Concerning Three Mischievous Accounts.

Abstract This article discusses the use of accounting in daily life. In its simplest form, the need for clearing an account is most commonly encountered where the accounting entity has two or more bank accounts, and there is a remittance from one to the other. A much more interesting and far-reaching application of the clearing account occurs where there are transfers of assets or services between two units of the same business. By its very nature the asset most amenable to overage or shortage is cash. But other vulnerable assets are accounts receivable, inventories, and even certain equipment such as small tools. Presumably today's accounting student, about to enter the world of business or government, is long since the master of these sometimes mischievous accounts. If not, he should be. Although these accounts occupy but a small nook in the spacious firmament of accounting, they are often of great practical value, if not indispensable. And, despite their minor rank, they illustrate that, like the chemical elements, they nevertheless have their own peculiar functions, structures, limits, and idiosyncrasies. They are not just "data."