Farber, Arthur John

Jennings, Paul Charlton

English

eGrove (Univ. of Mississippi)

University of MississippieGroveHaskins and Sells Publications Deloitte Collection1922Tale of the tokenArthur John FarberPaul Charlton JenningsFollow this and additional works at: https://egrove.olemiss.edu/dl_hsPart of the Accounting Commons, and the Taxation CommonsThis Article is brought to you for free and open access by the Deloitte Collection at eGrove. It has been accepted for inclusion in Haskins and SellsPublications by an authorized administrator of eGrove. For more information, please contact egrove@olemiss.edu.Recommended CitationHaskins & Sells Bulletin, Vol. 05, no. 10 (1922 October 15), p. 74-7674 HASKINS & SELLS October The Tale of the Token By A . J . FARBER and P. C . JENNINGS, of the Pittsburgh Office ONE of the most recent developments in the operation of modern street railway systems has been the introduction of the token (metal check) to take the place of paper tickets and cash fares. This has resulted in a new phase in the auditing of the books and records of a street railway company. All new tokens, whether purchased from a manufacturer or made by the company, are received by the treasurer and a record made of the quantity thereof. Upon receipt they are counted and wrapped in packages by machines, the number in a package depending upon the rate of fare in effect, e.g., where the tickets are sold to passengers at the rate of three for 25c, they are wrapped in packages of thirty each, representing a fare value of $2.50 a package. The packages are then placed in canvas sacks, each sack containing a similar quantity of tokens, usually one hundred packages, which in the case of the rate mentioned would have a value of $250.00. The sacks are stored in the vaults of the treasury department and the tokens are then ready for use. All barn ticket offices and other ticket offices are furnished with a fixed supply of tokens from the stock of the treasurer, the amount furnished being governed by the needs for a period of two or more days. These advances are in the nature of im-prest funds for which the accounting de-partment holds receipts. Out of the im-prest token funds of the barn ticket offices, the conductors attached thereto are fur-nished with a fixed amount of tokens and their receipts taken therefor. As the conductors dispose of their tokens through sales to the public, they replenish their supply by purchasing for cash additional tokens from any ticket office which in turn replenishes its supply through pur-chases for cash from the treasury depart-ment. Sales are made by the treasury department in sack lots only and by the ticket offices in package lots only. In order to establish a control of tokens on hand a stock account is kept by the treasury department which reflects quan-tity of tokens only and not the value thereof. This account is charged with the number of tokens received from the manu-facturer, and with the number received by the treasury department through the daily fare collections. The account is credited with the number of tokens ad-vanced to the various ticket offices, and also with the number sold to the ticket offices to replenish their supply. There-fore, the stock account is a perpetual in-ventory of the number of tokens on hand in the treasury department. The accounting department also keeps a stock record which shows the location of all token funds, the quantities thereof, and the value at the rate of fare in effect. The stock account kept by the treasury de-partment should be in agreement with the Bulletin HASKINS & SELLS 75 account in the stock record of the ac-counting department. During the course of an audit it is essen-tial that the number of tokens in the custody of the treasurer be verified by count, although the value thereof is not reflected on the general books of account of the company. The reason for the verifi-cation is apparent when it is realized that, while the tokens in stock do not represent an asset of the company, they have a cash value to any individual who may possess them and they can be very easily dis-posed of. In order to make the count of any large amount of tokens with efficiency and dis-patch, there are required an in-charge accountant and at least two assistants as well as several of the company's employes. A balancing scale is also required. A sack of tokens is selected at random from the stock and is used as a master weight. The number of tokens in this sack (which should be a fixed number as stated before) is determined by count of the number of packages therein and test counts of the contents of a sufficient number of the packages. This master sack is placed on the scale and each counted sack should balance with it. As the company's em-ployes take the sacks from their location in the vault, place them on the scales, and pack them in another section of the vault, one assistant keeps tally of the number of sacks and the other assistant watches the scales. At intervals during the course of this work, sacks are opened and tests made of the contents therein, the number of such tests being at the dis-cretion of the in-charge accountant who is directing the entire procedure. The total number of tokens determined by this count in addition to the loose or unwrapped tokens (which are counted by hand), should be found to be in agreement with the number reflected by the stock account. The number of tokens in the hands of the public is reflected on the general books of the company in a "ticket float account" which should at all times reflect a credit balance and is shown as a deferred credit on the company's balance sheet. Each time that the treasurer sells tokens to the various ticket offices, the ticket float ac-count is credited with the amount of money received from such sale, and at the same time the stock account is credited with the number of tokens sold. The ticket float account is charged and revenue account is credited with amounts representing the value of all tokens received through the daily fare collections and, as stated before, the stock account is charged at the same time with the number of such tokens. At frequent intervals the stock account of the treasurer and also the token funds located at the ticket offices are audited by representatives of the accounting depart-ment. The audit of a ticket office token fund is similar to a verification of an im-prest cash fund, i.e., the ticket office must account for the total tokens advanced by producing tokens, conductors' receipts for tokens, or cash which has been received from sales of tokens. Since the tokens or metal tickets are now being used by a number of traction com-panies throughout the country, the daily fare receipts of any one company at times contain tokens issued by other companies, commonly known as "foreign tokens." This is due to the fact that many of the types of tokens in use are of a similar design and size and it is difficult for the conductor to detect them as they are dropped in the fare boxes. The revenue reflected by the collection of these tokens is not taken up on the records of the com-pany until they are redeemed by the issuing company. It is customary for the com-panies to exchange token for token and to redeem any excess of tokens over those ex-changed at the rate of fare of the issuing company. 76 HASKINS & SELLS October The traction companies issuing tokens must take every precaution to avoid dupli-cation or counterfeiting. The dies used for manufacturing the tokens are held by the traction company when not being used. The alloy from which they are made is either furnished by the manufacturer of the token or purchased by the traction com-pany and turned over to the manufacturer and from this a definite number of tokens must be produced which of course is pre-determined from the weight of the alloy. During the manufacture of the tokens the traction company has representa-tives present to supervise or check the work. 

Tale of the token

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Tale of the token

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