Similarly, Merchandise, with a summary inventory, may be closed with
the net profit carried to Loss and Gain and the inventory left as a balance
for the new year, thus:

The posting of this item gives the account a debit balance for the new
year of $20,000 as on page 46.

It would be possible, of course, to split these entries and enter only the
inventories or the accrued items in this way, crediting or debiting them
by simple journal entries. Then the balance of net profit or loss could be
transferred to Loss and Gain by the other method, as described in Chap-
ter V.

Accounts having no inventory or accrued items attached may be closed
into Loss and Gain by a simple debit or credit on the journal to transfer
the balance.

In the case of Real Estate and Plant, if, as may happen, the bookkeeper
wishes to keep an account to represent depreciation year by year, so that
the amount can be found at a glance without picking it out from the va-
rious items of the real estate and plant account, two journal entries may
be used. The first records the depreciation.

The second transfers the depreciation to Loss and Gain. When that has
been done, Depreciation is closed, Real Estate and Plant shows the proper
balance, and the loss is correctly reported; and the entries to Depreciation
show in convenient form just what has been charged on that account each
year. As many depreciation accounts may be distinguished as one may
wish.

Finally, Loss and Gain is closed by journal entries which carry the bal-
ance to the proprietors or to dividends, or to surplus, or what not.

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