31.114 Special cash deposits. This account shall include the amount of cash on special deposit, other than in sinking and other special funds provided for elsewhere, to pay dividends, interest, and other debts, when such payments are due 1 year or less from the date of deposit; the amount of cash deposited to insure the performance of contracts to be performed within 1 year from date of the deposit; and other cash deposits of a special nature not provided for elsewhere. This account shall include the amount of cash deposited with trustees to be held until mortgaged property sold, destroyed, or otherwise disposed of is replaced, and also cash realized from the sale of the company's securities and deposited with trustees to be held until invested in physical property of the company or for disbursement when the purposes for which the securities were sold are accomplished. (Note also § 31.1–11.)*†

NOTE A: Cash on deposit in special accounts where the funds are available for the current requirements of the company shall be included in Account 113. NOTE B: This account shall not include any amounts representing securities owned.

NOTE C: Cash on special deposit to be held for more than 1 year from the date of deposit shall be included in Account 102.

31.115 Working funds. This account shall include amounts advanced to officers, employees, and others as working funds from which expenditures are to be made and accounted for. (Note also § 31.1-11.) *†

31.116 Temporary cash investments. This account shall include the book cost (note also §§ 31.1-11, 31.1-12) of securities acquired for the purpose of temporarily investing cash, such as time drafts receivable and time loans, bankers' acceptances, United States Treasury certificates, marketable securities, and other similar investments of a temporary character. Securities of affiliated companies included in this account shall be recorded in a subaccount hereunder.**

31.117:1 Notes receivable from affiliated companies. This account shall include the book cost (note § 31.1-12) of demand or time notes, bills and drafts receivable, or other similar evidences (except interest coupons) of money receivable from affiliated companies on demand or within a time not exceeding 1 year from date of issue. (Note also § 31.1–11.)*†

NOTE: Obligations of affiliated companies any part of which matures more than 1 year from date of issue and notes evidencing investment advances (note § 31.01-3 (q)) shall be included in Accounts 101: 1, 101: 2, 104, 116, 136, or 137, as appropriate.

31.117: 2 Other notes receivable. This account shall include the book cost (note § 31.1-12) not includible elsewhere, of all collectible obligations from nonaffiliated companies and individuals in the form of notes receivable and other similar evidences (except interest coupons) of money receivable on demand or within a time not exceeding 1 year from date of issue. (Note also § 31.1-11.)*†

NOTE: Obligations any part of which matures more than 1 year from date of issue, notes evidencing investment advances (note § 31.01-3 (q)) and notes issued by affiliated companies shall be included in Accounts 101: 1, 101: 2, 102, 104, 116, 117: 1, 136, or 137, as appropriate.

*For statutory citation, see note to § 31.01-1.

Page 283

31.118 Due from customers and agents. This account shall be subdivided as follows:

(a) Due from customers and agents. (1) This subaccount shall include amounts due from customers for services rendered or billed and from agents and collectors authorized to make collections from customers. (Note also § 31.1-11.) This subaccount shall be kept in such manner as will enable the company to make the following analysis:

(i) Amounts due from customers who are still receiving telephone

service.

(ii) Amounts due from customers whose telephone service has been discontinued and whose accounts are in process of collection.

(2) Collections in excess of amounts charged to this subaccount may be credited to and carried in this account until applied against charges for services rendered or until refunded.

(3) The amount of notes held as security for customers' accounts may be carried in this account pending collection.

(b) Reserve for uncollectible accounts.-Cr. (1) This subaccount shall be credited with such amounts as may be charged to Account 530, "Uncollectible operating revenues-Dr.," to provide for uncollectible accounts included in subaccount 118 (a). (Note also § 31.5-51.) There shall also be credited to this subaccount amounts collected which previously have been written off through charges to this subaccount and credits to subaccount 118 (a).

(2) If this reserve for uncollectible accounts is maintained, there shall be charged to it any amounts covered thereby which have been found to be impracticable of collection. If such reserve is not maintained, amounts included in subaccount 118 (a) which have been found to be uncollectible shall be charged to Account 530, “Uncollectible operating revenues-Dr.”*†

31.120:1 Accounts receivable from affiliated companies. (a) This account shall include amounts due from affiliated companies (note § 31.01-3 (d)) on all transactions that are subject to current settlement, except for sales of telephone service at regular rates. There shall be included herein accounts receivable arising from divisions of toll revenues. (Note also § 31.1-11.)

(b) In the balance-sheet statement there may be included in this account the net amount receivable from companies against each of which there is a net debit balance between this account and Account 159: 1, "Accounts payable to affiliated companies."*+

NOTE: If any items included in this account are not actually paid currently they shall be transferred to Account 101: 2.

31.120: 2 Other accounts receivable. (a) This account shall include all amounts currently due, other than those from affiliated companies, and not provided for in other accounts, such as those for traffic settlements, material and supplies, repairs to telephone plant, matured rents, and interest receivable under monthly settlements on short-term loans, advances, and open accounts. (Note also § 31.1-11.)

(b) In the balance-sheet statement there may be included in this account the net amount receivable from companies against each of

Page 284

*For statutory citation, see note to § 31.01–1.

which there is a net debit balance between this account and Account 159:2, "Other accounts payable."*+

31.121 Interest and dividends receivable. This account shall include the amount of interest accrued to the date of the balance-sheet on bonds, notes, and other commercial paper owned, on loans made, and the amount of dividends receivable on stocks owned. (Note also § 31.1-11.)*+

NOTE A: These accounts shall not include dividends or other returns on securities issued or assumed by the company and held by or for it, whether pledged as collateral, or held in its treasury, in special deposits, or in sinking and other funds.

NOTE B: Interest receivable under monthly settlements on short-term loans, advances, and open accounts, shall be included in Accounts 120:1 or 120:2, as appropriate.

31.122 Material and supplies. (a) This account shall include the cost of unapplied material and supplies held in stock, including plant supplies, tools, fuel, stationery, directory paper stock, and other supplies; and material and articles of the company in process of manufacture for supply stock.

(b) Transportation charges, so far as practicable, shall be included as a part of the cost of the particular material to which they relate. When not so includible, they shall be charged to Account 704, "Supply expense."

(c) So far as practicable, cash and other discounts on material shall be deducted in determining the cost of the particular material to which they relate or credited to the account to which the material is charged. When not so deductible, they shall be credited to Account 704, "Supply expense."

(d) Material recovered in connection with construction, maintenance, or retirement of property shall be charged to this account as follows (note § 31.01-3 (bb)):

(1) Reusable material shall be included in this account at original cost (note 31.01-3 (x)), estimated if not known. (Note also § 31.2-25 (d).). The cost of repairing such material shall be charged to the appropriate account in operating expenses.

(2) Scrap and nonusable material included in this account shall be carried at the estimated amount which will be received therefor. The difference between the amounts realized for scrap and nonusable material sold and the amounts at which it is carried in this account, so far as practicable, shall be adjusted in the accounts credited when the material was taken up in this account.*†

NOTE A: This account shall not include amounts representing the cost of material or articles, title to which is not vested in the company.

NOTE B: Interest paid on material bills, the payments of which are delayed, shall be charged to Account 336.

NOTE C: Inventories of material and supplies shall be taken during each calendar year and the necessary adjustment to bring this account into harmony with the actual inventory shall be made. In effecting this adjustment, differences which may practically be assigned to important classes of material shall be equitably adjusted among the accounts to which the classes of material are ordinarily chargeable. Other differences shall be equitably apportioned among the primary accounts to which material has been charged since the last inventory or included in Account 704. The company is permitted to equalize

*For statutory citation, see note to § 31.01-1.

Page 285

over the period between inventories, through debits or credits to Account 704 and concurrent credits or debits to Account 122, the estimated amount, based on the company's past experience, of the overage or shortage which will occur at the subsequent inventory. Determined differences between the amount of the provision thus made and the actual inventory overage or shortage shall be cleared as provided for in the second and third sentences of this note.

NOTE D: If, for convenience in accounting and economy in handling material and supplies for nontelephone operations, their cost is included in this account, the company's records shall be maintained so that the cost of such material and supplies so carried can be determined.

31.123 Other current assets. This account shall include the amount of all current assets which are not includible in Accounts 113 to 122, inclusive, such as unmatured rents receivable. (Note also § 31.1-11.)*+

OTHER ASSETS

31.126 Subscriptions to capital stock. (a) This account shall include the balance owing from subscribers upon legally enforceable subscriptions to capital stock.

(b) The purchase price shall be debited to this account at the time the subscription is received. Concurrently there shall be credited to Account 153: 1, "Capital stock subscribed," the book amount (note § 31.01-3 (e)) of the stock subscribed. The difference between these amounts shall be debited or credited, as appropriate, to Account 134: 1, "Discount on capital stock," or Account 152, "Premium on capital stock." (Note also § 31.01-3 (n), (z).)

(c) Payments received from subscribers shall be credited to this account.**

NOTE: The records supporting the entries to this account shall be kept so that the company can furnish the name and address of each subscriber, the amount and kind of capital stock subscribed, the date of subscription, the date that each payment is due and the date that each is paid, the nature of each payment (whether cash or other consideration), and any other information that is necessary to make the history of the subscription complete.

31.127 Subscriptions to funded debt. (a) This account shall include the balance owing from subscribers upon legally enforceable subscriptions to funded debt.

(b) The purchase price shall be debited to this account at the time the subscription is received. Concurrently there shall be credited to Account 154: 2, "Funded debt subscribed," the face amount (note § 31.01-3 (0)) of the funded debt subscribed. The difference between these amounts shall be debited or credited, as appropriate, to Account 135, "Discount on long-term debt," or Account 168, "Premium on long-term debt." (Note also § 31.01-3 (n), (z).)

(c) Payments received from subscribers shall be credited to this account.*

NOTE: The records supporting the entries to this account shall be kept so that the company can furnish the name and address of each subscriber, the amount and kind of funded debt subscribed, the date of subscription, the date that each payment is due and the date that each is paid, the nature of each payment (whether cash or other consideration), and any other information that is necessary to make the history of the subscription complete.

Page 286

*For statutory citation, see note to § 31.01-1.

PREPAID ACCOUNTS AND DEFERRED CHARGES

31.129 Prepaid rents. This account shall include the amounts of rents paid in advance, except minor amounts which may be charged direct to the final accounts. As the term expires for which the rents are paid, this account shall be credited at monthly intervals and the appropriate account charged. (Note also §§ 31.2-22 (b), 31.2-23 (a), and Accounts 303, 315, 671, and the clearing accounts.) *f 31.130 Prepaid taxes. This account shall include the amounts of taxes paid in advance, except minor amounts which may be charged direct to the final accounts. As the term expires for which the taxes are paid, this account shall be credited at monthly intervals and the appropriate account charged. (Note also § 31.2-22 (b) (8) and Accounts 305 and 322.) *†

31.131 Prepaid insurance. This account shall include the amount of insurance premiums paid in advance, except premiums chargeable to the telephone plant accounts and minor amounts which may be charged direct to the final accounts. As the term expires for which the premiums are paid, this account shall be credited at monthly intervals and the appropriate account charged.*†

31.132 Prepaid directory expenses. This account shall include the cost of preparing, printing, binding, and delivering directories and the cost of soliciting advertisements for directories, except minor amounts which may be charged direct to Account 649, "Directory expenses." Amounts carried in this account shall be cleared to Account 649 by monthly charges of such amounts as represent the portion of the expense that is applicable to the respective months. (Note also Account 649.)*+

31.133 Other prepayments. This account shall include prepayments other than those includible in Accounts 129 to 132, inclusive, except minor amounts which may be charged direct to the final accounts. As the term expires for which the payments apply, this account shall be credited at monthly intervals and the appropriate account charged.*+

31.134:1 Discount on capital stock. This account shall include the total of debit balances in the discount and premium accounts, for all classes of capital stock having debit balances in these accounts. (Note § 31.1-14.)*†

31.134: 2 Capital stock expense. (a) This account shall include all commissions and expenses incurred in connection with the issuance, sale, or resale of capital stock, including additional capital stock of a certain class or series as well as first issues. (Note §§ 31.01–3 (ee), 31.1-13 (b).)

(b) When any issue of capital stock, or a portion thereof, is reacquired, there shall be credited to this account and charged to Account 413, "Miscellaneous debits to surplus," the amount herein with respect to such stock.

(c) The company may amortize or write off the balance carried in this account by credits hereto and concurrent charges to Account 413, "Miscellaneous debits to surplus."

*For statutory citation, see note to § 31.01-1.

Page 287