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8 HASKINS & SELLS March The Accounting for Liberty Bonds. UNDER date of February 15 the Amer-ican Institute of Accountants sent out a letter suggesting to members and associates of the Institute a way of showing in a balance sheet the subscriptions to and liabilities in connection with Liberty Bonds. This step was taken by the Institute, presumably, as a conscious attempt at standardization, for which there is ample opportunity. The letter met the fate of most attempts at standardization, namely, to provoke discussion. Suggestions for improvement usually result in discussion and criticism. It is perhaps one of the most hopeful signs for the future of the accountancy profession that a suggestion of any kind brings forth extensive discussion. The substance of the material for discussion might be summed up in a statement of facts, as follows: The Warburton Company subscribed for United States Liberty Bonds in the amount of $50,000.00. Of this amount, $20,000.00 was for account of employes, who are to pay therefor by installments. The company borrowed $10,000.00 from a bank on an open, unsecured note. Employes paid to the company $10,000.00 as the first installment on their subscription. The Warburton Company paid to the Government, $30,- 000.00 on account of the subscription of $50,000.00. Suppose you were called upon to set up in a balance sheet the condition resulting from these transactions, how would you show it? The Institute recommends setting it up net, as follows: U. S. Liberty Bonds (including $20,- 000.00 subscribed by employes)..... .$50,000.00 Deduct — Unpaid instalments not due.. 20,000.00 $30,000.00 Deduct—Amount borrowed to invest in bonds 10,000.00 $20,000.00 Deduct—Payments by employes 10,000.00 $10,000.00 With this everyone does not agree. The letter of the Institute does not make clear whether the bank loan is, or is not, secured
Object Description
Title |
Accounting for Liberty Bonds |
Author |
Anonymous |
Subject | Liberty bonds -- Accounting |
Citation | Haskins & Sells Bulletin, Vol. 01, no. 01 (1918 March 15), p. 08-12 |
Date-Issued | 1918 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 1-1-p8a |