The method of paying taxes varies so greatly that no general rules can be given. In all cases, however, some form of tax receipt is obtained. Sometimes such a receipt bears full description of the lands; sometimes, if the list is a long one, the collector attaches the list itself to the receipt form. When the official receipt reaches the owner, it is immediately carefully checked against the tax list in order to see that no improper changes or omissions have been made, for any such errors can best be corrected immediately. From these original tax receipts, entries are made in the property ledgers showing the number of each receipt, the amount of the assessment, and the amount of the tax. It is found convenient and useful in practice to enter the assessed value, for in some cases (for instance, wild lands) these assessments are raised, and this fact may escape the owner's attention, until he looks at his tax record in the property ledger, when the increase at once becomes apparent.

Tax receipts should be carefully preserved in files of sufficient size to receive them without folding, and enable quick reference to be made to them. The receipts for each county are placed together, and the counties are arranged in alphabetical order. It may be that some of the property owned lies in small towns in various counties, and that these towns also assess city taxes. In such cases, this property should be placed at the end of the list for the county in which it is situated; for if it should be placed among the regular lists, there is a possibility of the receipt being overlooked.

It is a good practice to make a note in red ink on each ledger sheet on which property subject to city taxes is entered, similar to the following: "Pay City Taxes"; and also to enter the dates upon which these taxes should be paid, as these do not coincide with the dates of payment for county taxes. The method followed for the payment of the ordinary city taxes is exactly similar to that used for the county taxes.

Probably the simplest way to enter tax payments on the books is to charge to Taxes account each check as it is given, and when the final tax receipt is received from the collector, to pick out from it all those properties upon which taxes have been paid which are covered by time sales and which are payable by the purchasers. A list of these is made, and a journal entry is put through the books in the following form:

Contracts ..........................

$......

To Taxes ............................

$......

For the following taxes for the year......

Contract No..... Name ..............

Amount......

The total of this is charged to the Contracts account in the general ledger, and the various items to the individual accounts in the sub-ledger. After crediting the Tax account with the above entries, the net balance is carried each year direct to Profit and Loss, the reason for this being discussed in Section 68. In the event of taxes having been paid in advance, it may be proper to carry all such amounts as an asset in the manner customary in connection with prepaid insurance.