The West Coast Accounting System.

Progress, Volume XV, Issue 1, 1 September 1919, Page 602

The West Coast Accounting System.

. The West Coast Lumbermen’s Association uniform cost accounting system which has been In course of preparation for three or four months, is completed and the prospectus is being distributed among the mills. The prospectus covers 225 pages of a neatly bound book and includes 24 full-page diagrams showing the type of blank forms. It contains instructions for the use of every form; it provides for the entry of every .possible form of transaction. .' The system sets up logging as a distinct operation. Each mill, whether it cuts its own logs or buys them in the open market, is expected to handle the logging end of its operation as a separate unit, capable of earning an independent profit. Thus it will be possible to segregate the profits and losses between the logging end of the business and the milling end. Underweight returns are treated separately from the returns on f.o.b. sales. Shipping is carried as an item of cost independent of manufacturing. In-

terest and discount are to be changed or credited to capital account rather than to the operating account. The system provides for the following major classification of accounts: Assets, liabilities, capital, revenue, purchases, controls, which latter item includes labour, supplies, expenses and repairs. Use of this system will enable the average mill office to dispense with a lot of unnecessary books and bookkeeping; even the largest operation can handle all its accounts in two or three books. With this system in general use the members of the West Coast Lumbermen’s Association will know exactly what their costs are, per unit, and can regulate their merchandising so that it will not be possible to sell below cost of production, and, in case of an upward swing on a rising market, so that lumber will not be the last of the staple commodities to advance. It will be easy, under this system, for any operation to determine its correct profits for, the purpose of making income tax and excess profits tax payments. As all forms to be used in operating the system will be uniform for all the mills, the association proposes to lay in a store of blank supplies and to furnish them to the mills.