name and credit to accommodate the drawer, payee or holder. He is not bound to the party he accommodates, but he is bound to all other parties, just as though there had been a good consideration, otherwise it would not be an effectual loan of credit. The party accommodated is bound to take up the paper, or to provide the accommodation acceptor, maker or indorser with funds to do so, or to indemnify him for taking it up. 2. A corporation has no power to make or indorse commercial paper for the mere accommodation of another person or corporation, unless the power is expressly conferred by its charter or governing statute, but no such charters are known to have been granted. 3. Accommodation paper is good in the hands of an innocent purchaser for value. If a corporate officer or agent has apparent authority to make or indorse such paper, it will be good as against the corporation in the hands of a bona fide purchaser for value before maturity without notice that it is accommodation paper. There are circumstances under which such paper may be enforced against the corporation, although in the hands of persons chargeable with notice of the circumstances under which it is executed. 4. An innocent purchaser of accommodation paper is protected, if purchased for value without notice of its character. 5. No. 6. It is difficult to detect upon the face of the instrument. Verbal or written notice should be obtained if possible. 7. They have not. 8. It will not, without authority or ratification. 9. No; see question No. 1. 10. No, it is not. When such paper is issued, with the assent of all the partners, an innocent purchaser for value without notice will be protected. 11. It is universally conceded that the holder of an accommodation note, without restriction as to how it should be used, may transfer it, either in payment, or as collateral security, for an antecedent debt, and the maker will have no defence. 12. An accommodation indorser on a note given in renewal of a note on which he was also accommoda tion indorser, at its maturity, is not relieved of liability because of his insanity at the time of signing it, if the bank taking it in renewal had no notice of his insanity and he having been sane when the prior note was executed. 13. No. 14. Yes. Account Books. Questions. 1. How should the account books of an individual, firm or corporation be devised? 2. Where should account books be kept? 3. Would you recommend the use of Loose-leaf Ledgers? 4. What is your opinion of the "Card System" of keeping accounts? 5. How will Loose-leaf Ledgers and Card Systems stand in law, compared with the regular bound account books? Account Books. Answers. 1. All account books should be devised to meet the special requirements of the business. They should be made of first-class material, ruled in bright colors, to be easy on the eyes, and contain special columns for all important accounts to save as much posting as possible. When account books are so arranged, they will save time, work and money. 2. Account books should be kept in the safest place possible--the best is the cheapest. A fire and burglar-proof vault should be provided for all large concerns, banks, etc., where the books can be laid flat, instead of standing on edge as is necessary with a safe. When a safe is used, I would advise you to have the appartments made so the books can lay flat; they will last much longer. 3. Loose-leaf Ledgers are very convenient and save a great deal of time and expense. I recommend their use, where the business warrants a change, and when the accounts are running and numerous. 4. The Card System is almost invaluable for a great many purposes, in fact I do not see how it could be dispensed with. It can be used to great advantage in keeping the accounts of many concerns, where the accounts do not have many items. I devised a card system for a Building and Loan Association in 1896 having 8,000 accounts. It is operated with ease and accuracy. 5. This is my only objection to the Loose-leaf Ledgers and Card Systems. If called upon to produce accounts in Court, the regular bound account books are there and speak for themselves, but with Loose-leaf Ledgers and Card Systems, where they are removed and replaced, it is a question whether they will stand in Court. To alter or destroy an account or page in a bound book would at once look suspicious, but it would be an easy matter to alter whole accounts and pages by the other systems; their safety and legality will not be known until there is a Supreme Court decision on them. Accounts. Questions. 1. How should the account books of an individual, firm or corporation be devised and kept? 2. Have the Stockholders of a corporation the right to investigate the accounts of the company? 3. Has the Treasurer of a corporation the right to settle his own accounts? Accounts. Answers. 1. Account books should be devised to meet the special requirements of the business, so as to give the best and most detailed information with the least amount of labor and expense. In a large business, especially manufacturing, it is difficult to devise a system of accounting to produce accurate cost for the various articles manufactured, but it can be done to a nicety by those experienced in such work. ́All books should be kept by Double Entry. If a new business is started, or if the books of a going concern are not properly devised or kept, I would advise you to call D. A. Keister & Co., the well-known Public Accountants, of 88 Wall Street, New York City. They can devise a system for you that will not only produce all the detail information that may be required, but will save you time and money, and make it more difficult for dishonest employees to practice fraud and deception. 2. The stockholders have a right to investigate the accounts of the company, but it is customary for them to appoint an investigating committee, with power to employ expert assistance. For work of this character, of course, it is necessary to secure the services of experienced and reputable men. You better consult D. A. Keister & Co., Public Accountants and Auditors, 88 Wall Street, New York City. 3. No; the Treasurer of a corporation can not settle his own accounts. He has no authority, by virtue of his office, to pay to himself his own claim against the company until the claim has been approved and ordered paid by the proper officers. Accounting. 1. Do business men place sufficient value on good accounting? 2. How do business men, manufacturers and others lose by poor accounting systems? 3. How should the work in the counting room be divided? 4. How much help should be employed in the accounting department? 5. What have you found by your experience as an Auditor to be the most economical arrangement of the office force? 6. Is there an authentic American work on Accounting? 7. Do you favor the "Voucher System counting? " of Ac D. A. KEISTER & Co. PUBLIC ACCOUNTANTS AND AUDITORS. 88 WALL STREET, NEW YORK. Accounting. 1. The majority of them do not, they look upon it as an unproductive outlay, the result is that many of them do not only overwork and underpay their bookkeepers, but they turn a deaf ear to modern methods and frequently fail or are ruined by defalcations. Every business should have the very best and most accurate system that can be procured. It will be the cheapest in the end. 2. Unless a thorough accurate system of accounting is adopted, it will be next to impossible to ascertain where losses arise. A manufacturer must know the exact cost of each article manufactured, the business man and merchant must know by his accounts which goods are profitable, and which are not. 3. It would be difficult to outline the routine work of the counting room here, but I would suggest that each employee be assigned to his particular duties and be held strictly responsible for everything connected therewith. The work should be arranged so that one would not interfere with the other. Have a time for everything, and everything in its time, and require detailed daily reports from each department through the office manager. 4. Eight or nine hours work a day is enough for any man to do. The force should be sufficient to do the work in that time. The duties of a bookkeeper and clerk are usually under-estimated, and while it is often necessary to work nights, they should have sufficient help to keep the work up to date by working hard for eight or not more than nine hours a day. 5. The most economical arrangement is the one where the help is ample to do the work in reasonable hours; where the compensation is in proportion to ability, duties and responsibilities; where the responsibility is fixed; where the employees are under bond and where regular audits are made by a reputable firm of Auditors. 6. Keister's Corporation Accounting and Auditing is the highest work in the English language on Higher Accounting. It covers the entire field, has 537 pages, is bound in full leather and costs but $4.00 |