page_title: Edward P. Moxey
section_title: Analysis of General Ledger
hierarchical_section_title: Edward P. Moxey / Work / Analysis of General Ledger
caption_attribution_description: English: Analysis of General Ledger, 1919
context_page_description: Edward Preston Moxey, Jr. was an American accountant, and the first Professor of Accounting at the Wharton School of Finance and Commerce at the University of Pennsylvania. He is known for his early works on cost keeping in factories, which describe the elementary principles of cost accounting.
context_section_description: A system of accounting, according to Moxey, should go beyond the elementary presentation of facts to furnish information sufficient and accurate enough for the requirements of modern business. Some classes of expense are not of a temporary nature. The use of certain articles in production such as machinery extends over a series of years. It is not right to charge the original cost of such purchases to profit and loss in the period in which they are made, for they will figure in the manufacture of hundreds of subsequent lots of goods. 
  In his Principles of Factory Cost Keeping (1913) Moxey proposes a system, which is based on the following basic distinctions:
  Temporary and Permanent Expenditures : For cost accounting purposes, therefore, a first distinction considering expenditures only for the present must be made between expenditures for assets of a more permanent type generally known as fixed assets, and comprehended in the term "Plant" and those of a more or less temporary character, known as "Profit and Loss" items, or those comprehended in the general class of "Nominal Accounts."
  Classification of Merchandising Expenditures : Following this a more detailed classification becomes desirable. Taking a merchandising concern for the sake of illustration, we find that "Profit and Loss" expenditure is divided into two parts, the distinguishing feature being the difference between payments for that which is dealt in, classified under the heading "Merchandise," and payments for services and other items necessary to the proper conduct of the business, known as "General Expense."
  A further subdivision of "General Expense" must then be made to show the items which make up its total amount. Two subheadings, known respectively as "Trading Expense" and "Administrative Expense," are usually employed. The former covers the detailed expense accounts which go to make up the cost of distributing the goods, including salesmen's salaries and expenses, rent of the store in the case of a merchandising house, costs of advertising and of the delivery service; while the latter includes those accounts which show the cost of managing the financial and business affairs of the concern, including all administrative salaries and general office expense, such as, for example, office supplies.
  On the other hand, "Merchandise," being entirely too general in its character, is also subdivided. The first distinction is that made between purchases and sales. The sales may also be divided into classified sales accounts, while in the division of the purchases we find the first signs of detailed costs.
caption: Analysis of General Ledger, 1919
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