receivable and payable, are due. Larger estates require the use of investment record books, notes payable registers, etc. As none of these are in any way peculiar to estate accounting they will not be discussed in detail, although a few forms of additional records are described in § 697. The fiduciary who is handling an estate whose affairs are so complicated as to necessitate the use of such records as these, would do well either to make sure that he has a competent bookkeeper or to arrange for the services of public accountants along one of the lines suggested in § 559. REVIEW QUESTIONS 1. Is the choice of forms used in probate accounting of vital importance? What is the object of the books that are kept? 2. Why is double entry superior to single entry? 3. Describe the form of book recommended in this work. What are three of the many names given it? 4. Describe how the double-entry principle is utilized in the synoptic? 5. Give the three advantages of the synoptic. 6. What is the object of a realization account? How are six columns used to keep this account? How do they balance when correctly kept? To what is the realization account subsidiary? What are the advantages of the realization account? 7. How may assets not in inventory be shown in the realization account? 8. How should check stubs be kept? 9. Why should a diary be kept? What should be recorded in the diary? 10. What other records may be kept? CHAPTER LXIX TYPICAL ENTRIES FOR THE ADMINISTRATOR § 590. Purpose of Chapter In this chapter the transactions which most commonly occur in the handling of an administratorship are given, together with the accounting entries necessary to record them. It is improbable that all the conditions presented here would exist in any one case. On the other hand, to present all the transactions which might occur would be an interminable task. An effort has been made, however, to suggest the proper manner of recording other complications that may arise. Some of these transactions, applied to the estate of an intestate who died on October 15, 1919, are shown recorded on the suggested form of books of original entry (see Form 26), in order that the manner of keeping the books may be made as clear as possible. No effort is made to carry the books of an estate through from the demise to the final accounting. The entries given have, on the contrary, been restricted as nearly as possible to one of each kind in order not to overburden the text. In studying them it must be borne in mind that these are but scattered transactions, shown to make clear the use of the synoptic rather than to attempt to show the complete record of an estate. Each transaction shown is commented on in the text, and references are made to the earlier sections of this work which give explanations of the rules of law, principles of accounting, or customary practices involved in the transactions and the records of them. Cross-references are given to other sections dealing with related matters. In all that follows in reference to the handling of the ac counts of an estate, no suggestions will be made as to what payments may be made or when they may be made, as these points have been separately treated in connection with the examination of the law earlier in this work. The instructions given for the entry of various transactions on the books presuppose the proper authority from court or statute, and in this study of accounting methods it is not to be assumed that, because attention is not called to the necessity for obtaining the permission of the court to perform certain acts, there is no necessity for obtaining such permission. § 591. Entries Before Appraisal Theoretically the inventory should be the first thing to appear on the books. However, it will usually be necessary to enter various transactions before the appraisal is completed. Examples of this are the first seven entries presented herewith. (See Form 26.) Although the transactions shown are not presented in strict chronological order, these seven may be considered as a group by themselves. The first of these represents the receipt of a dividend on the day following the decedent's death. It has been explained (see § 575) that the Inventory account is to be debited with the appraised value of the corpus of the estate, and that it is to be credited with the appraised value of each inventoried asset turned into cash, distributed, or otherwise disposed of. If the inventory had been completed, all would be simple in the matter of this dividend. The entry would be simply: Cash Inventory $....... $........ The inventory not yet having been taken, however, the same entry will be made (Entry No. 1 on Form 26), but it becomes incumbent upon the administrator to see that the figure which he has credited to Inventory account is the figure at which the dividend is computed in the appraisal, as otherwise his Inventory account will not clear itself at the time he renders his account. Entry No. 5 shows similarly the receipt of proceeds of a life insurance policy. § 592. Funeral and Administration Expenses Entry No. 2 shows a typical payment of an administration expense. The law defining such expenses is set out in $110. A payment of funeral expenses is shown in Entry No. 7. Entry No. 19, for repairs to an automobile, is a proper charge against this account because the repairs were made with a view to increasing the price for which the car could be sold. These entries will serve to show also the manner in which all disbursements are handled on the books, the amount paid being entered as a credit to Cash and a debit to the account which is to be charged with the amount of the disbursement. It is wise to provide on the synoptic for refunds of overpayments on administration expenses. These are likely to be somewhat numerous. The personal representative may have paid rent in advance and, upon not needing the rented property the full period, may receive a refund. Such a transaction would be recorded as: Cash .... $...... Funeral and Administration Expenses. $........ To accommodate such entries the latter account on the synoptic is provided with two columns, the second of which is for the credit entries. § 593. Taking Over Decedent's Bank Account As soon as the administrator secures his letters testamentary he should present them at the decedent's bank and secure possession of the decedent's funds. The entry in this case is like the one described in § 591 above, in that the asset has not yet been inventoried, and the same principles will apply, the entry being (No. 3): Cash Inventory $........ $........ When it is possible to adopt the theoretically correct practice of entering the inventory first, this entry should follow immediately thereafter. If a separate cash book, journal, and ledger are used, and entries like the one described in §592 above are necessary before appraisal, it is customary to leave the first line on the debit side blank in order that the amount of cash on hand at the time of death may be entered as soon as it is determined by the inventory. In such cases the bookkeeper may elect to have the cash book show only the active or checking bank accounts so as to carry nothing but the funds available for current use. All inactive deposits, such as savings accounts, will in that event be represented on the ledger by separate accounts. In using the synoptic, the inactive bank accounts are carried in one pair of columns. The transfer of a savings account from the inventory is shown in Entry No. 4. § 594. Distribution of Cash and Other Assets If the estate funds are sufficient and there seems to be no doubt of the estate's solvency, the administrator may be willing to pay to the heirs reasonable advances on the final distribution. These payments are entered as follows (No. 6): Distribution of Cash... Cash .... $...... $... The law in reference to such payments has been set out in Chapter XVII. The administrator must remember to deduct the state inheritance taxes from the amounts which he can dis |