Accounts in theory and practice; principles by Saliers Earl Adolphus 1884-

Author:Saliers, Earl Adolphus, 1884-
Language: eng
Format: epub, pdf
Tags: Accounting
Publisher: New York : McGraw-Hill book company, inc.
Published: 1920-03-25T05:00:00+00:00

must be taken into consideration. As interest accrues from month to month its effect upon profits must be carefully shown. Any actions of the board of directors definitely affecting the assets or liabilities of the company must be shown by proper entries in the books. In brief, the accounting principles already learned must be applied to those conditions which are peculiar to corporate organization.

CHAPTER XXIV THE CORPORATION—OPENING CORPORATION BOOKS

Work of the Promoter. —Before a corporation can be organized it must be promoted. It is beyond our province to discuss the work of the promoter here except to say that it is his duty to present the prospective enterprise to his friends or to the pubhc in order to secure their subscriptions to the stock of the new company. When enough stock has been subscribed the company is organized and the subscriptions become contracts between the subscribers and the corporation.

The Opening Entry—Stock Authorized. —As soon as the company is organized the books of account should be opened and entry made of whatever information of a financial character may be necessary to show clearly the status of the company. The Minute Book, in which a record is kept of all proceedings at the meetings of the stockholders and board of directors, may be consulted in order to obtain whatever information in the way historical development, purposes, etc., it may be desirable to incorporate in the opening Journal entry. Naturally the only assets of a newly organized corporation are the subscriptions to its stock, and its only liability is its obligation to the subscribers for their subscriptions. The opening entry should therefore show this incipient condition. Sometimes, however, it is not merely desirable to show the actual amount of subscriptions secured but also to indicate the amount of capital stock authorized by the charter, that is, the full amount of the stock which may be issued without securing an amendment to the charter. If the amount of stock authorized is to be made the subject of a formal journal entry, then this entry should precede the entry of the actual subscriptions. If it is not thought desirable to show the amount of stock authorized, in the balance sheet, then its amount may be given in the preliminary statement which it is customary to insert on the first page of the Journal —chiefly for explanatory purposes. In this case the first formal entry will be for the amount of stock actually subscribed.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.