for exchange, toll, and other services. The subscribers ledger should be first posted and the bills prepared from the subscribers ledger. The toll charges should be listed on the back of the bill and the total transferred to the space provided on the face of the bill. Messenger service, telegrams, and other charges may be included on the blank line on face of the bill. If desired, separate bills may be provided for exchange and for toll service. The bill may be provided with a stub to be detached when bill is paid and used for posting, or posting may be made from the collector's or cashier's reports of collections. Daily work report (Form 9).— In order to distribute properly the pay of employees which is chargeable to various accounts and to account properly for materials and supplies used, it is necessary to keep a record of the time devoted to and the mate- rials and supplies used on particular jobs. This is especially desirable when an employee devotfes part of his time to construction, the cost of which is chargeable to Plant and Equipment, and part to repair work, which is chargeable to Operating Expenses. Form 9 may be used by a small company employing one man to do practically all the work, or, if desirable, in such cases the time may be distributed on an estimated basis. The daily work reports may be used as a basis for prepar- ing the payrolls and for distributing the pay of employees on the vouchers cover- ing the payrolls. (See payroll. Form 10.) The materials and supplies shown on the work reports should be tabulated at the end of each month and an entry made in the cash-journal crediting account No. 135, "Materials and supplies," and charging the accounts benefited. (See entry No. 7 on Form 3.) Payroll (Form 10).— The payroll is provided for recording the salaries and wages of all employees, however employed. This form of payroll is provided for companies making payments semimonthly. In case payments are made by other periods the form should be amended to suit the conditions. Vouchers should be prepared to cover the total of the payrolls for each period, and the expense should be distributed to the various accounts on the voucher. The distribution may be made direct from the payroll when practicable, but if the employee's time is split up among various classes of work it will be necessary to prepare the distribution from the daily work reports (Form 9). If payment is made by check, separate checks should be issued for each employee. If payment is made in cash, the voucher can be dravm in favor of the paymaster or cashier and one check issued in his favor for the entire amount. (See voucher No. 4 on Form 4.) The employee's receipt for pay may be obtained on the payroll in space provided for that purpose or a separate receipt from each employee may be taken on a sub- voucher (Form 6). If the latter plan is adopted, the subvouchers should be filed with the payroll and voucher. Stock record (Form 11).— This form is designed to keep a record of materials and supplies on hand, by quantities and values. A separate record should be kept for each commodity. 38 When purchaoee are made they should be recorded under "Received " and the unit cost of each item should be extended in column "Unit cost." When materials and supplies are recovered from plant and returned to stock they should be also entered under "Received" and the value thereof should be shown under "Cost" and "Unit cost. ' ' In column * * Reference " should be shown the number of the voucher covering the purchase or the record covering the materials and supplies returned to stock. At the end of each month the materials and supplies used during the month, as shown on the daily work report (Form 9), should be summarized and values based on the unit cost should be assessed for each commodity. The total of each commodity by quantities and value should be entered on Form 11 under " Issued." There should also be entered thereunder the quantities and values of materials and supplies sold or disposed of otherwise. As the total cost of materials and supplies purchased and those returned to stores is charged to account No. 135, "Materials and supplies," and the total value of mate- rials and supplies used or otherwise disposed of is credited to account No. 135, the balance in account No. 135 should equal the value of the various materials and sup- plies on hand as shown by the stock record. EXPLANATION OF AND EXAMPLES SHOWING THE TREATMENT OF CERTAIN MATTERS IN THE BOOKS OF THE COMPANY. Depreciation.— Assuming that the ledger value of plant and equipment is $60,000, and that a rate of depreciation of 8 per cent per annum is determined upon, the annual charge for depreciation would be $4,800, and the monthly charge one-twelfth or $400. The following entry should be made monthly on the cash-journal: * 630. Depreciation of plant and equipment $400 To 185. Depreciation reserve 400 For one-twelfth of estimated depreciation on plant and equip- ment at 8 per cent per annum. The amounts credited to account No. 185, "Depreciation reserve" should remain in that account until charged out for reconstruction or for retirements of plant and equipment. Beconstraction. — When reconstruction as defined in section 12, page 11, of the System of Accounts is performed, the cost thereof should be charged to account No. 185, "Depreciation reserve, " to the extent that provision shall have been made for such expense in previous credits to the reserve. For example, if an exchange pole line is reconstructed at a cost of $750, with salvage recovered amounting to $50, the cost of reconstruction should be charged as follows: 185. Depreciation reserve $700 135. Materials and supplies 50 The charge to the reserve is based on the assumption that depreciation has been set up on the pole line since it wap originally installed. If, however, the depreciation has not been provided for during the entire life of the pole line and itis estimated that the reserve contains $300 on account of that property, the expense should be distributed as follows: 185. Depreciation reserve $300 600. Repairs of wire plant 400 135. Materials and supplies 50 If reconstruction shall not have been provided for by credits to the reserve the entire cost should be charged to the appropriate operating expense account. Retirements of plant and equipment. -Assuming that a switchboard originally installed at a cost of $1,000 is retired from service, that the old switchboard is sold for 39 $150, and that the cost of removing the switchboard is $20, the entry in the cash-journal should be as follows: , 185. Depreciation reserve $350 *" 130. Accounts receivable (or Cash) 150 To 220. Central office equipment $1 000 For switchboard in Rockville central office retired. A voucher should be issued covering the cost of removing ($20) and charged to account No. 185, "Depreciation reserve." The above chaiges to the reserve are based on the assumption that depreciation shall have been set up on the switchboard •ince it was originally installed. If, however, the depreciation has not been provided for during the entire life of the switchboard and it is estimated that the reserve contains $340 on account of that prop- erty, the casli-journal entry should be as follows: 185. Depreciation reserve 134© 640. Other maintenance cxp>enses 510 130. Accounts receivable 150 To 220. Central office equipment |i qqq The voucher covering the cost of removing ($20) should be charged to account No. 640, " Other maintenance expenses." Accruals of taxes, interest, rents, etc.— One of the principal purposes of correct ac- counting is to spread equitably over a period of time the expenses properly applicable to the whole period, instead of showing the entire amount of the expense in the month or year in which it is paid. This is especially desirable where the accounts are closed each month. In order to take care of such expenses, it is necessary to charge to Oper- ating Expenses each month the proper proportion (estimated, if not known) of such I expense, and to carry a corresponding amount in a balance-sheet account until the > payment is made. Assuming that the taxes for the year are estimated as $100, an entry should be made in the cash-journal monthly as follows: 350. Taxes .* ig 33 To 180. Accnied liabilities not due $8. 33 To one-twelfth of estimated taxes for the year. When the taxes are paid, a voucher should be issued and charge should be made to account No. 180, "Accrued liabilities not due." (See voucher No. 5 on Form 4.) Prepayments.— When payment of expense is made in advance of the period to which it applies, it is necessary that arrangement be made for charging in each month or period the proper proportion. For instance, if an insurance premium amounting to $240 is paid on a policy running two years into the future, the payment should be treated in the manner following: When the premium is paid, a voucher should be issued and the whole amount charged % to account No. 145, " Prepaymente " (see voucher No. 6 on Form 4). Each month an entry should be made in the cash-journal as follows: 680. Other general expenses ^q 145. To Prepayments hq For insurance for month of January, 1915. At the end of the period the entire amount charged to account No. 145, "Prepay- ments," under this method will have been credited to that account and charged to the operating expense accounts. Petty cash fund.— It may be necessary at times to make immediate cash payments for sundry accounts prior to the issuance of the regular voucher and check . Such pay- ments may be handled through a petty cash fund. To create such a fund, voucher for whatever amount is considered sufficient should be made in favor of the cashier 40 or other person who is to make the pay men t8. The amount of this voucher should be charged on the voucher record to account No. 130, "Accounts receivable " (see voucher No, 7 on Form 4), and a subaccount should be opened in the name of the cashier. This account should stand at that amount until it becomes necessary to increase the amount, when an additional voucher should be issued, or to decrease it, when an entry should be made in the cash-journal. As moneys are paid out by the cashier, receipts should be taken on sub voucher (Form 6) and a voucher should be put through monthly to reimburse the cashier for money disbursed during the month . This method may be used also when funds are advanced to agents, foremen, and others. Telephone installations, take-onts, and moves. — It is important that the investment in plant and equipment as shown by accounts Nos. 200 to 290 be kept at the correct figures. The system of accounts contemplates that when new telephones are installed the cost of the instrument, etc., plus the cost of installation, shall be charged to account No. 230, "Station equipment." When telephones are taken out, the cost of the instrument, plus the cost of original installation, shall be credited to account No. 230, "Station equipment"; and when telephones are moved from one location to another, the cost of moving shall be charged to account No. 620, "Station removals and cfianges." This will insure the correctness of the plant and equipment accounts, which should include the cost of the telephones in use. When telephones are taken out it may be difficult to ascertain the original installation cost. This cost may be handled on averages, and a simple method of treatment is as follows: Charge or credit account No. 230, "Station equipment," and credit or charge account No. 135, "Materials and supplies," with the value of all instruments installed or removed (not merely changed in location). Charge account No. 620, "Station removals and changes," with the cost of all installations and take-outa (not including value of instruments), and cost of all moves in location. At the end of the year make an entry in the cash-journal, charging account No. 230, * * Station equipment, ' ' and crediting account No. 620, * ' Station removals and changes, ' ' with such portion of the amount charged to account No. 620 during the year as the increase in the number of telephones in service at the end of year bears to the total number of installations, take-outa, and moves during the year. For example, if during the year there were 200 new telephones installed, 60 taken out, and 100 moved at a total expense of $1,125, there would be, by counting the moves as two operations — Installations 200 operations. Take-outs 50 operations. Moves 200 operations. Total 450 operations. The net increase in the number of telephones in use being 150, which is one-third of the total operations, one-third <.)f the total expense, or $375, should be cliarged to account No. 230 and credited to account No. 620 by an entry in the cash-journal at the end of the year. The method may be used only when the number of telephones in use increases from one year to the next. Form 1. — General Ledger. Account No Debit. Cbedit. Date. Folio. Amount. Date. Folio. Amount. Form 2. — Subscribers Ledger (left page). HOME TELEPHONE COMPANY. SUBSCRIBERS LEDGER. Account (or tele- phone) number. Name of subsorilxr. Address. Service. Date Installed. Date removed. Rate per month. January. February. Bal. due. Exch. TolL Miscl. Totai due. Paid. Allow- ances. Bal. due. Exch. Toll. Miscl. Total due. Paid. Allow- ances. Date. Amount. Date. Amoimt. (a) 316 422 537 693 782 793 854 861 945 960 9S1 (ft) Totals (c) • (rf) Res. Bus. Res. << Bus. 2Pty. i< Bus. Res. Bus. « (f) (f) 2.00 2.50 2.00 2.00 2.50 1.75 (») (0 2.00 2.50 2.00 2.00 2.50 1.75 1.75 2.50 2.00 2.50 2.50 U) (») (0 2.00 6.50 2.00 2.75 *LSO (m) 1/12 1/4 (n) 2.00 6.00 (0) (P) (?) (r) (») (0 (tt) (p) («) 3.ro ..50 .50 2.00 .75 1 .65 1.00 1.00 .50 2.00 .10 2.00 *1.S0 1.00 *.7S 5.35 1 •s.oo 4.00 .20 6.95 9.25 .'4..^•» 1/25 1/6 5.45 10.00 .:o 1.75 7.00 2.50 2.00 2.50 2.50 : .25 9,00 3.00 .60 .35 .10 11.95 5.50 1/15 9.00 2.95 5.50 tl9.75 24.00 I 6.00 t 1.00 t50.75 32.45 3.25 1 15.06 ♦ Figures in italics indicate entrv in red ink. t The totals of columns h, I, and p are net amounts or differences between the total black ink entries and the total red ink entries in the respective columns. Note.— The above form is niled for the left-hantl j a^e and covers the months January and February. The ri(!ht-hand j aire (the reverse side of thi.s) may be niled to cover the months September to December, inclusive, and a short page, three months on each side. in<-erted to cover the months March to August, inclusive. This arrangement makes it possible to post a year's business without rewriting the names'of subscribers. 3o819»— 14. (Toliicep.40.) No. 1 Form 3.— Cash-Journal. Debits. HOME TELEPHONE COMPANY. CASH-JOURNAL. Month of January, 1915. Cash. (•) Aooounts payable. (» Sundiies. 1 ^ («) 18,000 450 300 fiOO 32 45 827 KW 00 00 00 00 31 00 50 65 10 21 20 10 00 00 00 35 75 20 25 15 100 5 00 00 00 00 00 20 11 50 240 100 00 00 00 00 00 20 15 10 15 00 00 00 00 Particakn Janyl. (Entry No. 1.) The Home Telephone Company opens these books with the fol- lowing assets and liabilities: Assets 290. plant and equipment In service Jan'y 1, 1915. 115. C^h. 125. Due from subscribers and agents. 135. Materials and supplies. Liabilities. 160. Capital stock. 170. Notes payable. 175. Accounts payable. 195. Surplus. (Date) (Entry No. 2.) 125. Due from subscribers and agents. To 500. Exchange revenues. 610. Toll revenues. SaO. Miscellaneous revenues. For revenues for month of Jan'y, ViVt. (Date) (Entry No 116. CMh. ^ „ J _ ♦. To 125. Due from subecriljers and agents. For collections of charges for Jany , 1915. (Date) 500. Exchange revenues. 510. Toll revenues. 520. Miscellaneous revenues. To 125. Due from subscribers and agents. For refunds on acct. of faihires in service. (Date) 600. Repairs of wire plant. 610. Repairs of equipment. 620. Station removals and changes. 640. Oth«- maint. expenses. 650. Operators' wages. 670. General office salariss. 680. Other general expsnsss. 135. Materials and supplies. 220. Central office equipment. 230. Station equipment. 240. Exchange lines. 130. Accounts receivable. 146. Prepayments. 180. Accrued liabilities not due. To 175. Accounts payable. For vouchers for month of Jan'y, 1915. (Date) (Date) (Entry No. 4.) (Entry No (Entry No. 6.) i75. Accounts payable. To 115 Cash For cash paid out Jany. 1 to Jany. 15 incl., as per check stubs (Entry No. 7.) 230. Station equipment. 240. Exchange lines. 600. Repairs of wire plant. 610. Repairs of equipment. To 135. Materials and supplies. ,,. ,, _ iaic For material used from stock during month of January, 1»15 35S19' 14. (To face p. 40.) No. % Form 4.— Voucher Record (left page). Date. Jan. 1 1 1 15 15 15 15 J ^ In favor of- Smith Supply Co. George Brown. Edw. Fox. W.T.Hall, cashier. A. T. Johnson. Natl. Fire Ins. Co. W.T. Hall, cashier. HOME TELEPHONE COMPANY Issuer! for- Hardware, RentofofTice. Hire of teams. PajToll for Jany 1 to 15, inc. Taxes for year 1914. Premium on insurance policy tor years 1915 and 19IG. For working fund. Totals.* 35819"— 14. (To face p. 40.) No.I Paid. Date. Check No. 1/15 1/15 1/15 1/15 1/15 1/15 100 101 102 103 104 la*) Amount of voucher. Credit acct. 175, Accounts payable. 2i.00 30.00 12.00 2U0.00 100.00 240.00 50.00 647.00 Operating expenses. 600 Repairs of wire plant. 610 I Repairs of 'equipment. 620 Station re- movals ant! changes. 630 Deprecia- tion of P. and E. 640 Other maint. expenses. 650 Operators' wages. 6.00 IVOO 20.00 21.00 10.00 20.00 10.00 .'t.OO 660 Other traffic expenses. 35.00 5.00 35.00 670 General oflSce salaries. 680 Other general I expenses. 75.00 20.00 75.00 20.00 • See entry No. 5 In Form 3. VOUCHER RECORD. I'lant and equipment. 200 Intangi- bles. 210 Land and buildings. 220 Central office equipment. 230 Station equipment. 15.00 340 Exchange lines. 20.00 15.00 20.00 250 Toll lines. 6.00 5.{« 2G0 (Jeneral equipment 270 Undis- tributed con. expd. 11.00 280 P.andE 135 Materials and purchased.! s"PP"es- 25.00 25.00 183 Deprecia- tion reser\-e. Form 4.— Voucher Record (right page). Month of Janfary, 1015. Miscellaneous. Acct No. Account. 180 145 130 Accrued liabilities not due. Prepajments. Accounts receivable. Amount . 100.00 240.00 50.00 390.00 Form 5.— Voucher (face). Form 5. — Voucher (back). HOME TELEPHONE COMPANY. VOUCHER In Favor of Address Vouchee No Month or 191. Paid by Chick No Date or Check l^l. Date. Particulars. Amount. Correct : Approved for payment: Correct : HOME TELEPHONE OO. Voucher No Month of 191 . . IM FAVOR OF Dw.'ri&uaon— (continued) Account. Amount Distribution. BALANCE SHEET ACCTS. I 1()5. Other property 110. Securities 135. Materials and supplies 145. Prepayments 150. Other 'debit accounts 170. Notes payable 180. Accrued liabilities not due 185. Depreciation reserve 190. Other credit accounts Account. Amount. OPERATING EXPENSES. 600. Repairs of wire plant 610. Repairs of equipment 620, Station removals and changes 630, Depreciation ol plant and equip 610. Other maint, expenses 65f), Operators' wapes 660. Other traflic expenses 670. General oHu-e salaries 6!W. Other jreneral expenses Amount. PLANT AND EQUIPMENT. 200. Intangibles 210. Land and buildings 220. Central office equipment 230. Station equipment 240. Exchange lines 250. Toll lines 260. General equipment 270. Undistribut»'d const'n exp'dr's 280. Plant and equip, purchased INCOME ACCOUNTS. 310. other operating revenues 320. Miscellaneous income 340. Other operating expenses 350. Taxes 360. Interest accrued 370. Miscellaneous chgs. to income 380. Dividends declared operating revenues. 500. Exchange revenues 510. Toll revenues 520. Miscellaneous revenues 530. Licensee revenues— Cr. 640. Licensee revenues— Dr. 35819"— 14. CTotecep. 40.) No. 4 '^ I I e '4 ■ O a i! 'i I No. Form 6. — Subvoucher. mpm^mmmmmmmmm (Ptaw) , i^>^) ■OBfB TBL.EPHONB COMPANY. I To 191.. Dr. Particulars. Amount. Total Received of the Home Telephone Company, Dollars, in full for above account (I>ikt«) (Signature) Form 7.— 4^heck. (Ctty) (State) (D^) 191-. FIRST NATIONAL BANK. Pay to the order of Dollars. For . Countersigned by Home Telephone Company. By (TitU.) (TlUe.) 3Sm9*~14. (To face p. 40.) No. 5 41 \ ^ ■I '1 H Aooount "Y^ Telephone ■^^"' Mr. - Form 8.— Subscriber's bill (face). 191 . To Home Telephone Company, Dr. Telephone rental for month of 191. Toll charges, as per statement on back Balance due on former bills. Total Received payment, (Date) ... 191 (back.) Toll chasqes for Date. Message to 191 Amount. Total. 42 Form 9.— Work Report. HOME TELEPHONE COMPANY. Daily Work Report. Date Name 43 < •i '! Form 10.— Payroll. > %■■ 44 Form 11.— Stock Record. HOME TELEPHONE COMPANY. Stock Record. Commodity, RECEIVED. Date. Received from Ref. Quan- tity. Invoice. Cost. Frt., etc. Total. Unit cost. ISSUED. Date. Reference. ' Quantity. Value. Date. Reference. Quantity. Value. * i o X UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES AS PRESCRIBED 3Y THE t INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE FIRST ISSUE Effective on Januai*y i, J913 WASHINGTON 1915 OOLUMBIA UNWERSITY UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES AS PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THB ACT TO REGULATE COMMERCE FIRST ISSUE Effective on Jamiary 1, 191S WASHINGTON 191S The Interstate Commerce Commission. Charles A. Prouty, of Vermont. JUDSON C. Clements, of Georgia. Franklin K. Lane, of California. Edgar E. Clark, of Iowa. James S. Harlan, oflUinais. Charles C. McChord, of Kentucky. Balthasar H. Meyer, of Wisconnn. John H. Marble, Secretary, A additional copies of this pubucation may bk procuhed feom THB SUPERINTENDEKT OF DOCUMENTS OOVXKNMENT PRINTINO OFFICE WASHINOTON, D. C. AT 10 CENTS PER COPY (2) CONTENTS. Page. Order of the Commission 5 Introductory letter 7 General instructions 9 Telephone companies divided into two classes 9 Accounts should show fixed capital, operating revenues, and operating expenses pertaining solely to any exchange or toll system or common to two or more systems 9 Balance-sheet statement \\ Instructions pertaining to balance sheet 13 Balance-sheet accounts 13 Cost or book value of securities owned 13 Reacquired securities 13 Discount and premium on capital stock 13 Discount, expense, and premium on funded debt 14 Contingent assets and liabilities 15 Text explanatory of balance-sheet accounts 16 Fixed capital accounts 31 Instructions pertaining to fixed capital accounts 32 Fixed capital defined 32 Costs to be actual money costs 33 Interest accruing during construction period 33 C-oet of labor, materials, and supplies 33 Plant and equipment and other property purchased 33 Fixed capital withdrawn or retired 34 Texts explanatory of fixed capital accounts 3$ Income statement 45 Instructions pertaining to the income statement 47 Income account defined 47 Taxes 47 Text explanatory of accounts in income statement 48 Corporate surplus or deficit account 5^ Instructions pertaining to corporate surplus or deficit account. . 56 Corporate surplus or deficit account defined 56 Text explanatory of corporate surplus or deficit account 57 Operating revenue accounts 60 Instructions pertaining to operating revenue accounts 60 Operating revenues defined 60 Deductions from revenues 60 Commissions gA (3)'"*'" Text explanatory of operating revenue accounts 61 Operating expense accounts ^4 Instructions pertaining to operating expense accounts 66 Repairs defined gg Cost of repairs g7 Depreciation of plant and equipment 67 Extraordinary casualties and unanticipated reconstruction. 68 Joint operating expenses gg Text explanatory of operating expense accounts 69 Clearing accounts 77 V ill At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C, on the 10th day of December, 1912. The subject of a Uniform System of Accounts to be prescribed for and kept by telephone companies being under consideration, the following order was entered : It is ordered^ That the Uniform System of Accounts for Telephone Companies vnih. the text pertaining thereto, embodied in printed form to be hereafter known as First Issue, a copy of which is now before this Commission, be, and the same is hereby, appro v^ed; that a copy thereof duly authenticated by the Secretary of the Commission be filed in its archives, and a second copy thereof, in like manner authenticated, in the office of the Di\rision of Carriers' Accounts; and that each of said copies so au- thenticated and filed shall be deemed an original record thereof. It is further ordered ^ That the said Uniform System of Accounts for Telephone Companies with the text per- taining thereto, be, and the same is hereby, prescribed for the use of telephone companies having annual operating revenues exceeding $50,000, subject to the pro- visions of the act to regulate commerce as amended, in the keeping and recording of their accounts; that each and every such carrier and each and every receiver or operating trustee of any such carrier be required to keep all accounts in conformity therewith ; and that a copy of the said First Issue be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier. It is further ordered, That any such carrier or any receiver or operating trustee of any such carrier may sub- dinde any primary account in the said First Issue estab- lished (as permitted in the general instructions contained (5) in the said First Issue) ; or may malce assignment of the amount charged to any such primary account to operat- ing didsions, to its individual lines, or to States: Pro- videdj however, That such subprimary accounts set up or such assignments made by any such carrier or by any receiver or operating trustee of any such carrier do not impair the integrity of the accounts hereby prescribed. It is farther ordered, That in order that the basis of comparison with previous years be not destroyed, any such carrier or any receiver or operating trustee of any such carrier may, during the twelve months from the time that the said First Issue becomes effective, keep and maintain, in addition to the accounts hereby prescribed, such portion or portions of its present accounts as may be deemed desirable by any such carrier, or by any receiver or operating trustee thereof, tor the purpose ot such com- parison; or, during the same period, may mamtain such groupings of the primary accounts hereby prescribed as may be desired for that purpose. It is further ordered. That any such carrier or any receiver or operating trustee ot any such carrier, m addition to the accounts hereby prescribed, may unless otherwise ordered, keep any temporary or experimental accounts the purpose of which is to develop the efficiency of operation : Provided, however, That such temporary or experimental accounts shall not impair the integrity of any primary account hereby prescribed. It is further ordered, That January 1, 1913, be, and is hereby, fixed as the date on which the said First Issue of the Uniform System ot Accounts tor Telephone Com- panies shall become effective. By the Commission: John H. Marble, Secretary. i INTRODUCTORY LETTER. Interstate Commerce Commission, Division of Carriers' Accounts, Washington, December 10, 1912, To Telephone Companies: This Uniform System of Accoimts for Telephone Com- panies is issued in accordance with an order of the Inter- state Commerce Commission, the text of which immedi- ately precedes this letter. The act to regulate commerce, as amended, invests the Commission with authority to prescribe the forms of accoimts to be kept by telephone companies subject to the act, and prohibits the use of any accounts other than those prescribed by the Commis- sion. The observance of the rules and regulations stated in this system of accounts therefore becomes obligatory upon persons having direct charge of the accounts of the companies concerned, and such persons will be held re- sponsible for their proper application. In formulating this system of accounts it has been the endeavor of the Division of Carriers' Accounts to enlist the cooperation of the various telephone companies throughout the United States. For that purpose Ac- counting Series Circular No. 30, containing a tentative system of accounts, was submitted to all telephone com- panies of which there was record for criticisms and sug- gestions, and due consideration was given to all criticisms and suggestions received. Attention is directed to the fact that this system of accounts applies only to companies having annual operat- ing revenues exceeding $50,000; that such companies are divided into two classes, according to their earning ca- pacity (see par. 1, p. 9), and that it has been sought (7) 8 to provide classifications of accounts for each class, adjusted to their respective needs. No system of ac- counts has yet been prescribed for companies having annual operating revenues of $50,000 or less. Accounting officers are invited to correspond with this office should question arise with regard to the correct interpretation of any accoimt or rule herein prescribed, in order that uniformity may be secured in the applica- tion of the provisions of the classifications. Charles A. Lutz, Chief ExamiTier of Accounts. -I i GENERAL INSTRUCTIONS. 1. Telephone companies divided into two classes. — For the pur- pose of this system of accounts, the telephone companies affected by the preceding order are divided into two classes, as follows: Class A. — Companies having average annual operating revenues * exceeding $250,000. Class B. — Companies having average annual operating revenues * exceeding $50,000, but not more than $250,000. Two schemes of accounts, designed to meet the respective needs of companies of classes A and B, indicated above, are provided. The classifications for the two classes of companies are published jointly, with the titles of the accounts printed in CAPITALS and small CAPITALS, and in italics. Class A companies shall keep all the accounts (so far as they may be applicable to their affairs) the titles of which are printed in CAPITALS and SMALL CAPFTALS and also the accounts the titles of which are printed in italics^ except that where an account shown in CAPITALS and SMALL CAPFTALS is subdivided into accounts the titles of which are printed in italics, it is not required that the former be kept. Class A companies may further subdivide any of the accounts prescribed herein, provided that such subdivisions do not impair the integrity of any of the accounts prescribed. Class B companies shall keep all the accounts (so far as they may be applicable to their affairs) the titles of which are .printed in CAPITALS and small capfials. \Miere such accounts are subdi- vided into accounts the titles of which are printed in italics, it is not required that class B companies shall keep separate accounts for the latter. Class B companies may, if they so desire, keep the more extended accounts prescribed for class A companies, or may further subdivide such accounts, provided that such subdivisions do not impair the integrity of any of the accounts prescribed. 2. Accounts should show fixed capital, operating revenues, and oper- ating expenses pertaining solely to any exchange or toll system or com- mon to two or more systems. — (a) Telephone companies should keep their fixed capital accounts in such manner as will enable them to show, * In order that frequent changes may be avoided, companies operating established telephone plants may adopt the scheme of accounts indicated by the average of their annual revenues for three years preceding the date of this order. If at the close of any fiscal year the average of the annual revenues for the three preceding years is greater than the amount given for the class in which the company has been put, the higher scheme of accounts should be adopted. New companies should estimate the amount of their annual revenues and adopt the scheme of accounts provided for companies with avflrage annual revenues equal to the amount of the estimate. (9) 72528*— 15 2 10 when 80 required by the Commission, (1) the cost of fixed capital devoted solely to any exchange system, (2) the cost of fixed capital devoted solely to any toll system, and (3) the cost of fixed capital used in common by two or more exchange or toll systems. (6) The Classification of Operating Revenues provides separate ac- counts for exchange revenue and for toll revenue. WTiere it is neces- sary to apportion the revenue between these accounts telephone com- panies should be prepared, when so required by the Commission, to furnish the basis used in making such apportionment. (c) Telephone companies should keep their operating expense ac- counts in such manner as will permit them to show, when so required by the Commission, (1) the operating expenses pertaining solely to any exchange system, (2) the operating expenses pertaining solely to any toll system, and (3) the operating expenses which are common to two or more exchange or toll systems. ^v J i 11 BALANCE-SHEET STATEMENT. ASSET AOOOUNTS. Permanent and Long Term Investments — Page. 100. Fixed Capital Instau^ed Prior to January 1, 1913... 16 101. Fixed Capital Installed Since December 31, 1912 — 16 102. Reserve for Accrued Deprecla.tion — Cr 16 103. Reserve for Amortization op Intangible Capital — Cr. 17 104. Construction Work in Progress 17 105. Investment Securities 17 106. Stocks of System Corporations 18 107. Funded Debt of System Corporaiwtis 18 108. Miscellaneous Stocks -• 18 109. Miscellaneous Funded Debt 18 110. Advances to System Corporations for Construction, Equipment, and Betterments 18 111. Miscellaneous Investments 18 Working Assets — 112. Cash and Deposits 18 113. Cash 19 114. Special Deposits 19 115. Employees' Working Funds 19 116. I^Urketable Securities 19 117. Bills Receivable 19 118. Due from Subscribers and Agents 20 119. Accounts Receivable from System Corporations 20 120. Miscellaneous Accounts Receivable 20 121. Matured Interest and Dividends Receivable 20 122. Materla-is and Supplies 20 123. Other Current Assets 21 Accrued Income not Due — 124. Unmatured Interest, Dividends, and Rents Receiv- able 21 Deferred Debit Items — 125. Sinking Fund Assets 21 126. Insurance and Other Reserve Fund Assets 22 127. Provident Fund Assets 22 128. Prepayments 22 129. Prepaid Rents 22 130. Prepaid Taxes 22 131. Prepaid Insurance 23 132. Prepaid Directory Expense 23 133. Other Prepayments 23 134. Unextinguished Discount on Capital Stock 23 135. Unamortized Debt Discount and Expense 23 136. Other Suspense 23 Corporate Deficft — 137. Corporate Deficit 23 12 LIABILITY AOOOUBTS. Stock— Page. 150. Capital Stock 24 151. Stock Liability for Conversion of Securities 24 152. Premiums on Capi-^al Stock 25 Long Term Debt — 153. Funded Debt 26 154. Receivers' Certificates 26 155. Advances from System Corporations for Construc- tion, Equipment, and Betterments 26 Working Liabilities — 156. Judgments Unpaid 26 157. Bills Payable 27 158. Audited Vouchers And Wages Unpaid 27 159. Subscribers' Deposits 27 160. Accounts Payable to System Corporations 27 161. Miscellaneous Accounts Payable 27 162. Matured Interest, Dividends, and Rents Unpaid '27 163. Matured Funded Debt Unpaid 27 164. Service Billed in Advance 27 165. Other Current Ll^bilities 28 Accrued Lla-bilities not Due — 166. Taxes Accrued 28 167. Other Accrued Liabilities not Due 28 Deferred Credit Items — 168. Unextinguished Premium on Debt 28 169. Insurance and Casualty Reserves 28 170. Llability on Account op Provident Funds 29 Appropriated Surplus — 171. Surplus Invested Since December 31, 1912, in Fixed Capital 29 172. Surplus Invested in Sinking Funds 29 173. Other Surplus Reserved 30 Corporate Surplus — 174. Corporate Surplus Unappropriated 80 aX -^1 II 4 < 13 INSTRUCTIONS PERTAINING TO BALANCE SHEET. 3. Balance-sheet accounts. — By balance-sheet accounts are meant those titles under which the ledger accounts are combined and sum- marized to show the assets, liabilities, and profit or loss of the business at a given time. Where the title and definition of a balance-sheet account clearly indicate that it is a summary of other accounts, it is not required that a special ledger account shall be raised under such a title to include the balance from the accounts usually carried on the ledger. 4. Cost or book value of securities owned. — The term cost or book value, as applied to various accounts representing securities owned, is intended to recognize the option of the company of carrying its invest- ments in securities either at cost or at a reasonable valuation other than cost. Whenever securities are acquired they are to be entered on the books at cost. If, subsequently, the company desires to adjust their value on account of substantial appreciation or depreciation, tTie entries in its books, with respect to such securities, as well as its annual reports to the Commission, should clearly show the reasons for making the adjustments. 5. Beacquired securities. — The capital stock and funded debt lia- bility accounts in the balance sheet are intended to include only the par value of such capital stock or funded debt securities as have been actually issued to bona-fide holders for value or such securities as have been issued by other companies and have been assumed by the account- ing company and are actually outstanding at the date of the balance- sheet statement. When capital stock or funded-debt securities have been actually issued to bona-fide holders for value (or after such issue by another company have been assumed by the accounting company) and after such issue (or assumption) have been reacquired by the company under circumstances which require that they shall not be treated as paid or retired, they may be charged at par value to the appropriate asset account, but on the balance-sheet statement they should be shown separately as a deduction from both the asset and liability accounts in order that the asset accounts for securities owned will include only securities of other companies and that the liability accounts for securi- ties issued or assumed will include only those in the hands of the public. If any such securities are reacquired for more or less than their par value, the difference between the par value and the cost of reacquire- ment, after adjusting any amounts carried in the discount-and-premium accounts or other accounts with respect to such securities, should be debited or credited to Corporate Surplus or Deficit account, unless reacquired for a sinking or other fund, which is required to be repre- sented by a reserve, in which case the difference should be debited or credited to the appropriate reserve account. 6. Discount and Premium on Capital Stock. — Ledger accounts should be provided to cover the discounts and premiums on each class 14 of capital stock issued or assumed by the company. By discount is meant the excess of the par value of stocks issued or assumed over the actual money value of the c >nsideration received for such stock (except stock that has been sold and reacquired); by premium is meant the excess of the actual money value of the consideration received for stock issued or assumed over the par value of such stock (except stock that has been sold and reacquired). Entries in these accounts repre- senting discounts should be carried therein until offset, (1) by premiums realized on subsequent sales of the same class of stock, (2) by tinmim ments levied on the stockholders, (3) by appropriations of surplus for that purpose, or (4) by charges to Corporate Surplus or Deficit account upon reacquirement or retirement of the stock. Entries in theae accounts representing premiums realized should be carried perma- nently, unless offset (1) by discounts suffered on sales of the same class of stock or (2) by credits to Corporate Surplus or Deficit account upon reacquirement or retirement of the stock. If the net of the balances in the discount-and-premium accounts for all classes of capital stock sold or exchanged is a debit balance, the amount should be included in the balance-sheet statement in account No. 134, '* Unextinguished Discount on Capital Stock"; if a credit balance, the amount should be shown in account No. 152, * 'Premiums on Capital Stock." In no case should discount on capital stock be charged to or included in any account as a part of the cost of acquiring any property, tangible or intangible, or as a part of the cost of operation. 7. Discount, Expense, and Premium on Funded Debt. — Ledger accounts should be provided to cover the discount, expense, and premiums on each class of funded debt issued or assumed by the com- pany. By discount is meant the excess of the par value of funded-debt securities issued or assumed, and the accrued interest thereon, over the actual cash value of the consideration received for such securities (except securities that have been sold and reacquired); by premium is meant the excess of the actual cash value of the consideration received for funded-debt securities issued or assumed over the par value of such securities and the accrued interest thereon (except securities that have been sold and reacquired). By expense is meant all expenses in connection with the issue and sale of evidences of debt, such as fees for drafting mortgages and trust deeds, fees and taxes for recording mortgages and trust deeds, cost of engraving and printing bonds, certificates of indebtedness, and other commercial paper ha\dng a life of more than one year; fees paid trus- tees provided for in mortgages and trust deeds; fees and commissions paid under\vriter8 and brokers for marketing such evidences of debt and other like expense. If the net balance in any of these accounts is a debit, there should be charged to income accoimt No. 338, *' Amortization of Debt Dis- count and Expense," during each fiscal period (and crediteti to ^ ^v 4 15 the discount and premium accounts in which the discount and ex- pense is carried) such proportion of the discount and expense on the outstanding funded debt obligations as may be applicable to that period. This proportion should be determined according to a rule, the uniform application of which throughout the interval between the date of sale and the date of maturity, will extinguish the dis- count and expense on the funded debt. The charge to Income for any period shall not exceed the proportion applicable to that period, and a charge should be made for each period so long as any portion of the discount and expense remains imextinguished. In order that the discount and expense may be extinguished sooner, the company may, at its option, charge to Corporate Surplus or Deficit account all or any portion of the discount and expense on funded debt remaining at any time unextinguished. If the net balance in any of these accounts is a credit there should be credited to income account No. 339, "Release of Premiums on Debt — Cr.," during each fiscal period (and debited to the discount and pre- mium accounts in which the premium is carried) such proportion of the premium on outstanding funded debt obligations as may be applicable to that period. This proportion should be determined according to a rule, the imiform application of which throughout the interval between the date of sale and the date of maturity of the debt, will extinguish the premium at which such debt was sold. If the net of the balances in the discount and premium accounts for all classes of funded debt sold or exchanged is a debit balance, the amount should be included in account No. 135, ** Unamortized Debt Discount and Expense;" if a credit balance, the amount should be included in account No. 168, '* Unextinguished Premium on Debt." Except as provided in section 11, page 33, no discount and expense on* funded debt should be charged to or included in any account as a part of the cost of acquiring any property, tangible or intangible, or as a part of the cost of operation, 8. Contingent assets and liabilities. — Contingent assets and liabili- ties should not be included in the body of the balance-sheet statement, but should be shown in detail in a supplementary statement accom- panying the balance-sheet statement. Contingent assets represent possible sources of value contingent upon the fulfillment of conditions regarded as uncertain. Contingent liabilities include items which may, imder certain conditions, become obligations of the company, but are neither direct nor assumed obligations on the date of the balance sheet. TEXT EXPLANATORY OF BALANCE-SHEET ACCOUNTS. ASSET AGGOUirrS. 101 102 PERMANENT AND LONG TERM INVESTMENTS. 100. Fixed Capital Installed Prior to January 1, 1913.» In this account (on the balance-sheet statement) should be shown the total of the balances in the ledger accounts repre- senting the company's fixed capital, which was installed prior to January 1, 1913, and which is still in service at the date of the balance sheet. (See text of this account on p. 36.) Fixed Capftal Installed Since December 31, 1912.* In this account (on the balance-sheet statement) should be shown the total of the balances in the ledger accounts represent- ing the company's fixed capital which has been insUlled since December 31, 1912, and which is still in service at the date of the balance sheet. (See text of this account on p. 36.) Reserve for Accrued Depreciation — Cr.* Credit to this account such amounts as are concurrently charged to account No. 608, "Depreciation of Plant and Equip- ment," No. 701, ''Shop Expense," No. 702, "Stable and Garage Expense," and No. 703, "Tool Expense," to cover the expense of depreciation of plant, equipment, furniture, tools and imple- ments, as specified in the text of these accounts. This account should also be credited with any amount carried in reserve on January 1, 1913, to cover the expense of depreciation on plant, equipment, furniture, tools and implements installed prior to that date. Charge to this account the realized depreciation of tangible fixed capital installed since December 31, 1912, when such cap- ital is relinquished, retired, or destroyed, also the amount of depreciation carried herein in respect to tangible fixed capital installed prior to January 1, 1913, when relinquished, retired, or destroyed. (See sees. 14, p. 34, and 23, p. 67.) Charge also to this account Buch part of the expenditures for extraordinary repairs as is concurrently credited to accoimt No. 611, "Repairs Charged to Reserves— Cr." > The total of accounts Nos. 100 and 101 should be drawn down on the balance-sheet statement, and the total of accounts Nos. 102 and 103 deducted thenfrom, th« difference being shown as the net total. (16) ^v 4 17 103. Reserve for Amortization op Intangible Capital — Cr.* Credit to this account such amounts as are concurrently charged to account No. 340, "Amortization of Landed Capital," and to account No. 674, "Amortization of Franchises and Pat- ents." Charge to this account when any franchise, patent, or landed capital expires or is relinquished, the amount at which it stood charged in the company's fixed capital accounts or such portion thereof as has been previously credited to this reserve. When any intangible capital acquired pri9r to the raising of this reserve expires or is relinquished, that portion of its cost which has not been covered by credits to this account or previously writiten off should be charged to account No. 414, "Amortization Unprovided for Elsewhere." 104. Construction Work in Progress. This account should include the amoimts expended upon plant that is in process of construction under estimates or work orders, but is not ready for service at the date of the balance sheet. It includes interest charged to construction, also such proportion of plant supervision expenses, engineering expenses, tool expenses, supply expenses, and general expenses as may be properly chargeable to the construction work included under this account. When the work is completed on any job the cost of which has been included in this account, this account should be credited with the amount at which it stands charged, and the appropriate fixed capital or other accounts should be concurrently charged, but expenditures should not be carried in this account beyond the close of the fiscal year next succeeding that in which the expenditures were made. 106. Investment Securfties. This account should include the cost or book value of stocks, bonds, and other evidences of indebtedness (including notes having dates of maturity of more than one year from date of issue) held by the accounting company, and pledged as collateral for other securities issued or assumed, or held as a means of obtain- ing or exercising control over other corporations, for devotion to future operations, or for securing other business advantages. In stating this account or the subaccounts provided hereunder on the balance-sheet statement the par value of securities issued or assumed by the accounting company and carried in this account should be deducted in order that this account will show only the cost or book value of securities of other companies. (See sec. 5, p. 13.) » The total of accounts Nos. 100 and 101 should be drawn down on the balance-sheet stetement, and the total of accounts Nos. 102 and 103 deducted therefrom, the difference being shown as the net total. 72528"— 15 3 \ 18 The following subaccounts should be kept by class A com- panies: 106. Stocks of System Corporations.^ 107. Funded Debt of System Corporations .^ 108. Miscellaneous Stocks. 109. Miscellaneous Funded Debt. Note A .—Short-term notes payable upon demand or having dates of matu- rity of one year or less from the date of issue should not be included herein but in account No. 110, "Advances to System Corporations for Construction, Equipment, and Betterments," or No. 117, "Bills Receivable," as may b« appropriate. Note B. — In the annual reports of class A and class B telephone companies to the Commission investments will be required to be cla&sified so as to show those held subject to a lien of some character and those held free of all lien or pledge. 110. Advances to System Corporations for Construction, Equipment, and Betterments. This account should include advances to controlling, affili- ated, controlled, and subsidiary corporations to enable such cor- porations to pay for construction, equipment, or additions and betterments, if such advances are of a permanent nature (i. e., if there is not an understanding that the advances are to be repaid within one year) or if it is understood and intended that reimbursement shall be made by the issue of the securities of the debtor corporation. NoTK A. — Gifts to system corporations made without expectation of reim- bursement should be included in account No. 353, "Miscellaneous Appropri- ations from Income," or No. 416, "Miscellaneous Appropriations of Sur- plus" and not in this account. Note B .—Temporary advances on open accounts to system corporations and such advances for purposes other than construction, equipment, and betterments should be included in account No. 119, "Accounts Receivable from System Corporations." 111. Miscellaneous Investments. This account should include investments of a permanent nature in property (tangible or intangible) other than that held for the operation of the company's plant as a telephone system. It should include such items as investments in lighting, water, and power plants, manufacturing plants, lands, and buildings and other property not a part of the company's plant for tele- phone operations or of facilities incident thereto. WORKING ASSETS. 112. Cash and Deposits. This account includes the various items respecting cash and special deposits as provided in the following subaccounts: I By a system corporation Is meant any controlling, affiliated, controlled, or subsidiary eorporation. 19 113. Cash. This account should include the amount of current funds available for use on demand in the hands of financial officers and agents, or deposited in banks or with trust companies, and cash in transit for which agents receive current credit. 114. Special Deposits. This account should include deposits to pay declared divi- dends and matured interest; cash realized from the sale of securi- ties and deposited with trustees for disbursement when the pur- poses for which the securities are sold are accomplished; amounts realized from the sale of property and deposited with trustees other than in sinking funds until the property is replaced; special de- posits (in other than sinking funds) for the payment of debta and interest not matured; money and securities deposited to se- cure the performance of contracts; and other deposits of a special nature not provided for elsewhere. In stating this account on the balance-sheet statement the amount of any securities issued or assumed by the accounting company and included herein should be deducted in order that this account will show only the assets herein other than the company's own securities. (See sec. 5, p. 13.) . 115. Employees' Working Funds. This account should include amounts advanced to general and special agents, and other officers and employees as working funds from which certain expenditures are to be made and accounted for. 116. Marketable Securities. This account should include the cost or book value of securities held in the company 's treasury unpledged and free for sale and not necessary or desirable for the telephone company to hold for the purpose of maintaining the integrity of its telephone system. In stating this account on the balance-sheet statement the par value of securities issued or assumed by the company and carried in this account should be deducted in order that this account may show only the cost or book value of securities of other companies. (See sec. 5, p. 13.) 117. Bills Receivable. This account should include the cost of all collectible obliga- tions in the form of bills receivable or other similar evidences of money receivable on demand or within a time not exceeding one year (excluding interest coupons). Notb a.— Notes having dates of maturity of more than one year after date of issue should not be included in this account but in account No. 105, " Invest- ment Securities" or No. lift, « Marketable Securities." Note B .—When loans to system corporations i for construction purposes are evidenced by demand or short-term notes intended later to be exchanged for other securities, the amount of cuch loans should be included in account No. 110, "Advances to System Corporations for Construction, Equipment, and Betterments." it'l 20 118. Due from Subscribers and Agents. This account should include amounts due from subscribers for services rendered or billed and from agents and collectors author- ized to make collections from subscribers. This account should be kept in such manner as will enable the companies to make the following analysis, viz: (a) Amounts due from subscribers who are still receiving tele- phone service. (6) Amounts due from subscribers whose telephone service has been discontinued and whose accounts are in process of col- lection in the usual way. (c) Amounts due from subscribers whose telephone service has been discontinued and whose accounts are in litigation cr otherwise suspended. Credit to a subaccount hereunder such amounts as may be con- currently charged to account No. 304, "Uncollectible Operating Revenues," to provide a reserve for uncollectible accounts due from subscribers and agents. If such reserve is provided, when any bill for services has proved impracticable of collection, this subaccount should be charged and the account in which the bill is carried should be credited. 119. Accounts Receivable from System Corporations. This account should include amounts due from controlling, affiliated, controlled, or subsidiary corporations on open accounts other than those provided for in account No. 110, "Advances to System Corporations for Construction, Equipment, and Better- ments." 120. Miscellaneous Accounts Receivable. This account should include all amounts owed to the com- pany upon accounts with solvent concerns (other than system corw porations and subscribers and agents), also the cost of all accounts and claims (except notes or negotiable bills) upon which respon- sibility is acknowledged by solvent concerns or which are suffi- ciently secured to be considered good, and of all judgments against solvent concerns where the judgment is not appealable or suspended through appeal. Note.— Cash on deposit in banks or with trust companies should not be included in this account but in account No. 113, "Cash," or Na 114, "Special Deposits." 121. Matured Interest and Dividends Receivable. This account should include all interest accrued and due but not yet collected upon bonds, notes, or other commercial paper held by or for the benefit of the company, and all dividends declared and due by solvent concerns but not yet collected, the right to which is in the company. 122. Materlals and Supplies. This account should include the cost of unapplied material, including the value of material temporarily in use and not charged 21 4 ^ « out in the company's accounts; articles in process of manufacture by the company; tools, fuel, stationery, and other supplies. Freight and express charges paid on material included in this account should be included in the value of such material. Where discounts recovered through prompt payment can not be credited to the particular bills, the cost at which such mate- rials and supplies should be charged should be the invoice cost, and any discounts recovered through prompt payment of bills for such materials and supplies should be credited to clearing ac- count No. 704, "Supply Expense." When any tangible fixed capital is discontinued, withdrawn, or retired, and when any equipment, materials, and supplies are returned to store, the salvage value thereof should be charged to this account, regardless of whether such equipment, materials, and supplies are to be consumed in operation or in construction, or to be sold. If such value is not known and cannot readily be determined, it should be estimated, and errors in such estimates, when determined, involved during the year in which the esti- mates were made, should be adjusted through the accounts involved; if later, then through the Corporate Surplus or Deficit account. Inventories of materials and supplies on hand and unapplied should be taken at least annually, and any shortages or overages disclosed by such inventories should be credited or debited to this account and debited or credited to clearing account No. 704, ' * Supply Expense, ' ' in case such shortages or overages can not be assigned to specific accounts. 123. Other Current Assets. This account should include the cost of all current assets which are not includible under any of the foregoing accounts. By cur- rent assets are meant only those things that are readily con- vertible into money and which are held not as investments but with the intent of being presently converted into money. ACCRUED INCOME NOT DUE. 124. Unmatured Interest, Dividends, and Rents Receivable. This account should include the amount of interest on loans made and rents under leases accrued to the date of the balance sheet, but not due or collectible until after that date, and divi- dends declared on stocks owned, and dividends accrued on such stocks when contracts require that the dividends be paid at stated times. DEFERRED DEBIT ITEMS. 125. Sinking Fund Assets. This account should include the amount of cash, the cost or book value of live securities of other companies, the par value of live securities issued or assumed by the accounting company, and other assets which are in the hands of trustees of sinking 22 and other funds for the purpose ot redeeming outetanding obli- gations; also amounts deposited with such trustees on account of mortgaged property sold. A separate account should be raised for each sinking fund. In stating this account on the balance-sheet statement the par value of any securities issued or assumed by the company and carried in this account should be deducted from the total in order to show only the net assets in sinking funds other than the company's own securities. (See sec. 5, p. 13.) 126. Insurance and Other Reserve Fund Assets. This account should include the amount of cash, the cost or book value of securities of other companies, the par value of secu- rities issued or assumed by the accounting company, and other assets in the hands of trustees or managers of insurance, and other funds that have been raised and specifically set aside or invested by the company for specific purposes (except special deposits, provident funds, and sinking funds for the retirement of obligations). A separate account should be raised for each fund. In stating this account on the balance-sheet statement the par value of any securities issued or assumed by the company and carried in this account should be deducted from the total in order to show only the net assets in the funds other than the company's own securities. (See '^^c. 5, p. 13.) 127. Provident Fund Assets. This account should include the amount of cash, and the cost or book value of securities and other assets in the hands of trustees or managers of employees' pension fimds, savings funds, relief, hospital, and other association funds (whether contributed by the company, by employees, or by others), when such trustees or managers are acting for the company in the administration of such fimds. (See account No. 170.) 128. Prepayments. This account should include the balances arising from the pay- ment of rents, taxes, insurance, and like disbursements, in advance of the period to which they pertain, as defined in the following subaccounts: 129. Prepaid Rents. This account should include the amount of rents paid in ad- vance of the enjoyment of the term. As the term is consumed, credit this account at monthly intervals and debit the appropriate rent account with the amount applicable to the month. 130. Prepaid Taxes. This account should include the exceae ot taxes paid over the amount properly chargeable to Income or other accoimts as shown by the debit balance in the Tax Liability account. (See sec. 16, p. 47.) i 23 131. Prepaid Insurance When premiums on insurance policies are paid in advance of their accrual, the amount prepaid shall be charged to this ac- count. As such premiums accrue, they should be credited at monthly intervals to this account and charged to account No. 668, "Insurance." 132. Prepaid Directory Expense. Charge to this account the cost of preparing, printing, binding, and dalivering directories; also the cost of soliciting advertise- ments for directories. When directories are issued, this accoimt should be credited each month and operating expense account No. 649, "Directory Expenses," should be charged with the proportion of the cost based on the number of months the direc- tor>' will be in use. 133. Other Prepayments. When prepayments are made for anything other than as pro- • vided for in the four next preceding accounts, the amount of such prepayments should be included in this account. 134. Unextinguished Discount on Capital Stock. If the net of the balances in the discoimt and premium accounts for all classes of capital stock sold or exchanged is a debit balance, the amount should be stated in this accoimt. (See sec. 6, p. 13.) 135. Unamortized Debt Discount and Expense. If the net of the balances in the discount and premium accounts for all classes of funded debt sold or exchanged is a debit balance, the amount should be stated in this account. (See sec. 7, p. 14.) 136. Other Suspense. This account should include all debits not provided for else- where and the proper final disposition of which is uncertain. It will include all such items as expense of preliminary surveys, plans, investigations, etc., made for determining the feasibility of projects under contemplation. Should any such project later be carried to completion, such amounts should be credited to this account and charged to the proper fixed capital account or accounts; should it be abandoned, such amounts should be charged to Corporate Surplus or Deficit account. This account should also include the amounts carried in suspense due to extraordinary casualties and unanticipated re- construction. (See sec. 24, p. 68.) When the proper disposition of any item charged to this accoimt is determined, it should be credited to this account and charged to the appropriate accoimt or accounts. CORPORATE DEFICIT. 137. Corporate Deficft. Under this head should be shown the debit balajice, if any, in the Corporate Surplus or Deficit account. (See sec. 17, p. 56.) 1l ■ • 24 g^^j^ LIABILITT ACOOUITTS. 150. Capital Stock. This account should include the par value of stock actually issued. In case of the issue of two or more classes of stock a separate account should be provided for each class. Credit to a subaccount entitled "Instalhnents on Stock Subscriptions," the amount of installments paid on subscriptions for capital stocks; when certificates of stock are issued for instalhnents paid, this subaccount should be cleared and the par value of the stock so issued should be credited to the account appropriate for such stock. The amounts Included in this account, or in the subaccounts, should be subdivided so as to show (1) the par value of certifi- cates issued and outstanding and not held by the company, its agents or trustees, and (2) the par value of certificates (pledged or unpledged) issued by the company and held by or for it. In stating the accounts on the balance-sheet statement, the latter amount should be deducted from the total in order to show only the par value of the certificates actually outstanding in the hands of the public at the date of the balance-sheet statement. (See sec. 5, p. 13.) Note A.— By capital stock, as the term is here used, is meant those securities which represent permanent interests in the corporation, or interests which, If terminable, are so only at the option of the corporation. Stocks are classi- fied as — Common Hocks, those whose claims in the distribution of dividends are sub- ordinate to the claims of all other stocks. Pre/erred stocks, those having a first claim upon thOM dividends which mar be distributed. Debenture stocks, those issued under a contract to pay a specified return at specified intervals. No two stocks should be coaosidered of the same class unless they are equal in their dividend or interest rights, their voting rights, and the conditioM under which they may be retired. Note B.— If any issue of stock is for money, that fact should be stated: and if for any consideration other than money, the person to whom issued should be designated, and the consideration for which issued should be described with sufficient particularity to identify it. If such issue is to the treasurer or other agent of the company, to be by him disposed of for the benefit of the company, that fact and the name of such agent should be shown; and such agent should, in his account of the disposition thereof, show the like details amceming the consideration realized thereon. Note C— If the fair cash value of the consideration realized upon the issue of any amount of stock is greater or less than the par value of such stock the difference should be credited or charged to an appropriate discount and premium account, and corresponding reference thereto should be contained in the entry relating to such stock in the stock account. (8«e me. 6, p. 13.) 151. Stock Liabiuty for Conversion of Secuiuties. Th is account should include the par value of stock that the com- pany has agreed to issue in exchange for securities of constituent companies whose physical property has been acquired under 25 such agreements, but whose securities have not yet been surren- dered for exchange. 152. Premiums on CAPrrAL Stock. If the net of the balances in the discounts and premiums accounts for all classes of capital stock sold or exchanged is a credit balance, the amount should be stated in this account. (See sec. 6, p. 13.) LONG TERM DEBT. 153. Funded Debt. This account should include the par value of funded debt actually issued or assumed by the company. In case of two or more classes of funded debt a separate account should be provided for each class. Credit to a subaccoimt, entitled ** Installments on Funded Debt Subscriptions," the amount of installments paid on subscriptions to funded debt issues. When bonds, notes, or other evidences of indebtedness are delivered, this subaccount should be cleared and the par value of the funded debt so issued should be credited to the account appropriate for such funded debt. The entry in any account should rfiow also the purpose for which funded debt is issued. The amounts included in this account, or in the subaccounts, should be subdivided so as to show (1) the par value of funded debt securities issued or assumed and outstanding and not held by the company, its agents or trustees, and (2) the par value of • funded debt seciu-ities (pledged or unpledged) issued or assumed by the accounting company and held by or for it. In stating the accounts on the balance-sheet statement the latter amount should be deducted from the total in order to show only the par value of funded debt securities actually outstanding in the hands of the public at the date of the balance-sheet statement. (See sec. 5, p. 13.) Note A. — By funded debt, as the term is here used, is meant the pai value of all bonds, notes, and other evidences of indebtedness (except ojjen accounts for advances) which, by the terms of the creation of the debt, do not mature tmtil more than one year after the date of such creation. Funded debt is classified In accordance with four principal characteristics, viz, (1) mortgage or other lien or security therefor; (2) rate of interest; (3) interest dates; and (4) date of rtiaturity. No two amounts of fimded debt should be considered of the same class unless agreeing in all four of the above characteristics, except that any inue of securities agreeing in the first three characteristics but maturing serially may be treated as of the same class. Where any portion of the funded debt rests only on the general credit of the corporation and is not specially secured or supported by lien of any character, it should, for the purpose of these accounts, be known as a debenture. Debentures include promissory notes unsecured by mortgage or other lien, and securities commonly known as plain bonds. Note B.— If the consideration received for any issue of funded debt is any- thLig else than money, the entry should show the principal to whom issued and should describe with sufficient particularity to identify it the consideration actually received for the issue. If the issue is in any case to an agent of an undbclosed principal, the name and business address of such agent and the fact of his agency should be shown in the entry. 72528*— 15 1 ■» 26 NoTK C— If the fair cash value of the coDsideraticn reallied upon the issue of any amount of funded debt securities is greater or less than the i»r value of such securities plus the accrued interest, the difference should be credited or charged to an appropriate discount-and-premium account, and corresponding reference thereto should be made in the entry relating to such debt in the funded debt account. (See sec. 7, p. 14.) 154. Receivers' Certificates. When any receiver acting under the orders of a court of com- petent jurisdiction is in possession of the property of the com- pany and under the orders of such court issues certificates of indebtedness chargeable upon such property, the par value of such certificates should be credited to this account. Interest accruing upon such certificates should also be credited monthly to this account, and when paid should be chained to this account. 155. Advances from System Corporations for Construction, Equipment, and Betterments. This account should include advances from controlling, affili- ated, controlled, and subsidiary corporations to enable the ac- counting company to pay for construction, equipment, or addi- tions and betterments if such advances are of a permanent nature (i. e., if there is not an understanding that the advances are to be repaid within one year), or if it is understood and intended that a reimbursement shall be made by the issue of the securi- ties of the debtor corporation. Note A.— Gifts from system corporations without expectation of reim- bamment should not be credited to this account but to account No. iOl "Miwellaneous Additions to Surplus," ' Note B.— Temporary advances on open accounts from system COTporations and such advances for purposes other than construction, equipment, or additions and betterments should be inchided in account Xo. 100, "Accounts Payable to System Corporations." WORKING LIABILITIES. 156. Judgments Unpaid. When any judgment of indebtedness is rendered against the company by a court of competent jurisdiction, or any fine or penalty requiring the payment of money is assessed against the company by such a court, and no appeal accompanied by stay of execution has been taken therefrom within the time allowed by law for such appeal, the amount of such judgment,' fine, or penalty should be credited to this account, and the entry should designate the action or suit as a consequence of which such judg- nient is pronounced or such fine or penalty assessed . The designa- tion of the action or suit should show what court, the term thereof, the parties, and the character of the action or suit. I nterest accru- ing upon any such judgment should be credited ihonthly to this account. When payment is made this account should be charged. Note.— In case of appeal and affirmance in whole or in part, from which judgment of affirmance a further appeal lies, the same rule shall apply as upon entry of (M-iginal Judgment 27 i 157. Bills Payable. This account should include the par value of all notes, drafts, and other evidences of indebtedness, issued or assumed by the company, and which are payable on demand or within a time not exceeding one year. Note.— When loans from system corporations for construction purposes are evidenced by demand or short-term notes intended later to be exchanged for other securities, the amount of such loans should be included in account No. 155, "Advances from System Corporations for Construction, Equipment, and Betterments." 158. AuDFTED Vouchers and Wages Unpaid. This account should include the amount of audited vouchers or accounts and audited pay rolls unpaid on the date of the balance sheet. Include also the amount of unclaimed wages and out- standing pay and time checks issued in payment of wages. 159. Subscribers' Deposfts. Credit to this account, as such deposits are made, all cash deposited with the company by subscribers for telephone service as security for the payment of bills. Deposits refunded should be charged to this account and credited to cash . Deposits applied to uncollectible telephone bills should be credited to the account of the subscriber and charged to this account. 160. Accounts Payable to System Corporations. This account should include the amounts owed to controlling, afliliated, controlled, or subsidiary corporations on open accounts other than those provided for in account No. 155, * 'Advances from System Corporations for Construction, Equipment, and Betterments." 161. Miscellaneous Accounts Payable. This account should include all amounts owed to miscellaneous creditors on open accounts and not provided for elsewhere. 162. Matured Interest, Dividends, and Rents Unpaid. This account should include interest matured and unpaid on loans and funded debt of the accounting company, and of other companies, when payment has been assumed by the company; rents due and unpaid on property held under leases; and divi- dends due and payable on capital stock but unpaid, uncalled for, or unclaimed at the date of the balance sheet. 163. Matured Funded Debt Unpaid. This account should include the amount of matured mort- gage, bonded, and other funded debt payable, but not yet paid, including bonds drawn for redemption through the operation of sinking and redemption fund agreements. 164. Service Billed in Advance. When bills are made for service to be rendered in future months, and the amount of the bills is included in account No. 118, "Due from Subscribers and Agents," or other asset account but not in the revenue accounts, the proportion of the bills 28 applicable to future months should be credited to this account. As the term expires for which the bill is made, the appropriate revenue account should be credited and this account debited with the amount applicable to the current month. When toll coupons or tickets are sold, this account should be credited with the amount representing the service to be rendered. At the end of each month this account should be charged and the appropriate revenue accounts credited with the amount of coupons and tickets (less the discount, in case coupons or tickets were sold at a discount) redeemed during that month. 165. Other Current Liabilities. This account should include the amounts of all current liabili- ties which are not included in any of the foregoing accounts. ACCRUED LIABILITIES NOT DUE. 166. Taxes Accrued. This account should include the amount of taxes accrued and properly charged j^inst income or other accounts in excess of the amount of taxes paid. (See sec. 16, p. 47.) 167. Other Accrued Liabilities not Due. This account should include the amount of interest on loans and funded debt, including interest on funded debt assumed, and rents under leases accrued to the date for which the bal- ance sheet is made but not due until after that date; divi- dends on stock declared prior to the date of the balance sheet but not payable until after that date, and other liabilities (ex- cept taxes) that have accrued to the date of the balance sheet but not due until after that date. Note.— The interest aocnitag on any judgment against the company or upon any receivers' certificate should be credited to the account to which such judgment or receivers' certificate stands credited. DEFERRED CREDIT ITEMS. 168. Unextinguished Premium on Debt. If the net of the balances in the discount-and-premium accounts for all classes of funded debt sold or exchanged is a credit balance, the amount should be stated in this account. (See sec. 7, p. 14.) 169. Insurance and Casualty Reserves. This account should include any specific appropriation of income or surplus and such amounts as are concurrently charged to account No. 668, ** Insurance," to cover self-carried risks on fire, fidelity, boiler, casualty, buiglar, and other self-carried insurance. Charge to this account the proportion of losses realized on items protected by such self-carried insurance. When any admitted liability arises because of loss or damage to the property of others or of injuries to employees or other per- sons, the amount of the liability may (if not previously provided for by insurance or self-insurance) be charged to the appropriate V * ^ 29 oi)eratiiig expense or other accounts and credited to this account, against which (in such case) the actual cost of satisfaction of the liability should be charged when the matter is determined. If the extent of the liability can not be ascertained promptly after the liability arises, it may be estimated as accurately as prac- ticable for the purp>ose of determining the immediate charge to the expense or other appropriate account, in which case the matter should be adjusted when the extent of the liability is definitely ascertained. If the loss is of such character that it is in whole or in part indemnifiable under any contract of insurance carried by the company, the indemnifiable portion of the loss should be chaiged to the insurer and credited to this account. 170. LiABiLmr on Account op Provident Funds. This account should include any 8j)ecific appropriations of income or surplus and such amounts as are charged to account No. 672, "Relief Department and Pensions" to provide for pen- sion, benefit and other provident payments. This account should also include the ledger balances covering the amount of cash and the cost or book value of securities and other assets in the hands of trustees or managers of employees* pension funds, savings funds, relief, hospital, and other associa- tion funds (whether contributed by the company, by employees, or by others), when such trustees or managers are acting for the company in the administration of such funds; also the amount of such funds held in the company's treasury. APPROPRIATED SURPLUS. 171. Surplus Invested Since December 31, 1912, in Fixed Capptal, This account should Include such amounts of surplus as are def- initely set aside to cover expenditures for extensions or improve- ments of the fixed capital of the accounting company; such ap- propriations include those made for the purpose of discharging the principal (less the discount, if any, suffered at the time of sale) of any obligations incurred in the acquisition of any property whose cost is carried in the fixed capital accounts. The amounts credited to this account should be concurrently charged to account No. 362, "Appropriations of Income for Construction, Equipment, and Betterments," or No. 415, "Appropriations of Surplus for Construction, Equipment, and Betterments." This account should not include temporary appropriations for the acquisition of property the cost of which is intended later to be met by an issue of securities, nor appropriations for the pay- ment of obligations which are intended to be replaced by new issues. 172. Surplus Invested m Sinking Funds. This accoimt should include appropriations of income or surplus specifically invested or set aside in the hands of trustees for sinking and redemption funds, including accretions to such funds. 30 The amounts credited to this account should be concurrently charged to account No. 350, "Appropriations of Income to Sink- ing and Other Reserve Funds," or No. 411, "Appropriations of Surplus to Sinking and Other Reserve Funds." 173. Other Surplus Reserved. This account should include all appropriations of income or sur- . plus held in reserve except as covered by accounts Nos. 169, 170, 171, and 172. A separate subaccount c^ould be raised for each reserve, and the entries in such subaccounts will be required to be shown separately in the annual rep>ort to the Commission. This account should also include the unexpended balance, if any, of appropriations intended to be invested in fixed capital, and such appropriations to sinking or redemption fund reserves as are not specifically invested. CORPORATE SURPLUS. 174. Corporate Surplus Unapproprlated. Under this head should be shown the credit balance, if any, in the Corporate Surplus or Deficit account. (See sec. 17, p. 56.) fr ^1 i 31 FIXED CAPITAL ACCOUNTS. Page. 100. Fixed Capital Installed Prior to January 1, 1913 36 101. Fixed Capital Installed Since December 31, 1912 36 200. Intangible Capital 35 201. Organization 35 202. Franchises . . : 37 203. Patent Rights 37 204. Other Intangible Capital 37 207. Right of Wat 37 210. Land and Buildings 33 211. Land .- , 33 212. Buildings 33 220. Central Office Equipment 39 221. Central Office Telephone Equipment 39 222. Other Equipment of Central Offices 39 230. Station Equipment 39 231. Station Apparatus 39 232. Station Installations 40 233. Interior Block Wires 40 234. Private Branch Exchanges 40 235. Booths and Special Fittings 40 241. Exchange Pole Lines 40 242. Exchange Aerla.l Cable 40 243. Exchange Aerial Wire 40 244. Exchange Underground Conduits 40 245. Exchange Underground Cable 41 246. Exchange Submarine Cable 41 251. Toll Pole Lines 41 252. Toll Aerial Cable 41 253. Toll Aerial Wire 41 254. Toll Underground Conduit 41 255. Toll Underground Cable 42 256. Toll Submarine Cable 42 260. General Equipment 42 261. Office Furniture and Fixtures 42 262. General Shop Equipment 42 263. General Store Equipment 42 264. General Stable and Garage Equipm£nt. 43 265. General Tools and Implements 43 268. Interest During Construction 43 270. Undistributed Construction Expenditures 43 271. Engineering and Superintendence 43 272. Law Expenditures During Construction 43 273. Taxes During Construction 44 274. Miscellaneous Construction Expenditures 44 »> If li 32 INSTRUCTIONS PERTAINING TO FIXED CAPITAL ACCOUNTS. 9. Fixed capital dcflned.— By the fixed capital of a company (fre- quently termed the constructicm account) is meant the property, both tangible and intangible, which is devoted to the accomplishment of the principal purposes of its business, and which has an expectation of life in service of more than one year from date of installation in service (exception being made in the case of hand tools and other small porta- ble tools that may be lost or stolen). Fixed capital consists of original capital, additions, bettermenU. and replacements, and the cost thereof should be charged as directed below. Original capital is the fixed capital installed or acquired prior to the beginning of regular operaUons by the company. As apphed to a tele- phone company it includes the acquisition or construcUon of the plant necessary to begin the regular operation of an exchange or toll system. The cost of original capital should be charged to the appropriate sub- accounte under account No. 100, "Fixed Capital Installed Prior to January 1, 1913," or under account No. 101, *'Fixed Capital Installed Since December 31, 1912." Additi(ms are structures, facilities, equipment, and other properUea added to those in service at the beginning of operations, and not taking the place of any property of like purpose previously held by the com- T>anv The cost of additions should be charged to the appropriate sub- Jtccounte under account No. 101. "Fixed Capital InstaUed Since De- cember 31, 1912." . Betterments are mechanical changes in structures, facilities, or equipment which have as their primary aim and result the making of the properties affected more useful or of greater capacity than they were at the time of their installation or acquisition. The cost of such portion only of the changes incident to betterments as wiU, when added to the original cost of the property bettered, give the cost of replacement or reconstruction in present condition of tiie property aa bettered should be charged to the appropriate subaccounts under account No 101, "Fixed Capital Installed Since December 31, 1912. The remainder of tiie cost of the change should be classed as a repair and be charged to the appropriate operating expense accounts^ Replacements are those installations of fixed capital which have for their purpose tiie substitution of one buUding, structure, piece of equipment, or machinery for anotiier which it has Wome neces^ to retire, the substitute having substantially no greater capacity than tiie property replaced; also tiie extension of Ufe period of franchisee, patents, and other intangible fixed capital. . ^ . The cost of the fixed capital retired should be credited to tiie fixed capital accounts in which it is carried and tiie cost of tiie fixed capital installed in place of fixed capital so retired should be cha^d to the appropriate subaccounts under account No. 101, Fixed Lapitai Installed Since December 31, 1912." ^1 bli 33 10. Costs to be actual money costs. — All charges made to fixed capital or other property accounts with respect to any property acquired on or after January 1, 1913, should be the actual money costs of the property. When the consideration actually given for anything with respect to which a charge is mado to any fixed capital or other property account is anything other than money, the actual consideration should be described in the entry with sufficient fullness and particularity to identify it, and the amount charged should be the actual money value of such consideration at the time of the transaction. 11. Interest accruing during construction period. — Account No. 268, "Interest During Construction," should include only such pro- portion of the interest on funds used for construction purposes and of the discount and expense on funded debt as is equitably assign- able to the period between the date of the issuance of securities and the time when the property acquired or the improvement made through such issuance becomes available for the service for which it is intended. The proportion of interest, discount, and expense thus chargeable should be that which the period prior to the completion or coming into service of the facilities or improvements constructed bears to the entire life of the securities issued. 12. Costs of labor, materials, and supplies. — The term cost as used in the fixed capital (or construction) accounts means the actual cost in money of labor and materials used in construction, or the actual cost in money of property acquired after construction, or if the consideration given is other than money, the actual money value of such other con- sideration at the time of the purchase. Cost of labor includes not only wages, salaries, and fees paid employees, but also the personal expenses of such employees when borne by the company. Cost of material and supplies consumed in construction is the cost at the places where they enter into construction, including cost of transportation and inspec- tion when specifically assignable. If such materials and supplies are passed through storehouses, their cost entered in the account may in- clude a suitable proportion of store expense. 13. Plant and equipment and other property purchased. — When any property in the form of a going or completed plant is purchased, an appraisal of the property so acquired should be made, and the different constituent elements of the plant (and equipment, if any) or other property acquired should be appraised at their structural value; that is to say, at the estimated cost of replacement or reproduction less deterioration to the then existing conditions through wear and tear, obsolescence, and inadequacy. If the actual money value of the con- sideration given for the plant or other property was at the time of the acquisition in excess of such appraised value, the excess should be charged to account No. 204, "Other Intangible Capital," and the appraised values of the constituent elements should be chained to the appropriate fixed capital accounts aa hereinafter designated. If the actual money value of the consideration given was not in excess of 72528'— 15 5 III 34 such appraised value, such actual money value should be distributed through the said accounts in proportion to the said appraised value of the constituent elements appropriate to the resjjective accounts. Companies should be prepared to furnish the Commission, upon de- mand, a full report of the contract of acquisition, the consideration given therefor, the determination of the actual money value of such consideration if other than money, the appraisal, and the amounts charged to the respective accounts for each plant or other such fixed capital purchased. The purchaser is required to procure in connection with the acquisition of any such plant or other fixed capital all exist- ing records, memoranda, and accounts in the possession or control of the grantor relating to the construction and improvement of such plant, and to preserve such records, memoranda, and accounts until authorized by law to destroy or otherwise dispose of them. 14. Fixed capital withdrawn or retired. — (a) When any tangible fixed capital acquired prior to January 1, 1913, is withdrawn or retired from service for any cause, the amount at which it stands charged should be credited to the subaccount under account No. 100, *' Fixed Capital Installed Prior to January 1, 1913," in which it is charged, and such amount, plus the expenses incident to the retire- ment, less the value of salvage, should be charged (1) to account No. 102, "Reserve for Accrued Depreciation — Cr." for the proportion applicable to the period covered by the reserve, and (2) to account No. 413, ** Realized Depreciation not Covered by Reserves" for the remainder. Such portion only of the realized depreciation shall be charged to account No. 102, as is due to life in service during the period for which the reserve was established; this portion may be estimated on the basis of the proportion which the life in service of the property in question after that date bears to its entire life in service. The entry of the credit to the fixed capital account should cite by name and page of book or other record the original entry of cost of the thing withdrawn. If there is no such original entry, that fact should be stated in connection with the credit entry, and the actual amount originally charged should be credited. If such amount is not known, it should be estimated, the facts upon which the estimate is based and the name of the person by whom estimated should be shown, and the amount thus estimated to be equivalent to the original charge in respect of such thing withdrawn should be credited to the fixed capital accounts involved. (6) WTien any tangible fixed capital acquired subsequent to Decem- ber 31, 1912, is withdrawn or retired from service for any cause the amount at which it stands charged should be credited to the fixed capital account in which it is charged, and such amount, plus the expenses incident to the retirement, less the value of salvage, should be charged to ?iccount No. 102, ''Reserve for Accrued Deprecia- tion— Cr." i 35 The entry of the credit to the fixed capital account should cite by imme and page of book or other record the original entry of cost of the thing withdrawn. (c) If the age of tangible fixed capital withdrawn or retired from J^^^irT^'/n^ ^^ determined for classification between account No. T' .^^ui^^^^ ^'''^"^ ^"^^ ^ •^^'^^'^ 1' 1913," and account No. 101, Fixed Capital Installed Since December 31 1912 " the property so retired should be treated as having been charged 'to the former account, and the necessary credits should be made to the subaccounts thereunder. (d) When any fixed capital is withdrawn or retired whose book value as earned in the fixed capital accounts has been reduced by writing off estimated depreciation, only that part of the realized depreciati^ M^ ino^.r^ f^ ^^"^ "^"^^ ^^ *^^^ b« ^^^^ to account fiQ ^Z' . "^T ' ^'''^'"'^ Depreciation-Cr.," or to account No. 4ld, Realized Depreciation not Covered by Reserves " (6) When any fixed capital is withdrawn or retired whose book value 18 greater than the known or estimated cost, such excess should be charged to account No. 417, "Other Deductions from Surplus," and the realized depreciation should be chai^d as elsewhere directed (/) If any fixed capital is sold for more than its original cost the amount of depreciation, if any, accrued and credited to a reserve in respect thereof, should be determined as accurately as possible and charged to such reserve. The sum of the amount so charged and the excess of the selling price over the cost of the property should be credited to account No. 401, "Miscellaneous Additions to Surplus " 36 TEXT EXPLANATORY OF FIXED CAPITAL ACCOUNTS. 100. Fixed Capital Installed Prior to January 1, 1913. This account is a summary of those accounts which include the fixed capital of the company installed prior to January 1, 1913, and which is still in service at the date of the balance sheet. The accounts representing the fixed capital of the company as carried on its books at the close of December 31, 1912, should be so designated upon the books of the company as to show clearly that they relate only to fixed capital installed prior to the close of that date. No debits should be made to such accounts with respect to any property subsequently acquired, but the cost of such property should be charged to the accounts hereinafter provided. (See sec. 9, p. 32, and note under account No. 101.) Not*.— In the reports to the Commfasion a statement will be required show- ing the names of the accounts for flxed capital actually carried by the company on December 31, 1912, and the balances therein at the date of the report. 101. Fixed Capital Installed Since December 31, 1912. This account is a summary of accounts Noe. 200 to 274, inclu- sive, which include the cost of fixed capital installed since December 31, 1912. The sum of the balances in accounts Noe. 200 to 274, inclusive, as provided hereinafter, should be shown on the balance-sheet statement under this account. (See sec. 9, p. 32.) Note.— If the accounts of a telephone company have been kept as pre- scribed by a State commission and it is possible to cloae the fUed capItAl accounts substantially into the primary flxed capital accounts prescribed hereinafter, it will not be necessary to separate the flxed capital accounts as of January 1, 1913, but the primary accounts under account Na 101 may include the flxed capital accounts since the efTective date of supervision by the State commission, and the dates in the titles of accounts Nos. 100 and 101 may be changed accordingly. 200. Intangible Capital. This account should include the cost of intangible capital, as provided for in the following subaccounts: 201. Organization. This account should include all fees paid to governments for the privilege of incorporation, and all office and other expendi- tures incident to organizing the company or other enteiprise and putting it in readiness to do business. This includes the cost of preparing and distributing prospectuses, the cost of soliciting subscriptions for stock (but not for loans nor for the purchase of bonds or other evidence of indebtedness), cash fees paid to pro- moters, and the actual cash value at the time of organization of securities paid to promoters for their services in organizing the enterprise; counsel fees; cost of preparing and issuing certifi- cates of stock, and cost of procuring certificates of necessity from State authorities, and other like costs. ^1 i > 37 202. Franchises. This account should include the amount (exclusive of any tax or annual charge) actually paid to governments as the considera- tion for the grant of such franchise or right as is necessary to the conduct of the company's telephone operations. If any such franchise is acquired by assignment, the charge to this ac- count in respect thereof should not exceed the amount actually paid therefor by the company to its assignor, nor should it exceed the amount actually paid the government. Any excess of the amount actually paid by the company over the amount paid by the original grantee to the grantor of the franchise should be charged to account No. 204, ''Other Intangible Capital." If any such franchise has a life of not more than one year after the date when it is first exercised by the company, it should not be charged to this account, but to the appropriate accounts in operating expenses, or in account No. 128, " Prepayments, "- if extending beyond the fiscal year. Note.— Annual or more frequent payments in respect of franchises must not be charged to this account, but to the appropriate tax or operating expense account. 203. Patent Rights. This account should include the cost of all rights (having a life of more than one year from the date when placed in service) acquired by the company in or under valid patents granted by the United States to inventors for inventions and discoveries in connection with the conduct of the company's telephone operations. 204. Other Intangible Capital. This account should include the cost of all other property com- ing within the definition of intangible capital and devoted to telephone operations. Entries of chaises to this account should describe the acquired property with sufficient particularity cleariy to identify it, and should also show specifically the prin- cipal from whom acquired and all agents representing such principal in the transaction; also the term of life of such prop- erty, estimated if not known, and, if estimated, the facts upon which the estimate is based. (See sec. 13, p. 33.) 207. Right of Way. This account should include the cost of all land and interests in land acquired for the location of telephone wires, cables, pole lines, and conduits; salaries and expenses of right-of-way agents; expenses of appraisals and of juries, conunissioners, or arbitra- tors in condemnation cases; real-estate brokers' commissions; cost of plats, abstracts, notarial fees, examination of title, re^ cording deeds, etc. This account should also include the first cost of acquiring leaseholds of land for right of way, the terms of which are rnor© propriate fixed capital account. 335. Interest Deductions for Funded Debt. This account should include all interest accrued on out- standing funded debt and debenture stock issued or assumed by the company. This account does not include interest on securities held by the company in its treasury, in sinking or other reserve funds, or pledged as collateral. Note A.— Interest accruing on funded securities after maturity should not be included in this account, but in account No. 336, "Other Interest Deduc- tions." Note B. — If any of the funded debt securities issued or assumed by the company are held in its sinking or other reserve funds and the interest on such funded debt is an accretion to the fund, the interest on such securities should not be charged to this account, but an amount equal to the interest on the funded debt so held should be charged to account No. 350, "Appropria- tions of Income to Sinking and Other Reserve Funds." This does not apply to securities carried in account No. 127, " Provident Fund Assets." 336. Other Interest Deductions. This account should include all interest accrued on unfunded debt, such as short-term notes payable on demand or having dates of maturity one year or less from date of issue, and open accounts and other analogous items, including discount on short- term notes; also interest accruing on funded debt securities after maturity of debt. i^ I I 53 337. Loss ON Operations of Others. Whenever, in accordance with the terms of any contract, the company is bound to contribute toward reimbursement of the losses resulting from the operations of others, all liabilities against the company accruing from such source should be charged to this account. 338. Amortization of Debt Discount and Expense. Charge to this account during each fiscal period the propor- tion of the unamortized discount and expense on outstanding funded debt which is applicable to the period. (See sec. 7, p. 14.) 339. Release of Premiums on Debt — Cr. Credit to this account, during each fiscal period the propor- tion of the premium at which outstanding funded debt was issued which is applicable to the period. (See sec. 7, p. 14.) 340. Amortization op Landed Capftal. Charge to this account during each fiscal period such portion of the original money cost (estimated, if not known) of landed capital as carried in account No. 207, "Right of Way," and No. 211, **Land, " as is necessary to cover the proportion of life thereof expired during such period. Note A.— The amounts charged to this account should be concurrently credited to accotmt No. 103, " Reserve for Amortization of Intangible Capital— Cr." Note B.— When any landed capital expires or is otherwise retired from service (as e. g., through sale) the fixed capital account or invest- ment account, if any, originally charged therewith should be credited with the amount originally charged, account No. 103, "Reserve for Amor- tization of Intangible Capital— Cr.," should be debited with all amounts theretofore credited to such account in respect of such capital so going out of service; the appropriate account should be debited with the proc-eeds of sale, if any, and any necessary adjustment should be made through the Corporate Surplus or Deficit account. 341. Miscellaneous Deductions from Income. This account should include all deductions from gross income which are in the nature of fixed charges but not otherwise pro- vided for, such as those required by the terms of some contract, agreement, charter provision, law, or ordinance. Such deductions should not include any appropriations or dispositions of income that rest solely in the discretion of the accounting company. V. DISPOSITION OF NET INCOME. 350. Approprl\tion8 of Income to Sinking and Other Reserve Funds. This account should include amounts of appropriations of income for sinking and other reserve funds. The terms of mortgages, deeds of trust, or other contracts providing for the allocation of income or for the pajTuent of definite sums into 54 sinkiiig and other reserve funds, and for accretions to such funds on account of income from pre\dous investments, may be made the basis of such appropriations. The appropriations for payments or accretions to the funds may include amounts equal to (1) direct payments; (2) the interest or dividends on securities issued or assumed by the accounting company and held in such funds; (3) the income from investments in securities (other than those issued or assumed by the accounting company) held in such funds; and (4) the income from cash and other property held in such funds. NoTK A. — The amounts charged to this aocount should be concurrently credited to account No. 172, "Surplus Invested In Sinking Funds," or other appropriate reserve. Note B.— If appropriations for direct pajrments are made fh>m surplus, they should be charged to account No. 411, "Appropriations of Surplus to Sinking and Other Reserve Funds. " 361. Dividend Appropriations op Income. This account should include dividends on outstanding capital stock issued or assumed by the accounting company (other than that held by it), if declared from income. This account should be subdivided so as to show separately the dividends on the various classes of capital stock. If a dividend is payable in any thing other than money, such thing should be described in the entry with sufficient particu- larity to identify it. Note A.— This accoimt should include the dividends declared out of income on all classes of capital stock, except debenture stock. The payments on debenture stock should be charged to account No. 335, "Interest Deduc- tions for Funded Debt. " Note B. — This account should not include charges for dividends on capital stock issued or assumed by the accounting company and owned by it, whether held in its treasury, in special deposits, or in sinking or othor reserve funds, or pledged as collateral. (See account No. 350, "Appropriations of Income to Sinking and Other Reserve Funds. ") Note C— This account should be used if the appropriations are definitely made as chargeable to income. If simflar appropriations arc made from surplus, they should be charged to account No. 412, " Dividend Appropri&> tions of Surplus. " 352. Appropriations of Income for Construction, Equipment, AND Betterments. This account should include amounts appropriated from income for construction and equipment and for betterments of property carried in fixed capital accounts. These amoimts should be subdivided so as to show — (a) amounts expended during preceding fiscal periods, (6) amoimts expended during the current fiscal period, and (c) amounts held in reserve. Note.— This account should be used if the appropriations are definitely made as chargeable to income. If similar appropriations are made from surplus, they should be charged to account No. 415, "Appropriations of Sur- plus for Construction, Equipment, and Betterments." 55 363. Miscellaneous Approprl^tions of Income. This account should include appropriations of income not provided for elsewhere. Note.— This account should be used if the appropriations are definitely made as chargeable to income. If similar appropriations ara made from surplus, they should be charged to account No. 416, "Miscellaneous Appro- priations of Surplus. " 56 CORPORATE SURPLUS OR DEFICIT ACCOUNT. I. CREDITS. Balance (at beginning of fiscal period). Page. 400. Credit Balance Transferred from Income Account.. . 57 401. Miscellaneous Additions to Surplus 57 Bam>nce Debit (at end of fiscal period) Carried to Balance Sheet. n. DEBITS. Balance (at beginning of fiscal period). 410. Debit Balance Transferred From Income Account... 57 411. Appropriations of Surplus to Sinking and Other Reserve Funds 57 412. Dividend Appropriations of Surplus ' 58 413. Realized Depreciation not Covered by Reserves... 68 414. Amortization Unprovided for Elsewhere 58 415. Appropriations of Surplus for Construction, Equip- ment, AND Betterments 58 416. Miscellaneous Appropriations of Surplus 59 417. Other Deductions from Surplus 59 Balance Credit (at end of fiscal period) Carried to Balance Sheet. INSTRUCTIONS PERTAINING TO CORPORATE SURPLUS OR DEFICIT ACCOUNT. 17. Corporate surplus or deficit account defined. — This account or summary is the connecting link between the Income Account and the Balance Sheet. It summarizes the changes in the corporate surplus or deficit during a given fiscal period resulting from the operations and the business transactions during that period, as well as those effected by any disposition of net profits made solely at the option of the company by accounting adjustments not properly attributable to the period, or by miscellaneous losses or gains not provided for elsewhere. The cor- porate surplus or deficit should be shown on the balance-sheet state- ment under account No. 137, "Corporate Deficit," or No. 174, "Corpo- rate Surplus Unappropriated." •< :"» f" 57 TEXT EXPLANATORY OF CORPORATE SURPLUS OR DEFICIT ACCOUNT. L CREDITS. 400. Credit Balance Transferred from Income Account. Under this title should be shown the amount of net income brought forward from the Income Account. 401. Miscellaneous Additions to Surplus. This account should include amounts (not provided for else- where) transferred to Surplus from other accounts and amounts representing increases in resources not properly assignable to the income of the fiscal period for which the accounts are stated. Among the items which should be credited to this account are, for example — Adjustment or cancellaUon of old balance-sheet accounts (other than fixed capital). Profits derived from the sale of property carried in account No. Ill, "Miscellaneous Investments." Credits resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost less than the par value. Premium on capital stock at the time of its retirement. Unextinguished premiums on funded debt retired before maturity. n. DEBITS. 410. Debit Balance Transferred prom Income Account. Under this title should be shown the amount of net loss brought forward from the Income Account. Appropriations of Surplus to Sinking and Other Reserve Funds. This account should include amounts of appropriations of surplus for sinking and other reserve funds. The terms of mortgages, deeds of trust, or other contracts providing for the allocation of surplus or for the payment of definite amounts into sinking and other reserve funds may be made the basis of such appropriations. Note A.— This account should be used If the appropriations are definitely made as chargeable to surplus. If similar appropriations are made from income, they should be charged to account No. 350, "Appropriations of Income to Sinking and Other Reserve Funds." Note B.— If appropriations are made to cover the income accruing on sinking-fund assets and to cover amounts equivalent to interest on securities issued or assumed by the accounting company and held in such funds, the amounts of such appropriations should not be included in this account,' but should be Included in account No. 350, "Appropriations of Income to Sinking and Other Reserve Funds." If appropriations are made to cover sums equivalent to dividends on stock issued or assumed by the accounting com- pany and held in such funds the amounts of such appropriations may be Included In this account or in account No. 350, according as the dividend is declared from surplus or from income. 411 58 59 ! I N(yri5C.-The amounts charged to this acooont should be concwrently credited to balance-sheet account No. 172, "Surplus Invested In Sinking Funds," or other appropriate reserve accounts. 412 DivroEND Appropriations of Surplus. This account should include dividends on outstanding capi- tal stock issued or assumed by the accounting company (other than that held by it), if declared from surplus. This account should be subdivided so as to show separately the dividends on the various classes of capital stock. If a dividend is payable in any thing other than money, such thing should be described in the entry with sufficient particularity to identify it. Note A— This account includes the dividends declared from surplus on all classes of capital stock except debenture stock. The payments on debenture stock should be charged to account Na 335, " Interest Deductions for Funded Debt." . .._^^ ^ ,* • NOTB B.— This account should not include charges for dividends on capital stock issued or assumed by the accounting company and owned by it. whether held in its treasury, in special deposits, or sinking or other reser>'e funds, or pledged as collateral. (See account No. 411, "Appropriations of Surplus to Sinking and Other Reserve Funds.") Nom— This account should be used if appropriations are definitely made as chargeable to surplus. If similar appropriations are made from income, they should be charged to account No. 351, "Dividend Appropriations of Income." 413 Realized Depreciation not Covered by Reserves. Charge to this account the realized depreciaUon (i. e., the difference between the original cost and the salvage, if any) on tangible fixed capital retired, if such depreciation has not been provided for through a depreciation reserve. This includes such portion of the reaUzed depreciation on any physical property which was installed prior to the period for which the reserve was established as is due to life in service before that period. This portion may be estimated on the basis of the proportion which the Ufe in service of the property in question prior to the period for which the reserve was established bears to its entire life in service. (See sec. 23, p. 67.) 414 Amortization Unprovided for Elsewhere. Charge to this account, when any intangible property expires or is relinquished, such portion of its cost as has not been pre- viously written off or is not covered by account No. 103, ' * Reserve for Amortization of Intangible Capital--Cr." Charge also to this account all optional amortization, such as that of assets car- ried in accounts No. 201, " Organization " and No. 204, "Other Intangible Capital." 415. Appropriations of Surplus for Construction, Equipment, AND Betterments. ^ This account should include amounts appropriated from surplus for construction and equipment and for betterments of property carried in the fixed capital accounts. These amounts should be subdivided so as to show (a) amounts expended during preceding fiscal periods, (6) amounts expended during the current fiscal period, and (c) amounts held in reserve. Note.— This account should be used if appropriations are definitely made as chargeable to surplus. If similar appropriations are made from income, they should be charged to account No. 352, " Appropriations of Income for Construc- tion, Equipment, and Betterments." 416. Miscellaneous Appropriations of Surplus. This account should include appropriations of surplus not provided for elsewhere. Note.— This account should be used when the appropriations are definitely made as chargeable to surplus. If similar appropriations are made from income, they should be charged to account No. 353, " Miscellaneous Appropria- tions of Income." 417. Other Deductions from Surplus. This account should include amounts (not provided for else- where) transferred from Surplus to other accounts, amounts written off in consequence of adjustments, and payments not properly chargeable to Income for the fiscal period for which the accounts are stated. Among the items which should be charged to this account are, for example: Adjustment or cancellation of old balance-sheet accounts (other than fixed capital). Losses resulting from the sale, destruction, or retirement of property carried in account No. Ill, "Miscellaneous Invest- ments." Losses resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost exceeding the par value. Deductions made to extinguish discount on capital stock. Deductions made to amortize debt discount and expense when not properly cliargeable to income. Note.— a complete analysis of this account will be required in annual reports of the company to the Commission. 60 61 OPERATING REVENUE ACCOUNTS. L EXOHANGE SERVIOE REVENUES. Page. 500. Subscribers' Station Revenues 61 501. Public Pay Station Revenues 61 502. Miscellaneous Exchange Service Revenues 61 503. Service Stations 61 504. Private Exchange Lines 61 505. Minor Rents of Exchange Plant 61 606. Other Exchange Revenues 61 n. TOLL SEEVIOE REVENUES. 510. Message Tolls 62 511. Miscellaneous Toll Line Revenues 62 512. Leased Toll Lines 62 513. Telegraph Tolls 62 514. Telegraph Service on Toll Lines 62 515. Minor Rents of Toll Plant 62 516. Other Toll Line Revenues 62 m. MISCELLANEOUS OPERATING REVENUEa 620. Messenger Service 63 621. Telegraph Commissions 63 622. Other Telegraph Service Charges 63 623. Advertising and Directory 63 624. Rents from Other Operating Property 63 626. Other Miscellaneous Revenue 63 626. Licensee Revenue — Cr 63 527. Licensee Revenue — Dr 63 INSTRUCTIONS PERTAINING TO OPERATING REVENUE ACCOUNTS. 18. Operating revenues defined. — By operating revenues are meant all amounts of money which the company receives or becomes law- fully entitled to recover for services rendered and as a return upon property used by the company in its own operations. Credits to the various revenue accounts should be based upon the gross charges made for services rendered by the company. 19. Deductions from revenues.— Discounts allowed subscribers for prompt payment, corrections of overcharges, overcol lections thereto- fore credited and afterwards cort-ected, authorized refunds on account of failures in transmission, and other corrections should be charged to the revenue account to which they relate. 20. Commissions. — Commissions paid to attendants at pay stations and to employees or others in lieu of salaries should be chained to appro- priate expense accounts and not to Xhe revenue accounts. TEXT EXPLANATORY OF OPERATING REVENUE ACCOUNTS. I EXOHANGE SERVICE REVENUES. 600. Subscribers Station Revenues. This account should include all revenues from subscribers for exchange service, extension stations, private branch exchanges, and other exchange service stations, whether the charge is based upon a flat rate or measured rate. Include in this account, also, charges made for the insertion of extra names in directory and for use of extra exchange mileage in circuits to subscribers' sta- tions, installation and cancellation charges, and any commissions on telegraph tolls received in lieu of rent for exchange lines. 601. Public Pay Station Revenues. This account should include all revenues from exchange service at public pay stations. This account should not include revenues • from regular subscribers' stations having measured service or coin box service at standard rates. The amount credited to this account should be the gross amount collected or due at tariff rates; commissions allowed attendants or others for pay station tolls should be debited to account No. 648, "Pay Station Commis- 602 rions," and not to this "account. A 603. 604. Miscellaneous Exchange Service Revenues. This account should include all revenues derived from ex- change service other than from subscribers' stations or public pay stations, as provided for in the following subaccounts: Service Stations. This account should include switching charges and other revenues derived from stations, the Unes and equipments for which are owned wholly or in part by others, but to which the accounting company furnishes exchange service. Private Exchange Lines. This account should include all revenues derived from tele- phone Unes, equipment, and instruments forming part of the company's exchange plant and leased to others for use as private Unes but without exchange connections with other subscribers 605. Minor Rents of Exchange Plant. This account should include all revenues derived from attach- ments to exchange poles, the use of exchange conduits, and other minor rents from exchange plant where such property is main- tained by the accounting company, and the cost of such mainte- nance can not be separated from the expense of maintaining the rented property. This account should not Include rents for equipment leased to licensees under an arrangement for a division of revenues as provided for in account No. 526 "Li- censee Revenue— Cr." ' 606. Other Exchange Revenues. This account should include all exchange service revenues not provided for elsewhere. / 62 63 n TOLL 8EEVI0E REYENUES. 510. Message Tolls. This account should include all revenues derived from messages transmitted wholly over the company 's lines between stations in different exchange areas and for which a charge is made that is not included in contracts with subscribers for station service; also the accounting company's proportion of tolls on messages transmitted by the joint use of its own and other lines. 511. Miscellaneous Toll Line Revenues. This account should include all toll service revenues (other than message tolls), as provided for in the following subaccounts: 512. Leased Toll Lines. This account should include all revenues derived from toll lines (including the terminal exchange circuits) leased by others imder contracts giving exclusive telephone use either con- tinuously or during stated periods. Such plant may be leased in connection with private branch exchange or private exchange line installations. Note.— Revenues from private branch exchanges or private lines, the contracts for which provide for the use of toil circuits, should be divided (by estimate, if necessary) between Exclfange Revenue and Toll Revenue. 513. Telegraph Tolls. This account should include all revenues received from tele- graph companies for the use of toll lines for telephoning tele- grams and cablegrams. 514. Telegraph Service on Toll Lines. This account should include all revenues derived from the use of toll lines for telegraph circuits whether such lines are used by telegraph companies, brokers, or others. 515. Minor Rents of Toll Plant. This account should include all revenues derived from attach- ments to toll poles, the use of toll conduits, and other minor rents from toll plant where such property is maintained by the ac- counting company, and the cost of such maintenance can not be separated from expense of maintaining the rented property. This account should not include rents from equipment leased to licensees under an arrangement for a division of revenues as provided for in account No. 526, "Licensee Revenue — Cr. " 516. Other Toll Line Reveniues. This account should include all toll line revenues not pro- vided for elsewhere. \i m. MISOELLANEOUS OPERATING REVENUES. 520. Messenger Service. This account should include all revenues derived from mes- senger service. 521. Telegraph Commissions. This account should include all commissions receivable for the collection of telegraph and cable tolls on messages trans- mitted between telegraph offices and their patrons and upon which the accounting company undertakes to make collection. 522. Other Telegraph Service Charges. This account should include all revenues (not classed as tele- graph commissions or telegraph tolls) received from telegraph companies for services rendered by the telephone company's employees in joint telephone offices in connection with telegraph and cable messages, such, for example, as receiving messages from the public and quoting rates. 523. Advertising and Directory. This account should include all revenues derived from adver- tising in directories and elsewhere. 524. Rents from Other Operating Property. This account should include all revenues accruing from' the rent of buildings and other property (except leased wires, poles, conduits, and equipment covered by accounts No. 505, ** Minor Rents of Exchange Plant," and No. 515, "Minor Rents of Toll Plant, ' '), when such property is used also by the company and the ; expense of maintaining and operating the rented portion can not be separated from the total expense. 525. Other Miscellaneous Revenue. This account should include all miscellaneous operating reve- nues not provided for elsewhere. This accoimt does not include . nonoperating revenue as provided for in accounts Nos. 310 to 316, inclusive. 526. Licensee Revenue — Cr. When a telephone company grants to another telephone company the use of its patents or furnishes instruments and equipment and general supervision under an agreement for apportioning the revenues of the licensee, the proportion accru- ing to the licensor should be included by the licensor in this account. 627. Licensee Revenue — Dr. When a telephone company is granted by another telephone company the use of its patents, or is furnished instruments and equipment and general supervision under an agreement for apportioning the revenues of the Ucensee, the proportion accru- ing to the licensor should be included by the licensee in this account. 64 65 OPERATING EXPENSE ACCOUNTS. L MATNTENANOE EXPENSES. 601. Supervision op Maintenance qq 602. Repairs of Aerial Plant 99 603. Repairs op Underground Plant 09 604. Repairs op Central Office Equipment 69 605. Repairs of Station Equipment 70 606. Repairs of Buildings and Grounds 70 607. Station Removals and Changes 70 608. Depreciation of Plant and Equipment 71 609. Extraordinary Depreciation 7x 610. Other Maintenance Expenses 71 611. Repairs Charged to Reserves — Cr 71 n trapfio expenses. 620. Central Office Superintendence 7x 621. Traffic Superintendence 72 622. Service Inspection 72 623. Clerical Operating Wages 72 624. Operators' Wages 72 625. Central Office Supplies and Expenses 72 626. Rest and Lunch Rooms 72 627. Operators' Schooling 72 628. Trwnsmission Power 72 629. Central Offijce Stationery and Printing 72 630. Messenger Service 72 631. Miscellaneous Central Office Expenses 73 632. Pay Station Expenses 73 633. Other Traffic Expenses 73 m. OOMMEEOIAL EXPENSES. 640. Commercla-l Administration 73 641. Promotion Expenses 73 642. Advertising 73 643. Canvassing 73 644. Sublicensee Relations 74 645. Collection Expenses : 74 646. Revenue Accounting 74 647. Revenue Collecting 74 648. Pay Station Commissions 74 649. Directory Expenses 74 650. Other Commercla.l Expenses 74 i IV. GENEEAL AND mSOELLANEOTTS EXPEBSES. Page. 660. General Office Salaries 74 661. Salaries o/General Officers 74 662. Salaries o/General Office Clerks 74 663. General Office Supplies and Expenses 75 664. Expenses o/General Officers and Clerks 75 665. General Office Stationery and Printing 75 666. Other General Office Supplies and Expenses 75 667. General Law Expenses 75 668. Insurance 75 669. Accidents and Damages 75 670. Law Expenses Connected with Damages 76 671. Miscellaneous General Expenses 76 672. Relic/ Department and Pensions 75 673. Telephone Franchise Requirements 75 674. Amortization 0/ Franchises and Patents 77 675. Other General Expenses 77 676. Telephone Franchise Requirements — Cr 77 66 67 INSTRUCTIONS PERTAINING TO OPERATING EXPENSE ACCOUNTS. 21. Bepairs deflned. — Repairs, as used in the text of the various operating expense accounts, includes ordinary and extraordinary repairs. Ordinary repairs include: (a) Testing for, locating, and clearing crosses, breaks, grounds, and other line troubles, including routine work intended to prevent such troubles, as, for example, pulling up slack, tightening guys and reset- ting guy stubs, trimming trees, straightening poles and cross arms, and cleaning and adjusting apparatus; (6) Replacements of minor or short-lived parts of structures, equip- ment, or facilities; (c) Replacements of minor parts of wire plant or equipment made necessary by reason of faulty adjustments, excessive strains, mechanical injuries, or other minor casualties, not provided against in the chai^ for depreciation of plant and equipment; ((f) Rearrangements and changes in location of plant, except sub- scribers' station equipment (for which a special account is provided). This includes rearrangements of circuits, reaasociation of party lines, rearranging ^ouping of trunks and calling circuits, recroas connecting on distributing frames, rerunning jumper wires, underlining switch- board jacks, etc., together with materials used for such purposes which do not add to the tangible value of such plant; (e) Recovering salvage and removing retired or abandoned property; (except subscribers' station equipment) when such costs are not pro- vided for by the depreciation reserve. Ordinary repairs are not required to be taken into account in fixing a rate of depreciation. Extraordinary repairs include: (a) Restoring to an efficient or proper condition buildings, structures, or other units of property which nave deteriorated; (6) Substituting, in order to maintain normal efficiency, new parts for old parts of continuous structures, such as pole lines, cables, wires, conduits, etc., where such substitutions do not amount to a prac- tical replacement of any considerable length of such continuous struc- tures; (c) Restoring the condition of property damaged by storms, floods, fire, or other casualties; (d) Recovering salvage and removing retired or abandoned property in connection with above work. Extraordinary repairs should be provided for by adequate charges to depreciation. When it is necessary substantially to reconstruct or to replace a major portion of any unit of property or any important section of a continuous structure, the cost should be handled through the capital accounts; that is, the cost of the pro{>erty removed or replaced should be credited to the appropriate fixed capital accounts and the new property should be charged thereto. All repairs, whether ordinary or extraordinary*, should be charged to the appropriate primary oi)erating expense accounts. Extraordinary' repairs for which a reserve has been provided should then be concur- I rently charged to account No. 102, ''Reserve for Accrued Deprecia- tion— Cr.," and credited to account No. 611, ''Repairs Charged to Re- serves — Cr." 22. Cost of repairs.— The cost of repairs, as used in the text of the various operating expense accounts, should be understood to include • the wages, salaries, and fees paid employees directly engaged in the work of repairs, personal expenses of such employees when borne by the company, and the cost of materials and supplies consumed and the expenses of facilities employed in making the repairs less the value of any salvage recovered. It includes also the cost of direct supervision, such as of foremen or superintendents of repair gangs, but does not include the cost of general supervision as provided for in account No. 601, "Suj)ervision of Maintenance." 23. Depreciation of plant and equipment.— Telephone companies should include in operating expenses depreciation charges for the pur- pose of creating proper and adequate reserves to cover the expenses of depreciation currently accruing in the tangible fixed capital. By expense of depredation is meant — (a) The losses suffered through the current lessening in value of tangible property from wear and tear (not coverec^by current repairs). (6) 0b8r)le8cence or inadequacy resulting from age, physical change, or supersession by reason of new inventions and discoveries, changes in popular demand, or public requirements, and (c) Losses suffered through destructipn of property by extraordinary casualties. The amount charged as expense of depreciation should be based upon rules determined by the accounting company. Such rules may be derived from a consideration of the company's history and experience. Companies should be prepared to furnish the Commission, upon de- mand, the rules and a sworn statement of the facts, expert opinions, and estimates upon which they are based. The estimate for depreciation of physical property should take into account — (a) The gradual deterioration and ultimate retirement of units of property which may be satisfactorily individualized, such as build- ings, machines, valuable instruments, etc., to the end that by the time such units of property go out of service there shall have been accumulated a reserve equal to the original money cost of such property plus expenses incident to retirement less the value of any salvage. (b) The depreciation accruing in property which can not be readily individualized, such as pole lines, wires, cables, or other continuous structures, where expenditures for repairs or replacements of indi- vidual parts ordinarily are not actually made until the later years of the life in service of such property, and when made may, therefore, be classed as extraordinary repairs. • The rate of depreciation should be fixed so as to distribute, as nearly as may be, evenly throughout the life of the depreciating property the burden of repairs and the cost of capital consumed in operations during a given month or year, and should be based upon the average life of the units comprised in the respective classes of property. 68 I The amount estimated to cover the expense of depreciation of fixed capital should be charged monthly to account No. 608, "Deprecia- tion of Plant and Equipment " (or to the appropriate clearing account or accounts), and concurrently credited to account No. 102, "Reserve for Accrued Depreciation — Cr." Account No. 413, "Realized Depreciation not Covered by Reserves," is provided in the Corporate Surplus or Deficit account for charges for realized depreciation on tangible fixed capital retired when such depreciation occurred prior to the establishment of account No. 102, "Reserve for Accrued Depreciation — Cr.," or has not been provided for by credits to that account. 24. Extraordinary casualties and unanticipated reconstmction. — If so authorized, upon application to the Commission, the company granted such authority may charge the amount named in the authorization to a suspense account for the purpose of distributing over a limited period an extraordinary loss of such a nature that it can not be anticipated by the exercise of reasonable prudence. Losses of this sort may be due to the requirement by lawful authority or public necessity of improvements involving the abandonment of a considerable portion of plant and equipment before it has attained ita normal life in service, or to an extraordinary casualty entirely unforeseen and unprovided for. The original cost of the property so abandoned or destroyed should be credited to the fixed capital accounts in which it was carried, and such portion of the cost as may be authorized by the Commission may be charged to the suspense account, the remainder of the cost, less any salvage, being charged out as elsewhere provided in case of retirements of property. The suspense account so raised should be credited and account No. 609, "Extraordinary Depreciation," debited monthly with such an amount as will, through its regular application, amortize the amount of the loss at the end of the period designated. All ordinary casualties (those which occur with such frequency that the principles of insurance are applicable thereto) should be provided for through an insurance reserve maintained for such losses or be included in the provision for depreciation of plant and equipment. 25. Joint operating expenses. — When any operating exf>ense is in- curred by the accounting company for the joint benefit of itself and others under an agreement for apportioning such expenses the company charging such expenses to others should credit such. amounts to its primary expense accounts to which the expenses were charged when incurred. The debtor company should chaige the amounts so billed to its primary expense accounts. Bills rendered by the operating company for joint expenses should show the expenses in detail. The amounts so handled through the expense accounts should not include any allowance for profit or return upon the value of the property used; such allowance, if any, should be credited by the payee to the appropriate rent revenue account and charged by the payor to the appropriate rent deduction account. 69 TEXT EXPLANATORY OF OPERATING EXPENSE ACCOUNTS. eoi. 602. 4 «03. L MAINTENANCE EXPENSES. [ki Supervision of Maintenance. This account should include the pay and office and traveling expenses of superintendents and their assistants when directly in chai^ of maintenance of telephone plant, including general, division, and district plant superintendents, engineers, archi- tects, and their office and field forces; the cost of repairing drafting and engineering instruments, and the original cost of such instruments as are not properly chargeable to fixed capital accounts; the cost of office and other supplies used by officers and employees whose salaries are charged to this account; jani- tor service, light, heat, and miscellaneous office expenses where separate offices are maintained for such employees; also that portion of the salaries and expenses of the general engineering staff of the company which is assignable to maintenance. Repairs op Aerial Plant. This account should include the cost of repairs of all plant clas- sified as aerial plant, such as poles, towers, cross arms, pins, brack- ets, and other pole fixtures; braces, guy wires, guy stubs, and other pole supports; aerial cables, and the suspension wires, bolts, clamps, rings, hangers, etc., used to attach cables to poles, towers, or other supports; aerial cable loading coils, cable boxes, and their appurtenances; and aerial telephone wires, drop wires, tie wires, insulators, and sleeves. It includes also the cost of trim- ming trees and clearing and removing obstructions from right of way for aerial plant, other than the cost of first clearing right of way. Repairs of Underground Plant. This account should include the cost of repairs of all plant clas- sified as underground plant, such as underground conduits and their appurtenances; underground cables, submarine cables, and the loading coils, towers, boxes, and fittings belonging to such cables. It also includes the cost of repairing right of way for underground and submarine cables, and the cost of repaving after repairs of underground conduits. 604. Repairs of Central Office Equipment. This account should include the cost of repairing telephone equipment in central telephone offices, such as switchboards, monitors' and supervisors' desks, testing outfits, main and in- termediate frames, cables, and jumper wires, call registers and meters, relay racks and coil racks; equipment for generating and regulating power for telephone purposes, such as batteries, en- gines, motors, generators, rectifiers, transformers, meters, fuses, and protectors; telephone and telegraph instruments and other i^fr 70 electrical instrumente and apparatus in the central office; equip- ment for operators' schools and rest rooms, and furniture and fixtures required for the uses or convenience of the operating forces. 605. Repairs of Station Equipment. This account should include the cost of repairing station appa- ratus, such as telephone sets, intercommunicating seto, bells, backboards, desk stands, coin boxes, protectors, battery boxes, batteries, cords, and telephone and telegraph instruments or parts thereof; interior block wires; private branch exchange switchboards, distributing frames, and switchboard cables, and booths and special fittings for same, such as desks, chairs, fans, and cash registers. Note.— The cost of renewals of batteries at stations is not chargeable to this account, but to account No. 628, "Transmission Power." 606. Repairs op Buildings and Grounds. This account should include the cost of repairing general offices, central offices, test stations, or other telephone offices and the fix- tures (except telephone apparatus) therein, such as elevators, plumbing, apparatus for heating, lighting, ventilating, and power; and the cost of maintaining yards and grounds, with their fences, sidewalks, sewers, etc., appurtenant to such build- ings. Charge also to this account the cost of repairing shope, stores, stables, and garages, and permanent fixtures therein. 607. Station Removals and Changes. This account should include the cost of disconnecting and removing and of changing the location of all plant classified as subscribers' station equipment (as defined in account No. 230 "Station Equipment"), including freight and cartage on such equipment and material as is sent to storehouse. (1) When stations are removed (not merely changed in loca- tion) from subscribers' premises, the original cost (estimated, if not known) of the station should be credited to the appropriate fixed capital accounts, and the cost of the instruments, private branch exchange apparatus, booths, and fittings should be charged to account No. 122, "Materials and Supplies," while the cost of installation, including inside wires, or interior block wires and that portion of aerial wire which could be used only at the subscribers' premises from which the station is removed, less the value of any salvage, should be charged to this account. Note.— When extensive replacements are made of subscribers' station equip- ment, or of drop or block wiring taken out of service because of inadequacy or obsolescence, as when a magneto system Is changed to a common battery or when open wire distribution is replaced by interior block construction the cost of making such replacements should be handled through the regular construc- Uon and depreciation accoimts, and should not be Included In the abova account. < •■V 71 (2) If wiring left from previous installations is reused either on same or other premises, the gain should be credited to this Account. This includes the gain on inside wires and interior block wires and on that portion of aerial wire which could be used only at subscribers' premises. (3) When stations are disconnected but left on premises, charge to this account the cost of disconnecting, and when reconnected, the cost of reconnecting, (4) WTien station location or service is changed, charge to this account the cost of such changes, less the amount, if any, properly chargeable to fixed capital accounts for actual additions to plant. (5) Credit to this account amounts charged subscribers for moves and changes, 608, DEPRECLA.TION OF PlANT AND EQUIPMENT. Charge to this account monthly the amount estimated to be necessary to cover the depreciation accruing during the month in the company's tangible fixed capital (except depreciation provided in "Clearing Accounts," Nos. 701, 702, and 703), Amounts charged to this account should be concurrently credited to account No, 102, "Reserve for Accrued Depreciation— Cr." (See sec, 23, p. 67.) 609. Extraordinary Depreciation. This account should be charged monthly with such an amount as will, through its regular application, amortize any amount that may be carried in suspense on account of extraordinary casualties and unanticipated reconstruction, (See sec, 24, p, 68.) 610. Other Maintenance Expenses. This acc-ount should include cost of repairing telephone plant and equipment not provided for elsewhere. 611. Repairs Charged to Reserves — Cr. Credit to this account and charge concurrently to account No. 102, "Reserve for Accrued Depreciation— Cr. , " an amount equal to the cost of extraordinary repairs made for which provision had been made in that reserve; also, credit to this account and charge concurrently to the insurers or to the insurance reserve an amount equal to the cost of repairs made necessary by casualties when such cost is covered by insurance or an insurance reserve. (See sec. 21, p. 66.) H TEAFFIO EXPENSES. 620. Central Office Superintendence. This account should include the cost of all central office superintendence as provided in the following subaccounts: 621. Traffic Superintendence. This account should include the pay and traveling expenses of officers and their assistants when directly in charge of traffic, either for the company as a whole or a territorial subdivision; ■'^SB mmmmvM ■^ I. t 72 «,, °f *' "f maintained for ,uch employee,. ^ ^'^*^ OJ^. Service Inspection. ThiB account should include the pay and expenaea of ^r^n inspection forcps inr^l, .,«;«« n ; expenses of service ense of fumishinR, heatine, and lighting them by the lessor) should be charged to account No. 331, "Rent Deductions for Telephone OflQces." 667. General Law Expenses. This account should include all law expenses (except those in- curred in the defense and settlement of damage claims), including pay and expenses of all counsel, solicitors, and attorneys, their clerks and attendants, janitor service, light, heat, and other ex- penses of their offices; cost of law books, printing briefs, legal forms, testimony, reports, etc.; fees and retainers for services of attorneys not regular employees; court costs and payments of special, notarial, and witness fees not provided for elsewhere; expenses connected with taking depositions; and all law and court expenses not provided for elsewhere. Note.— The compensation of the general solicitor or counsel or other attor- neys engaged partly in the defense or settlement of damage suits and partly In other legal work should be properly apportioned between this account and account No. 070, "Law Expenses Connected with Damages." 668. Insurance. This account should include premiums paid to insurance companies for fire, fidelity, boiler, casualty, burglar, and all other insurance. Charge also to this account and credit account No. 169, "Insurance and Casualty Reserves," amounts set aside as an insurance reserve. This account should be credited and the proper fixed capital account or account^ concurrently charged with the cost of insur- ance applicable to construction work. NoTK.— In annual reports to the Commission the company will be required to report the charges made to this account for the various kinds of insur* Mice, and for self-instvance. 76 77 669. Accidents and Damages. This account should include all expenses (other than law expenses) incurred on account of persons killed or injured and on account of property of others damaged when such expenses have not been provided for by insurance or by a reserve. It includes the pay and expenses of claim agents, investigators, and adjusters; wages paid employees if absent on account of injury; fees and expenses of surgeons and doctors; nursing, hospital attendance, medical and surgical supplies, fees and expenses of coroners and undertakers, and contributions to hospitals; also amounts paid in settlement of personal injury or damage claims. This account should be credited and the proper subdivisions of fixed capital accounts concurrently charged with the expenses of accidents and damages incident to construction work. 670. Law Expenses Connected wfth Damages. This account should include all law expenses connected with the defense or settlement of damage claims, including a proper proportion of the salaries and expenses of the general solicitor or counsel, and salaries, fees, and expenses of attorneys engaged in this work; fees of court stenographers and other court expenses; the cost of law books, printing briefs, court records, and similar papers in connection with such cases. This account should be credited and the proper subdivisions of fixed capital accounts concurrently charged with law expenses incident to damage claims arising out of construction work. 671. Miscellaneous General Expenses, This account should include the matters provided for in the following subaccounts: 672. Relief Department and Pensions. This accoimt should include pensions or other benefits paid to employees or representatives of former employees and ex- penses in connection therewith; salaries and expenses incurred in conducting a relief department, and contributions made to such department. 673. Telephone Franchise Requirements. This account should include the cost of all service jmd materi- als and supplies furnished to municipal corporations in compli- ance with franchise requirements and for which no payment is re- ceived by the company: also of all direct expense, such as paving and other like matters, incurred in compliance with such require- ments and for which no reimbursement is received by the com- pany. This does not include such expense incurred in con- nection with construction or repairs, 'which should be charged to fixed capital or maintenance accounts. Amounts charged to this account for which there is no direct money outlay should be credited to account No. 676, "Telephone Franchise Require- ments — Cr." 4 ^■V 674. Amortization of Francises and Patents. This account should include each month the amount neces- sary to cover such portions of the life of limited franchises and patents as has expired or been consumed during the month. The amount so charged should be concurrently credited to account No. 103, "Reserve for Amortization of Intangible Cap- ital— Cr." Note.— The amount charged U> this account should be based upon a rule determined by the accounting company, the purpose and effect of such rule being to accumulate by charges equitably distributed throughout the life of any franchise or patent, a reserve that will, at the expiration of its life, equal the original cost. 675. Other General Expenses. This account should include such incidental general expenses as are not provided for in the foregoing accounts, such as cost of publishing notices of stockholders' meetings, of election of directors, annual reports in newspapers, and of dividends de- clared, and fees and expenses paid to directors, expenses of transfer agents, and listing of stocks on exchange. 676. Telephone Fran<^ise Requirements— Cr. This account should include the amounts included in account No. 673, "Telephone Franchise Requirements," for which there is no actual money outlay. OLEAEIKG AOOOUKTS. [Required of Class A and Class B Companies.] The following accounts are provided for certain expenses which usually affect several classes of operations but need to be brought together in one account in order that the total of the expenses may be known and properly distributed. 701. Shop Expense. This accoimt or appropriate subaccounts should be arranged 80 as to record separately the expenses of the general shops as follows: (1) Salaries and wages of shop employees; (2) personal and incidental expenses of such employees; (3) materials and supplies for general shop use; (4) repairs of shop tools and machinery; (5) rent paid for shop buildings; (6) depreciation of shop tools, machinery, and appliances. The shop expense account should be cleared by apportioning the total amount of the expenses to the various jobs on an equi- table basis. ?02. Stable and Garage Expense. « This account or appropriate subaccounts should be arranged so as to record separately the expenses of stables and garages as follows: (1) Salaries and wages of drivers, chauffeurs, stable- men, garagemen, and other employees in stables and garages; 78 (2) personal and incidental expenses of such employees; (3) materials and supplies, including fuel and gasoline, hamesB, tires, and other supplies for stables and garages; (4) repairs of automobiles and other vehicles and harness; (5) rent paid for buildings, horses and vehicles; (6) depreciation on vehicles, horses, harness, etc., including losses unprovided for by reserves or insurance. Credit to this account any charges for service performed for others. A record should be kept of the iise of teams and automobiles, and the total expense should be apportioned to the proper accounts according to use, or the debits to the expense ac- counts may be made at rates per hour of service which have been found to be fair and to distribute the total expense equitably. 703. Tool Expense. Charge to this account all expense for tools (except shop tools and tools carried as supplies unissued). It includes (1) the cost of small hand tools of which no account is kept after issue; (2) the cost of repairing tools; (3) the cost of tools lost or stolen; (4) de- preciation on tools taken out of service because of breakage or other deterioration. This account should be cleared by adding to the expense of repairs and cost of plant installed such amounts as will equitably distribute the total expense for tools. 7'H. Supply Expense. Charge to this account or to appropriate subaccounts all ex- penses (except insurance and taxes) incurred directly in con- nection with the purchase, storage, handling, and distribution of materials and supplies and stationery. It includes (1) the pay and expenses of purchasing agents, mani^ers of stores, clerks, and laborers; (2) rents paid for stores; (3) cost of lighting and heating; (4) undistributed transportation charges; (5) discounts recovered through prompt payment of bills for materials and supplies when such discounts can not be assigned to the particu- lar bills; (6) oven^es or shortages in the uLiterials and supplies account disclosed by inventories which can not be assigned to specific accounts; and (7) the estimated depreciation on mate- rials and supplies due to breakage, leakage, shortage, and wear and tear. This account should be cleared by adding to the cost of ma- terials and supplies passing through stores a suitable loading charge which will equitably distribute the total cost of conduct- ing the stores and by adding to the cost of such supplies as are bought by the purchasing department a pro rata share of the total expense for the purchasing department. •^ 4 ^ > 79 705. Engineering Expense. Charge to this account or to appropriate subaccounts all ex- penses for engineering so as to show separately the following: (1) Salaries and wages; (2) personal and incidental expenses of engineering department employees; (3) rent paid for office and (4) office ex])enses. This account should be cleared by apportioning the total expenses to operating expenses and fixed capital accounts on the basis of service rendered, as determined by the actual time devoted to particular jobs or on an equitable basis fixed by the officers of the company. 706. Plant SupervisiojJ Expense. Charge to this account the cost of general supervision of the maintenance and construction of the plant where a separate department of the company's organization is charged with such supervision. It includes the pay and expenses of the plant supervising officers, such as the general plant superintendent, district plant superintendent, plant engineers and their office a^d field forces, charged with planning for and superintending the work of maintenance and plant construction. This account or appropriate subaccounts should be so arranged as to show in detail the expenses of the plant supervision depart- ment as follows: (1) Salaries and wages; (2) personal and inci- dental expenses of employees; (3) rent paid for offices; and (4) office expenses. This account should be cleared by charging directly to the appropriate accounts such expenses as can be allocated to par- ticular pieces of work and by charging out the balance on the basis of labor employed in all construction or maintenance work in progress. v^^:"?*^® ^-^' °' ^"^^^ foremen and foremen in direct charge of jobs should be included in the cost of the job and not charged to this account. 707. House Service Expense. This account should include the expenses pertaining to the operation of offices and buildings, whether owned or rented by the company, when such expenses can not be allocated as they accrue to the operating expense accounts and other accounts This account includes fuel, heat, light, power, elevator service, janitor service, and like expenses, but does not include rents, • insurance, taxes, and maintenance expenses. This account should be cleared by apportioning the entire expense to the operating expenses and other accounts on basis of the use made of such property. o SUPPLE]MENT TO FIRST ISSUE OF THE UNIFORM SYSTEM OF ACCOUNTS FOB TELEPHONE COMPANIES CLASS A AND CLASS B AS PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGDLATE COMMERCE Effectiye on January 1, 1915 < WASHINGTON GOVKRNMENT PRINTING OFFICE 1»14 SCHOOL CF U'J ''"'r titS- OOLUMaiA UNIVc^SITY THE INTERSTATE COMMERCE COMMISSION. James S. Harlan, of lUijiois, JxjDsoN C. Clements, of Georgia. Edoab E. Clark, of I(ywa, Charles C. McChord, of Kentucky, Balthasar H. Meyer, of Wiscormn, Henry C. Hall, of Colorado. WiNTHROP M. Daniels, of New Jersey. George B. McGinty, Secretary, (2) y %' < ORDER. At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C, on the 22d day of December, 1914. The subject of a Uniform System of Accounts to be prescribed for and kept by telephone companies being under consideration, the following order was entered; It is ordered, That the Supplement to the First Issue of the Uniform System of Accounts for Telephone Com- panies, Class A and Class B, with the text pertaining thereto, a copy of which is now before this Commission, be, and the same is hereby, approved ; that a copy thereof, duly authenticated by the Secretary of the Commission be filed in its archives, and a second copy thereof, in like manner authenticated, in the office of the Division of Carriers' Accoimts; and that each of said copies so authenticated and filed shall be deemed an original record thereof. It is further ordered, That the said Supplement, with the text pertaining thereto, be, and the same is hereby,, prescribed for the use of Class A and Class, B telephone companies (those having annual operating revenues exceeding $50,000), subject to the provisions of the Act to Regulate Commerce as amended; and that a copy of the said Supplement be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier. It is further ordered, That January 1, 1915, be, and is hereby, fixed as the date on which the said Supplement shall become effective. By the Commission : [seal.] 73556*-14 George B. McGinty, Secretary. (8) INTRODUCTORY LETTER. Interstate Commerce Commission, Division of Carriers' Accounts, Washington, December 22, 1914' To Class A and Class B Telephone Companies: The Uniform System of Accounts for Telephone Com- panies, Class A and Class B, became effective on January 1, 1913. It is found advisable to add an additional balance- sheet account to take care of deferred credit items not covered by accounts Nos. 1 68, 1 69, and 1 70. Account No. 170a, ^' Other deferred credit items," is added to cover suspense account credit balances that are not provided for elsewhere. With this exception, no changes have been made in the Uniform System of Accounts for Telephone Compa- nies, Class A and Class B. Fred W. Sweney, Chief Examiner of Accounts, (6) y < SUPPLEMENT TO THE FIRST ISSUE OF THE UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES, CLASS A AND CLASS B. / ( BALANCE-SHEET ACCOUNTS. Add the following to the text explanatory of balance-sheet accounts on page 29: 170a. Other Deferred Credit Items. This account shall include suspense account credit balances that can not be entirely cleared and disposed of until additional information is received, and other items of the nature of deferred credite not provided for elsewhere. It should include such mat- ters 88 credit balances in clearing accounts, items awaiting adjustment between accounts, amounts to be spread over a stated period not provided for elsewhere, and similar items. (7) O y INTERSTATE COMMERCE COMMISSION RULES GOVERNING THE CLASSIFICATION OF TELEPHONE EMPLOYEES EFFECTIVE AS QF JULY 1, 1917 WashtnCToi^ government printing officb 1917 eOt l OOL OF BUSINESS COLUMBIA UNIVERSITY INTERSTATE COMMERCE COMMISSION RULES GOVERNING THE CLASSIFICATION OF TELEPHONE EMPLOYEES i EFFECTIVE AS OF JULY 1, 1917 > T < WASHINGTON GOVERNMENT PRINTING OFFICE 1917 /. MMHMMl THE INTERSTATE COMMERCE COMMISSION. Henry C. Hall. Edgar E. Clark. Ja^ies S. Harlan. Charles C. McChord. Balthasar H. Meyer. WiNTHROP M. Daniels. George B. McGintt, Secretary, (2) ORDER. At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C, on the 13th day of July, A D. 1917. Ordered, That the rules entitled " Rules governing the classifica- tion of telephone employees'' be approved, effective as of July 1, 1917, and that all telephone companies within the scope of section 20 of the Act to Regulate Commerce as amended be governed by the said rules in the preparation and submission of their annual reports to the Interstate Commerce Commission. By the Commission. [seal.] George B. McGinty, Secretary, 104475°— 17 RULES GOVERNING THE CLASSIHCATION OF TELEPHONE EMPLOYEES. Effective as of July 1, 1911. 1. Befliiition of employees. — For the purpose of statistical count and classification the word employees^ as used herein, is intended to include all pei*sons in the serv^ice of the reporting telephone company subject to its continuing authority to supervise and direct the manner of rendition of their service, regardless of the fact that certain of such persons may be devoting part time only to the service of the company; may be employed for temporary periods; or may be absent temporarily on leave (e. g., vacation) or on account of disability due to accident or sickness. It is intended to exclude persons engaged to render only specifically defined service and not subject to the continuing authority of the company to supervise nnd control their acts, such as independent contractors performing specific work or services for the company but not under its direct control and management; also persons who receive only a royalty or re- tainer from the company; pensioners not required to render service; persons absent on definitely granted leave without pay and not sub- ject to call for duty ; and persons temporarily laid olf from service. Persons on vacation, whether with or without pay, should be con- sidered employees if subject to call for duty. 2. Counting employees. — Section 20 of the Act to Regulate Com- merce requires that telephone companies in their annual reports to the Interstate Commerce Commission shall state " the number of em- ployees and the salaries paid each class." The number of employees being likely to fluctuate, telephone companies ai-e required to classify and count their employees, male and female separately, at two dif- ferent times each year; viz, as of the end of each of the months of June and December. The last day of the month shall be considered the end of the month, except when it falls on a Sunday or a holiday, in which case the count shall be made as of the last preceding business day. Every person sustaining to the telephone company the rela- tion of employee, as defined in section 1 above, shall be included in the count. (5) II ii'ih ■■ain'Miin iiitm^m Mi 3. Joint employees.— Eacli person (except as pro\'ide(l in the next succeeding paragraph) concurrently engaged under a joint ar- rangement in the service of two or more telephone companies, shall l)e considered a joint employee and shall be counted by each tele- phone company involved in such joint service arrangement and rep- resented in its return of the number of employees by a fraction based on the number of telephone companies served. For example, if such an employee is in the service of three telephone companies, each such company shall report him under the number of employees as one- third of an employee. If, however, the entire compensation of an employee concurrently engaged in the service of two or more tele- phone companies is borne by a single telephone company, he shall, for the purpose of these returns, be treated as an employee of that company and not as a '' joint " employee. A person employed by and serving two or more telephone com- panies in the capacity of a general officer but acting independently for each company shall be counted and reported as one employee by each company. The term '^general officer" as here used means an officer serving a company in such a capacity as that of president, vice president, secretaiy, treasurer, general counsel, general solicitor, controller, general auditor, general manager, or chief engineer. 4. Classiftcatioii of employees with respect to character of service.— Employees shall be classified with resi^ect to character of service rendered in accordance with the definitions of classes given below. Where an employee's duties are such as to make him includ- able in two or more classes he shall be (Counted under that classifica- tion indicated by the preponderating character of his work, and the return of his rate of compensation shall be assigned to the same classification. 1. CxEXERAL OFFICERS AND ASSISTANTS. Include under this head employees engaged in the general super- vision of the affairs of a company as a whole, together with their special staff assistants, and those engaged in the supervision of a general department of a company, such as president, assistants to president, vice presidents, assistants to vice presidents, secretary, as- sistant secretaries, treasurer, assistant treasurers, general counsel, general solicitor, controller, general auditor, general manager, or chief engineer. 2. OPERATING OFFICIALS AND ASSISTANTS. Include under this head employees engaged in, and responsible for, the administration of an entire operating department of a com- pany or a division or district thereof, and those engaged either in the supervision of certain phases of the work of an operating unit or in staff or research work incidental thereto, such as general, di- vision, and district commercial, plant and traffic superintendents, superintendents of construction, maintenance, and buildings and supplies, purchasing agents, supervisors of directories, and advertis- ing managers. Note.— The general manager shall be included in Group 1. 3. ATTORNEYS AND RIGHT-OF-WAY AGENTS. Include under this head employees regularly engaged in legal work on behalf of the company, those engaged in negotiations with official public bodies and individual or corporate property owners for the purpose of securing right-of-way privileges, tax attorneys, tax agents, etc. Note.— The administrative bead of tlie legal department shall be included in llroup 1. 4. ENGINEERS. Include under this head employees engaged in the supervision of the engineering work of a departmental or territorial unit, and those who direct surveys or field work, prepare designs, plans, estimates or specifications, or make technical studies and investigations in con- nection with the development, construction, modification, mainte- nance, or operation of telephone plant ; such as engineers of outside ])lant, engineers of inside plant, traffic engineers, building engineers, appraisal engineers, power and light engineers, fundamental plan engineers, division plant engineers, and district plant engineers. XoTE.— The administrative head of the eujrineerinjj department shall be in- cluded in Group 1. .5. DRAFTSMEN, SURVEYORS, AND STUDENT ENGINEERS. Include under this head employees engaged, in field or office, in elementary technical work in connection with the development, con- struction, modification, maintenance, or operation of telephone plant, such as chief draftsmen, draftsmen, fieldmen, surveyors, rodmen, chainmen, and student engineers. G. ACCOUNTANTS. Include under this head employees engaged in directing the dis- bursement or revenue accounting of an entire company or at an ac- counting center, and those engaged in directing or making audits or in special staff or research work in telephone accounting and statis- tics, such as auditors of disbursements, auditors of receipts, division auditors of receipts, division revenue supervisors, disbursement super- visors, chief traveling auditor, traveling auditors, statisticians, and other special accountants. Note A.— The administrative head of the accounting department shall be in- clude i 13. SUPERVISING FOREMEN. Include under this head employees who have immediate charge of unit or gang foremen engaged in the construction, installation, modi- fication, or maintenance of telephone plant, such as general foremen, chief equipment foremen, chief installation foremen, chief line fore- men, chief foremen of cablemen, chief foremen of cable splicers, and chief foremen of subway construction. 14. CENTRAL OFFICE INSTALLATION AND MAINTE- NANCE MEN. Include under this head employees engaged in installing or direct- ing installations of central office equipment, those engaged at cen- tral offices in making tests of plant and equipment or in the main- tenance of central office equipment, or in immediate charge of such test and maintenance forces, and those engaged in inspecting central office equipment; such as central office installation foremen, central office installers, wire chiefs, test board men, equipment men, auto- matic and semiautomatic switchmen, central office repairmen, and central office inspectors. 15. LINE AND STATION CONSTRUCTION, INSTALLATION, AND MAINTENA^^CE MEN. Include under this head employees engaged in the construction, modification, and maintenance of aerial plant, including those in immediate charge of this work and those engaged in its inspection, those engaged in installing station or private branch exchange equip- ment or in immediate charge of this work, and those engaged in re- pairing station and private branch exchange equipment and the repair of aerial plant incidental thereto, together with employees at small exchanges who, in addition, repair central office equipment and in- stall station equipment, such as line foremen, linemen, climbers, groundmen, troublemen, line inspectors, station installation foremen, P. B. X and P. A. X. (private automatic exchange) foremen, station installers, P. B. X- and P. A. X. installers and installers' helpers. Note. — Where an employee is assigned both to line and station work and to cable and conduit work, he should be classed in accordance with the prepon- derating character of his work. 16. CABLE AND CONT)UIT CONSTRUCTION AND MAINTE- NANCE MEN. Include under this head employees engaged in the construction, modification, or maintenance of underground conduit, the placing, rearrangement, or removal of underground, house, block, or sub- marine cable, or the testing or splicing of cable, and those in immedi- ate charge of one or more phases of this work, such as conduit fore- men, masons, masons' helpers, tile layers, concretemen, conduit 10 laborers, paving foremen, pavers, cable foremen, cablemen, splicing foremen, splicers, and splicers' helpers. 17. ALL OTHEE EMPLOYEES. Include under this head employees not provided for in other groups, such as nurses, matrons, teamsters, chauffeurs, yard, shop, and miscellaneous foremen, storekeepers, stable and garage men, shopmen, janitors, porters, watchmen, elevator operators, cooks, wait- resses, dishwashers, directory carriers, miscellaneous laborers, etc. Grouping of clastfCft of employees for annual reports of telephone eotnpanies to Interstate (jommerec Commission, Group Class A Companies. Class B Companies. Class C Companies. No. Title. Title. Title. 1 General officers and assist- General officers and as- ants. sistants. Officers and operating 2 Operating officials and as- Operating officials and heads. sistants. assistants. 3 Attorneys and right-of- Attorneys and right-of- ' way agents. way agents. 4 Engineers. I Engineers, draftsmen, Attorneys, engineers, 5 Draftsmen, surveyors, surveyors, and stu- and accountants. and student engineers. dent engineers. e Accountants. Accountants, 7 Clerical employees. Clerical employees. Clerical employees. 8 Local managers. Local managers. Local managers and 9 Commercial agents. Commercial agents. commercial agents. 10 Experienced switchboard Experienced switch- ■ operators. board operators. Operators and service 11 Operators in training. Operators in training. inspectors. 12 Sendee inspectors. Service inspectors. . 13 Supervi.sing foremen. 14 Central office installation and maintenance men. • 15 Line and station construc- tion, installation, and maintenance men. Plant construction and • maintenance men. Plant construction and maintenance men. 16 Cable and conduit con- struction and mainte- nance men. • 17 All other employees. All other employees. All other employees. *. ADDITIONAL COPIES OF THIS PUBUCATION MAY BE PROCLTIED FROM THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTING CFHCE WASHINGTON, D. C. AT 5 CENTS PER COPY V > O ; i XJNIFORM SYSTEM OF ACCOUNTS FOR TELEGRAPH AND CABLE COMPANIES (EXCLUSIVE OF WIRELESS TELEGRAPH COMPANIES) AS PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION IN ACCORDANCE WITH SECTION 20 OF THE ACT TO REGULATE COMMERCE FIRST ISSUE Effective on January 1, 1914 washington government printing office 1918 SCHOOL OK BUSINESS OOLUMBiA UNIVERSITY CONTENTS. Tbm Intebstate Gommzroi Coiociflaox. Edoab B. Clabk, of loioa, JuDsoN C Clemekts, of Oeorffia, Chableb a. Pboutt, of Vermont. 3 HUES S. Hablan, of IlUnnU. Chableb C. McChobd, of Kentue^. Balthabab H. MmtB, of Wiscofuin. OoBJi H. MiLBBUE, of California. Geobob B. McQuiTr, B€artt^f% (2) Pafe. Order of the Commission • & Introductory letter 7 General instructions: 1. Balance-sheet accounts defined 9 2. Cost or book value of securities owned 9 8. Reacquired securities 9 4. Discount and premium on capital sttx-k 10 6. Discount, expense, and premium on funded debt 10 6. Contingent assets and liabilities 11 7. Pl»nt and equipment defined 11 8. Costs to be actual money costs 12 9. Interest, debt discount, and debt expense durini; oonBtniction period. 12 10. Costs of labor, materials, and supplies 12 11. Plant and equipment and other property purchaaed 13 12. Plant and equipment withdrawn or retired ...••. 13 13. Income account defined 14 14. Taxes H 15. Profit and loss account defined 15 16. Operating revenues defi ned 15 17. Deductions from revenues 15 18. Commissions 15 19. Repairs defined • 15 20. Cost of repairs 16 21. Depreciation of plant and equipment 16 22. Extraordinary casualties and unanticipated reconstruction 17 23. Joint operating expenses 17 Balance-sheet statement 19 Text for accounts in the balance-sheet statement 21 Plant and equipment accounts 33 Text for plant and equipment accounts 35 Income statement ^3 Text for accounts in the income statement 45 Profit and loss account 51 Text for profit and loss accounts 53 Operating revenue accounts 57 Text for operating revenue accounts 59 Operating expense accounts 63 Text for operating exix-nse accouiitj^ 65 Text pertaining to clearing accounts 72 Index 75 At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its office in Washington, D. C. on the 13th day of October. 1913. The subject of a Uniform System of Accounts to be prescribed for tnd kept by telegraph companies and cable companies being under consideration, the following order was entered : It is ordered, That the Uniform System of Accounts for Telegraph and Cable Companies with the text pertaining thereto, embodied in printed form to be hereafter known as P'irst Issue, a copy of which is now before this Commission, be, and the same is hereby, approved ; that a copy thereof duly authenticated by the Secretary of the Com- mission be filed in its archives, and a second copy thereof, in like manner authenticated, in the oflSce of the Division of Carriers' Ac- counts; and that each of said copies so authenticated and filed shall be deemed an original record thereof. It is further ordered, That the said Uniform System of Accounts for Telegraph and Cable Companies with the text pertaining thereto be, and the same is hereby, prescribed for the use of telegraph com- panies and cable companies (exclusive of wireless telegraph com- panies) subject to the provisions of the act to regulate commerce as amended, in the keeping and recording of their accounts; that each and every such carrier and each and every receiver or operating trustee of any such carrier be required to keep all accounts in con- formity therewith ; and that a copy of the said First Issue be sent to each and every such carrier and to each and every receiver or operat- ing trustee of any such carrier. It is further ordered. That any such carrier or any receiver or operating trustee of any such carrier may subdivide any primary account in the said First Issue established; or may make assignment of the amount charged to any such primary account to operating divisions, to its individual lines, or to States: Provided, however, That such subprimary accounts set up or such assignments made by any such carrier or by any receiver or operating trustee of any such carrier shall not impair the integrity of the accounts hereby pre- scribed. It is further ordered, That in order that the basis of comparison with previous years be not destroyed, any such carrier or any receiver or operating trustee of any such carrier may, during the twelve months from the time that the said First Issue becomes effective, keep X6) I I 6 ZS'::!^^:''^,:'' ^ «--"'« ^^^^y prescribed, s,.ch for the purpose of surh nL^ • ! operating trustee thereof, - may be desiS TMhat pur^r"''^ ''^'"'"'^ '^^'^''^ P'--»-d hereby prescribed, .ay, u^nl^ot^rS "deld 'Eplv LT ""*" or experimental accounts the ournoc* „,„':r'.''?P ""7 temporary efficiency of operation: ProvLTZevt That s«'.W '""'"' "'' experimental accounts shall not impah- th^'inte«itv * "'''''■"'■^ "' account hereby prescribed. integrity of any primary /< M /«r " 10 Ing any amonots carried In the discount and pn»mlnm accounts or other accounts with respect to such securities, should be debited or credited to Profit nnd Loss Account, unless rencqulred for a sinking or other fund which is required to be represented by n reserve. In which cnse the difference should be debited or credited to the npproprlnte reserve account. 4. Disconnt and premium on capital stock.— Ledger accounts should be pro- Tided to cover the discounts nnd premiums on ench cinss of capital stock Issued or as.sunied by the company. By discount is meant the excess of th^ par value of stocks issued or assumed over the actual money value of the consideration received for such stock ; by premium Is meant the excess of the actual money value of the consideration received for stock Issued or assumed over the par value of such stock. Entries in these accounts representing discounts should be carried therein until offset (1) by premiums realized on subsequent sales of the same class of stock, (2) by assessmeuts levied on the Btockholders, (3) by periodical charges to Profit and I^ss or (4) by chargea to Profit and Loss upon reacqulreuieut of the stock. Entries in these account* representing premiums realized should be carried permanently, unless offset (1) by discounts suffered on sales of the same class of stock or (2) by credits to Profit and Loss upon reacqulrement of the stock. If the net of the balances In the discount nnd premium accounts for all classes of capital stock sold or exchanged is a debit balance, the amount should be included In the balance-sheet statement in account No. 125, " Unextinguished discount on capital stock**; if a credit balance, the amount should be shown in account No. 152, "Premiums on capital stock.'* In no case should discount on capital stock be charged to or included in any account as a part of the cost of acquiring any property, tangible or intangible* or as n part of the cost of operation. 6. Discount, expense, and premium on funded debt — I.«edger accounts should be provided to cover the discounts, expense, and premiums op each class of funded debt issued or assumed by the company. By discount is meant the excess of the par value of funded debt securities issued or assumed, and the accrued interest thereon, over the actual cash Talue of the consideration received lor such securities; by premium Is meant the excess of the actual cash value of the consideration received for funded debt securities Issued or assumed over the par value of such securities and the accrued interest thereon. By expense is meant all expenses In connection with the Issue nnd sale of evi- dences of debt, such as fees for drafting mortgages and trust deeds, fees and taxes for recording mortgages nnd trust deeds; cost of engraving and printing bonds, certificates of Indebtedness, and other commercial paper having a life of more than one year; fees pnid trustees when provided for In mortgages and trust deeds; fees and commissions paid underwriters and brokers for marketing snch evidences of debt; and other like expenses. If tlie net bnlnnce In any of these accounts Is a debit, there should be charged to income account No. 320, "Amortization of debt discount and expense,** during each fiscal period (and credited to the discount and premium accounts in which the discount and expense is carried) such proportion of the discount and expense on the outstanding funded debt obligations as mny be applicable to that period. This proportion shoul^ be determined according to a rule, tlie onlform application of which throughout the interval between the date of sale and the date of maturity will extinguish the discount nnd expense on the funded debt. The charge to Income for any period should not exceed the proportion applicable to that period, and a charge should be made for each period so long i »j u as any portion of the discount and expense remains unextinguished. In order that the discount and expense may be extinguished sooner, the company may, at Its option, charge to Profit and Loss all or any portion of the discount and exr>en.se on funded debt remaining at any time unextinguished. If the net balance in any of these accounts is a credit, there should be credited to income account No. 327, " Release of premiums on debt — Cr.,** during each fiscal period (and debited to the discount and premium accounts in which the premium Is carried) such proportion of the premium on out- standing funded debt obligations as may be applicable to that period. This proiK)rtIon should be determined according to a rule, the uniform application of which throughout the interval between the date of sale and the date of maturity of the debt will extinguish the premium at which such debt was sold. If the net of the balances In the discount and premium accounts for all classes of funded debt sold or exchanged is a debit balance, the amount should be included In the balance-sheet statement in account No. 126, " Unamortized debt discount and expense**; if a credit balance, the amount should be included in account No. ICO, "Unextinguished premium on debt*' No discount and expense on funded debt should be charged to or included in any account as a part of the cost of operation or, except as provided in section 0, page 12. as a part of the cost of acquiring any property, tangible or intangible. 6. Contingent assets and liabilities. — Contingent assets and liabilities should not t>e Included in the body of the balance-sheet statement, but should be shown In detail in a supplementary statement accompanying the balance-sheet state- ment Contingent assets are those without value to the accounting company until the fulfillment of conditions regarded as uncertain. Contingent liabilitieM Include items which may, under certain conditions, become obligations of the company, but are neither direct nor assumed obligations on the date of tlw tMilance sheet 7. Plant and equipment defined. — The plant and equipment accounts of a company (frequently termed the construction accounts) should Include the investment In property, both tangible and Intangible, devoted to accomplishment of the purposes of the company's business, and which has an expectation of life In service of more than one year from date of installation In service, excluding hand tools and other small portable tools liable to be lost or stolen. Plant and equipment consists of original plant and equipment, additions, betterments, and rep/acemenf«, and the cost thereof should be charged as directed below. Original plant and equipment is that installed or acquired prior to the be- ginning of regular operations by the company. As applied to a telegraph or cable company. It Includes the acquisition or construction of the plant neces- sary to begin the regular telegraph or cable operations. The cost of original plant and equipment should l>e charged to the appropriate book accounts under account No. 100, "Plant and equipment to January 1, 1914,** or to the pre- scribed plant and equipment primary accounts under account No. 101, "Plant and equipment since December 31, 1913.** Additions are structures, facilities, equipment, and other properties added to thoFe in service at the beginning of operations, and not taking the place of any property of like purpose previously held by the company. The cost of additions should be charged to the appropriate plant and equipment primary accounts under account No. 101, "Plant and equipment since December 31, 1913.** Betterments are physical changes In structures, facilities, ok* equipment which have as their primary aim and result the making of the properties affected more useful or of greater capacity than they were at the time of their !l ii 12 Instflllatloii or acquisition. Of the cbanpe* Incident to betterments the cost of such portion only ns will, when ndded to the original cost of the property bet- tered, give the cost of reconstnictlon In present condition of the pro|>erty as bettered, should be charged as plant and equipment to the appropriate primary accounts under account No. 101. ** Plant and equipment since December 31. iniS.** The remainder of the cost of the changes should be classed as a repair and IM charged to the appropriate ©iterating expense accounts, or to the reserve account. If provision has been made therein. /2ep/acemcnf« are those Installations of plant and equipment which have for their purpose the substitution of one building, structure, piece of equipment, or machine for another which It has become necessary to retire, the substi- tute having substantially no greater capacity than the plant and equlimient replaced; also extensions of the life i^erlod of franchises, patents, and other Intangible Investment. The cost of the plant and equipment retired should be credited to the accounts In which It Is carried, and the cost of the plant and equipment Installed In place of that so retired should be charged to the appro- priate primary accounts under account No. 101, " riant and equipment since December 31. 1913.'* & Cost! to be actual money costi.— All charges made to plant and equipment or other proi)erty accounts with respect to any property acquired on or after January 1, 1914, should be the actual money costs of the property. When the consideration actually given for anything with respect to which a charge is made to any plant and equipment or other property account Is anything other than money, the actual consideration should be described In the entry with sufficient fullness and particularity to Identify It. and the amount charged ahould be the actual money value of such consideration at the time of the transaction. 9. Interest, debt discount, and debt expense during constmction period.— All Interest, debt discount, and debt expense assignable to the construction period should be carried in account No. 229. "Interest during construction.* and not distributed to the various plant and equipment accounts to which such accruals relate. Account No. 229 should Include only such proportion of the Interest on funds used for con.structlon pun^ses and of the discount and e.^i^ense on funded debt as Is equitably assignable to the period between the date of the issuance of securities and the time when the property acquired or the improvement made through such issuance becomes available for the service for which it is Intended. 10. Costs of labor, materials, and supplies.— The term cost as used In the plant and equipment (or conptructlon) accounts means the actual cost In money of labor and materials used in construction, the actual cost In money of property acquired after construction, or. If the consideration given Is other than money, the actual money value of such other consideration at the time of tlie purchase. Coat of labor includes not only wages, salaries, and fees paid employees, but also personal expenses of such employees when borne by the company. CoMt of materials and supplies consumed In construction Is the cost at the places where they enter into construction, including cost of transportation and Inspection when si)€clflcally assignable. If such materials and supplies are passed through storehouses, their cost entered in the account may include a suitable proportion of store expense. If officers and employees of an operating company are specially assigned to construction worlt. or If they devote a substantial portion of their time to such work, the proper proportion of their salari*^ and expenses should be charged to Plant and Equipment No charge, however, should be made to plant and 13 fqnipment acconnts for InHdental services of officers and employees whose time ii* regularly «levoitMl to the o|)enition and maintenance of the plant. . II. Plant and equipment and other property purchased. — When any property I in tlie form of a p>ing ur ctuupletcd plant Is purchased, an appraisal of the T pro|N*rty so acquired should i»e nunle. and the different constituent elements I of the plant (and efiulpmont, if any) or other property acquired should be •ppniisetl at tlieir structumi value: that Is to say. at the estimated cost of replacement or repHKluctlon less existing deterioration through wear and tear, obHoU^Mcence. ami inadequacy. if tlie actual money value of the conskleratlon given for the plant or other pr»|terty was nt tiie time of the acquisition In excess of such appraised value, tlie e.\cexs shoultl be charged to account No. 2(i:i, "Other Intangiliie capital." and tlie appraised values of the constituent elements should l>e charged to the a|»pr(»prlaie plant and equipment accounts. If the actual money value of the coiisidenition given was not In e.xcess of such appnilsed value, such actual money value should be dlsrrltuited through the said accounts in profiortlon to the saltl appraised value of the constituent elements appropriate to the re- Bfiectlve accounts. 12. Plant and equipment withdrawn or retired. — When plant and equipment Is wltlidniwii or retired fmm senice for any cause the rules here following ■bouid govern the accounting: (0) Wlien any tangible plant and equipment of the company acquired prior to January 1. 1914. Is withdrawn or retired from service for any cause, the amount nt which it stantls charged should l>e credited to the l>ook account In which It Is chargetl under account No. 100. "Plant and equipment to January 1. 1914." and such amount i»lus the exi>ense8 Incident to the retirement, loHK I he value of salvage, sliould l>e charged (1) to account No. 170. " Ueserve for accrue*! depreciation." for tiie proportion applicable to the period covered by tlie reserve: and (2) to acc<»unt No. 413. " Reiilixed depreciation not covereil by renerves." for the remainder. Such portion only of the realized depreciation should l»e chnrgwi to accituiit No. 170. " Iteserve for accrued depreciation." as Is due to life In service during the period for which the reserve was established. This iMirtlon may tie estimateti on the basis of the (irofiortion which the life in servU-e of the pn»|»erty after that date l>ears to Its entire life In service. The entry of the creage of iMxtk or other record the original entry of cost of the thing uiilidrawn. If tiiere Is no such original entry, that fact should t>e stated in ii innei*! Ion with the creilit entry, and the actual amount originally charged should lie cren which the tnttiniafe 1h liased and the name of the [>erson by whom estimated should be shown, and the amount thus estimated to be equivalent to the original charge In resftect of such thing withdrawn should be credited to the plant and (M|nlpnient acctuint Involved. ih) When any tangible plant iind eqnliiment of the company acquired since |Vceinl»er 31. I!n3. Is withdrawn or retired from service for any cause, the amount at which It stands charged should be credited to the plant and equl|>- ment accouiii In which It is chargeil. and such amount plus the expenses inci- dent to ihe retireiiient. less the value of salvage, should be charged to account No. I7«. " Iteserve for accrued depreciation." Tlie entry of tlie credit to the plant and equipment account should cite by name and |Nige of book or other record the original entry of cost of the tiling withdrawn. {!■ iMl 14 (o) If tbe age of tangible plant and equipment withdrawn or retired from Berxice cannot be deteruiioed for cinssiflcatlon between account No. 100, ** Plant and equipment to January 1. 1014," and account No. 101, "Plant and equip- ment since I>ecember 31. 1013,'* the proi)erty so retired should be treateil ai having been charged to the former account, and the necessary credits should be made to the book accounts thereunder. (tf) When any tangible plant and equipment Is withdrawn or retired whose book value as carried in the plant and equipment accounts has been reduced by writing off estimated depreciation, only that part of the realized deprecia- tion which has not already l>een written off should be charged to account Na 170, " Resen'e for accrued depreciation," or to account No. 413, ** Iteullzed depreciation not covered by reserves." (e) When any plant and equipment is withdrawn or retired whose book Talue is greater than the known or estimated cost, such excess should be charged to account No. 417, ** Miscellaneous debits," and the realized depreciation should be charged as elsewhere directed. (/) If any plant and equipment Is sold for more than its original cost the amount of depreciation, if any, accrued and credited to a reserve in respect thereof, should be determined as accurately as possible and charged to such reserve. The sum of the amount so charged and the excess of the selling price over the cost of the property should be credited to account No. 401, ** Miscel- laneous credits." 13. Income Account defined. — ^The Income' Account brings together those ac- counts that show the total amount of money that the company has received or become entitled to receive for services rendered during a given periiid. the return accruing during the period uiwn investments, and the disbursements and obligations (fixed charges) incurred that affect the disposition of the amounts 80 received or accrued. The net balance of income (or loss) should be carried to Protit and Loss. 14. Taxes. — Separate accounts should be kept distinguishing between taxes related to operating revenues and those related to nonofieratiug revenues, and, if the company engages in business other than telegraph or cable operations, taxes applicable to such other business should also be kept separate. The tax accounts should be charged each month and an oi^n account entitled "Tax liability account" concurrently credited with the month's proportion of taxes applicable to the operations covered by each account. If the exact amounts of the annual taxes are not known, they should be estimated and one twelfth of the estimated amounts be charged each month. From time to time during the year, as the actual tax levies become known, the monthly charges should be adjusted so as to include as neorly as may be possible the total amount of the taxes in the period to which they apply. When any such tax bill Is actually paid, the tax liability account should be debited with the amount of the pay- ment. If the balance in the tax liability account is a debit balance, due to the prepayment of taxes applicable to a period subsequent to that for which the Income Account is stated, the amount of the debit balance should be shown In account No. 122, "Prepaid taxes"; if the balance Is a credit balance the amount should be shown in account No. 1G7, " Taxes accrued." Taxes on property lejised should be chargeecific service rendered by the Government. 15. Profit and Lost Account defined. — This account or summary is the con- necting link between the Income Account and the Balance Sheet. It sum- marizes the changes In the surj^lus or deficit during a given fiscal period as effected by the oi)erations and business transiictions during that period, by any disposition of net profits made solely at the option of the company, by accounting adjustments not properly attributable to the period, or by miscel- laneous losses or gains not provided for elsewhere. The profit and loss balance ■hould be shown on the balance-sheet statement under account No. 12S, ** Profit and loss— Debit balance," or No. 170, ** Profit and loss — Credit balance." 16. Operating revenues defined. — By opera /inyret'enuc^ are meant all amounts of money which the com[)auy receives or becomes lawfully entitled to recover for services rendered and as a return upon property used by the company in its own operations. Credits to the various revenue accounts should be based opon the gross charges made for services rendered by the company. 17. Deductions from revenues. — C>)rrections of overcharges, overcollectloni theretofore credited and afterwards corrected, authorized refunds on account of errora or failures in transmission, and other corrections should be charged to the revenue account to which they relate. 18. Commissions. — Ck>mmlsslons allowed to othere for originating or handling messages or for other commercial service connected with revenue messages should not be charged to the revenue accounts. Such commissions, when al- lowed company employees In lieu of or In addition to salaries, should l>e charged to the operating expense accounts chargeable with the salaries of such em- ployees. Such commissions allowed other than employees should be charged to operating expense account No. G31, "Telephone company service," If the recipients are engaged in telephone operations, or to account No. 632, *' Ck)mmi8- ■ions," if payable to others. 19. Kepairs defined. — The term repairs, as used In the text of the various operating expense accounts, includes ordinary and extraordinary repairs. Ordinary repaire are not required to be taken into account in fixing a rate of depreciation. They include: (a) (^Hearing crosses, breaks, grounds, and other line troubles, including rou- tine work intended to prevent such troubles, such as pulling up slack, tightening guys and reletting guy stubs, trlnnning trees, straightening poles and cross arms, and cleaning and adjusting apparattis; (6) Replacements of minor or short-lived structures, equipment, or facilities, or parts thereof not provided against in the charge for depreciation of plant and equipment; (r) Hearrnngements and changes In location of plant involving no substantial replacement or any betterment; id) Recovering salvage and removing retired or abandoned property, when such costs are not provided for In the depreciation reserves. Extraordinary repairs, which should be provided for, so far as may be pos- sible, by charges to depreciation, include: (aa) Restoring the condition of property damaged by storms, floods, fire, or other casu:ilrles: (bb) Recovering salvage and removing retired or abandoned property in con- nection with above-mentioned work. All repairs, whether ordinary or extraordinary, should be charged to the appropriate primary operating expense accounts. Extraordinary repairs for which a reserve has been provided should then be concurrently ciiirged to 16 •coonnt No. 170, "TtM^nre for aocrned depreciation,** and credited to account Na Oil, ••Repairs charged to reHfrveii — Cr.'* When It Is iiecessairy substniitially to reconstruct or to replace a major por- tion of any unit of profierty or iiuy important section of a continnous structure, the cost should l>e handled throufsh the capital accounts: that Is, the cost of tlie property removed or replaced should be credited to the a|»prupriate plant and equipment accounts and the new profierty should lie charged thereto. 20. Cost of repairs. — ^The term coti of rcftairs, as used In the texts of the ▼arlous operating ezf^nae accounts, should t>e understood to Include the wages, Mlarlea. and fees iwld employees directly engaged in the work of reiwirs, \ter- aonal expenses of such employees when borne by the comimny. the cost (Includ- ing transix>rtation) of materials and sui^plles consimied. and the exiiense of fBcilltles employed In making the reiwirs, less the value of any salvage recov- ered. It Includes also the cost of direct supervision, such as by foremen or superintendents of repair gangs, but does not Include the cost of general suiier* Tision as provided for In account No. GOO, ** Su|)ervision of maintenance.** 21. Deprecifttion of plant and equipment. — ^IViegraph and cable companies should Include In 0|)enitlng exfienses depreciation charges for the pur|)ose of creating pro|)er and adequate reserves to cover the ex|)enses of depreciaiion currently accruing in the tangible plant and equipment Uy expense of dcpr^ dation Is meant — (a) T/Osses suffered through the ctirrent lessening In value of tangible prop- erty from wear and tear not t-overed by current repjiirs: (b) Obsolescence or inadequacy reHultiiig from age. physical change, or super- session by reason of new iuveutiuus and discoveries, changes In iiopular demand, or public reciuirements; (r) Losses suffered through destruction of pro[ierty by extraordinary cnsii- altiea The rate of depreciation should be fixed so as to distribute, as nearly as may be, evenly throughout the life of the defirecltitlng |)ro|ierty the bunlen of ex- traordinary repairs and the cost of capital couHunied In oftenitlons during a given month or year, and should be based ufion the average life of the units comprised In any class of profierty The amount charged as exfiense of depreciation should be based upon rules determined by the accounting company. Such rules may be derived fnan a consideration of the comimny's hlstor>' and experience. Com|Ninles should be preinired to furnish the Conmilssion. u|)on denitind. the rules and a sworn state- ment of facts. ex|iert oiilnlons. and estimates U|Mm which the rules are based. The estimate for depreciation of physical profieity should take into account — (an) The gradual deterioration and ultimate retirement of units of pro|»erty which may l»e satisfactorily ludi vidua IIsuhI. such as buililings. machines, and valuable Instnuiients. to the end that by the time such units of pro|ierty go out of service there shnll have l>een accnnnilatetl a reserve vi\\M\\ to the original money cost of such pn»|»erty. plus c«)Ht of removal, less tiie vjilue of any sil\age; {bb\ The de|)reciation accruing In profsTty which can not be readily Indl- Tldu}ilIxer minor replacements of such structures made from time to time are to be classed as ordinary repairs and '*Jiarged to the primary reiuir accounts when nuide. The amount estimated to cover the expense of deprerlntion of plant and equipment should l>e charged monthly to account .\o. (MiH. ** I>epreciiition of plant and equlimient.*' or to the aiM>nM)rI>ite clearing account or accounts and concurrently credited to account No. 17U, ** iteserve fur accrued depreclaUoa." f' 17 Account No. 41S, ** Realized depreciation not covered by reserves,** Is provided in the Proflt and Loss Account for charges for realized depreciation on plant and equipment retired when such depreciation occurred prior to the esbibiish- ment of account No. 170, " Reserve for accrued depreciation,** or 1ms not been provided for by credits to that account 22. Extraordinary eatnalties and nnanticipated recoBstruction. — If so anthor- Ised, upon api)iication to the Commission, the company granted such authority may charge the amount named in the authority to a suspense account for the purpose of distributing over a limited period an extraordinary loss of such a nature that It can not be anticipated by the exercise of reasonable prudence. Losses of this sort may be due to the requirement by lawful authority or public necessity of Improvements Involving the abandonment of a consider- able portion of plant and equipment before it has attained its normal life in service, or to an extraordinary casualty entirely unforeseen and unprovided for. The original cost of the property so abandoned or destroyed should be credited to the plant and equipment accounts in which it was carried, and such portion of the cost as may be authorized by the Commission may be charged to the suspense account, the remainder of the cost, less any salvage, being charged out as elsewhere provided in case of retirement of property. The susi»ense account so raised should be credited and account No. GOO, *' Extraordinary de- preciation,** debited monthly with such an amount as will, through its regular application, amortize the amount of the loss at the end of the period designated. 23. Joint operating expenses. — When any operating expense is Incurred by a company for the Joint benefit of Itself and another under agreement for apportioning such expenses, the creditor company should credit to its primary expense or other accounts to which the ex[)eQses were charged when Incurred, the amounts billed by It to the sharing company. The debtor company should charge to Its primary expense or other accounts the amounts so billed. Bills ren- dered by the operating company for joint expenses should show tha expenses In detail. 6D022*— 13- I t I 'i a i' *, ( I ! mi BALANCE SHEET STATEMENT* ASSET SIDE. 100. "Plant and Fqttipment to January 1, 1914 21 101. Plant and Equipment since December 31, 1913 21 102. Construction Work in Progress 21 103. Investment Securities 21 104. LoNo-TERM Advances Receivable 22 105. Miscellaneous Investments 22 106. Cash 22 107. SPEaAL Deposits 22 108. Employees' Working Funds 22 109. Marketable Securities 23 110. Bills Receivable 23 111. Accounts Receivable prom Customers and Agents 23 112. Accounts Receivable prom System Corporations 23 113. Miscellaneous Accounts Receivable 23 114. Matured Interest and Dividends Receivable 23 115. Materials and Supplies 23 116. Other Current Assets 24 117. Unmatured Interest, Dividends, and Rents Receivable 24 118. Sinking Fund Assets 24 119. Insurance and Other Reserve Fund Assets 24 120. Provident Fund Assets 25 121. Prepaid Rents 25 122. Prepaid Taxes 25 123. Prepaid Insurance 25 124. Other Prepayments 25 125. Unextinguished Discount on Capital Stock 25 126. Unamortized Debt Discount and Expense 25 127. Other Deferred Debit Items 26 128. Pkofit and Loss — Debit Balance 26 LIABILITY SIDE. 150. Capital Stock 28 151. Stock Liability for Conversion of Securities 27 152. Premiums on Capital Stock 27 163. Grants in Aid of Construction ,. 27 164. Funded Debt 27 165. Receiver's Certificates 28 166. Long-term Advances Payable 28 167. Judgments Unpaid 29 158. Bills Payable 29 169. Audited Vouchers and Wages Unpaid 29 160. Customers' Deposits .••••••.••••.••.••....„„ 28 (10) {' I i 20 lei. Accounts Patabw to SrerrEif Corporatioh. ^ loz. Miscellaneous Accounts Payable m. Matured Interest. Dividends, and Rents 'un;;^:;;;; !! 104. Matured Funded Debt Unpaid 165. Service Billed in ADVANct.....ii]i]][]][.' ^ 166. Other Current Liabilities.. ^ 167. Taxes Accrued 30 IM. Unmatured Interest.* Dm;;;;;VlVDRENi:s VI ;^^^^^^^^ ^ 169. Unextinguished Preihum on Debt 170. Reserve for Accrued Deprecution ^ 171. Reserve for Amortization or iNTANoiBlE* Cawtal.V.V.V. ?? 17J. Reserve por Doubtful Accounts * 173. Insurance and Casualty Reserves.!!]]]!]]]].' l^ 174. LUBILTTY FOR PROVIDENT FUNDS ]]J]]]] 175. Other Deferred Credit Items... ^^ 176. Surplus Invested since DECEMBER'si] iViV.Vn PlanVI'nd Egui^MEs;* 32 177. Surplus Invested in Sinking Funds »^'estment Setubitiks. This account should Include the cost or book value of stocks and of bomls notes, and other evidences of Indebtedness, having dat^ of ma ur «y of more than one year from date of Issue, held by the alrt, '" snmed. or held as a means of obtaining or exercising control over other The amounts Included herein should be subdivided as (o) Stocks of STnlrrrand'ti/ri,'""" "' '^^'^'^ -Po-^oi ^ M.^ v^ .uuwus hiocKs, and (d) Miscellaneous fimded debt (21) 22 1€8. ImrESTMEKT SE CU B i T in — Continued. In stating this account or tbe subaccounts hereof on the balnnce-sbeet statement the par value of securities issued or assumed by the company and held by it, if carried in this account should be deducted in order that this account may show only the cost or book value of securities •f other companies. (See sec 3, ik 9.) I NoTB A. — By a Bytiem corp<»ntUm Is meaot any controlling, affiliated, trolled, or sabsidlary corporation. NoTB B. — Notes payable upon demand or harlnff date* of maturity of one year •r leaa from tbe date of issue should not be Included herein but In account Naw 104. ** Ix»ns-term advances receivable,'* or No. 110, ** Bills recelTable," aa may be appropriate. NoTi C. — In the annual reports to tbe Commtsston InvcKtments In secnrttlas will be required to be classified so as to show those held subject to a lien of boom diaracter and those held free of Hen, pledge, or oUier restrictions. 104. LoNG-TEBM Advances Recuvablb. This account should include advances to other companies, both when evidenced by t>oolc accounts nnd when evidenced by demand notes, when It is mutually agreed that the accounting comimny' sbull be reimbursed for such advances in securities of the debtor company's issue. 106. Miscellaneous Investments. This account sliould include Investments of a permanent nature la property, elttier tangible or Intangible, other thnn that properly charge* able to the plant and equipment accounts. This should include such items ns investments In lighting, water, and power plants, mnnufucturing plants, lands, buildings, and other property not a port of the company's plant for telegraph or cable operations nor of facilities incident theretow 106w Cash. This account should include the amount of current funds, avnilnbia for use on demand. In tbe hands of flnnncini officers nnd ngents, or d»> posited In banks or with trust companies; also cash in transit for wldch managers and agents receive current credit 107. Special Deposits. This account should Include deposits to pay declared dividends nnd matured Interest; cash realized from tbe Kile of securities nnd defiosited with trustees for disbursement wben tlie purposes for wblch tbe securi- ties are sold are accomplished; amounts realised from tbe sale of prop- erty and deposited with trustees. In otber tlinu sinking funds, until the property Is replaced; special de|K)sIts In otber than sinking funds for tbe payment of debts and interest not matured; money and securities de> posited to secure tbe performance of contracts; and other deposits of a special nature not provided for elsewhere. In stating this account on the balance-sheet statement tbe amount of any securities issued or assumed by tbe company nnd Included berein should be deducted In order that tlie account may show only the assets herein other than the company's own securities. (See sec. 3, p. 9.) 108. Employees* Working Funds. This account should Include amoimts ad>'anced to sufierlntendents, managers, and otber officers and employees as working funds from wiiidi certttin expenditures are to be made and accounted for. ^ \ 23 109. HaIICITABLB B BUUtlllES . This account should include the cost or t>oolc value of securities of other companies and (he par value of securities Issued or assimied by the accounting company, wben held in the company's treasury unpledged and free for sale and not necessary or desirable for tbe company to bold for the purpose of maintaining the integrity of its telegraph or cable system. In stating this account on tbe balance-sheet statement the par value of securities Issued or assumed by the company and caiTled In this account should be deducted. In order that this account shall show only tha cost or book value of securities of other companies. (See sec. 3, p. 0.) UO. Bills Receivable. This account shonid include the cost of collectible obligations In the form of bills receivable or other similar evidences of money receivable on demand or witliin a time not exceeding one year, excluding interest coupons. NoTB A. — Notes having dates of maturity of more than one year after dste of issue should be Included in account No. 103, ** Investment securities " or No. 100, ** ilsrketable securities." Nora B. — When lains are evidenced by demand notes Intended later to be ex- dinnKed for other securities, the amount of fiuch loans should be Included in ac- count No. 104, ** L«nf-term advances receivable." |tl- Accounts Receivable from Customebs ano Agents. This account should Include amounts due from customers for services rendered or billed, and from agents and collectors autborizetl to make collections of operating revenues. (See accounts Kos. 172 and 304.) 112. Accounts Recefvabt-e fbom System Corporation s. This account should include amounts due from controlling, affiliated, controlled, or subsidiary corporations on open accounts other tbnn those provided for in account No. 104, ** Long-term advances receivable." 113. Miscellaneous Accounts Receivable. This account should include all amounts owing to the company upon accounts with solvent concerns, otber than amounts provided for la accounts Nos. Ill and 112; claims upon which responsibility Is acknowl- edged by solvent concerns or which are sufficiently secured to be con- sidered good; nnd judgments against solvent concerns where tbe judg- ment Is not appealable or suspended through appeal. Notb. — Cash on deposit in banks or with trust companies should be included in account No. 100, " Cash," or No. 107, " Special deposite." 114. Matured Interest and Dividends Receivable. This account should Include interest accrued and due but not yet col- lected upon bonds, notes, or otber commercial paper held by or for the l)eneflt of tbe comimny, and all dividends declared and due from •olveut concerns but not yet collected, the right to which is in the . accounting company. 115. Materials and Supplies. This account should include the cost of unapplied material, including material temporarily In use and not charged out in tbe company's ac- counts, articles In firocesH of manufacture by tbe company, fuel station- ery, tools, and other supplies^ Freight and express ciiurges puid oo J I » 24 us. Matcbtals and S uf p um — Continaed. materia I iDcJuded In this account sbonld be Included In the Talue of luch mnierial. Wben nny plant and equipment Is discontinued, withdrawn, or retired, and wben any equipment, materials, and supplies are returned to store, the salvage value thereof should be charged to this account, regardless of wbether It is to be consumed Id operation or In construction or to be ■old. If such value Is not known and can not readily be determined. It should be estimated. Errors In such estimates wben determined. If made during the year In wblch the estimates were made, should be adjusted through the accounts hivolved ; If later, then through the Profit and Loss Account. Inventories of materials and supplies on hand and unapplied should be taken at least annually, and any shortages or overages disclosed by •uch Inventories should be credited or debited to this account and debite«l or credited to clearing account No. 704, " Supply expense," In case such shortages or overages can not be assigned to specific accounts. Note,— Where discounts recorercd thron^h prompt pnyment can not be credited to the pnrtfciilnr bills, guch materials and supplies should be charired at the In- voice cost, and any discounts recovered through prompt payment of bills for such materials and supplies should be credited to clearlnf account No. 704. - SuddIv expense.'* '^'^ * 116. OniER CURREWT ASSETS. This account should Include the cost of all current assets which ara not Includible under any of the foregoing accounts. By current annrtt are me.int only money or those things that are readily convertible Into money and which are held not as Investments but with the Intent of being presently converted Into money. 117 Unmatured Interest. Dividends, and Rents Receivable. This account should Include interest on loans made; rents nnder leases accrued to the date of the balance sheet, but not due or collectible until after that date; dividends declared but not doe on stocks owned; and dividends accrued on stocks owned when contracts require that the dividends be paid at stated times. 118. Sinking Fund Assets. This account should Include the amount of cash, the cost or book Talue of live securities of other companies, and other assets which are In the hands of trustees of sinking and other funds for the purpose of redeeming outstanding obligations; also amounts deposited with such trustees on account of mortgaged property sold, and the par value of live securities Issued or assumed by the accounting company and held In such funds. A separate account should be kept for each fund. In stating this account on the balance-sheet statement the par value of any securities Issued or assumed by the company and carried In this account should be deducted from the total In order to show only the aswts in sinking funds other than the company's own securities. (See ■ec. 3, p. 9.) 119. Insurance and Other Reserve Fund Assets. This account should include the amount of cash, the cost or book value of securities of other companies, and other assets In the hands of tni*. tees or managers of Insurance and other funds that have been raised and specifically set aside or Invested by the company for specific pur- poses, not provided for elsewhere; alto the par value of aecuritles issued ' 25 no. Insurance and other Reserve Fund Assets — Continued. or assumed by the accounting company and held In such funds. A sepal rate account should be kept for each fund. In stating this account on the balance-sheet statement the par value of any securities Issued or assumed by the company and carried In this account should be deducted from the total In order to show only the assets In the fuuds other than the company's own securities. (See sec. 8, p. 9.) 120. Provident Fund Assets. This account should Include the amount of cash, the cost or book value of securities of other companies, and other assets, whether con- tributed by the company, by employees, or by others. In the hands of trustees or managers of employees' i)en.sIon funds, savings funds, relief, hospital, and other assc^iation funds, when such trustees or managers are acting for the company In the administration of such funds; also the i)ar value of securities issued or assumed by the accouutiug com- pany and held in such funds. Notr. — This account should not Include funds held by the accounting company solely as trustee, and In which It bus no beneflcial interest. 121. Prepaid Rents. This account should Include the amount of rents paid In advance of the enjoyment of the term. As the term is consumed, this account should be credited at monthly intervals and the appropriate reut accouut should be debited with the amouut applicable to the month. 122. Prepaid Taxes. This account should Include the excess of taxes paid over the amount properly chargeable to income or other accounts as shown by the debit balance In the tax liability accouut. (See sec. 14, p. 14.) 123. Prepaid Insurance. This account should Include amounts paid as premiums on insur- ance policies In advance of their accrual. As such premiums accrue, they should be credited at monthly iutervals to this accouut and charged to accouut No. 04G, "Insurance.** 124. Other Prepayments. This account should Include amounts of prepayments made for any- thing other than as provided for lu the last three i)receding accounts. 125. Unextinguished Discount on Capital Stock. If the net of the balances In the discount and premium accounts for all classes of capital stock sold or exchanged Is a debit balance, the amouut shoukl be stated In this account. (See sec. 4, p. 10.) 126. Unamortized Debt Discount and Expense. If the net of the balances In the discount and premium accounts for all classes of funded del»t sold or exchanged Is a del)It balance, the amouat ahould be stated In this account (See sec. 5, p. 10.) 127. Other Deferred Debit Items. This account should Include suspense account debit balances that can not l>e entirely cleared and dIs{>osed of until additional Information is receiver!. It should Include such matters an amounts carried In suspense due to extraordinary casualties and unantict|iated reconxt ruction (See sec. 22, p. 17) ; expense of preilmliiary surveys, plans, Investigatiomi, etc.. nisda I 127 OTfnn DcmtRED Dcbtt Ttcmb — Contlnaed. for deternjiniiig tbe feiisibility of projects hHd In eontemplfltloa: Itemt awolting adjustment between occounts: debit bnlances in clenring accounts: amounts to t>e sprend over a stated term and not provl led for In other accounts: debit biilnnces In openiting reserves created for r^ pairs of ocean cables; and otber similar items. 128. Pbofit and I>08S — Debit BALAitcc. Under this bend sbould be shown the debit balance, if any, in tiM Profit and Loss Account (See sec. 15, p. 1&) LlABIUTT SlDt. ISO. Capital Stock. This account should Include the total por value of certificates or receipts actually or nominally issued to represent permnneut interests io the accounting company, or interests which, if terminable, are so only at the option of the coiiiittiny. The amounts Included In this account should be divided so ns to show (1) the pnr value of certificates Issued and actually outstanding, t)elng those not held by the company. Its njrents or trustees, or subject to its control: and (2) the pnr value of certificates, pledged and unpledged, held in the company's treasury, by Its ogents or trustees, or otherwise subject to Its control, including l>oth those reacquired after actual issue and those nominally but never actually issued. The amounts Included In this account should be further divided so aa to show the amount of each cinss of stock Issued, ns follows: (o) Common stock. — Stocks whose claims in the distribution of divi- dends nre subordinnte to the claims of all other stock. (b) Peeferbed stock. — Stocks Imviug a prior claim upon such divi- dends ns may be distributed. (c) DcBENTUBB STOCK. — Stocks issued under a contract to pay a speci- fied return nt sjieclfled Intervals. (d) ItECEiPTs OUTSTANDING FOB INSTALLMENTS PAH). — Receipts for pay- ments on account of subscriptions to cniiltnl stock. When certificates are issued for n mounts so paid, the piir value should be included In the account covering tiie class of stock for which the certlficntes are issued. Each of the above classes should be divided niso Into subclasses accord- ing to diflTerenees In dividend or Interest rights, voting rights, or con- ditions under which tbe securities mny be retired. If any issue of stwk is for money, that fact should be stated ; and If for any considenition other than money, the person to whom Issued should be designated, and the consideration for which issued should be described with sutticlent particularity to Identify it. If such Issue Is to the treasurer or other agent of the comimny. to be by him dlsiM)sed of for tlie benefit of the company, tliat fact and the name of such agent should ba shown: and such ngent sbould. In his account of the disftositlon thereof, show the like details concerning the considenition realized thcreuu. If tbe fair cash value of the consie actuall§ outstandinu. If reacquired and held by or for the accounting company under such circumstances as require It to t>e considered as held alive and not canceled or retired, it is considered to be nominally ouisianding. NuTB B. — When a genenil levy or assessment Is made against the holders of eipital stock, requiring the payment of any sum for the use of the company In addition to the consideration agreed upon at the time of sale, the amount col- lected upon such levy or assessment should t>e credited to the discount and premium account for the class of stock on which the assessment is made. IfiL Stock Liability fob Convebsion of Secubities. This account should include the par value of stock that the company has agreed to issue In exchange for securities of constituent companies whose physical property has been acquired under such agreements, but whose securities tiave not yet been surrendered for exchange. 102. Pbemiumb on Capital Stock. If the net of the balances in the discount and premium accounts for all classes of capital stock sold or exchanged is a credit balance, the amount should be stated in this account (See sec 4, p. 10.) 15S. Gbants in Am of Constbuction. This account should include tbe amounts of grants by individuals, associations, corporations, governments, or others as contributions to the cost of construction, additions, or betterments. IM. FUNDEn Debt. This account should include the total par value of unmatured funded debt mnturing more than one year from date of issue, issued by the accounting comiiany and not retired or canceled, and the total par value of similar unmatured debt of other companies the payment of which has been assumed by the accounting company. The amounts Included in this account sbould be divided so as to show (1) the par value of certificates or other evidences of funded debt issued and actually outstanding. t>eing those not held by the company, its agents or trustees, or subject to its control ; and (2) the par value of certificates or other evidences of funded debt, pledged and unpledged, held in the company's treasury, by its agents or trustees, or otherwise subject to its control. Including both those reacquired after actual issue and those nominally but never nctuaily issued. The amounts Included in this account should be further divided so as to show the amount of each class of funded debt, as follows: (a) MoBTGAGE BONDS. — Rouds sccurcd by a lien on physical property and not includible in the other subdivisions of this account (b) CoiJ^ATERAL TRUST BONDS. — Rouds oud uotcs having a date of ma- turity of more than one j*ejir nfter date of issue, secured by a lien on securities or other commercial paper; also stock trust certificates Himliar Id character to collateral trust bonds. (c) Income bonds. — Bonds w^hlch are a lien on a company's revenue alone, or txmds which, while being a lien on its property and franchises, can claim payment of interest only in case interest is earned. ill i liili 28 154. FnifDED Debt — Contlnnedt ((/) MisccLLANKous oRLTQATTOifs. — All funded obllfnitlons not provided, for bj tlie otber subdivisions of tbis nccount. also notes, unsecured cer- tSficutes of indebtedness, debenture bonds, plain bonds, reul estiite mort- gages executed or ossumed, aind otber sUuil&r obligutioos luuturiug iiiort tban one year after date of Issue. (e) Receipts outstawdiiio for ruwDFD debt. — Receipts for pnjnienta on account of funded debt. When certifloites are issued for amounts ao pnid. the par value should be included in the account covering the class of funded debt for which the certificates are issued. Eitch of the above classes should be divided also Into subctnsKes ac- cording to diflTerenccs in mortgage or other lien or security therefor, rat* of interest, interest dates, or date of maturity. Parts of any issue agreeing in other characteristics but maturing serially may be treoted as of the same subclass. If the consideration received for any Issne of funded debt is anything else than money, the entry should show the principal to whom issued and should describe the considenitlon actually received for (he Issue with sufficient particularity to Identify It. If the issue Is In any case to an agent of an undisclosed principal, the name and business address of such agent and the fact of his agency should be shown In the entry. If the fair cash value of the consideration realized is greater or less than the par value plus the accrued interest, the difference credited or charged to an appropriate discount and premium account should have reference made to It In the fundied debt account. (See sec. 5, p. 10.) In stating this account on the balance-sheet statement, the amonnt held by the company, its agents or trustees, or subject to Its control ■hould be deducted from the total in order to show only the fiar value of funded debt securities actually outstanding at the date of the bulance- sheet statement. (See sec. 3, p. 0.) Note. — For the purposes of the balance-sheet statement, funded debt securl- tlen are considered to be nominully itaued when certified by trustees nod placed with the proper officer for sale and delivery, or pledged, or otherwise placed la some special fund of the accounting company. They are considered to lie actu- ally iMtued when they have been sold to a bona flde purchaser for a ralunlile con- sideration, snd such purchaser holds them free from all control by the accnimflng company. All fuuded debt securities actually Issued and not reacquired and held by or for the accounting company are considered to t>e actuaUy ouUtandiny. If re- acquired by or for the accoiintinx company under such circumstances aa requlrt them to l)e considered ns held alive and not canceled or retired, they are consld* ered aomi«o/iy ouUtanding. 155. Receiver's Certificates. When any receiver acting under the orders of a court of competent Jurisdiction is In possession of the property of the conifmny and under the orders of such court Issues certiflcntes of Indebtedness chnrgonhle upon such property, the par value of such certificates should l»e cre«llied to this account. Interest accruing upon such certificates should also ba credited monthly to this account, and when paid should be char:;ed to this account. 150. Long-term Advances Payable. This account should Include ad%*aDces from other compnnleii, both when evidenced by l>ook accounts and when evidenced by demand notes, when it Is mutually agree * nient, fine, or penalty, should be credited to this account, and the entry •bould designate the action or suit as a consequence of which such Judg- ment Is pronounced or such flue or penalty assessed. The designation of the action or suit should Indicate the court, the term thereof, the parties, and the character of the action or suit Interest accruing upon any such Judgment should be credited to tbis account. In case of appeal and affirmance In whole or In part from which Judg- ment of affirmance a further appeal lies» tiie same rule shall apply as uix>n entry of original Judgment 158. Bills Payable. This account should include the par value of all notes, drafts, and other evidences of Indebtedness, issued or assumed by the company, and payable on demand or within a time not exceeding one year. Noxr. — VThen loans from other companies are evidenced by demand notes In- tended later to be excbantfed for other securities, the amount of such loans should be Included In account No. 15U, ** Long-term advances payable." 150. Audited Vouchers and Wages Unpaid. This account should include the amount of audited vouchers or accounts and audited pay rolls unpaid on the date of the balance sheet; also the omount of unclaimed wages and outstanding pay and time checks issued in iMiymeut of wages. 100. Customers* Deposits. This account should Include nil cash deposited with the company by customers as security for the [uiyment of bills. Deposits refunded should be charged to this account and credited to cash. Deposits applied to uncollectible telegraph or cable bills should be charged to this account and credited to the account of the customer. Kots. — ^Thls account is not Intended to cover small amounts deposited by ■rnders of collect messages as gunrnnty in case charges can not be collected at dvstlnulion, such amounts being usually refunded or applied within a short time. 161. Accounts Payable to System Corporations. This account should Include the amounts owed to controlling, affiliated, controlled or subsidiary corfMrations on open accomits, other than thosa provided for in account No. 15G, ** Long-term advances payable.** 1G2. Miscellaneous Accounts Payable. This account should Include all amounts owed to miscellaneous credi- tors on oi>eu accounts and n^t provided for elsewhere. 163. Matured Interest, Dividends, and Rents Unpaid. lliis account should Include matured and unpaid interest on funded debt loans, and debenture stock of the accounting company, and of other companies when payment has been assumed by the company; rents due and unpaid for property held under leases; and dividends due and pay- able on capital stock but impaid« uncalled for, or unclaimed at the data of the balance sheet ^ !S !■ lii^ i 1(1 t 30 104. Matured Funded Debt Unpaid. This account should Include the amount of mntured mortgnge, bonded, and other funded debt payable, but not yet paid, including bonds drnwo for redemption through the operaUon of sinl^ing and redempUon fund agreements. 165. Sebvicb Billed in Advance. This account should include the amounts covering time service and other services which are billed in advance. As the service is performed this account should be charged and the appropriate revenue account should be credited. 166. 0th EB Current Liabilitie8. This account should include the amounts of all current llabilitlea which are not included in any of the foregoing accounts. 167. Taxes Accrued. This account should Include the amount of taxes accrued and properly charged against Income or other accounts In excess of the amount of taxes paid. (See sec. 14, p. 14.) ICa Unmatured Interest, Dividends, and Rents Patablc This account should Include the amount of interest accrued but not due on funded debt issued or assumed, loans, and open accounts; and renta under leases accrued to the date for which the bahince sheet is made but not due until after that date; also dividends declared on stock prior to the date of the balance sheet but not payable until after that date. Not*. — The Interest accnilns on any Judgments apalnst the company or npon any recelvor'a certlflcntea ahould be credited to the account to which such Judg^ ments or receiver's certificates stand credited. 168. Unextinguished Premium on Debt. If the net of the balances in the discount and premium accounts for all classes of funded debt sold or exchanged is a credit balance, the amount should be stated In this account (See sec. 6, p. 10.) 170. Reserve for Accrued Depreciation. To this account should be credited such amounts as are concurrently charged to operating expense account No. COS, " Depreciation of plant and equipment," and to clearing accounts Nos. 701, 702. 703. 708, and 709. to cover the expense of depreciation of plant, equipment, furniture, tools, and Implements. To this account should also be credited any amount carrlesed of until additional Infoni.atlon 18 received. It should Include such mutters as credit bailuuces In o|.eniilnff reserves created for re|«ilrs of ocemi caible lines; Items awaiting «dJ^s^ nieiit between accounts; credit balances In clearing accounts; amounts to be spread over a stated term and not provided for elsewhere; and other similar Itema «?. ««u 17a Surplus Invested since December 31. 1013. iw Plant and Equipment This account should Include such amounts of Income and surplus •■ have been definitely appro|.rlated or set aside ami expended since Decern- ber 31. 1913. for extensions or Improvements of the compnny's pl.int and equipment, such apf.roprh.tlons to Include those made for the purpose of discharging the princliwl (less the discount. If nny. sundered at the time of sale) of obligations Incurred in the acquisition of any property whose cost Is carried In the plant and equipment accounts.. Nora A.—The amounts credited to this account should be concurrently chanred to ncc.>un No. :m. "Ar^pruprUtlon^ of Income for construction, e^pmen, ?^ rnd'u:tre;m:n:«..^" '''• "•^'^''-P^'""- o' -P- 'or const ruct:::n/egu.pme„\' .cn7,^Mo''*~r'*^" "*^"".^ "**'*""' "**' '"*''"*'* temporary appropriations for tba acquisition of property the co-t of which Is Intended Infer lo be met bv an Isiu! of ^ocurlties. n«r approprlntlon. for the payment of obligation, which are i^ tended to be replaced by new Issues. 177. Surplus Invested in Sinking Funds. This account should Include aiM>ropriatlon8 of Income and surplus that ■re specifically Invested or set aside in the hands of trustees for slukinf and redemption funds, and also accretions to such funds. 178. Other Surplus Reserved. This account should Include all appropriations of Income and surplut held In reserve, other than appropriations Invested since Deceml>er 31, 1»13, In plant and equipment and those Invested In sinking funds A ■eiMirate subaccount should be nilsed for each reserve, and the entriei In such subaiccounts are required to be shown separately in the annual report to the Commission. This account should Include the unexpended balance. If any, of appro- priations Intended to be Invested in plant and equipment, and such appropriations to sinking or redemption fund reserves as are not specill- caily Invested. 179. Profit and Ijosb — CREDrr Balance. Under this head should be shown the credit balance, If any, In the Profit and Loss Account. (See sec 16, j^ 15.) PLANT AND EQUIPMENT ACCOUNTS. GENERAL ACCOUNTS. Pac*. 100. Plant and Equipment to Jajtuart 1, 1914 35 101. Plant and Equipment since December 31, 1913 35 PRIMARY ACCOUNTS. 200. Organization 36 201. Franchises 35 202. Patent Rights 36 203. Other Intangible Capftal 36 204. Right op Way 36 205. Land 36 206. Buildings 37 207. Telegraph Equipment 37 208. Messenger Equipment 38 209. Other Equipment op Telegraph Offices 38 210. Subscribers' Equipment 38 211 . Pole Lines 33 212. Aerlal Cable 38 213. Aerial Wire 38 214. Underground Conduits 38 215. Underground Cable 38 216. Submarine Telegraph Cable 38 217. Pneumatic Tubes 39 218. Floating Equipment 39 219. Railway Equipment 39 220. Cable Equipment 39 221. Other Equipment op Cable Offices 39 222. Cable Lines 39 223. Cable Floating Equipment 39 224. Oppice FuRNrruRE and Fixtures 39 225. General Shop Equipment 40 226. General Store Equipment 40 227. General Stable and Garage Equipment 40 228. General Tools and Implements 40 229. Interest During Construction 40 230. Undistributed Engineering and Superintendence 41 231. Undistributed Law Expenditures 41 232. Taxes During Construction 41 233. Miscellaneous Construction Expenditures 41 (33) 65922'— 13 3 I! U,:^i TEXT PERTAINING TO ACCOUNTS FOR INVESTMENT IN PLANT AND EQUIPMENT. lOD. PLANT AND EQUIPMENT TO JANUARY 1, 1914. This general account is a suniniary of those booh: accounts which in- clude the plant and equiimient of the company installea prior to January 1, 1914, and which is still in service at the date of the balance sheet. The accounts representing the plant and equipment of the company as carried on its books at the close of December 31, 1913, should be so desig- natetl upon the books of the company as to show clearly that they relate only to plant and equipment installed prior to the close of that date. (See •ec. 7, p. 11.) Note A. — No debits should be made to such accounts with respect to any prop- erty acquired subsequent to December 31, 1913, but the cost of such property should t>e charged to primary accounts Nos. 200 to 233. Note B. — In the reports to the Commission a statement will be required show- ing the names of the plant and equipment accounts actually carried by the com- pany on December 31, 1913, and the balances therein at the date of the report. 101. PLANT AND EQUIPMENT SINCE DECEMBER 31, 1913. This general account is a summary of primary accounts Nos. 200 to 233, Inclusive, which include the investment in plant and equipment in- stalled since December 31, 1913. The sum of the balances in accounts Nos. 200 to 233, inclusive, as provided hereinafter, should be shown on the balance-sheet statement under this account (See sec. 7, p. 11.) 200. Obqamzation. This account should Include all fees paid to governments for the privilege of Incorporation, and all office and other expenditures incident to organizing the company or other enterprise and putting it In readiness to do business. This Includes the cost of preparing and distributing prospectuses, the cost of soliciting subscriptions for stock, cash fees paid to promoters, actual cash value, at the time of organization, of securities paid to promoters for their services in organizing the enterprise, counsel fees, cost of preparing and issuing certificates of stock, cost of procuring certificates of necessity from State authorities, and other like costs. (See account No. 414, p. 54.) NoTB. — The cost of soliciting for loans or for purchase of bonds or other eyl- dences of indebtedness should not be charged to this account. 201. Franchises. This account should Include the amount (exclusive of any tax or annual charge) actually paid to governments as the consideration for the grant of such franchise or right having a life of more than one year as Is necessary to the conduct of the company's telegraph or cable opera- tions, or for the extension of such franchise. If any such franchise Is acquired by assignment, the charge to this account In respect thereof (35) tl Hi ' !lt !:!■ 1.JK li 36 201. Franchises — Continued. must not exceed the amount actually paid therefor by the company to Its assignor nor should It exceed the amount actually paid the Govern- ment. (See account No. 652, p. 71.) NOTB A.— Annual or more frequent payments In respect of franchises should be charged to the appropriate tax or operating expense account. Note B.— Any excess of the amount actually paid by the company over the amount paid by the original grantee to the grantor of the franchise should be charged to account No. 203, " Other intangible capital." if any franchise has a life of not more than one year after the date when It is first exercised by the com- pany, the cost of the franchise should not be charged to this account, but to the appropriate operating expense accounts or, if extending beyond the fiscal year, to account No. 124, " Other prepayments." 202. Patent Rights. This account should Include the cost of all rights having a life of more than one year from the date when placed In service acquired by the company in or under valid patents granted by governments to in- ventors for inventions and discoveries in connection with conducting telegraph or cable operations. (See account No. 652, p. 71.) 203. Otheb Intawgible Capital. This account should include the cost of all property, not covered by the last three preceding accounts, coming within the definition of in- tangible capital and devoted to telegraph or cable operations. Entries of charges to this account should describe the acquired property with sufficient particularity clearly to identify It, and should also show specifi- cally the principal from whom acquired and all agents representing such principal in the transaction ; also the term of life of such property, esti- mated, if not known, and, if estimated, the facts upon which the estimate Is based. (See account No. 414, p. 54.) 204. Right of Wat. This account should Include the cost of aU land and Interests In land acquired for the location of wires, cables, pole lines, and conduits; salaries and expenses of purchasing agents; expenses of appraisals and of juries, commissioners, or arbitrators In condemnation cases; notarial fees, real-estate brokers' commissions; cost of plats, abstracts, exami- nation of tiUe, recording deeds, etc. ; and cost of assessmente for public improvements which are not the property of the accounting company. This account should also include the first cost of acquiring leaseholds of land for right of way, the terms of which are for more than one year each, whether acquired through direct lease, assignment, or otherwise. If any such leasehold is acquired by assignment, the charge to this ac count must not exceed the amount actually paid therefor by the account- ing company to the assignor. 206. Land. This account should include the cost of all land and Interests in land, other than right of way, acquired for use In the operation of the telepniph or cable plant, such as land occupied by general and division oflSces, main, local, branch, or relay telegraph or cable offices, shops, storehouses, stables, and garages. It includes the cost of examination and registration of tiUe, conveyancer's and notary's fees, purchasing agent's commissions or proportion of purchasing agent's salary, taxes accrued to date of trans- fer of title, and all Hens upon the title, when such costs are assumed or paid by the purchaser In Its own behalf; cost of anMsments for public Improvements which add to the value of the lands but which are not th« 37 206. Land — Continued. property of the accounting company, including sidewalks on public prop- erty; cost of grading land when not done in connection with buildings; costs of obtaining consents and payments for abutting damages; and expenses of condemnation proceedings. This account should also Include the first cost of acquiring leaseholds of land, other than for right of way, the terms of which are for more than one year each, whether acquired through direct lease, assignment, or otherwise. If any such leasehold is acquired by assignment, the charge to this account must not exceed the amount actually paid therefor by the accounting company to the assignor. Not*. — Cost of buildings and other Improvements should not be included in this account. If at the time of acquisition of an interest in lands such Interest extends to buildings or other Improvements thereon, which improvements are de- voted by the company to telegraph or cable operations, and if the price of such Improvements is not determined by the contract, the buildings or improvements should be appraised at their fair cash value for use in such operations, and such appraised value should be charged to account No. 206, " Buildings." If such Im- provements are devoted to operations other than telegraph or cable or held as Investments, the cost (or the appraised value, if the cost is not determined in the contract of acquisition) should be charged to account No. 105, " Miscellaneous Investments. • If the improvements are removed or wrecked, the salvage, less the cost of removal or wreckage, should be credited to this account. 206 Buildings. This account should include the cost of all buildings, such as general and division offices, main, local, branch, or relay telegraph or cable offices, shops, storehouses, stables, and garages devoted to the general purposes of the company ; also of all permanent fixtures, such as water, steam, and gas pipes and fixtures; electric wiring and fixtures for lighting; elevators and the engines and motors specially provided for operating them ; fur- naces, boilers, and other apparatus provided for producing steam for such engines and for heating; and electric generators specially provided for producing current for lighting such buildings. This account should include such piers and other foundations for machinery and apparatus as are designed to be as permanent as the buildings in which, or in con- nection with which they are constructed, and to outlast the first machinery or apparatus mounted thereon. It also includes the cost of real-estate brokers' commissions, examina- tion and registration of titles, and other expenses, such as architects' fees, and supervision Incident to the construction or purchase of buildings; and the cost of grading and cost of sidewalks, fences, hedges, etc., on grounds used in connection with such buildings. NOTB. — This account should not include any telegraph or cable equipment, wiring, or apparatus for generating or controlling electricity for operation of the telegraph or cable system. lOT. Telegraph Equi]?ment. This account should Include the cost of all electrical, mechanical, or pneumatic equipment in telegraph offices when such equipment is adapted to use In telegraph operations, such as distributing frames, switchboards, and testing apparatus; keys, relays, and sounders; operating tables; automatic transmitting and receiving apparatus; duplex, quadruple!, and repeater apparatus; engines, generators, batteries, air compressors, and other power equipment ; pneumatic tubes used for conveying messages In telegraph offices; and other automatic message conveyors. Include herein the cost of all associated interior wiring, cabling, and conduits in telegraph ofllces. I III II 38 208. Messenger Equipment. This account should Include the cost of equipment used In the operation of the messenger senice, such us call circuit registers, call boxes, associ- ated interior wiring and Installation In ofBces and on subscribers' prem- ises, and accessories; and also, when borne by tlie company, the cost of messenger uniforms. 209. Other Equipment of Telegraph OmcEa. This account should Include the cost of business equipment in tele- graph offices, such as furniture, typewriters, numbering machines, and other incidental equipment used in the operating room. This account ■hould Include also furniture and equipment in managers' offices, in rest and lunch rooms, and in operators' schools; and public office furniture, such as counters, writing desks, and chairs. 210. Subscribers' Equipment. This account should include the cost (Including the expense incident to Installation) of telegraph equipment devoted to the use of subscribers, such as telej?raph instruments and apparatus, ticiiers. cables, wires, and conduits on subscribers' premises. NoTB.— Call boxes and associated Interior wiring on subscribers' premises should be includwl undor account No. 208. " Messenger equipment." 211. Pole Lines. This account should include the cost of poles, towers, cross arms, pins, brackets, braces, guy wire, guy stubs, and other materials used in the construction of telegraph pole lines; also the cost of first clearing right of way. 212. Aerial Cable. This account sh(nild include the cost of aerial cables, including the cost of suspension wire, cable clips and rinirs. cable boxes and fittings, pole seats and platforms, loading colls, pot heads, protectors, sleeves, and other materials used in hanging such cables. 213. Aerial Wire. This account should include the cost of aerial wires, including insu- lators, sleeves, and other materials used In attaching such wires to the insulators. 214. Underground Conduits. This account should include the cost of conduits, including cost of pipe, cement, manholes, manhole furnishings, and other materials used; cost of connections to poles and buildings; and other costs incident to the installation of underground conduits for telegraph lines. 215. Underground Cable. This account should include the cost of underground cables, cable boxes and fittings, and other materials used in the work of installing under- ground cables for telegraph lines, Including as such, cables leading from main conduits to main, local, branch, or relay telo«;raph offices or to subscribers' premises, 216. Submarine Telegraph Cable. This account should Include the cost of submarine cables, cable towera. cable houses or boxes and their appurtenances, when such submarlnt cables form a part of telegraph lines. 39 217. PwEUMATic Tubes. This account should Include the cost of outside pneumatic tubes for telegraph lines, including the metal tubing, encasement, and manheles, and other material used in their construction. 218. Floating Equipment. This account should Include the cost of steamships, steamboats, launches, and other vessels used in the construction and maintenance of telegraph lines. This includes the cost of hulls, rigging, boilers, machinery, special apparatus, and all appurtenances and fixtures neces- sary to equip such vessels for service. 219. Railway Equipment. This account should include the cost of officers' cars, and of motor, bunk, pole, and hand cars, velocipedes, and other railway equipment used in the construction and maintenance of telegraph lines; also all appurtenances and fixtures necessary to equip such cars for service. 220. Cable Equipment. This account should include the cost of all electrical, mechanical, or pneumatic equipment in cable offices, such as switchboards and testing apparatus, keys and sounders, operating tables, perforators and re- corders, power equipment, and pneumatic tubes and other message con- Teyors. Include herein the cost of all associated interior wiring, cabling, and conduits in cable offices. 221. Other Equipment of Cable Offices. This account should include the cost of business equipment in cable offices, such as furniture, typewriters, numbering machines, and other incidental equipment used in the operating room. This account should include also the furniture and equipment In managers' offices. In rest and lunch rooms, and in operators' schools; and public office furniture, such as counters, writing desks, and chairs. 222. Cable Lines. This account should include the cost of cable lines, including submarine and underground cables, conduits, pole lines, aerial cables, aerial wires, and all appurtenances, when such lines are used exclusively in the opera- tion of ocean cables. Cable Floating Equipment. This account should include the cost of steamships, steamboats launches, and other vessels used In the construction and maintenance of ocean cables. This includes the cost of hulls, rigging, boilers, ma- chinery, special apparatus, and all appurtenances and fixtures necessary to equip such vessels for service. Office Furniture and Fixtures. This account should Include the cost of desks, tables, chairs, carpets, cases, movable partitions, railings, shelves, typewriters, addressing ma- chines, adding machines, and other office devices; stoves, poitable gas and electric fixtures, and other office fittings not considered a part of the building and not telegraph, messenger, and cable equipment provided for in accounts Nos. 207, 208, 209, 220, and 221. (See general note under account No. 228.) 40 226. Genebajl Shop Eqxtipmeitt. This account should include the cost of all equipment specially pro- Tided for general shops, such as engines, gas producers, electric gener- ators, other power apparatus used In operating machinery In such shops, machine tools, shafting, belts, and like shop equipment; also such smithing equipment In general shops as Is used principally for general purposes other than shoeing horses and repairing vehicles. Portable tools and apparatus of special value may be charged to this account and remain herein so long as record Is kept of such tools and apparatus (See general note under account No. 228.) 228. GiNERAL Store Equipment. This account should include the cost of all equipment of general store structures, such as movable counters, movable shelving, and other movable equipment of like nature; carts, barrows, trucks, tools, and other apparatus and appliances used in handling, storing, or packing materials and supplies. (See general note under account No. 228.) NoTB.-Counter8, shelving, and the like which are permanently atUched to the KTUcture should be charged to account No. 206. " Buildings." 227. General Stable and Gaeage Equipment. This account should include the cost of equipment of stables and garages, including horses, harness, drays, wagons, automobiles, and other vehicles; also equipment of shoeing shops, harness repair shops, vehicle repair shops, etc. (See general note under account No. 228.) 228. General Tools and Implements. This account should include the cost of portable testing apparatus and valuable tools and Implements devoted to the maintenance or construction of the telegraph or cable plant and not provided for In the equipment ac- counts. Not. —This account should not Include tools not yet in use carried as suDDlles "to" tpL'se."' '""" '"' '°"" "''^"^'•' '^' '" ^^^-'^"^ accolt No^Tot General Note to Accodnts 224 to 228.— Items of small value or short llfA mich as portable tool, liable to be lost or stolen, temporary shelving, waste baskes* '^llZT' "' ''"""^ ''""''''^ '" "^""°^ ""^^"^ accoun^ts^rt clewing Interest During Construction. This account should include the Interest accrued upon all moneys (and credits available upon demand) devoted to the construction j.nd equip- ment of the property from the time of such devotion until the construc- tion Is ready for use. and such proportion of the discount and expense on funded debt as is equitably assignable to the period between the date of the issuance of securities and the time when the property acquired, or the Improvement made through such issuance, becomes available for the iervlce for which It is Intended. The proportion of Interest, discount and expense thus chargeable should be that which the period prior to th^ completion or coming into service of the facIllUes or Improvements con- •tructed bears to the entire life of the securities issued. (See sec. 9, p. 1^.) Interest receivable accrued upon such moneys (and upon such credits) •houid be credited to this account. If any property with respect to which an Interest charge Is included in this account is withdrawn or fetlred from service, the amount of such Interest (estimated, if not 41 229. Interest Dubino Constbuction — Continued. known) should be credited to this account and charged off as a part of the original cost of the property so retired. Note. — No interest upon expenditures for replacements or reconstruction should be included In this account unless proper credits are made to the appropriata plant and equipment accounts for any interest included in such accounts in respect of the property retired or withdrawn. 230. Undistributed Engineering and Superintendence. This account should include expenditures for services and expenses of engineers, draftsmen, and superintendents employed on preliminary and construction work, including instruments and supplies, when such ex- penditures can not be assigned to specific construction accounts. 281. Undistributed Law EIxpenditures. This account should include, when not chargeable directly to the ac- count for which incurred, general law expenditures incurred In the con- struction of the telegraph or cable plant, such as the pay and expenses of counsel, solicitors, and attorneys, their clerks and attendants, and exjienses of their offices; the cost of printing briefs, legal forms, testi- mony, reports, etc. ; payments to arbitrators for the settlement of disputed questions; cost of suits, payments of special fees, notarial fees, witness fees, and other court expenses Note. — If separable, expenditures incurred in connection with the acquisition of right of way should be charged to account No. 204, " Right of way," those Incurred In the acquisition of other land to account No. 205, " Land," and those Incurred in connection with the organization of the corporation to account No. 200, "Organisation." Taxes During Construction. This account should Include all taxes and assessments levied and paid on property belonging to the company while under construction and before the plant is opened for operation, except special taxes assessed for Improvements. Note. — Special taxes assessed for street and other improvements, such as grad* ifig. sewering, curbing, guttering, paving, and sidewalks, should be charged to the account to which the property benefited is charged Miscellaneous CJonstruction Expenditures. This account should include items which can not properly be charged to any other plant and equipment account, such as salaries and expenses of executive and general officers of the comi)any before it is ready to begin operations and of clerks in general offices engaged on construction accounts or work: rent and repair of general offices when rented, with the office expenses; insurance premiums during construction; also other construction and equipment items of a special and incidental nature. This account may include a suitable proportion of supply expense (as defined in account No. 704) applicable to construction, when not assign- able to specific materials. Notb. — This account should not Include any costs of organization, or any costs or discounts connected with the issue and disposal of stocks, bonds, or otber secoritles, or commercial paper. S3S. w \ mCOME STATEMENT. I. OPERATING INCOME. 800. Telegraph and Cable Opbbatino Revenues 45 801. Telegraph and Cable Operating Expenses 45 Net Telegraph and Cable Operating Revenues (or Deficit). 802. Other Operating Revenues 45 303. Other Operating Expenses 45 Net Revenue (or Dewcit) from Miscellaneous Operations. 804. Uncollectible Operating Revenues 45 805. Taxes Assignable to Operations 46 Operating Income (or Loss). II. NONOPERATING INCOME. 810. Income from Lease of Plant.. 46 811. Miscellaneous Rent Income 46 812. Dividend Income 46 313. Interest Income 47 314. Sinking and Other Reserve Fund Accretions 47 315. Profits from Operations of Others 47 316. Miscellaneous Nonoperating Income 47 Gross Income (or Loss). III. DEDUCTIONS FROM GROSS INCOME. 320. Rent foe Lease of Plant 48 821. Miscellaneous Rents 48 822. Interest on Funded Debt 48 823. Other Interest Deductions 48 824. Nonoperating Taxes 48 825. Loss ON Operations of Others 48 326. Amortization of Debt Discount and Expense 49 827. Release of Premiums ON Debt — Cr 49 828. Miscellaneous Deductions from Income 49 Net Income (or Loss). IV. DISPOSITION OF NET INCOME. 330. Appropriations of Income to Sinking and Other Reserve Funds 49 331. Dividend Appropriations of Income 49 832. Appropriations of Income for Construction, Equipment, and Bet- terments 50 S33. Miscellaneous Appropriations of Income 50 Income Balance Transferred to Credit (or Debit) of Profit and Loss Account. (43) II i. Il TEXT PERTAINING TO ACCOUNTS IN THE INCOME STATEMENT. I. Operating Income. 800. Telegraph and Cable Operating Revenues. This account should include the total operating revenues derived from the telegraph and cable operations of the company for the period covered by the income statement. (For the primary operating revenue accounts, see pp. 59 to 61.) 801. Telegraph and Cable Operating Expenses. This account should include the total operating expenses of the tele- graph and cable oiierations of the company for the period covered by the income statement. (For the primary operating expense accounts, see pp. 65 to 71.) 802. Other Operating Revenues. This account should include the total revenues of the company derived from operations other than telegraph and cable operations, for the period covered by the income statement. This account includes the revenue derived from the operation of property carried in balance-sheet account No. 105, " Miscellaneous investments," when such property Is operated by the accounting company. 803. Other Operating Expenses. This account should include the total expenses of operations other than telegraph and cable operations for the period covered by the income rtatement. This account includes the expenses of the operation of property carried in balance-sheet account No. 105, "Miscellaneous in- vestments," when such property is operated by the accounting company. 804. Uncollectible Operating Revenues. This account should include the amount of any accounts for telegrai»h, cable, and other services which, after a reasonably diligent effort to col- lect, have proved impracticable of collection. This account should include only uncollectible bills for amounts which have been treated as operating revenues. This account may Include monthly charges, based upon estimates, to create a reserve for uncollectible bills, provided such reserve is adjusted annually in accordance with the experience of the accounting company. Such amounts should be credited to account No. 172, " Reserve for doubt- ful accounts." jjgainst which should be charged bills that have proved Impracticable of collection. Note. — Uncollectible bills for amounts which have not been treated as operating revenues should be charged to account No. 328, " Miscellaneous deductions from Income," or to Prolit and Loss Account, as may be appropriate. (45) 46 47 1 I It 805. Taxes AssioNAni-E to Operations. This account should Include Federal. State, county, municipal, and other taxing-district taxes relating to telegruph and cable property, operations, and privileges for the period for which tlie Income Account Is stated; also annual or more frequent payments in respect of fran- chises. This account should also include the taxes on other property and operations, the revenues and expenses of which are Included in accounts Nos. 302 and 303, respectively. (See sec. 14, p. 14.) II. NONOPERATINO INCOMI. 810. INOOME FROM LEASE OF PLANT. This account should include all Income accrued from the company** interest in telegraph or cable plant (including the equipment and other property covereil by the contract) held by others under some form of lease whereby the company surrenders possession of such property for operating purixxscs. This account should include the entire amount of rent (except taxes) receivable by the lessor according to the terms of lease or other agree- ment, whether it is paid to the lessor in cash or is disbursed by the lessee for the account of the lessor as interest on funded debt, guaranteed dividends on stock, or otherwise. This account is intended to cover only rents receivable for the ns« of an entire telegraph or cable plant or an iniiiortant section of a telegraph or cable plant. When the lessor company maintains the plant and equipment leased, the cost of maintaining the property rented should be charged to this account 811. Miscellaneous Rent Income. This account should include the income accruing to the company as a retum upon rented proi^erty, other than telegraph or cable plant pro- Tided for in account No. 310. Tills account should include such items as the rent from lands, build- ings, wires, instrunjents, ducts, short portions of pole lines, and short ■ections of conduits To this account should be charged the cost of maintenance of the property rented, also incidental expenses In connection with such prop- erty, such as the cost of negotiating contracts, advertising for tenants. fees paid conveyancers, collectors' commissions, and analogous items. Note. — If the property rented Is so Intimately connected with property used In the company's telegraph or cal)lo operations that the expenses of the former can not l>e nscertalncd, the revenues should be credited to account No. 520 or No. 521 as may be appropriate, and the expenses in connection with the rented prop- erty sfiould be included in operating expenses. 812. DiviDENn Income. This account should Include dividends declared on stocks, the Income from which Is the property of the accounting company, whether such stocks are owned by the accounting company and held in its treasury or deposited in trust, or are controlled throigh lease or otherwise. Atvrnals of guaranteed dividends may be included in this account If their payment Isa reasonably assured. Note A. — This account should not include credits for dividends on stocks Issuetl or assumed by the accounting company and owned by It, whether held la Ita 812. Dividend Income — Continued. treasury, in special deposits, or In sinking or other reserve funds, or pledged as collateral. Note B. — Dividends on stocks of other companies held In sinking or other re- serve funds should be credited to account No. 314, " Sinking and other reserve fund accretions." 813. Interest Income. This account should include interest on bonds and other funded securi ties and on debenture stock of other companies, the income from which is the proi>erty of the accounting company, whether such securities are owne NOTB C. This account should be used unless appropriations are definitely made chargeable to surplus, In which case they should be charged to account No. 412, •• Dividend appropriations of surplus." 332. Appbopbiations of Income fob Constbuction, Equipment, and Betteb- MENTS. This account should include amounts appropriated from Income for construction and equipment and for betterments of property carried In plant and equipment accounts. These amounts should be subdivided so as to show (a) amounts ex- pended during preceding fiscal periods, (6) amounts expended during the current fiscal period, and (c) amounts held In reserve. IfOTK. This account should be used unless appropriations are definitely made chargeable to surplus, in which case they should be charged to account No. 416, "Appropriations of surplus for construction, equipment, and betterments." 833. Miscellaneous Appbopbiations or Income. This account should include appropriations of Income not provldeli messages and land-line transmission of wireless and cable press messages. 604. Money Transfer Tolls. This account should include all revenues derived from the transmis- sion of messages incident to the transfer of money, including telegraph messages and land-line transmission of wireless and cable messages. fiOTV. — The preralnms on the money transferred should be credited to account No. 622, "Money transfer premiums." 505. Stock and Commfrcial News Rkvenues. This account should include all revenues derived from the transmis- sion or sale of stock and other market reports, sporting news, election re- turns, marine reports, and similar items. OOd Other Telegraph Transmission Revenues. This account should include all revenues derived from the transmission of telegraph messages and not provided for elsewhere, (58) BOT. Telefhoitb Tbansmisston Tolls — Dr. This account should Include charges for amounts due telephone companies for the transmission of telegrams and cablegrams over tele- phone lines. The amounts so chargeable may be the telephone com- panies' proportions of the through rate or may be the telephone com- panies' charges for toll or exchange service. Note. — If telephones installed for the transaction of ordinary bnsineM ar* osed only tncidontally for the transmission of telegrams or cablo^rama, th« entire expense of such telephones may be charged to the appropriate operating expense accounts and no charge need be made to this account. II. Revenues from Transmission — Cable. 510. CoMUKnciAL Cable Tolls. This account should include all revenues derived from the transmit- tlon of messages by o(^ean cable lines at commercial rates; also from transmission of messages at government rates, when collection Is made at local offices. The revenue to be credited to this account may be based on the rates of the company for cable service or on the proportion of through rates for cable and land-line telegraph service. 611. Government Cable Tolls. This account should include all revenues derived from the transmis- sion of messages by ocean cable lines at government rates, when settle- ments for such messages are made through the general offices of the company. B12. Press Cable Tolls. This account should Include all revenues derived from the transmis- sion of press messages by ocean cable lines at other than commercial rates. 513. Otlieb Cable Transmission Revenues. This account should Include all revenues derived from the transmis- sion of messages by ocean cable lines and not provided for elsewhere. III. Revenues from Operations Other than Transmission. 620. Rents from Leased Wires. This account should include all revenues accruing as rent from wires used by telegraph companies, telephone companies, brolcers, and others, when the exi)ense of maintaining such wires can not be separated from the maintenance of lines used by the company. NOTB. — If the expenses on the leasiod wires can be ascertained, the rents received and the expenses in connection with such wires should be Included in account No. 311, " Miscellaneous rent Income." 521. Rents from Other Operated Property. This account should include all revenues accruing as rent for the use by others of lands, buildings, poles, conduits, and other proi>erty except wires, when sach property is used also by the conipany and the exjiense of maintaining and operating the rented portion can not be separated from the total expense. Note. — If the expenses on the rented property can be ascertained, the rents received and the expenses In connection with such property should be included In account No. 311, ** Miscellaneous rent income." 61 822. Monet Transfer Premiums. This account should include revenues derived from premiums on money transferred by telegraph or ocean cable. NoTB. — The tolls for the transmission of messages incident to money transfers •hould be credited to account No. 604, " Money transfer tolls," or to account No. 610, " Commercial cable tolls." 628. Messenger Service Revenues. This account should include all revenues derived from messenger service when such service is not included in the rate charged for the trans- mission of messages. 624. Time Service Revenues. This account should include all revenues accruing for self-winding clock and other time service. 625. Otheb Nontransmission Revenues. This account should include all nontransmission operating revenues not provided for elsewhere. This includes the profit on condensation of money-transfer messages for transmission by wireless and ocean cable. IV. Contract Payments to Transportation Companies. OoNTBAOT Revenues — Db. This account should include payments to transportation companies covering the proportion of receipts due such companies under the pro- ▼isioQS of operating contractiL \i OPERATING EXPENSE ACCOTJNTS. I. Maintenance. Page. 600. Supervision of Maintknanck 65 601. Repairs of Office Equipment 65 602. Repairs of Aerial Plant 65 603. Repairs of Underground Plant 66 604. Repairs of Ocean Cablx Lines 66 605. Repairs of Buildings and Grounds 66 606. Testing and Regulating 66 607. Minor Rents for Property iiQ 608. Depreciation of Plant and Equipment 06 609. Extraordinary Deprecl/ition 66 610. Other Maintenance Expenses 66 611. Repairs Charged to Reserves — Cr 67 II. Conducting Operations. 620. Supervision of Operations 67 621. Operators 67 622. Telegraph and Cable Office Clerks 67 623. Messenger Service Expenses 67 il24. Operating Power 67 625. Rents of Telegraph and Cable Offices 68 626. Telegraph and Cable Office Stationery and Printing 68 627. Operators' Schooling 6S 628. Rest and Lunch Rooms 68 629. Miscellaneous Telegraph and Cable Office Expenses 68 630. Obtaining Stock and Commercial News 68 631. Telephone Company Service 68 632. Commissions 68 633. Advertising and Souciting 69 634. Traffic Damages 69 635. Other Conductino Operations Expenses 69 III. General and Miscellaneous. 640. Salaries of General Officers 69 641. Salaries of General Office Clerks 69 642. Expenses of General Officers and Clerks 69 643. General Stationery and Printing 69 644. Other General Office Supplies and Expenses 69 645. General Law Expenses 69 646. Insurance 70 647. Accidbnts and Damages 70 648. Law Expenses Connected with Damages 70 649. Relief Department and Pensions 70 660. Franchise Requirements 71 •61. Valuation Expenses 71 662. Amortization of Franchises and Patents 71 653. Other General Expenses 71 664. Franchise Requirkments- Cr 71 (03) TEXT PERTAIXIXG TO OrERATTXO EXPENSE ACCOUNTS. I. Maintenance. KOTC Am.TCAm.F to An. Matntfnance Accounts. — Tf n oompnny conducts hotb tele^M'npli hiiiiMiiH* o|K*nition8 niiil octniii c^iltle oiteralUuis. eavh of the luiiiuiry iii.'iiiiiciuiiiee ex|ieiise nccunnts reliiUii}; to boili classes of openi- tuiis >liniil(| lie sniullvitlpil s<» as t«» sliow isepuiutely the exiwuses for each of the two classes of oiieratlous. COO. Sui'KKvisioN OF Maintenance. Tills account should Ineiude the pny nnd office and traveling expenses of oHicors and their assistants when dlrectlj* hi charge of innlntenancc^ including general, division, nnd district fjlant superintendents, engineers, an*hitects. nnd tlieir ottice and field forces, but not including foremen and «i|»erlntendent8 of repair gangs; also that jwrtlon of the sjilarles and exitenses of the general eugiueeriug staff of the company which is assignable to ninintennnce. It should ailso include the cost of repairs of drafting nnd engineering Instruments and the original cost of such instruments as are not properly chargeable to the |»Iaut nnd equiiiment accounts; the cost of otHce nnd other supplies (including postage, stationery, and printing) used by offi- cers and employees whose salaries are charged to this nccount ; rent nnd repairs of rented offices; nnd janitor service, light, heat, nnd miscel- laneous office expenses where separate offices are maintained for such emiiloyees. 601. ItEPAiKs or Office Equipment. This account should Include the cost of repairs of telegraph, messenger, or cable etpiipment in main, local, branch, or relay telegraph or cable offices or on sul)scrlbers' premises. It Includes the cost of repairs of ehH'trlcal, mechanical, or lateumatic equipment in oliiccs. such as distrlb- mlng frames, switchboards, and testing apparatus; keys, relays, and siMniders; operating tables; nutomntic transmitting and receiving appa- ratrs; duplex, quadruplex, and repeater apparatus; engines, generators, batteries, air compressors, nnd other i>ower equipment; pneumatic tubes In telegiai)h offices and other automatic message conveyoi*»; interior wiring, cabling, and conduits; also the cost of repairs of cjill registers, call boxes, nnd nccessories; and of office furniture uud other equipmeut of telegraph and cable offices. C02. Repairs of Aebial Tlant. This account should include the cost of repairs of telegraph plant classe ets. and other pole fixtures; braces, guy wires, guy stubs, nnd other pole 8U|iports; aerial cables, and the susi)enslon wires, bolts, clamps, rings, bangers, etc., used to attach cables to poles, towers, or other supports; cable l)oxes and their appurtenances; and aerial wires, tie wires, insu- la tors, and sleeves. It Includes also the cost of trimming trees and clear- ing and removing obstructions from right of way for aerial plant, other than the first cost. NoTB. — Thr cost of flrpt '•loarlnir of ri^ht of way for aerial plant is prorided for In plant and (K)uipment account No. 21 1, ** Pole lines.** 65922'*— 1.3 5 (05) C6 003. Retatrs of Uttdercrouwd Plant. Tbis ncconnt should include the cost of repnirs of tolcprnph plnnt cinssed ns underground plnnt, such ns underground conduits and their appurtennnres; outside pneumatic tubes nud their appurtenances : nn«ler- ground cables, Eubniarlne telegraph cables, and towers, boxes, nnd fittings belonging to such cables. It Includes also the cost of repairing right of waj- for underground and 6ul)niariue cables, and the cost of repuviii]; after repairs of underground conduits. C04. Repairs of Ocean Cable Lines. This account should include the cost of repairs of ocean cable lines, and of aerial and underground cables, conduits, pole line, and wires, and their appurtenances, used exclusively in the oi)eratlon of oce.m cables. This account may include each month a proportion of tlie total amount authorized or appropriated for ocean cable repairs during a term of years regardless of the mouth in which the actual repairs are made. COS. Repairs of Buildings and Grounds. This account should include tlie cost of repairs to the stnictnres and permanent fixtures of general and division offices; of mala, local, brancli, or relay telegraph and cable offices and test stations; nnd of storehouses, shops, stnbles, and garages, such fixtures including elevators, plumbing, and plaats for heat, light, ventilation, nnd power, but not including tele- graph or cable apparatus. This account should Include also the cost of maintaining jards and grounds, with their fences, sidewalks, sewers, etc., appurtenant to such buildings. COG. Testing and Regulating. This account should include the pay and expenses of wire chiefs, test- Iward chiefs, repeater chiefs, multiplex chiefs, and their as.slstanis. engaged in interior testing and ptitching wires, and in watching and regulating the oi)eration of repeater and multiplex apparatus. » 007. Minor Rents for Property. This account should include amounts payable for rents of wires, dncta, conduits, lands, pole lines and other supports for wires, and other prop- erty, when rented for one year or less. NOTK. — Rents for similar property when lensed for more than one year should be charged to account No. 321, " Miscellaneous rents." COS. Depreciation of Plant and Equipment. This account should include monthly the amount estimated to be nccea- sary to cover the depreciation accruing during the month in the com- pany's tangible plant and equipment, except tliat provided for in the dealing accounts. (See sec. 21, p. 10.) NoTK. — Amounts charged to this account should l>e concurrently credited %m account No. 170, " Ueserve for accrued depreciutlon." 009. Extraordinary Depreciation. This account should be charged monthly such an nmonnt ns will, through Its regular application, amortize the amount carried In suspense on account of extraordinary casualties and unanticipated rcconstructioa (See sec. 22, p. 17.) 610. Other Maintenance Expenses. This account should Include the cost, when not provided for elsewhere, of repairing telegraph and cable pUint and equipment ■4 !•♦ G7 611 Repairs CnARCFD to Rfrerves — Cr. Credit to this account nnd charge concurrently to accnnnt Xo. 170, "Reserve for accrutni depreciation," an amount equal to the cost of extiaiordlnaiy repairs for which provision lias been made in ihat reserve; also credit to this account and charge concurrently to the Insurers or to the insurance reserve an amount equal to the c-ost of repairs made necessary by casualties when such cost is covered by Insurance or uu Insurance reserve. (See sec. 19, p. 15.) II. Conducting Operations. KoTE APPMCAm-E TO ALL ACCOUNTS IN CONDUCTING OPERATIONS. — Tf a Company conducts both telegraph land-Hue operations and ocean cable oper.iti«»ns, e:ioh of the |>rlmary expense accounts under the head of coudtuMliig Operations, when relating to botii classes of operations, should bi» soIh dixided so as to show separately the expenses for each of the two classes of o])eratious. 020. Supervision of Operations. This account should include the pay and expenses of officers and their assistants when la charge of connnercial and traffic departments: the pay and expenses of their office and field forces; cost of oHice and other sui)- plles (Including postage, stationery, and printing) used by officers nnd employees whose salaries are charged to this account; rent nnd cost of repnlring rented offices, janitor service, light, heat, and miscellaneous office expenses, If separate offices are maintained for such officei*s and •uiployees. This account should Include the entire pay of managers and chief operators who are engaged exclusively In the supervision of commercial and tniffic matters. 621. Operators. This account should include the pay of operators ond attendants in main, local, branch, or relay offices engaged in the transmission of mes- sages; also commissions paid in lieu of, or in addition to, .salaries. This account may include the entire pay of managers, chief oi>erator8, and operators who are engaged principally in the thmsniission of messages and are engaged only Incidep.tally In performing other duties. 622. Telegraph and Cable Office Clerks. This account should include the pay of bcolikeei)er8, clerks, and at- tendants engaged In receiving and delivering messages at counters, quot- ing nites, collecting charges, keeping accounts, and performing other clerical duties in telegraph or cable offices. 623. Messenger Service Expenses. This account should Include the pay and expenses of messengers en- gaged In the colleitlon and delivery of messages and in the performance of other messenger service for which collection Is made by the company; also the cost of repairs to messengers' uniforms, when borne by tiie company. To this account should be credited rents received by the company for nse of messengers' uniforma 624. Operating Power. This account should include the cost of generating power for the opera- tion of telegraph and cable wires and accessory apparatus, the cost of supplies used In operating power plants, the cost of battery soluUon and materials, and the cost of purchased power. 68 625. Rents of Telecbaph and Cable Offices. Tbis nccount should Include nniounts nccrued pnynble ns rent of looa! telegraph and cable offices. Including furnUhed Janitor service, light, Lejit, and uuilnteuance covered by the rent imyuients; also the cost of repali-iuR rented telegraph and cable offices when repairs are borne bj the lessee. G2C. Telegraph and Cable Office Stationebt and rBiNxiNo. This account should Include the cost of iwstage, stationery, stationery supplies, and printing used hi telegraph or cable offices. C27. Operatobs' Schooling. This account should Include the cost of training new operators, either In school or otherwise. Including wnpes paid them for which no service Is rendered, salaries and expenses of Instructors, and cost of supplie* furnished to schools for operators. C28. ItEST and Lunch Rooms. Tills account should Include the cost of conducting rert and Inncb rooms for the operating force, including th-3 cost of lunches furnished. To this account should be credited amounts received by the company for lunches served. 029. Miscellaneous Telegraph and Cable Office Expenses. This account should include the traveling expenses of managers and chief operators whose pay Is chargeable to account No. G21. and of oper- otors. clerks, and attendants employed In main, local, branch, or relay telegraph and cable offices; the cost of office supplies not properly charge- able to the plant and eqnli)uie:it accounts, and not provided for In account Ko. C2G; the cost of water. Ice. fuel, light, towels, toilet supplies, and of Janitor service and other care of main, local, branch, or relay telegraph ond cable offices. 630. Obtaining Stock and Commercial News. This account should Include all expenses Incident to the gathering of Infoiniation relative to stock and other market quotations, transiictions in securities, siwrtlng news, election returns, marine reports, and similar Items subsequently disseminated as stock and commercial news. 631. Telephone Company Service. This account should Include amounts accruing to telephone companies for services rendered by employees of telephone companies In Joint offices, »uch as receiving messages from the public, delivering messages to the public, quoting rates, collecting charges, and making rei>orts; also amounts due la the form of commissions or otherwise to telephone com- panies for collecting charges at other than Joint officea jitYTK. — Amountg due telephone companies for transmisMon of mes^agefl OTer their wirea ahould be charsed to account No. GOT, ** Telephone tranamlssioa tolls— Dr." 2, Commissions. This account should Include commissions for originating or handling messjiges or for other commercial service connected with revenue mes- sages, when payable to Individuals not employees of the company, sncb as of>erators employed by transportation companies, and when payable to concerns other than telephone companies, such as hotels, stores, and apartment houses. Norr.— Commiwlona paid employees In lien of or In addition to talarlea ahonid Se changed to the salary accounts appropriate to such eniployeea. CommlsRlnna paid to prrsona conducting telephone operatlona abould bt cktarged to account N«» 631, *' Telephone company aerTice." '■♦ C9 633. iDrFRTismo and Roltcittno. This account should Include the pay and expenses of advertising and sollcliing agriits; cost of coiiiineivial advertising in newspnpers t»r maga- i eIiich: and cost of iiosters, bulletins, advertising sundries, booklets, uud oilier related Items. 634. Traffic Damages. This account should Include payments made In settlement of damage claims arising out of delays and errors in service, and e.\|MMises directly Incident to such claims, including the pay and expenses of wiinessus in law suits Involving such claims, but not including law exiieiises. NoTK A. — Where tplegraph and entile tolls are refunded under a claim of faltur* In service, the auiuuuia of the lolla ahould be chart^ed to the upprupriate reveuue aiH'ouniM. N«nB R. — Paymonts on nccount of injuries to persons or damage to property ■bould he charged to nccount No. (MT. ".\ccideDt» and damages." N«»TB C — l«jiw expensea connected with the defense or settlement of damnse rlainin are provided fur In account No. G4S, ** Law expenses connected with damages." 635. Otiifr Conductino Operations Expenses. This account should Include all expenses Incident to conducting tele- graph and cable oiieratious and not provided for elsewhere. III. General and Miscellaneous. 610. Salaries of General Officers. Tills account shot^Id Include the salaries of the ctnlnn.'vn of the hoard, preslrovided for elsewhere. Note. — The comprnsatlon of the general nollclfor or counsel or other ittomejrt cnsa^od partly In the dofonse or settlomrnt of dntnace suits and partly In other te^ral work slioiild be proprrly apportioned between Ibis account and account No. 6 IS, " Law expenses connected with damases.** MC. Insukancf^ This acconnt should include premiums pnii to Insurance companies for fire, fidelity, boiler, casualty, burglar, and other insurance. Charge ailso to this account and credit to account No. 1T3. "Insurance and casualty reserves," amounts set aside as an insurance reserve. This account should be credited and the plant and equipment accounts charged with the cost of insurance aiipUctible to construction work. Note. — In reports to the Commission the companies will be required to report the charges made to this account for the various kinds of Insurance, and for self- Insurance. W7. ACCIDFNTS AND DAMAGES. This account should include expenses, other than law expenses. In- curred on account of i^rsons killed or injured and on account of prop- erly of others damaged. It includes the pay and expenses of claim agents. Investigators, and adjusters; fees and exi)euses of surgeons and doctors, nursing, hospital attendance, medical and surgical supplies, fees ond expenses of coroners and undertakers, and contributions to hospitals; also anjounts paid on Judgments and other settlements of i)ersoual injury or damage claims. This account should be credited and the plant and equipment accounts charged with the expenses of accidents and damages Incident to construc- tion work. fCoTB. — Payments made in settlement of damage claims arising out of delay and errors In service should be charged to account No. C34, '* Traffic damages." IMS. Law Ivxpensks Connectfj) with Damaoks. This account should include law expenses connected with the de- fense or sett lenient of damage claims, including a pror>er proiwrtion of the salaries and expenses of the general solicitor or counsel; of salaries, fees, and expenses of attorneys engaged In this work; fees of court stenographers and other court expenses; and cost of law books, printing briefs, conrt records, and similar papers in connection with such cases. This account should be credited and the plant and equipment accounts charjjed with law expenses incident to damage claims arising out of con- struction work. pjnXK. — The compensation of the general solicitor or counsel and of other attor- neys engageense, such as iwiving and other like matters, incurred in coin- Iiliaiice with such requirements and for which no reimbursement U received by the company. ^orr..— Amounts charged to this acconnt for which there Is no direct money outlay should be credited to account No. Oo4, "Franchise requirements— Cr." C51. Valuation Expenses. This- account should Include expenses Incident to the ascertainment (In nc-cordance with the act to regulate commerce as amended March 1. ll)i;i. or with other Fcnlerai or State requirements) of the value of p'ro|.ert'y owned or used by the accounting company, such expenses in- cluding r»ay. and office, tniveiing, and other expenses of officers specially enii»ioved or assigned to such work, and of their assistants, clerks, and attendants, and the cost of stationery and printing, and of engiut-Pring Buiiplies consumed. Note A.— No charge should be made to this acconnt for the salaries of ,)fflrpr» or uf llulr clerks and attendants for merely Inrldnntal servlo-s In connortion with Talnatlon work, but simh-IuI office, clerical, traveling, and In.ldental expanses In- » currwl by these officers un account of such work may be Included as a part of the cuHi of the work. ,. .», Note It.— It Is not Intended that this account shall in any degree relieve the Other primary accounts of expenses ordinarily chargeable thereto under cenditluus existing while no valuation work Is In progress. SC2 Amortization of Franchises and Patents. This account should Include each month the amount necessary to cover such portions of the life of limited franchises and patents as have esi>ired or been consumed during the month. Kote— The amount charged to this account should be concurrently crees whcli usiuilly jiffect sevenil cl.isses of opfnitionR :\\u\ ium*«I to b« broiijrbt logetber in one jiccoiint lu order Uiut the total of tlie ejii»eusef u:aiy be kuowu and projierly distributed. 701. SUOP EXPKNSF, This ncc-oiint or npproprlnte subaccounts should be nrrtinsed ho •■ to record sepamfoly tlie expenses of the generni shoiwi ns follows: (1) Sniaries and wn^es of shop employees: (2) personjil and incidental expenses of such eniidoyees; (U) materials and supplies for penernl sliop use; (-1) repairs of sbof) tools, machinery, and nppllnnccs: (5) deprecia- tion of shop tools, mncblnery, and nppllnnces; (G) rents paid for Kiiop buildings; and (7) power, beat, light, and other expenses of sliops. The shop expense account should be cleared by apiwrtlonlug the total amount of the expenses to the various jobs on an equitable basis. TQ2. Stable and Garage Expense. This account or appropriate subaccounts should be arranged so as to record gei»arately the exjienFes of stables and garages as follows: (1 ) Sal- aries and wages of drivers, chauffeurs, stablemen, gnragemen, anJ otiier employees In stables and garages; (2) personal and incidental exponsci of such employees; (3) materials and supplies, including fuel and gaso- line, feed, harness, tires, and other supplies for stables and garages; (4) repairs of automobiles and other vehicles and harness: (5) depre- ciation of vehicles, horses, harness, etc., including losses unprovided for by reserves or insurance; (0) rents paid for buildings, vehicles, and horses: and (7) heat, light, and other exi»enj*e8 of stables and gar.tges. Credit to this account any charges for service performed for others bj the accounting com[)any. A record should be kept of the use of teams and automobiles, and tlie amount carried in tliis account should be apportioned to the proper accounts according to use. or tlie debits to the accounts may be made at rates i)er hour of service which have been found to be fair and to distrii>ute the total exi>euse equitably. T03. Tool Expense. This account should include exf)ense for tools other than shop tools and tools carried as supplies unissued, including (1) the cost of small Land tools of which no account is kept after issue; (2) the cost of re- pairing tools; (3) the cost of tools lost or stolen; and (4) depreciation on tools taken out of service because of breakage or other deterioration. This account should be cleared by adding to the exi>ense of reitnln and cost of pl.-uit installed such amounts as will equitably distribute tha total expense for tools. 701 Supply Expknse. This account or appropriate subaccounts should be arranged so as to record separately the expenses, except Insurance and taxes, incurred directly in connection with the purchase, storage, handling, and distri- bution of materials and supplies and stationery, as follows: (1) The IH17 and exi)euses of purchasing agents, managers of stores, clerks, aud ) 73 TOl. SfPFLT Expense — Continued. lalNirers; (2> personal and Incidental expenses of such employees; <») rents paid for storerooms or storehouses; (4) repairs of store equipment; (5) cost of lighting and heating; (G) undistributed trans- I»ortation charges; (7) discounts recovered through prompt payment of biiJs for materials and supplies when such discounts can not be assigned to the particular bills; (8) overages or shortages in tlie materials and supplies account disclosed by Inventories and not assignable to specific accounts; and (0> the estimated depreciation on materials and suiipliea due to breakage, leakage, shortage, and wear and tear. This account should be cleared by adding to the cost of materials and supplies passing through stores a suitable loading charge wlilch will equitably distribute the total cost of conducting the stores, and by adding to the cost of such supplies as are bought by the purchasing department a pro rata share of the total expense of the purchasing department. T05. Encinfering Expense. This account or appropriate subaccounts should be arranged so as to record seimrately the ex|»ense8 for engineering as follows; (1) Salaries and wages; (2) personal and incidental expenses of engineering depart- ment employees; (3) rent paid for offices; and (4) light, heat, and other ofllce expensen. This account should be cleared by apportioning the total expenses to operating expense and plant and equipment accounts on the basis of service rendered, as determined by the actual time devoted to particular Jobs or on an equitable basis fixed by the oflicers of the company. 706. Plant Supervision Expense. This account should Include the cost of general supenlslon of the main- tenance and construction of the plant where a separate department of the company's organlzjitlon is charged with such 8ui)ervislon. It Includes the pay and exi)enses of general plant superintendent, district plant auperlntendent. plant engineers, othet: plant supervising officers, and their office and field forces, charged with planning for and superintending the work of maintenance and plant construction. This account or appropriate subaccounts should be so arranged as to show in detail the expenses of the plant supervision department as follows: (1) Salaries and wages; (2) personal and Incidental expenses of employees: (3) rent paid for offices; and (4) light, heat, and other office expenses. This account should be cleared by charging directly to the appro- priate accounts such expenses as can be allocated to particular pieies of work, and by charging out the balance on the basis of labor employed in all construction or maintenance work in progress. jfOTB. The pay of penoral fori«mon and foromen in direct charpe of jobs should be Included in the cost of the Job and not charged to this account. 707. House Service Expense. This account sljould Include the expenses pertaining to the operation of oUic-es and buildings, wheiher owneil or rented by the company, \tben such expenses can not be allocated as they accrue to the operating ex- pense accounts and other accounts. This account includes rents paid, fuel, heat, light. iM>wer. elevator service, janitor service, and like ex- |»enses, but does not include insurance, taxes, and maintenance expenses. This account should be cleareil by apiK)rtlonlng tlie entire expense to the operating exiieuse and other accounts ou the basis of use made of Buch property. ?. If h 74 70S. Floattng EQumrENT Expense. Clinige to this aiccouiit the coPt of mnfntennnce nnd opemtlon of stenm. Bhlns. stennibonts, Uuinches, mid other vessels used lu the imihiteiiaiice utu\ const met Ion of teleprnph or en hie Tnes. This neeount or npin-oprinte subneeounts should be so nrransed ns to show in detnll the expenses of flojirinff equipment, ns follows- (1) Sjila- rlesnnd wnpes; (2) i>ersonal nnd Ineldentnl expenses of such employees- (3) nniteilnls and supplies; (4) reiwirs of ves.«els and .ippuiieuances' (i.) depreciation of vessels and appurtenances; (G) rents [lald for vessels;* (7) other expenses of operatln'j ves.sels. Credit to this account any charges for services performed by the com- pany for others. This account should be clejired by adding to the exr>ense of repalm nnd cost of plant Installed such amounts us will equitably distribute the total expense for floating equipment. TOO. Railway Equipment Expknse. Charge to this account the cost of maintenance nnd operation of motor bunk. i)ole. and hand cars. velocl|»ede8 and other railroad equipment used iu the maintenance and construction of telegraph lines. This iiccount or approprhjte subaccounts should be so arranged as to sliow In detail the expenses of railway equipment, as follows: H) Sala- ries and wjiges; (2) i)ersonal and Incidental exi«n.«es of such empl.iyees- (3) materials and supplies: (4) repairs of ears and appuriemnues- (5) depreciation of cars and appurtenances; (0) rents paid for railway equipnent; (7) other exi)enses of oiieratlug railway equipment. Credit to Uils account any charges for services performed by the com- pnny for otliers. This account should be cleared by adding to the expense of repalrt nn.l cost of plant iiiMalled such amounts us will equitably diairibuie llic tiiiai expense for ruilwuy equipment. > INDEX. Roman namerala refer to the general Instnirtlom; Arabic numerals to the several ac'coiintd. Abandoned property. * (See Retire- ment.) Aecidents. (See Casualties. Dnmages.) Accounts (pnyable) ; for joint opera- tions, xxlll: with other coujinmies. 150. 101; audited but unpaid, 15U; miscellaneous. 102. Accounts (receivable): for joint oper- ations, xxlil : Willi other companies. 104. 112: with customers and jipents. 111. IW: miscellaneous, ll.'l: reserve fen.««es. 2(>4, 2Mrt. 704: advertising nnd s<»llcltlng ngents' psiy and ex- penses. 033: claim ngents' \y,\y and expenses. 047; transfer ngents' ex- ptMises. (;r»3. Aniorti/.ntion: reserve. 171: of debt discount and ex|>ense, v. 325: of debt premium, v. 327; of »nstructlon period. 2.*12n. Assessments (on stockholders) : ns- gignnble to discount and premium nccount, I v. IfiOn. Asseets: contingent, vl; actual. (See nnlnnce sheet.) Automobiles. (See Vehicles.) ( Ba^ance-Rheet nccounts; definition. I: npset side. 10()-12S: liability side, 150-179: adjustments and cancella- tions. 4(11. 417. Betterments; definition, vll : account- ing for cost, vii; ai»i)ropriations, 332, 415. nilis: receivable. 110; paynble. 15S. Bonds. (See Fumlwl ; in transit. 100; in special deposits. 107: in reserve funds, lis. 110; in provident fumLs, 120: deiJoslteil by customers, llX); refunded to customers. 1(H). Casunltles: reserve. 173: extraordl- nnr.v. xlx. xxil, 000; other, ('►47. Clnlms; In fnvor of company. 113; for tr:itfic damages. o:U: for personal Injury, 047; fur property duniui;efl, 047. 5) 76 3 ^ - .( I ClenHnjr ncoonnta: debit bnlnnoea VJl; credit luiljinoes, 170: Inclusion of siiiiill items, 2l»«u; lu detail, 7ul- 709. Clericjil expense. (See Pay and ex- l)enst*s.) Collectors' bnlam-es receivable. 111. Connneivial news service; revenues, fiU."): ox I tenses. (I'^O. Conniit*ici;ii r:ite messages: telejrrnpb revLMiue, 500, 001; cable revenue. nio. Cuninilsslons: for ninrketlns debt se- ciirhles. v: in lieu of or addition t<» 8:iliirles. xvlil. G21 : to telephone conip.inles, xvlll, (Wl; to agencies and otiiers, xvlll, 032. Condeninntlon costs. 204. 20.1. Conducting oiieralious expense, C20- orir.. Conduits (of cable lines) : Inteiior. 220: underjrround. 222: nialntennnce Willie lejiserelindnjiry ch.irges to o|>- en.tion. G4IMMS: charges to clearing accounts. 701-700. (See also riant and cqulinncnt. Keconst ruction.) Contingent jjssets and liabilities, vl. Contrnct revenue debits. 030. Contributions: to provident funds. 120; to reimburse losses of others, 320: to hospitals, (>47; to relief de- partment. Vt4U. Conversion of securities, 101. Cost; charges for securities ownefl. il: ch.irges for property, vill. x: of labor, x: of materials and supplies. X : in excess of structural value, xi ; of reprilr.s, xx. Court expen.se. (See Law expense.) Current assets; miscellaneous, 110; detinltion. 110. Current funds assets. 108. Current liability, nd seel la neons. 100. Customers' accounts; balances receiv- able, 111: de])osits made, 100: serv- ice billed In advance. 100. Dam.iges: adjustment of charges, 173: abutting. 200: traffic. 034: to proi»- erty. 047; based on personal injury 047: law expense. 048. Debentrres: stock Hablllt.v. 100: bond liability, 104; Interest accrued, 1(J3. 313, 322. Debt discount. (See Discount.) Delit expense: definition, v; account- ing. \: un;imortlz«*d balance. 12ti; for construction period, Ix, 2211; anmrtlzjitlon charges, v. 320. 417. Deferred ndscellaneous items; debits, 127: credits. 170. De'osits: current cash, 100: for spe- cial puriJoses, 107; with sinking lund mi-siees, lis; by customers, 100. Depreciation: of security values, II; for property retlreil. xli: for ex- traordinary repairs, xlx : deHnltion, xxl; fixing of rates nnd ch.irges, XX I; covered by reserxe. xxl. liO: not covered by reserves, xxl 413: of I»lant and equipment, xxl, OOS; for extr.iordinary losses, xxll. WKl; pre- llndnary charges to clearing ac- counts, 701-704. 70S. 70r). DIitH.tors* fees and ex reuses, 00.T Discount (ndscellaneous) : on bills for materials and supplies. llOn. 704; on securities of other companies. :^l 3, 314; on short-term notes, 313. 32:{. Discount (on capitnl stock): detlnl- tlon. Iv; accounting. Iv: exclusion from Investment and o|ienitlon. Iv; unextinguished. 125; rectird entry iu stock account. lOO; adjustment cred- its at reacquirement. III. 401 : ex- tinguished through profit :ind loss. 417. Discount (on funded debt): defini- tion, v; accounting, v; e.xcluslon from Investment and operation, v; unamortized. 120; record entry on debt account. 104; for construction period. Ix, 220; amortizillon ihrongh income, v. 320; adjustment crwilts at reacquirement. ill. 401 ; :Mnortized tbronirh profit and loss. v. 417. Dividends (on company stock owne08. Expenses. (See Debt expense. Operat- ing expenses. Pay and expenses.) Fines uuMald. 107. Fhaithig equipment: expense for con- struction In progress. 102: Invest- ment for telegraph lines, 218; In- vestment for cable lines. 223; ex- pense In de.irlng account. 708. Franchise: recounting for extensions, vli; amortization reserve. 171; cost of requirement or extension. 201 ; ■hort-term rights, 201n: pnyment In ex4n; matured but unpaid, 1('»4; drawn for redemption but uni)aid, 104. (See also Secu- rities.) Fund.s. (See Current funds. Deposits. i:eserve funds. Trust funds, Work- ing funds.) Furniture: Investment for offices. 209, 221. 224: malnienance. 001. 044. Gnr.'ges: land, 200; buildings. 200; eested since 1013 In pl.ujt and eqniiv nient, 170; temporary appropria- tiouji. 17Cn: reserveil In sinking funds. 177. 178: held In miscellane- ous reserves, 178: intended for in- vestment In i)lant and eqni undent. 178: operating Income. 300-SOO; nonoperatlng income, 310-310; de- ductions from income. 304n, 320- 328; appropri.-itions of lncon»e, 330- '333; income balance, 400, 410. Incorporation expense. 2U0. Injury to i)ersons. (See Personal in- jury.) Inspection of materials and supplies, x. Insurance; fund assets. 110: premi- ums prepaid, 123: reserve. 173. 040: insnr.ince recoveiable. 173. Oil; iire- ndums during construction. 23.3» 040: charges against reserve. Oil; credits to operating expense. Oil; premiums p:>id. (340. Intang ble capital; replacement. vIl; excess cost of tangible property, xi; amortization reserve, 171 : cost cl:ar?es, 2(X)-203: ."mortizn^ion through profit and loss. 414; amorti- z- tlon through operating expense, r-o Interest (on company debt held) : ex- clusion from Interest Income. 31.3n; exclusion from Interest dejlnffons, 32'2n : assigned to reserve funds. 330. Interest (pry ble) : for construction perlofl. Ix. 102. 220; dPiwsits to meet payment 107: related to debt dis- count and premium, v. 1.04: on re- ceiver's certificates, 1.'.'. 322; on judgments, 107: matured but unpaid, 103; on unmatured funded debt, 103, 108. :V22: on matured funded debt. 103. lOS, 323: on unfunded debt .-Mid open accounts. 103, lOS. ;i23: by les- see In lessor's beludf. 310, 320; on on debenture stock. 322. Interest (receivable) ; matured but un- collected. 114; accrued but not due. 117; accrued during construction, 220: receivable sis' income. 313: ac- crued to reserve funds. .3i:}n. .'i,30. Inventory: balances, 110; overages and shortages, 110. 704. Investment; In plnnt and equipment. 100. 101 ; In construction in progress. 102: In securities. 103: In long-term advan-'es, 104; In property not used in operations. 100: profit from sale. 401 ; loss by sjile or retirement. 417. Janitor service. (See House service,. Office expenses.) Joint operations expense, xxUL 78 '!r' h Jud;nnents; in fnvor of company, 113: n/u'siinst conipnny n\u\ uuikiIiI. 157; ji^jMlnsr conipnny juid paid, G47. Tjibor cost ilrfincd. x. Ljnnl: not nseil in operntlons. 10.': for rl;;bf of wny. 2fM : for other oi»enit- ln« nses. 2or». ( See also (Ironnds.) Linv expense: for orpniilxcition. IMK): for consirnctlon period, 231. C4S: for peneral puri>oses, 045; for dauiajje cases. 049. Leasetl proyierty; rent roceiv?ible In- come, 310. .'ill; maintenance by les- Bor. 310. 311; rent receivable reve- nno. .IStK 521. Leasebobls: for rlffht of way. 204; for otiier operating nses. 205. Liabilities: contlnyrcnt, - vl ; actual, (.'^ee Italance sheet.) Loss: by extraordinary cnsnnltles. .\xl. xxil: handled throuRh reserve. 173: on operations of others. 325: by sile or retirement of Investments. 417; on vehicles and horses. 702: on tools! 703. (See also Depreciation.) Lnnch rooms; eqniiunent, 200, 221 ; ex- |»ense. 02S; receipts, G28. M»'chlnery: appnrtenant to bnlldlnjrs 20G: foundations In buildings, 20(;: in transndssion olHces. 207. 220; in floating' equipment, 21S, 22;J: in shops. 225: repairs in transmission otfiLes, 001; repairs in buildlnps. 005: repairs and depreciation lu shoi)s, 701. (See also Tools.) Maintenance expense; on property leased to others. 310. 311 : for sui>er- vlslon. 000; for repairs, 001 -(lOO: for short-term rentals. G07: for deprwl- ntlon, (JOS. (501). Oil: miscellaneous. CIO: covered by otilce reiit, 025: In clearlnj; accounts. 701-704, 700, 70S, 700. (See also Kei»ali-s,) Marine news service; revenues, 505; expenses. 030. Mairket news service; revenues. 505; expenses, 030. Marketable securities assets, 109. Materials. (See Supplies.) Messijre revenues; guaranty deposits. lOOn; telegraph, 500-507; cable, 510-513. Messenger service; equipment. 209; revenue, 523; equipment repairs, 001; expense, 623; credits to ex- r>ense. 023. Money transfer revenue: from trnns- mlssions. 504; from prendums. 522; from ni jsajre condensjitlon. 525. Mortgage (real estate) llablllt.v. 154. News service ; revenues, 505 ; exi)euses. 030. Nonoperating Income: rents, 310. .311: dividends. 312; interest. 313; fund accretiojis. 314: from o[>eratlons of otliers, 315; mlsceiiuneous, 310. Xontranjfmisslon rerenuw: w»nts P;20, 521: money transfer piemlinn.s, .''•22; messenger service. C2:J: time siuvice, 524; misceltaneous. 52.1. Notes (pa.vable): long-term note lia- bility, l.')4: demand notes to cover advances, l.'(;: demand and short- term notes. l."S. Notes (receivable); long-term note In- vestments, Kki; sl)ort-t»Min notes as b;il8 receivable. 103n: demand notes to cover advances. 104; lontf-term notes marketable. llOn. Obsolescence as form of depreclatioD, XX I. Olllce equipment: transmission tonnl- nals. 207. 220: furnishings ami busi- ness cqnl|iment. 200. 221, 224: re- pairs of terminals. (K)l ; repairs of furnishings, 001, 044. Offlce expen.ses: for organization. 200; during constrrrtlon, 2:n, 2:j;5. 7(i.'i. 7(Ki; for suiiervlsion of milntenance, COD. 700; for su|>ervisioii of opera- tions, 020: for transmission iilllces. 02."i. 020. 020: for general «)mces, (M.J. 044; for law otlices, 045; for valua- tion force. 051 ; for geneial engineer- ing. 705: for genoral purposes. ';(i7. Oflive structures: land cost. 205: struc- ture i-ost, 200; repairs when reniiMl. O^K), 020. 025, G44; repairs when owned. i'tOr*. Oi)eiating expenses; telegraph and cable total, 301 : other than telegraph and cable, 303; for mdnten ince. C(J0-011 ; for conducting operations, 020-(U'55; general and ndscel la neons, (540-054; iu clearing accounts. 701- 700. Operating income accounts, 300~30,'*. Oi)eratlng reserves; debit balances, 127; credit balances, 175; oi)erating exiiense debits, 004. Operating revenues; definition, xvl; luisis of credits, xvl : permiss ble deblt-s. xvii; credits from customers' accounts, 1(50. 105: reserve for doubt- ful accounts. 172; telegrapl; and cable total. 300; other than tele- grai)h and cable. 302; uncollectible, .304; from telegraph transmission, .'i00-.'»07: from cable transniisshm. 510-513; from nontransndssion sources, 520-525; contract debits, .''.30. Operations of others; profits, 315; lo.sses, 325. Oiwrators: |iay for service. 021; pay while training, 027; lunches fur- nished. 02S; expenses. 029. Organization; costs, 200; amortlxa- tlon of co.sts, 414. Original plant and equipment; de'^iU- tlon. vll : acr^nntlng for cost, vll. Overcliarge debits to revenues, x?U. 79 " Pntentu: accounting for extensions, vll: amortization reserve. 171; In- vestment. 2(12; anion Ization. 052. Paving; assessments, 232ii : after con- duit repairs. (J03; by franchise re- quirement, ()50. Pay and expenses; inclusion in cost of labor, x; Inclusion in cost of re- jialrs. XX ; audited but mipaid. 15'.>: Of purchasing agents. 204. 205; as- signable to cojistrucllon. 2;:0, 231, 2r{3; maintenance supervision foice, (500: engineering force. COO, 705: testing and regulating force. COO; transmission supervision force. 020; operators and nmnagers. 021, 027. 029: transmission otti(e clerk.s. 022: messenger force, 023; operators' school force. 027: advertising and g«»llcltlng force. 033: general officers, WO. 042: general office clerks, 041. CW2: geneial office attendants. 014: law force. Ch15. G4S; cbilms force, 047 ; relief depnrtn»ent force. 049; \ abla- tion forte, 051 ; shoi> force. 701 ; St; ble and garage force. 702; pur- cl'asing and stores force. 704; apiwir- tlonment between operation and con- struction. X. 701-709: plant supervi- sion force. 700: Iiouse service force. 707: floating equipment force. 70S: railway etpilpment force, 701). (See also Commissions.) Pensions: fund assets, 120; fund lia- bility, 174; payments and exi)euse, C49. Personal injury: credits to reserve. 173; adjustment of charges. 173; charges to oi)erating exi>enses. C47; charges to plant and efpiipment. (547. Plant and equipment; definitions, vii ; cost diarges on money basis, vlll: factors in cost charges, x: cost charges for purchased property, xi ; a,s.set linlances, 100. 101 Ip. 21 1: investment. 100. 101 ip. 35i : charges for property put into service, 102: Income and surplus invested, 170; Investment In detail. 200-2.33: ac- counting for withdrawals and retire- ments, xll. 229; appropriations for investment. 332. 415; depreciation. OOS; preliminary charges to clearing accounts, 701-7OD. (See also l*roi>- erty. ) Plant sufjer vision expense In clearing accoinit. 700. Pneumatic tubes: for telegraph. 207. 217: for calde lines. 220; repairs of Interior tubes, COl; repair of outside tuhes. 00.3. Pole line: for telegraph. 211 : for cable line, 222: maintenance while letised. 811: reiiairs for telegraph, C02; re- pairs for cable line, 004. Power equipment; for buildings. 200; for telegraph lines 207; for fiositing e4: unextin- guished, V, 109; relense through in- come. V. 327; at reacquirement. lil. 401 ; adjustment debits at reacquire- ment, 417. Prepayments; rents, 121; taxes. 122; insurance premiums, 123; miscel- laneous, 124. Press rate messages; telegraph reve- nue, 503; cable revenue. 512. Printing. (See Stationery and print- ing.) Profit and loss account: debits for property retiretl or sold, xll: defini- tion. XV ; adjustments of s;iivage values. 115: debit balance. 12S; credit balance. 179; debits for un collectible reveiue, 304 n ; credit ac- counts. 400, 401; debit accounts. 410-417. Profits; from operations of others, 315: from sale of property, xii. 401 ; from services for others) 702, 708, 7Ci9. Proujotlon expense. 200. Property; retired or sold, xll. aban- doned or destro.ved, xxii: in course of construction, 102: not used in op- erations. 105; purchased, xi, 205u. (See also Plant and equipment.) Provident funds, asset balances. 120; linlillty. 174. Railway equipment; expense for con- struction In progress. 102: invest- ment for telegraph. 219; expense in clearing account. 709. Reacquired securities; accounting, ill; inclusion in liability, 150. l.">4; ad- justment of book value, 401. 417. Receiver's ceitlflcates ll'bilit.v, l.Vi. Reconstruction of plant; as distinct from repairs, xlx; unanticipated. xxiL 80 Redemrttton funds. (See Resen*e flllKlK. ) Refunds: of revenue, xvll: of custom- ers' depopits. 100; for failure uf service. 03-1 n. nojjuIntluK force pny nnd expense. HOC. Relief: fund iissers, 120: fund liability. 174 : expenses nnd contributions, 040. Relocsition of plant, xlx. Rent (p.'iyiible) ; prepaid. 121; due. but unpsiid. lo:^: accrued, but not due, lOS: of general ottices during con- struction. 2iW: for leased proi)erty. 320. 321 : for maintenance ottices. CoO: for short-term rentals, GOT: ft»r supervision otti es, 020: for transmis- sion oHices, 025; for peneral ottices. 644 : for shop buildini^s. 701 ; for stables nnd pirapes. 702; for vehi- cles and ijorses. 702; for storerooms nnd storeliouses. 704; for engineers' ottices, 705; for plaint suiiervis on ottices. 70<»: for buildings and ottices not allocated. 707 ; for floating equl])- nient, 703; for railway equipment, 709. Rent ( receivable) ; accrued, but not due. 117: from plant leased to olhers. 310, 311 ; rent expenses, 311 ; from plant maintained by company, ri2«», 521 : from messengers' uul- for;ns. G23. Repairs; ordinary repn Irs nud extrnor- dinnry reii.iirs dettned, xlx; cost of repairs dettned, xx : depreciation chnrges for repairs, xlx, 170, Gil; ortice repairs during construction. 2:J3: of engineering outtti. GOO; of rente Right of way; investment. 204; clear- ing, 211, G02; repairs, G03. Salaries. (See Pay nnd expenses.) Snlvnge; cost of recovery, xlx; iucln- sion iu nniterials and supplies, 115; credit to laud account. 20.')U. Savings funds; asset balances, 120; liability. 174. Schools; equlpmenr. 209. 221; expense, G27. Securities; optional record of Invest- ment value, ii; par value entries for Ihiblllty, iil; accounting for value when reacquired, lii: held as lnvi»8t- ment, 103; in .special deiwsits. 107; held as marketable. 109: In reserve funds, lis. 110; In provident lunds, 120; liability for conver.^^iou, l.'il : assignable to organiz tlon expense. 2(X): adjustment of book value when reacqulretl. 11, 401. 417. Service; billed to customers In nd- vnnce, 1G5; under franchise require- ment, (>50; performed for others with equipment, 702. 70S. 709. Shop equipment ; for general shops, 225; for stables and gar.iges, 227; repnlrs nud depreclatlou. 701. Shop expense In clearing account. 701. Shop structures: land, 205; buiidlugs, 2UG; leialrs. 005. Sinking funds; asset balances, 118: re- serves, 177. 178; accretions, 177. 314. 330; premium nnd discount entries, 314; npproprlatlons from Income, 330; appropriations from surplus, 411. Smithing equipment, 225. (See also Stables,) Soliciting expense; nt organization. 200; for opemtlon, G33. Stables: laud. 205; buildings. 206; equipment. 227; building repairs, 605; ex))ense in clearing account, 702; service for others. 702. Stationery and printing: In debt ex« r>ense, v; unapplied. 115; for law force during construction. 231 : for muintenauce offices, 600; for super- 81 vision of operations. 620; for trans- mission offices, 626; for general offices, 643 ; for law work, 645, 648 ; for valuation work, 651; expense in clearing account, 704. Steamboats. (See Floating equip- ment.) Stock. (See Capital stock, Securities.) ties.) Stock news; revenue, 505; expense. Store equipment; Investment, 226; re- pairs, 704. Store rooms. (See Storehouses.) Store supplies. (See Supplies.) Storehouses; land, 205; buildings, 206; equipment, 226; building repairs, 605; expense in clearing account, 7(V4. Street Improvements; chargeable to plant and equipment, 232n. (See also Assessments, Paving.) Structural value defined, xl. Submarine plant; telegraph, 216; cable line, 222; repairs for telegraph, G03; repairs for cable line. 604. Subscribers' equipment ; for messenger service, 208; for telegraph, 210; re- pairs, 601. Superintendence; during construction, 230; expense in clearing account, 706. (See also Engineering.) V Supervision expense; for construc- 1 tlon in progress. 102; for building construction, 200; for maintenance, 600; for operations, 020; in clear- ing account, 706. Supplies; cost defined, x; inclusion In cost of repairs, xx;1mapplied. 115; shortages nnd overages, 115, 704; of small value, 228n; for engineers on construction, 2?J0; for sui)ervisiou ottices, 600. G20: for power plants, 624; for transmission offices, « CONTENTS. Pafe. Order of the Commission ^ Special notice '^ Destruction authorized ^ Officer having supervision of destruction ^ Committorson or persons by whom the accounts, records, or memoranda are to bo destroyed (except as provided for in paragraph 19). 8. The written authority (a) may be confined to certain accounts, records, and memoranda which have been retained for the ])eriods of time specified in these regulations and which the carrier then desires to destroy, in which case it shall indicate — First. The accounts, records, or memoranda to ])(> destroyed, ex- pressed either in form numbers or by descriptive titles; and, Second. The period or periods coveres compa- nies) specifically referred to by theregulatioiLs embodied in paragraph 1. The classification of accounts, records, and memoranda enumerated below under the various general headings is m-rely for convenient reference and is more or less arbitrary. The regulations arc intended to apply to the items as named or described, regardless of the classi- fication and regardless of where filed. Of the accounts, records, and memoranda which are to be retained permanently only the more important are indicated in the list, such specific mention being made so that they may not be confused with any accounts, records, or memoranda which the carrier is hereby given permission to destroy. Description of accounts, etc. OEN'ERAL AND FINANCIAL. 1. Ledgers: , • , (a) General and auxiliaiy ledgers and indexes thereto, except subscribers' and other ledgers provided for in items below. (6 ) Balance sheets of general ledgers (c) Trial balance sheets of general and auxiliary ledgers. (d) Subscribers' and pay station ledgers and other records used in lieu thereof, (f ) Customers' ledgers at local telegraph offices, local cable offices, local wireless otlices. and other agencies. (/) Trial balance sheets of ledgers covered by items ((/) and (e) above. 2. Records of securities owned: Record.-^ of secuiitio? owned, in treasury, or with custodians. S. Journals: General and auxiliary journals 4. Cash books: ,,11 j (a) Treasurers' and auditors' general cash books and auxiliary cash books subsidiary to the general cash books. (6) Other auxiliary cash books (c) Cash books at' telephone exchanges, telegraph and cable and wireless offices, and other agencies. Note —If any receipts or payments are entered in tlie aggregate in cash books and are detailed only on loose sheets, such loose sheets comtitute an auxiliary cash boolc when no other perma- nent record of the items thereon is made. 5. Capital stock records: (a) Capital stock ledgers ) _,, „ (b) Records or stubs of capital stock certificates. (c) Stock transfer registers. (rf) Memoranda and bills of sale or of transfer of capi- tal stock («) Capital stock subscription notices and requests for allotment. (/) Canceled capital stock certificates Bond records: (a) Registered bor\d ledgers (6) Records or stubs of bonds Period to be retained. Permanently. Permanently. Permanently. 3 years. 3 years. 3 years. Permanently. Permanently. Permanently. 3 years. 3 years. Permanently. Permanently. Permanently. 3 years. 1 year. See item 16. Permanently. Permanently. 14 DESTKUCTION OF RECORDS. Description of accounts, etc. GENERAL AND FINANCIAL- Continued. 6. Bond records — Continued. (e) Memoranda and bilk* of sale or of transfer of rejjistered bonds. (d) Funded debt subscription notices and requests for allotment. (€) Records of interest coupons, paid and un^>aid.. (J) Canceled bonds and paid interest coupons , 7. Copies of applications to and authorities from re^ilat- mg bodies for the issuance of stocks, bonds, and other securities. (See item llOe.) 8. Proxies and voting lists: (a) Proxies of holders of voting securities (6) Lists of holders of voting securities presented at meetings. 9. Journal entries: (a) Journal entries and interdepartmental bills and supporting jmpers. (6) Slips or statements jiving advance postini^ of miscellaneous receipts and payments of funds. (c) Records of prepaid expenses and of accrued lia- bilities not due, used for monthly apportion- ment of such items, but not constituting sup- porting papers covered by item (a) above. 10. Accounts receivable records: (a) Record or register of accounts receivable bills except as covered in items 1 {d) and (>) and indexes thereto, and summaries of distribution of credits through bills for entry in general books. (6) Accounting department copies of bills issued and supporting paners which do not accompany the original bills, except bills for service cov- ered by item 41 (6) ana (c), if recorded in rec- ords covered by item (n) above. (Seeitem 20.) (c) Authorizations for accounts receivable ^bills, other than supporting papers, with notations of dates of issue. (d) Record or index of bills to be issued with nota- tions of dates of issue. («) Perif the accounts, records, and memoranda, elsewhere provided for in these regtUatioos, are of this character, they snail be retained permanently re> gardless of any lesser period of retention assigned to them. 21. Authorities for expenditures: (a) Estimates, completion reports, and authorities for expenditures, and registers and records thereof, for construction, extensions, additions, and betterments made. (6) Detail records and memoranda used in prepara- tion of estimates and minor reports and state- ments pertaining thereto, if summarized in records covered by item (a) above. (c) Estimates, detail reconls, and memoranda and reports pertaining thereto, when the expendi- tures were not authorized, except as covered by item 22. (d) Eecords, reports, and statements showing com- parison between authorized estimates and actual expenditures. (e) Notices of the approval of estimates (f) Records and reports pertaining to the progre«i of construction work, the order in which jobs are to be completed, orders to expedite spe- cific work, reports and statements of com- pleted and uncompleted work orders, and similar records which do not form a basis of charges or credits to the accounts. 22. Engineering records: (a) Maps, profiles, plans, specifications, estimates of work, records of engineering studies, unit costs, and similar records pertaining to projects which have been put into execution, whether in whole or in part. (6) Maps, profiles, plans, specifications, estimates of work, recoras of engineering stu^lies, and similar records pertaining U:> projects wliich have been abandoned. 23. Traveling accountants' and auditors' reports: (a) Reports of examinations and audits by special accountants and traveling auditors. (6) Reports and records of incidental and miscel- laneous audits, 24. Di\'i8ion auditors' reports: Reports and statements from division auditors of revenues, expenses, receipts, disbursements operations, anci similar items. TREASURY. 30. Statements of funds and deposits: (a) Statements and summaries of balances on hand and with depositaries. (6) Authorities for aiul statements of transfer of funds from one depositary to another, (c) Periodical statements of working cash balances. . Period to be retained. Permanently. Description of accounts, etc. Permanently. 3 years. Optional. Permanently. Optional. Optional. Permanently. 6 yean. TREASURY— continued. 30. Statements of funds and deposits— Continued. (d) Requisitions and receipts for fimds furnished managers, agents, ana others. (c) Reports and estimates of working funds required . (/) Statements of managers' and agents' deposits, grouped by depositaries. 31. Records of deixwits with banks and others: (a) Statements from depositaries regarding funds received, disbursed, and transferred. (6) Bank reconcilement papers (c) Statements from banks of interest due on average daily balances. (d) Bank depasit books and stubs, ledgers, or rec- ords of checks. (e) Copies of bank deposit slips if) Aclvice of deix)8it8 made, when information contained thereon is shown on other records which are retained. (g) Correspondence and memoranda relating to the stopping of payment of bank checks and to the iasuance of duplicates. Records of receipts ana disbursements: (a) Daily or other periodical statements of the re- reipt and disbursement of funds. (See note, item 4.). (6) Records or periodical statements of outstanding vouchers, chocks, drafts, etc., issued and not j)resoiited. (c) Cash remittance slips or reports of managers and agents and general office summaries thereof. (d) Voucher lists, showing mailing dates and to whom sent. Managers' and agents' balances: Records of managers' and agents' accounts showing working fund debits and credits from various sources. 34. Field cashiers' balances: Reports of working fimd balances in hands of field cashiers. Records pertaining to verifications of treasurers' cash or pocurities. REVENUES. iy.i 35. 3 years. Optional. For the period prescribed lor the records to which they pertain. 3 years. 3 years. 3 yean. ( Period to be retalneJ. 40. Revenue Bumniaries: (a) Records and summaries of revenues (by classes) for entry in general books. (6) Reports from managers, agents, and others show- ing debits and credits to revenue from all sources, and summaries of such reports. (c) Statements and summaries of telephone or A^-ire- less message toll cliarge tickets and telegram or cable charge tickets, if summarized into records covered by item (a) or (6) above. 41. Collection reports and records: (a) Itemized lists and summaries of collections of operating revenues by ugonts, collectors, and branch ofticos. 15209^—1^- 3 May be destroyed at op- tion of carrier after funds have been re- turned or accounted for. Optional. 3 years. 3 years. 3 years. 3 years. 6 years. 3 years. Optional, C years. 3 years. G years. 3 years. Optional. 3 years. 3 years. 3 years. 6 years. 3 years. 1 year. 'A years. 18 DESTRUCTION OF RECORDS. Description of acc3unt8, etc. REVENUES — continued. 41. Collection reports and records — Continued. (6) Bill stuKs. copies of bills, collection ticket*, col- lection books, and other forms of reporting col- lertions covered by item (a) above. (c) Bill stubs, copies of bills, and statements of col- lections of operating revenues not used for re- porting collei'tions covered by item (a) above. {d) Statements and reports of amounts collected or due from employees for meals furnished. («) Records of coin box collection books, coin box combinations, seals applied and removed from coin boxes, and similar records, and reports relative to the collection of operating reve- nues. (/) Records of ratings, credit classification and in- vestigations of patrons and prospective sub- scribers. (g) Reports relating to the status of subscribere* and customers' accoimts. 42. Remittances and deposits: Local office records of remittances and deposits 43. Adjustments with agents: Dt^tail records and reports of adju.stmentswith man- agers, ngents. and other employees on account of revenue, disbursements, or other items. 44. Subscribers' and customers' account adjustments: Detail records of adju.stments of accounts of sub- scribers and other rustoraers for overcharges, undercharges, and other errors, results of which have been transcribed to records covered by item 40. 45. Settlements with telephone, telegraph, cable, and wireless companies: (a) Records pertaining to settlement of revenues and other cfiarges with telephone, telegraph, cable, and wireless companies by officers, managers, and agents. (6) Statements, summaries, and memoranda per- taining to the monthly record of inter-company business if summariz«'ears. Optional. G years. 3 vears. 20 DESTRUCTION OF RECORDS. DESTRUCTION OF RECORDS. 21 Description ol accounts, etc. EXPENDITURES— continued. 65. Assignments, attachments, and garnishments: (a) Record of assignments, attachments, and gar- nishments of employees' salaries. (6) File:^ containing as-signments, attachments, gar- nishments, notices of suits, notices of release, and correspondence relating thereto. (c) Minors* salary releases 66. Authorized expenses: (o) Records, statements and advices of authorized expenses by divisions, districts, departments, offices, and otherwise, which form the basis of charges to accounts. (b) Requests and authorities for expenditures for incidental expenses, repairs, etc., not cov- ered by estimates provided for in item 21, and not used for msJcing charges to account*. 67. Claims: (a) Claims registers, card or book indexes, and other records in connection with the record- ing of overcharge, damage, personal injury, and other claims presented against carriers, except as provided for in item 44. (6) All papers substantiating claims, whether such papers are attached to vouchers or filed sep- arately (see item 60r), except as provided for in item 44. Note.— It is not Intended that documents comprising claims, sub-stantiating their validity, or accnmulatcd in the progress of investigation shall be retained permanently. 68. Records of accidents, damages, and injuries: (a) Reports and statements regarding accidents, when not necessary to support claims or vouchers. (Sec item 123.) (6) Records of damages to company property or property of others, also reports and state- ments of employees and witnesses regarding damages to company property or property of others, when not necessary to support claims or vouchers. (c) Reports and statements regarding personal injuries, when not necessary to support claims or vouchers. • PURCH.^SES AND STORES. 70. Material ledgers: (a) Records of material and supplies on hand (6) Balance sheets of material and Fuj)]>lies received, issued, and on hand at branch sup])ly de- partments. 71. Purchases and sales: (a) Copies of orders for the purchase of material and supplies. (6) Invoice.^ for material and supplies purchased, and records or reports of such invoices. (c) Authorities for the sale of scrap and material and supplies. (d) Price recf>rds of purchases (file copies) (e) Advices from individuals and comi)anies ac- knowledging receipt of orders for material and supplies, notices of shipment, packing slips, and copies of bills of lading. Period to be retained. Description of accounts, etc. Period to be retained. 3 years. 3 years. Optional. Permanently. Optional. Permanently. 6 years after settlement or rejection. / Optional. Optional. Optional. Permanently. 3 years. 3 years. Permanently. 3 years. Permanently. Optional. ) f PURCHASES AND STORES — Continued. 71. Purchases and sales — Continued. (/) liids and offers for the sale or purchase of ma- terial and supplies. (g) Contracts for the purchase or sale of material and supplies. (h) Advices or requisitions from storekeepers and others for the purchase of material and sup- plies. (t) Lists or records of invoices transmitted to or from storekeepers. 0) Receipts or delivery tickets issued for material and supplies received in installments and subsequently surrendered with and in sup- port of invoices or bills showing full infor- mation. (h) Freight bills covering charges on material and supplies. NoTK.— The fumishin<» of freij^ht bills in support of claims on transDortation companies is not con.siderentracts l)etween wireless companies and ship- owners for wireless equipment and wireless service. ((J) Applications for telephone service for which no contracts have been executed. (h) Contracts for lease of instriunents, including receipts for instruments burnished under the terms of such contracts. 81. Records of subscribers: Address lists and card records of subscribers by ad- dresses, names, or telephone numbers, and similar lists and records of former subscribers. 82. Records of instruments: Records and rep arts of instruments and equipment furnished to subscribers and patrons and of matru- ments and ecjuipment on vacant premises, not usepie.M made at destination ' ofiices, of messages covered by item (a) above. I Period to be retained. C years. 1 year. 1 vear. Optional, DESTRUCTION OF RECORDS. Description of accounts, etc. 3 years after cancella- tion. Optional. ;J year.s after cancella- tion. Optional. 1 ^-ear after canceling tion. years after t-ancella- tion. 1 voar. 3 years after cancella- tion. ^ Optional. Optional. ) 1 year. 1 vear. I OPERATIONS — continued. 83. Telegrams and cablegrams— Continued. (c) Original filed messages transmitted for trans- portation companies in compliance with terms of contracts; also tissue or carbon copies of such messages made at destination offices. Note.— The furnishing of original filed messages to transporta- tion companies in siii-port of settlements under contracts is not considered a destruction of records. (d) Service messages relating to commercial mes- sages, including tissue or carbon copies of such messages maon8: (a) Copies of orders on printing house*' for printed forms of franks, etc. Records of blank form.s of franks, etc., received, distributed, and destroyed. Requests, and copies of reqiiest.s, for franks, etc. . Records of franks, etc., issued Records of fnmks received from other companies. Identification slips for frank.", etc Used franks, niessagc passes, and coupons, if complete record of issue is maintained as pro- vided in item (d) above. (h) Unexpired, surrrendered, or partially used franks, etc. (i) Void, unused, and unissued franks, etc (j) Reports and records of franks, etc., collected or honored, and of free messages handled. (k) Reports of reduced -rate messages sent or received . 88. Telegraph, cable, and wireless identification cards: (a) Records of identification cards issued (6) Returned and \vithdrawn identification cards.. (c) Unused and unissued identification cards 89. Transportation company passes: (a) Requests, and copies, for piksses (6) Record of passes received from carriers (c) Record of pass identification forms issued (d) Record of use made of passes Receiving and delivering telegrams and cablegrams: a) Receivers' record of messages filed G years after expiration or cancellation. (6) (c) (d) [e (.1 May be destroyed at op- tion of carrier after ex- piration or cancella- tion. Optional. G years after cancella- tion. G years after cancella- tion or expiration of basis. C years after cancellation of tariff, etc. 90 6) Message delivery records. (c) Messengers' delivery sheets. 91. (d) Operators' number sheets Telegraph and cable office rei)oris: (a) Monthly balance sheets and support ing papers. . (6) Weekly and daily balance sheets when figures are combined on monthly or weekly balance sheets, respectively. G years. G vears. 6 years. G years. 6 years. 3 years. G months. 1 year after current year 1 year after current year. 3 years. 3 years. 3 years. 1 1 yetir. ' I year after current year. 3 years. 3 years. 3 years. 3 years. 1 year. I year. J year. Optional. J G years. 1 year. I DESTRUCTION OF BECORDS. 25 Description of accounts, etc. OPERATIONS — continued. 91 (rf) 92. 93 94. Telegraph and cable office report^} — Continued. (c) Weekly and daily balance sheets and supporting papers, when figures are not combined on monthly or weekly balance dieets, respec- tively. Daily, weekly, or monthly statements of re- ceipts and disbursements. Statrracnts of ledger balances Reports of guarantee' loads, trunking requirements, spare facilities, peg counts, and similar records which do not affect the accounts of the company. Records of telegraph, cable, and wireless messages handled: (a) Monthly or periodical reports of number of mesi^ages handled. (6) Reports of unit cost of handling messages (c) Message delay reports Inspection records: Reports and records of condition of pay station signs and Ixwths, central olhce quarters, build- ings, elevators, meters, machine!^', etc., except as provided for in items 18 and 97. Detective and i>olice service: Reports and records in connection with policing the company's property, detective service, stolen property, investigations of robberies, and at- tempts to defraud the company. 101. Miscellaneous records of telephone exchanges and branch offices: All records at telei)hone exchanges and branch offi- ces not elsewhere provided for herein. 102. Miscellaneous rt cords of local telegraph and cable offices: All records at local telegraph and cable offices not elsewhere i)rovided for herein. 103. Miscellaneous records of wireless stations: All records of wireless stations (ship and coast > not elsewhere provided for herein. ST.VTISTICS. 110. ReiK)rta to Interstate Commerce Commission and other governmental authorities: (a) Annual financial, operating, and statistical reports, file copies of, and supporting papers. (b) Monthly reports of operating revenues and expenses, file copies of, ana supporting pa- pers. (c) Monthly or periodical reports regarding acci- dents, file copies of, and supporting papers. (d) Monthly or periodical reports regarding em- ployt'cs and salaries, file copies of, and sup- porting papers. (e) Reports regarding expenditures of proceeds from sale of authorized securities, file copies of, and supporting papers. (J) Other reports, file copies of, and supporting papers. {(j) Reports of proix?rty units added and retired, completion of property changes and state- ments of charges and credits to the invest- ment account, file copies of, and supporting papei-s. Optional. Optional. 1 year. Optional. 6 yeare. 3 years. 1 vear. Optional. Optional. G years. (> years. a veare. Permanently. 1 year after current year. 3 years. 3 years. Permanently. 6 years. Permanently. ) DESTRUCTION OF KECORDS. 27 Description of accounts, etc. <. f STATISTICS — continued. 111. Reports to stockholders: (a) Annual reports or statements to stockholders, file copies of, and supporting papers. (6) Written requests for conies of, and acknowl- edgments of receipt of, reports to stockhold- ers. 112. Monthly, annual, or other periodical financial reports or statements, comparative or otherwise, and sup- porting papers. Note.— Tiie dupportin^ papers referred to in items 110, 111, and 112, are the scpnrato detailed reports and .statements, notelsx- whoro pro- ided for hortin, which arc essential toaveriBcati(m and analy.-is of the reports, etc., referred to in those items. 113. Working papers (i. e., preliminary drafts", memo- randa, etc.) pro|yared in connection with the com- pilation of reports and statement-s covered by items ilO, 111, and 112, but which are not necessary to directly support such reports and statements. (Pee note following item 112.) 114. Miscellaneous statistical reports, statements, and summaries (not other>n'ise provided for herein) used by officials and department heads for ad- minLstrative purposes only and not entering the accounts of the ccmipany. 115. Tabulating cards: Tabulating rards used in the compilation of statis- tics and other data when the results are trans- scribed to other records covered by these regula- tions. MISCELLANEOUS. 120. Telephone directories: (a) File copiea of telephone directories of the com- pany's issue, in the general file of the com- pany. .^ (b) Surplus^ and other copies of telephone di- rectories, if copies of the same issues are preserved in the general file referred to in Item (a) above. (c) Summaries, data, and miscellaneous records incident to the preparation and issuance of directories. 121. Instructions to employees and others: (a) Rooks and circulars of instruction to employees and others, in the general file of the depart- ment in which tlie complete official file is maintained, except as provided for in item 124. (6) Circulars and notices of instructions to em- ployees on matters of discipline, deportment, anci similar subjects. 122. Records of auxiliary and other operations: Records summarizing the results of operations other than telephone, telegraph, cable, and wire- less operations. Note.— Led,:iers, joumils, abstracts, reports, vouchers, etc., shall bo retained for the same periods as are provided for ■imilar documents elsewhere in these regulations. Period to be retained. Perpianently. Optional. 6 years. Optional. Optional. 1 year. 3 years. Optional. Optional 6 yeaiti after expiration or i^ancellation. Optional. 6 years. 28 DESTRUCTION OF RECOKDS. Descrip'ion oi accounts, etc. MiscEii,AXE0us— continued. 123. Benefit, hospital, and insurance departments: Records of employees' ])enefit, hospital, and in- surance dei)artments, other than records support- ing the receipt and disbursement of funds and records provided for in item 68. Note.— The re«jrds supporlinT the receipt and dlsbursoment of funds shall be retained for the same i)eriods as are pro- vided for similar records elsewhere in these regulat ions. 124. Data on destruction of records: (a) Written authorities, cancellation of authorities, certificates of destruction; reports of (lestruc- tion, records of appointment of executive ofl5cers and committees having supervision of the destruction of records, bulletins, circulars, instructions and lists or schedules of forms and records pertaining to the destruction of the carrier's records, in the general file of the department in which the complete official file is maintained. (6) Records and memoranda relating to the prepa- ration and issuance of bulletins, circulars, etc., covered by item (a) above; also minor records and memoranda pertaining to tho compliance with the requirements of such bulletins and circulars. 125. Records of employees: (a) Employees' service records and rosters, showins? positions filled, attendance, length of servico, and other relative data. (6) Applications for employment, s<'hedules oi working hours, efficiency records, photf>- graphs and other identification records, and all other miscellaneous records pertaining to employees. 126. Other mis<:ellaneous records: (a) Records, reports, and statements pertaining to construction or maintenance work performed by the carrier for others. (6) Records and reports pertaining to motor and other vehicles and their equipment, such as tires, oil, gasoline, and batteries, when such records and Reports are not used in determin- ing charges or credits to the accounts of the company. (c) Receipts for records and papers temporarily removed from file, when records and papers have been returned. (d) Receipts and records pertaining to delivery of articles to employ exi, such as badges, keys, and material receipt books. Period tt be retained. 1 year? DESTRUCTION OF RECORDS. 29 Description of accounts, etc. Permanently. Vil Optional. 1 year. Optional, For the periods pro- s<'ribed for similar records pertaining to oi)erating exj)en8C3. Optional. 127. 128. Optional. Optional. } f MISCELLANEOUS— continued. 126. Other miscellaneous records — Continued. («) Receipts for registered mail, express packages, etc. (/) Passes to buildings or property of the company, surrendered upon or after use. (a) Records of building space occupied (h) Lunch tickets redeemed, after summary into accounting classification. (t) Records of lunch tickets on hand and receipts for tickets issued. (j) Unissued lunch tickets (k) Records of mileage and other transportation used. (I) Adding machine lists and memoranda of com- l)ilations by mechanical devices if not used as summaries to support entries to the ac- counts. (m) Organization diagrams, charts, records, and mailing lists. (n) Records of forms used by the company. Records and report? of tire drills, (p) Records of postage stamps received in pa>iiient of subscribers' bills and records of stamps pur- chased, when not necessary to support vouchers. (q) Transmittal lists or forms used for indicating papers and records forwarded from one de- partment to another, provided such lists or forms do not contain data affecting the ac- counts of the company. Duplicate accounts, records, and memoranda: JJuplicatc copies of accounts, records, and memo- randa listed in these regulations, if all informa- tion on such duplicates is contained on the originals or other copies retained, and if such duplicates are not specifically provided for in these regulations. (See par. 19, p. 12.) Correspondence : (a) Correspondence and records thereof relating to subjects listed in items 1 to 127, inclusive. (6) Stenographers' notebook and phonograph and other mechanical device records. (c) Extra copies of letters, etc., used for tracing or following up correspondence, or for other pur- poses, if original or other copies are retained as provided for in item (a) above. (tional. Optional. Optional. Optional. Optional. Optional. Optional. Optional. For the period pre- scribed for the item to which it relates. Optional. Optional. Optional APPENDIX. 0^ 'v The following forms are suggested for the use of telephone, tele- graph, and cable companies (including wireless companies) , but any other forms may be used, provided they show the information re- quired by the regulations. (A) Form of resolution of Board of Directors designating an of5.cer to have general supervision over the destruction of accounts, records, and memoranda. (See par. 2, a, of the regulations.) Excerpt from minutes of the meeting of the Board of Directors of Company, held at its office in on , 19...: ''Resolved, That (Title of officer or name and title.) be, and he is hereby, desij^nated as the executive officer of this company to have general supervision over the destruction of accounts, records, and memoranda in accordance with the Regulations to Govern the Destruction of Records of Telephone, Telegraph, and (able Companies (including wireless companies), effective on January 1, 1920, issued by the Interstate Commerce Commission." I hereby certify that the above is a true and correct copy. (Name.) ^ f ,19. (Title.) 31 32 APPENDIX. (B) Form of resolution of Board of Directors designating an officer to have super- vision over th5 destraetion of certain accounts, records, and m*moranda. (See par. 2, b, of the regulations.) Excerpt from minutes of the meeting of the Board of Directors of the Company, held at its office in on 19. . .: ''Resolved, That « (Title of officer or nam© and title.) be, and he hereby is, designated as the officer having supervision over the destruction of the accounts, records, and memoranda named below, the destruction of which is permitted by the Regulations to Govern the Destruction of Records of Telephone, Telegraph, and Cable Companies (including wireless companies), effective on Janu- ary 1, 1920, issued by the Interstate Commerce Commk*«ion." Form No. Description. Period. Item No. In I. C. C. Uegulations. I hereby certify that the above is a true and correct copy (Name.) ,19. (Title. J (C) Form of resolntion of Board of Directors naming a cremation committee for the destruction of canceled bonds, interest coupons, etc. (See par. ti of the regula- tions.) Excerpt from lninute^ of the meeting of the Hoard of 1 >ircctors of the Company, held at it.*» office in on ,19..: "Resolved, Tliat i)ursuaut to the Regulatious to Govern the Destruction of Records of Telephone. Telegraph, and Cable Companies, (includih- wiroloss <-ompanies), effective on January 1. I92i), i.s«ued by the Interstate Commertre Cornmia.sion, the board designates. (Titles of sucti persons, or names and title.s.) to be a cremation < oinmittee to act in conjunct ioti with the representatives of the trustees in the destruction of »» (Li.st of and description ofdocuments to be destroyed.) 1 hereby certify that the aliove is a true and correct copy. (Name.) . ^ 1^ . • « « (Title.) i» .» (C) Form of resolution of Board of Directors naming a cremation committee for the destmcUon of canceled bonds, interest coupons, etc. (See par. 6 of the regula- tions.") Excerpt from miuulr.- of the inootiu^' of (ho IJoartl of I >irv(tors of the Company, held at it.s office in on ,19..: ''Resolved, That i)ursuaut to the Hegulatioii.s to (iovern the Destruction of Records of Telephone, Telegraph, and Cable Companies, (includih:,' wireless companies), effective on January I, 1920, i.ssued by the Interstate Commerce Comini.Hsion, the board designates. (Titles of such persons, or names and tltle.«!.) to be a cremation < ununittee to act in conjunction with the representatives of the trustees in the destruction of »» •••.•••-.. ....,,4 (LI.-escriptIon. Period. Item No. in I. C. a Regulations. (Name.) (Title.) (E) Form of written authority of continuing efTect for the destruction of accounts, records, and memoranda. (See par. 8, b, of the regulations.) The Company, Office of ,19... In conformity with the authority conferred upon me by the Board of Directors, I hereby authorize and direct (Name and title or occi^iation.) to destroy from time to time the accounts, records, and memoranda of this company in hm custody, the destruction of which is permitted by the Regulations to Govern the Destruction of Records of Telephone, Telegraph, and Cable Companies (includ- ing wireiew companies), effective on January 1, 1920, issued by the Interstate Com- merce Commission. (Name.) (Title.) 34 APPENDIX. (F) Form of certificate of destruction. (See par. 11, a, of the regulations.) The Company, OfHceof ; , 19. Dear Sir: I hereby certify that I have this day dostroyed the accounts, records, and memoranda listed below, pursuant to your authority dated , 19 I further certify that no accounts, records, or memoranda other than those named have been destroyed therewith. io Form No. Description. rcriod. Item No. in I. C. C. Regulations. Yours truly, (Name.) (Title or occupation.) (G) Form of cumulative certificate of destruction. (See par. 11, b, of the regu- lations.) ITie Com])any, Office of , ' I 1J...« Dear Sir: I hereby certify that I have destroyed the accounts, records, and mem- oranda listed below, pursuant to your authority dated , 19 J further certify that no accounts, records, or memoranda other than those named have been destroyed therewith. "; I v< Form No. Description. Period. Item No. in I. C. C. Itogiilatifflis. Date of Destruction. Youi-s truly, (Name.) (Title or occtipation.) INDEX TO RECORDS. Abandonod project*, 226. Accidents, 6S, 110c. Accomitants, traveling, reports, 23. Accoimts; general, 1, 3, 4, 9; local office, U, /, 4e, 42, 92<: ship, 92f. Accruals memoranda, 9c. Adding machine records, 1261. Addresses of subscribers, 81. Adjustments; with agents, 43, 49; oX patrons' ac- counts, 44, 49; of inventories, 73a. Advertising; patrons' contracts, £0e: tor promoting business, 96a, c; solicitation, 966. Afandes; ledgers, U, /; cash books, 4e; audits of, 23 funds 30 J, /, 33, 42; remittances, 32c, 42; revenues, 405, 41a. 46!>, 91; adjustments, 43; »ettlcments, 45; disbursements, 465,91; allowances, 49; charge ad- vices, :0; tariff files, 866; miscellaneous, 101, IflfiJ, 103. Agreements. (Set Contracts.) Allotment requests, Se, Qd. AllowaxMXs for irregularities, 49. Applications. (See Requests.) Appointment tickets, 856. Assignments of pay, 65. Attachments of pay, 65. Auditors; general auditors' cash books, 4a; travel- ing auditors' reports, 23a; miscellaneous audits, 236; division auditor' reports, 24. Authorities; for security Issues, 7; for accounts re- ceivable bills, 10c; for expenditures, 21, 666; for deposit transfers, 306; lor writinf off accoimts, 48; for service rates, 50, 86; for specific voudiers, 60d; for pay roll changes, 636; far material sales, 71c; for material recoived, 72i; for record de- struction, 124a. Automobiles. (See Vehicles.) Auxiliary operations, 122. Badges for employees, 12M. Balance sheets; of geiieral olBces, 16, c, /; of local offlces. If, 91a, 6, c; of storekeepers, 706, Bank deposits, 30, 31, 42. Benefit department, 123. Bids and offers on materials, 71/. Bills; bills oi sale, 5d, . 6c; interdepartmental, 9a; bills collectible, 10, 41a, 6; bUls pa>-ablc, «(y; bUls of lading, 71c. Bonds; mortgage bonds, 6, 7, 16; fidelity bonds, 17. Branch offices; collections, 41a; tariff flics, b66; mis- cellaneous. 101. Buildings; inspection, 99; passes, 12V; spaee oeco- pied, 126^. Cable service; local ofRco accounts, Ic, 4c. 91; mes- sage records, 83, 90, 95, 98; miseellaueous, 102. Call boxes, 93. Canvassing for business, 96. Capital stock, 5, 7, 16. Carbon copies of messages, 83, 84. Cash accounts, 4, 30c, 34, 35, 92/. Cashiers' balances in field, 34. Oertificatcs; stock, 56, /, 16; receivers', 16; tempo, rary, 16; of wages, 63c; of record destruction, 124a. Charge advices, 50, 66a. Checking; of employees' time, 20c, 62; of messages, 47, So/; of materials, 71o. Checks; issued, 31rf, g; stopped, 31^; outstanding, 326; paid, 606, 63c; receipts tor, 63^. Circuit service, 07a. Claims; for hisurance, 18a; against carrier, 67. Coast station records, 84, 92, 103. Codes, 12. Coin boxes, 41c. Collect ions, 41, Commercial news service, 83a, 6, 94. Company messages, S3d, 846, 856. Complaints of service, 97^?. Completion reports, 21a, UOg. Concurrences in rates, fOd. Construction; contracts, 20c; authorities, 21a; esti- mates, 213, 6, c, e; expenditures, 21rf; work rec- ord, 21/' work for others, 126a. Contracts; unspecified, Ua, c, d; with employees, 146, d; for insurance, 186.- on property, 20c- Ux service, 50, 80; on materials, 71^. Correction of telephone tickets, 85c. Correspondence; on fire damages, 18c; on bank checks, Zlg; on employees' pay, 656; on rates, 8^; in general, 128a, c. Coupons; bond interest, 6c,/, 16; reduced rates, 87. Credit of ratroEs, 41/. Customers; ledgers, Ic , /; credit, 41/, g; adjustments, 44; service contracts, 80. Damages, from f^re, 18c,/, g; in operations, 67, 68. Deeds of title, 13. Delays in service, 97c, 98c. Delivery; of materials, 71 j; of messages, 906, c. Department records; bills, 9a; autborired expenses, 66a, material records, 706, 72c rate files, 866; star tistics, 114. Deposits in banks, 30, 31, 42. Depreciation of f roperty, 206. Destruction of records, 124. Detective service, 100. Diagrams, ¥0d, I26m. Directories; advertising, 80c, 966; files and stock, 1203, 6; compilation data, 120c. Directors' minutes, 11. Disbursements; for construction, 20rf, c, 21; distri- bution, 20d, 61, 64; of material, 20r, 646, Tlk; by depositaries, 31o; by treasurer, 32; adjtistments, 43; vouchers, 60; pay rolls, 63; specially authorized, 66; by local oliices, 91d; lor employees' benefit, 123tjo • Time records of labor, 20*, 62, 63*. Time-service contracts, 80c. Title papers, 13 Toll service, 40c, 85, 86*. Tracing; of materials, 71o; of correspondence, 128c. Transfers; of securities, 5c, d, Cc; of funds, 31a; of service, 50; of materials, 72c. Transportation companies; settlements 46; mes- sa:jes, S3c; passes, 89. Travelin;; accountants' reports, 23. Treasurer's records, 4a, 30-35. Treasury securities, 2, 35. Trial balance sheets, U,i. Trouble records, 976. Uncollectible revenue, 48, 91/. Undercharges, 44. Unit costs, 221,986. Unsettled accounts, 10*. Vehicles; iusurance, 186; miscellaneous, 1266. Voting list of security holders, S. Vouchers; outstan Un?, 326, d, uy: audited, 60a; paid, COc; authorities, COd; memoranda, 60*; of auxiliary operations, 122 noe. Wages. (See Pay of employees.) Watchmen's reports, 18y. Wireless service; local office accounts, 1*, 4c; con- tracts, SO/; messages, 18*, 84,93 message records^ 95, 9S; station records, 92, 103 Witnesses' statements, 686. Work orders, 20*, 21 , G2, 046. Workin:^ funds, 30c, c, 33, 34. Workmen's rejwrts, 20*, (2, 64>. O } Date Due fthfT ft « k*« ►w JIIL 8 7 196( 5 lar— 106 a « vtinir \ «U6 SPP 7 iqfi«; I I ^ 9 NEH COLUMBIA UNIVERSITY L BRARIES 004140861 k APR t 5 1994 WAY 2 3 1930 :;^!rrs; Hfiiirii ■^5' "^c. END OF TITLE