EXAMPLES. The foregoing Table is reproduced from the twenty-second edition of Inwood's "Tables for the Purchasing of Estates, &c.," by kind permission of the publishers, Messrs. Crosby Lockwood and Son, and shows the annual amounts to be debited to Profit and Loss Account, and credited to account of Lease or other object to be amortized in a given number of years with interest at 3, 4, 5, 6, 7, 8, 9, and 10 per cent. per annum. The table is also serviceable for ascertaining the value of a Lease at the several rates of interest.* EXAMPLE:-A Lease or Annuity for 14 years, to make 3 per cent. and to get back the principal, is worth 11296 or 11 years' purchase of the clear annual rent; at 4 per cent., 10'563, or 10 years' purchase; at 5 per cent., 9899, or 10 years' purchase; at 6 per cent., 9295, or 9 years' purchase. In calculating the value of Annuities, Leases, &c., Compound Interest is always reckoned and allowed. A hypothetical Ledger Account, showing the amortization of a Lease at 5 per cent. per annum, will be found, with a description in Chapter VI., p. 120. * For other rates of interest than are shown in the Table here reproduced, the reader may be referred to the current (Twenty-sixth) revised edition of "Inwood's Tables" (London: Crosby Lockwood & Son, 1900), where a similar Table is given, but extended to many more rates of interest-16 in all : namely, 1, 1, 2, 21, 21, 21, 3, 31, 4, 41, 5, 6, 7, 8, 9, and 10 per cent. GLOSSARY OF SOME OF THE TERMS USED. The definitions do not extend to terms used in quotations or in the Appendices. Amortization. The process by which provision is made for the expiration of value in an asset. Appreciation.-The increase in value of assets either through special or general causes. (Opposed to Depreciation, q. v.) Assets. Property of all kinds, possessed or in reversion. (Opposed to Liabilities, q. v.) Balance Sheet.-A complete summary of debit and credit balances as they appear in the accounts of the Ledger at a given date. Book Value. The monetary value of any asset according to the books of account. (Distinguished from Market Value, q. v.) Capital. The money or properties invested in the business. Assets applied to production of further wealth, or assets used as a source of income. Cash Book.—A commercial book recording the cash transactions. Commercial Books.-The books pertaining to the counting house, such as the Ledger, Journal, Cash Book, recording mercantile transactions, as distinguished from Factory Books treating of merchandise. Commercial Ledger.-The Mercantile Ledger (as distinguished from the Stores, Stock, and Plant Ledgers). Cost of Production. The total expenditure incurred in the production of a commodity. (Distinguished from Prime Cost, q. v.) Counting-House. The place in which the mercantile bookkeeping is conducted. Craft Register. The book recording the work done by, and the earnings of, each of the Craft. Credit Note. If received, an advice of indebtedness to the firm. If issued, an advice of indebtedness by the firm. Credit Note Register.--A commercial book in which the credit notes received are registered. Day Book.-A commercial book in which the sales of stock are recorded. Delivery Note.-A request to receive, and a description of, material tendered. Depreciation.-The falling off in the value of buildings, machinery, plant, and other assets. (Distinguished from Appreciation, q. v.) Dilapidations.-Those defects in a tenement which have arisen from neglect or misuse; and of use or age, if the efficiency of the structure is destroyed. Establishment Expenses-General Charges.—The general expenses which cannot be directly charged to any particular process or branch of a business. Estimate of Cost.-A calculation of the probable cost of a commodity. Factory. The place in which manufacturing operations are carried on. Factory Accounts.-The systematic registration for purposes of account of transactions appertaining to manufacture. Factory General Charges. The general expenses incurred in the factory which cannot be directly charged to any particular Order No. Factory General Charges Book.-The book in which the Factory General Charges are collected. Fixed Capital. That part of the capital of a firm which consists of the instruments of production of a more or less permanent character. Fixed Plant. The machinery and appurtenances required for the purpose of manufacture, and permanently located in one position in a factory. (Distinguished from Loose Plant and Tools, q. v.) Foreman. A superintendent of a floor, wing, or shop in a factory, or of a set of men. Fuel Summary Form.-A form summarising the various items of cost in the delivered price of fuel. General Charges.-(See ESTABLISHMENT EXPENSES.) General Stores Account. The account in the Commercial Ledger in which the receipts and issues of stores, as recorded in the Commercial Books, are collected. Going Concern.-A business the efficiency of which, for the purpose of profit, is maintained. Goodwill. The value pertaining to the clientèle, or interest in the business. |