/^/v^~~~~1 7 /1 ^., //p1 /~~~~~~~~~~~~~~~~~~~~~-/ * ^ //~ )^ ^ /' Y ^/^ ^( -t~ /0 4 a BRYANT AND STRATTON'S COMMON SCHOOL BOOK-KEEPING; EMBRACING SINGLE AND DOUBLE ENTRY. CONTAINING SIXTEEN COMPLETE SETS OF BOOKS. WITH AMPLE EXERCISES AND ILLUSTRATIONS. FOIR PIIM:ARY SCI-IOOLS A.IND ACAD_ EM:IES. BY H. B. BRYANT, AND I. D. STRATTON, PBOPRIETORS OF "TIIE NATIONAL CIIAIN OF MEItCANTILE COLLIGES," LOCATED IN NEW YORK, PHILADELPIIA, ALBANY, BUFFALO, CLEVELAND, DETROIT, CHICAGO, AND ST. LOUIS. AND S. S. PACKARD, RESIDENT PRINCIPAL OF THE NEW YORK CITY MERCANTILE COLLEGO. NEW YORK: IVISON, PHINNEY, BLAKEMAN & CO., 48 & 50 WALKER ST. CHICAGO: S. C. GRIGGS & CO., 39 & 41 LAKE ST. 1864. Entered, according to Act of Congress, in the year 1861, by BRYANT, STRATTON & PACKARD, In the Clerk's Office of the District Court of the United States for the Southern District of New York. ELECTROTYPED BY SMITH & MODOUGAL, 82 & 84 Beekman st. PRE FACE. THAT there is a demand for a primary work on Book-keeping, which, while it is specially adapted to the comprehension and wants of a younger class of students at our public and private schools, shall seek to enforce, in a philosophical manner, the abstract theories of the science, is assumed by the authors of this treatise, not solely as the basis of an apology for producing a new book, but as the result of careful inquiry among teachers and educationalists, not less than a faithful survey of the field of literature compassing this end. Experience has often proven that less tact and labor are necessary in discovering a want than in supplying it, and the present effort whether or not the public may pronounce it successful, is made in full view of this fact. To state an abstract proposition, which the unerring testimony of figures will render impregnable is no difficult matter; but to give vital force to such a statement in clear and satisfactory analyses, whose sequences shall take a practical hold of minds not schooled in the processes of reasoning, is an undertaking which may well cause the conscientious author to pause upon the threshold of his well-meant endeavor. There are minds so constituted as to be able to grasp intuitively, and with unerring certainty, the grander truths of a mathematical problem, discarding alike the minor points of reasoning and illustration, and the pretentious "rules" which, though too often but diluted axioms, are kindly intended to aid the faltering steps of the less selfreliant; but these are the exceptions and not the rule;' and hence, experience in teaching has shown us that in the majority of cases, the bare statement of a principle, however fundamental and vital, cannot be alone relied upon for the thorough work of instruction. The labor of a teacher is necessarily one of endless variety and repetition. "Line upon line, and precept upon precept" is the motto of 1'3 profession and the signet of his success. While it is not the privilege of an author to know, by actual contact, the individual wants of those whom he aims to instruct, he must, nevertheless be possessed of a general knowledge of these wants, and address himself conscientiously to the task of supplying them. The authors of this treatise claim for it the distinctive merit of thoroughness, both in the statement and elucidation of principles. In its preparation, two points were assumed: first, that the class of students who would gather instruction from its pages were already learned in the idioms of their own language, no less than in 3 PREFACE. the fundamental rules of Arithmetic; and second, that the teachers who would adopt it as a text book, would make themselves familiar with the general scope of its teachings, no less than the details by which its prime theories are enforced. In order that a text book should accomplish any certain result, there should exist a perfect understanding between the author and the teacher, each of which has his own peculiar sphere of labor into which the other cannot enter. The author deals in general principles and their most palpable applications, without being able to anticipate the particular and varied wants of the student, or to supply those wants, even if he knew them. The teacher on the other hand, is the living exponent of the dead letters and forms which, to unpractised eyes are surrounded with a mazy mystery which can be dispelled only by the human voice. His is the sacred office of an interpreter, the duties of which demand of him not only a thorough appreciation of the thought interpreted, but an intimate knowledge of the bearing and capacity of the mind to which he discloses the hidden lore. In the multiplicity of exercises given, the teacher will find material for an almost indefinite variety of illustrations, and it should be his special care that the student be not permitted to pass from one set to another without fully mastering the subject, both in its general and special application. The sets are short and definite in their purpose, the object being to keep con. stantly in view the result of the student's labor; for, while it is true that in no way can the science of Accounts be so quickly and thoroughly enforced as in showing at once the result of each separate transaction, as regards both the persons and causes affected, it is no less so that the fundamental theory of the science can best be made apparent by frequently exhibiting the general result of all the transactions. The prominence which is given to Single Entry will, we trust, satisfy the public that we are not prepared to enter into the popular cry of authors and teachers that no system of Accounts is worthy of thought that does not fully carry out the test of equal debits and credits; for while we are free to express our decided preference for Double Entry, we cannot, either in justice to our own convictions, or the prejudices of the public, ignore the points of excellence, or fail to suggest such improvements as are deemed important to a system which will be used, to a greater or less extent, to the end of time. In short, it has been the earnest aim of the authors to produce a book which, though its external appearance would not disgrace the shelves of the Bookseller, its internal merits will not permit it to remain there. It is a book designed for use, and as such is respectfully submitted. BRYANT, STRATTON & PACKARD. IS COOPER INSTITUTE, NEW YOIKE, July 1, 1861. 4 CONTENTS. PART I.-SINGLE ENTRY. PAGES. ABBREVIATIONS AND CHARACTERS,... 7 PLAN OF THE WORK,.........8 INTRODUCTION TO PART I...... 11-17 QUESTIONS FOR REVIEW,........ 13 SET I.-Initiatory-Showing the use of the Books. Remarks.... 20 Day Book.2..... 222 Ledger...... 23 —25 Exercises for the Learner and Questions for Review.. 2 SET II. —Retail Merchandise. (Prosperous.) Remarks........ 2 Day Book...... 29 —35 Index to Ledger......... 36 Ledger....... 37 —10 Cash Books...... 41 -1 Statement... 45 Examples for Practice....... 46 Exerci*s for the Learner (Second Series.)... 47, 48 Questions for Review..... 48 SET III. —Wholesale Dry Goods. (Adverse.) Remarks..... 50 Day Book........ 51-54 Index to Ledger....... 55 Ledger...... 56-59 Sales Book......... 60-63 Cash Book...... 64, 65 Bill Book......... 66 Statement.... 67 Examples for Practice... 68 Exercises for the Learner (Third Series.)... 69, 70 SET IV. —Cabinet Ware and Furniture. (Prosperous.) Remarks.......... 2, 13 Day Book....... 4-77 Sales Book........ 8- 3 Ledger........ 84-7 Cash Book... 88, 9S Time Book......... 90 Statement....... 91 Examples for Practice..... 92 Exercises for the Learner (Fourth Series.).. 93-95 Questions for Review..... 96 5 CONTENTS. PART II.-DOUBLE ENTRY. PAGES. INTRODUCTION TO PART II.. 99-102 THE SCIENCE OF ACCOUNTS. Theory of the Ledger... 103, 104 Debits and Credits....... 105 Principles.... 106 Questions for Review....... 107 SET I.-Produce Business. (Initiatory.) Remarks.... 110 Day Book....111, 112 Journal.....113-115 Ledger.... 116-118 General Statement... 119-121 Examples for Practice... 122, 123 Exercises for the Learner. (First Series.). 124, 125 SET II.-Grocery Business. (Prosperous.) Remarks...... 128 Day Book.-.......129 —132 Journal...... 133-135 Ledger...... 136-140 Balance Sheet...... 141 Cl1sing the Ledger...... 142-147 Description of Balance Sheet..... 147, 148 Examples for Practice...... 149 Exercises for the Learner. (Second Series.)... 150, 151 Questions for Review..... 152 SET III.-Wholesale Dry Goods. (Adverse.) Remarks...... 154 Journal Day Book..... 155-161 Ledger...... 162-167 Statement..........168, 169 Examples for Practice and Questions for Review.. 170 SET IV.- Gentlemen's Furnishing Business. (Prosperous.) Remarks. 172 Journal...... 173 Cash Book..........174, 175 Sales Book.... 176, 177 Ledger......... 178-181 Exercises for the Learner. (Fourth Series.).. 181, 182 PRACTICAL HINTS. Order and Neatness.......183, 184 Proficiency in Mathematics... 184, 185 To detect Errors in Trial Balance..... 185-187 Resources and Liabilities....... 187, 188 Exchange......... 188-192 Questions for Review....192 6 ABBREVIATIONS AND CHARACTERS USED IN THIS WORK. ABBREVIATIONS. A E M Ac't.... Account. ea.....Each. M~ar.....March. Am't... Amount.. E....ErrorsExcepted. Mdse.... Merchandise. Ans.....Answer. Emb'd... Embroidered. Mo..... Month. Apr.....April. Ex..... Example. Mgy.....Mahogany. Ass't'd...Assorted. Exch....Exchange. N Aug.....August. Exp.....Expenses. No. Number. B F Nov.....November. av..... Favor. O Bal.....Balance. Bal......Bill Bo. Feb....February. Oct.....October. Bs.....BBarrels. Fig'd.....Figured. 0. I. B.. Outward Invoice Bols......Folio. Book. B. Pay..Bills Payable. For'... Forward. B. Rec... Bills Receivable...... Freiht P Blk. Black. p.......Page. Bo't....Bought. G Pay't. Payment. Bro't... Brought. Gal. Gallon. P. C. B.Petty Cash -Book B. WV...Black Walnut. Pd.....Paid. H Pkg.....Package. C Mihd....Hogshead. Pr.....Pair. 1.....Capital. pr., per.. By. C. B Cashp Book.. Capil. I.Prem... Premium. C. B....Cash Book. p pr By. o...... Company. Co.... Company. Ins.....B. Invoice Book. R Con... Commission. Ins....nsan. Rec'd... Received. Const..... Consignment. Inst..... Instant.Rosewood Cr.Credito. at..... Interest. Rosewood. Inv... Invoice. S D Inv't....Inventory. S. B....Sales Book. D iSept.....Septembert. eptmber..Dec...December. dJ S p. Shipment Ship' t... Shipment. Dft.....Draft. Jan.. January. Sands... Sundries. do.... The same. doz......Dozen. L Y Dr......Debtor. lbs......Pounds. Yds.....Yards. d's......Days. L. F.. Ledger Folio. Yr....Year. CHA RACTERS..At. At.~.. Pound Sterling. x.. Sign of Multiplication...Account.... Shilling. =..Sign of Equality...Per Cent. [/..Check Mark. 11..One and one fourth. $..Dollars. +..Sign of Addition. 1.. One and one half.... Cents. -.. Sign of Subtraction. 1.. One and three fourths. 7 PLAN OF THE WORK. THE course of instruction is synthetical, commencing at the foundation and working upward, making each principle and illustration the opening wedge to higher developments of reason and application, and enforcing at every stage, the practical bearings of the required labor. The Book is divided into two parts, Part I being devoted to Single Entry, and Part II to Double Entry. Each part comprises eight distinct Sets of Books, four of which are written out in full, and four given in the form of memoranda for the student to arrange after the models given. The first Set in Part I is intended solely to show the use of the principal books, Day Book and Ledger. Set II begins to deal in results. Set III commences with a capital, representing a General Merchandise business, shows the use of the necessary auxiliary books, and enforces the theory of loss and gain by comparing the capital at commencing with that at closing. Set IV represents a Furniture business, introducing the necessary principal and auxiliary books. The peculiar feature of this set is the admitting of a new partner, and continuing the business in the same books. Set. I, Part II, is purely initiatory, introduced for the purpose of enforcing the fundamental principles of the science. Set II continues the business of Set I, but enlarges it, and gives a wider scope of transactions, and more fully enforcing the theory and processes of producing results. This set is given in colors, as affording a more exact model for imitation. Set III contains the same transactions as Set III, Part I, and is presented for the purpose of showing the exact differences between Single and Double Entry. Set IV is a practical set, using all the necessary books of original entry as principal books; posting from them to the Ledger, dispensing with the Journal except for such entries as are not recorded in the other books. This set exhibits, in the most decided manner, the economy and symmetry of Double Entry. The intermediate "Exercises for the Learner," and "Examples for Practice," are relied upon to make the theory and practice of the different sets effective. The " Practical Hints," at the close, embrace suggestions which should not be overlooked. 8 PART 1. SINGLE ENTRY. PART I. SINGLE ENTRY. INTRODUCTION.'IN estimating the true basis of any science, it is well, if possible, to follow the line of its history, and become familiar with the order and processes of its development. 2This is especially true of the. science of Book-keeping, for although it is purely a branch of mathematics, and as such fully entitled to the favor and consideration of scientific men, yet at no period of its history has it ranked in the estimation of scholars, with the more complex and abstract sciences; 3which fact is owing, mainly, to a misconception or under appreciation of its dignity and importance as connected with the actual duties of life. It is lamentably true that men will grow enthusiastic over the solution of a problem in Euclid, or the effect of a combination of movements upon a chess-board, who are ignorant of the first principles of this the most beautiful and practical of sciences; and are content to pass through life, receiving and appropriating the reputation belonging to men of science and erudition, while they are consciously and persistently unable to decide the simplest question in partnership settlements, or to appreciate the well-established theory of debits and credits in any of its practical applications or philosophical abstractions. It is difficult to account for this strange inconsistency except upon the ground that Book-keeping is apractical science, and as such is suggestive of rude contact with actual business life. It has too much of " the smell of the shop," and mixes too promiscuously with unpoetic bales, boxes, and barrels. It is, doubtless, this restricted view of the science which, more than aught else, has deprived the world of sufficient data from which to compile its history, and left 11 INTRODUCTION. to the imagination and logical inference what had else been a connected series of recorded facts. Necessity, it is said, is the mother of invention; and as all science is the immediate result no less of invention than investigation, it may with truth be said that science is the offspring of necessity. That the science of Book-keeping is essentially so will be apparent in the commonest application of its principles. 4The very condition of life is want, and the plans and purposes of life aim at the supplying of want. 5 This necessity of our being begets industry and frugality, and lays the foundation of all real progress in arts and civilization. 6To supply the necessities of life the earth, through careful and patient toil, is made to yield her abundance, and the various channels of human enterprise and skill are laid under perpetual contribution. The wants of man are so numerous, and the means, of supplying them so various, that a system of mutual dependence and reciprocal labor becomes not only economical, but necessary; and thus, from the very first enforcement of the divine law, "In the sweat of thy face shalt thou eat bread," has there grown up a division and classifcation of labor and wealth. The tiller of the soil,. whose products supply the necessities of hunger; the manufacturer of fabrics, which are to clothe the body; tlhe artificer, whose cunning workmanship gratifies the more refined wiants and tastes; the man of science, who supplies food for the mind; the spiritual teacher, who ministers to the higher development of soul faculties, and the common laborer, who lifts from our shoulders the drudgery of baser toil, are each dependent upon all the others for the sum of material and intellectual comforts which minister to their individual wants; 9 and a mutual exchange of these comforts constitutes the foundation principle and impulse of that grand system of economy which we call BUSINESS.'To facilitate these exchanges it has been found necessary to establish some regular standard of value by which the comparative worth of commodities may be adjusted. I This standard is usually represented by certain precious metals, usually gold and silver, which also serve as a medium in effecting the exchanges. In all civilized countries this metal is divided into convenient particles, and stamped with its appraised value, and is used, either really, or by implication, in all commercial dealings. 2 The particular necessity of Book-keeping is to preserve a record 12 INTRODUCTION. of such exchanges as would otherwise be trusted to memory; although a thorough application of the science embraces other most important results. Its more simple and restricted use may be easily shown. Suppose, for example, that John Smith is a farmer, and Thomas Jones a manufacturer; that John raises as much food on his farm as is necessary to supply his own wants and those of his neighbor, while Thomas makes clothing sufficient for the demands of both. It is now the easiest thing in the world for both John and Thomas to have food and clothing, simply by exchanging with each other their surplus products.' An exchange of this kind would possibly need no record; and were this the extent to which commerce had been carried, it is scarcely probable that obstinate brains would have been puzzled with the dry formulas of Book-keeping. But, suppose, further, that Thomas should happen to be in immediate want of some of his neighbor's surplus food, without the ability, at the time, to render an equivalent in his own products. IHe says to John, "I want food, and cannot pay for it now, but if you will confide in my honor, I will surely return you an equivalent when I have completed.work now in progress." The conditions being satisfactory, thefood is conveyed fiom John to Thomas, and the promise from Thomas to John. If John is blessed with a faithful memory he may be able to retain the facts connected with this transaction, and thus constantly bear in mind that he owns a certain quantity of clothing, which his neighbor is to bring him at a stated time. 4 But suppose he is not willing to trust to his own memory, nor to that of his neighbor, but desires something tangible which shall at least represent this prospective property-a record which will not fade with the memory, but will stand for the benefit of whom it may concern, even in the absence of those having a personal knowledge of the facts. The person relied upon to fulfill this promise is Thomas Jones, and 15the most natural form of record would be to write his name in a book kept for that purpose, and state the fact underneath it, thus: THOMAS JONES Bought of JOHN SMITH, a quantity of food, valued at Ten Dollars, for which he agrees to pay a quantity of clothing of equal value, on [naming the date of payment.]' A record like the above would be intelligible as containing all the facts, and affording to John Smith a tangible evidence of prop13 INTRODUCTION. erty which he owns, but which is in the hands of another party; and if this single transaction comprised all of this nature it would scarcely be worth while to attempt a more concise or symmetrical record. 7 But as dealings of this kind may be very frequent, not only with Thomas Jones, but with other parties, it may be well to'ascertain if some more satisfactory and less cumbrous method may not be adopted. 8 The simple fact expressed in the foregoing record is that Thomas Jones owes John Smith ten dollars worth of clothing. 9 The only events which can vary this fact are, the payment of the debt, or a part of it, overpaying it, or adding to it by subsequent purchase without payment. 10There are, really, but two conditions, as pertaining to persons with whom we have dealings on credit, viz.: that of owing, and being owed.' These two conditions are exact counterparts, and so far as they are equal, will cancel each other. 2 It will, therefore, be easy to arrange these opposite facts under the names to which they pertain in such way as that not only the facts themselves, but their relative results, may be ascertained at a glance. For example: DR. THOMAS JONES. CR. Date. lIe owes us, Dolls. Cts. Date. We owe him. Dolls. Cts. Jan. 1 To Bbl. Flour.... 0 Jan. 15 By 4 yds. Cloth..... 10 Mar. 1 "10 Bush Wheat. 12 50 Apr. 1 "Cash 5 This form has been found by experience to be both compreLensive and practical. 3 It is called an account, and, as will be readily seen, 4is a statement of dealings with Thomas Jones. 25 On one side are arranged the separate amounts of his indebtedness to us, and on the other of our indebtedness to him. 26The difference or result will be a net amount owing either to us from Thomas Jones, or to Thomas Jones from us. In other words, if Thomas Jones owes us more than we owe him, the indebtedness is in our favor, and may be reckoned as a part of our property; while, if we owe him more than he owes us, the indebtedness is in his favor, and should be reckoned among our debts. The facts shown 14 INTRODUCTION. in the account given may be thus analyzed: 27 On the first of January Thomas Jones purchased of us I barrel of flour at $10; and on the 15th of January, sold us 4 yards of cloth for enough to cancel the debt. The amounts on the opposite sides of the account will now exactly balance each other, and the result is the same as though the exchange had been made at once. Again, on the first of March he purchased 10 bushels of wheat, for $12 50; and on the first of April pays us in cash $5. This leaves a deficiency in his account of the difference between $12 50 and $5; and we say that Thomas Jones owes us $7 50. We have thus a tangible record of property, which if left to memory might be forgotten, and we thus become losers. 28It will thus be seen that in all cases where exchanges are effected between parties, either of whom is allowed time to perform his part of the contract, some written record of the facts are necessary. 9 This written record constitutes the germ and sphere of BOOI-KEEPING. From the foregoing illustration it will appear that 30 an account has two sides, a 31 debtor and a creditor; that 3 upon the debtor side is shown what is owing to us, and 33upon the creditor side, what is owing by us; 84that when the debtor side is the larger, the difference will express an amount belonging to us, 35 and when the creditor side is the larger, the difference will express an amount which we owe. 36 In the former case the account would represent property or resources; 3 and in the latter, debt or liability. 8 In the earlier history of Book-keeping, doubtless this form, or something similar, was deemed sufficient for the purposes of trade, 39 it being absolutely necessary only to have some written evidence of such resources and liabilities as had no other tangible existence, and which it would be unsafe to trust entirely to memory. 40 It is evident, however, that in an extensive credit business, a book of consecutive record, giving a plain and simple account of the business as it progresses day by day, would be of essential service, and it is, therefore, the almost universal practice, particularly among merchants and tradesmen, to keep a 4 Day Book, in which are entered transactions as they occur. An example, showing the form of this book, and also that of the Ledger, with the transactions properly transferred, will be seen on the following page. 15 INTRODUCTION. DAY BOOK. NEW YORK, JANUARY 30, 1861. Jan. 30 JOHN SMITH, Dr. To 5 yds. Broadcloth........ $4 00 $20 10 do Cassinlere........ 1 50 15 80 do Black Dress Silk.@ 1 25 87 50 "25 do Flannel..........Ca 50 12 50 "10 do Figured Silk..... 1 50 15 100 Mar. 1 JOHN SMITIH, Cr. By Cash paid on account, 75 These entries, carried to the Ledger, which is the Book of Accounts, would appear thus: LEDGER. DR. JOHN SMITH. CR. Jan. 30 To Merchandise.... 100 Mar. I By Cash.....:...... 75 42The advantages of a Day Book are twofold: First, it affords a regular daily history of the business; and, next, by giving the particulars and details of each transaction in the Day Book, the amount alone may be carried to the Ledger, requiring thus less space, and' preserving a more symmetrical form of the Ledger accounts. 4 The Day Book and Ledger in Single Entry contain only such transactions as relate to persons. 44 All prudent men, however, will feel the importance of having a strict record kept of the receipts and payments of cash and other people's notes, and of the issue and redemption of their own notes. 5 This is done by means of books specially arranged for such purpose. The following are the most simple of these forms: 16 INTRODUCTION. CASH BOOK. Received. Paid. Jan. 1 Amount on hand........... $000 Received of James Monroe, on account................ 150 Paid Store Expenses, as per Expense Book............. 175 Lent John Thompson for one day..................... 500 Received of Jacob Schuyler for Bill of Mdse........... 75 " " Robert M. Hart "........... 18 75 Paid A. T. Stewart in full of account.................. 400 Received for petty sales, as per Cash Drawer........... 110 Balance on hand............ 2278 75 3353'75 3353 75 2 Amount brought down........ 2278 75 BILL BOOK. BILLS RECEIVABLE.. When Drawer or Drawee or Tim When Am When and How No. Draee o i Amount. Rec'd. Endorser. Maker. Date. Time. Due. disposed of. 1861 1860 1861 1861 1 Jan. 1 Robert Minturn, Jas. Cruikshank, Dec. 1 60 ds. Feb. 2 500 Feb. 2 Paid. 1861 2 "5 Charles Hawley, David Woods, Jan. 5 30 ds. eb. 00 Feb. 7 Paid. 3 Feb. 1 Abram Duryea, Duncan Phyfe, " 10 90 ds. Ap. 13 1500 4 "15 W.W. Granger, Ivison & Phinney, Feb.15 60 ds. Ap.17 300 BILLS PAYABLE. No.. Amount. When rad How Issued. Endorser. Maker. Due. Redeemed. 1861 1861 1 Jan. 12 Samuel Higgins, Ourselves, Jan.12 15 ds. Jan. 30 150 Jan. 30 Paid. 2 Mar. 1 Peter Cook, do Mar. 1 90 ds. June 2 750 3 John D. Hinde, do 60 ds. Apr. 5 300 These simple and suggestive forms comprise the books commonly used in Single Entry; and are, perhaps, sufficient for the most pressing demands of business record. It will be the aim of the instructions which follow in this part of the work, to present the subject of Book-keeping as expressed through the forms of Single Entry in as progressive a manner as possible; and with a view to prepare the mind of the student for the more perfect and beautiful science of Double Entry, which is unfolded in Part Second. 17 INTRODUCTION. QUESTIO.NS FOR REVIEW. 1. How can the true basis of any science be best estimated? 2. Why is this especially true of Book-keeping? 3. Why has Book-keeping not usually been ranked with abstract sciences? 4. What is the chief condition of life? 5. What does this necessity beget? 6. How are the necessities of life supplied? 7. What system grows out of the numerous wants of man? 8. Name some of the classes of men who are mutually dependent one upon the other? 9. What constitutes the foundation principle and impulse of business? 10. How are these exchanges facilitated? 11. How is the'standard of value represented? 12. What is the particular necessity of Book-keeping? 13. In the case cited between John Smith and Thomas Jones, where the food and clothing are simultaneously exchanged, is there any actual need of a written record? 14. In the case where the payment of the clothing is deferred, why is a written record necessary? 15. What is the most natural record of the indebtedness of Thomas Jones in the example given? 16. Would this record be intelligible? I. Why is a more symmetrical and concise record necessary? 18. What is the simple fact expressed in the foregoing record? 19. How may this fact be varied? 20. How many conditions are there pertaining to dealings with persons on credit? 21. How are these conditions as compared with each other? 22. How may these opposite facts be best arranged? 23. What is this form called? 24. How may it be defined? 25. What facts are arranged on either side of an account? 26. What is shown by the difference between the sides of an account? 27. Will you analyze the entries in Thomas Jones' account? 28. In cases where exchanges are effected involving time in their fulfilment, what is necessary? 29. What does this written record constitute? 30. How many sides has an account? 31. What are they called? 32. What is shown by the debtor side? 33. What by the creditor side? 34. If the debtor side be the larger, what will the difference express? 35. What, if the creditor side be the larger? 36. What will the account represent in the former case? 37. What, in the latter? 38. In the earlier history of Book-keeping what form of record was probably used? 39. Why was this form alone sufficient? 40. What other forms become necessary in an extensive credit business? 41. What book is usually kept by merchants and tradesmen? 42. What are the advantages of a Day Book? 43. What class of transactions do the Day Book and Ledger in Single Entry contain? 44. What other records will all prudent men keep? 45. How is this done? 18 SET I. (INITIATORY.) DAY BOOK AND LED G:ER. SHOWING SIMPLY THE USE OF THE BOOKS, WITHOUT EXHItGITING A GENERAL RESULT. REMARKS. IN the following set we have the simplest forms known in Bookkeeping, viz:'the Day Book and Ledger.'This set is designed to be purely initiatory, and is introduced mainly to exhibit the forms and character of these important books, which will be extensively used hereafter. It must be borne in mind that 3 the true purpose of Book-keeping is to preserve a sufficient record of resources and liabilities, to enable the proprietor at any time to ascertain the condition of his business. 4This purpose is only partially effected in the records which follow, but it is deemed important that this class of property and debts should be clearly understood before proceeding to the others.'A Ledger, in Single Entry, is used to exhibit the relation in which the various persons with whom we deal on account stand to our business, and contains, therefore, only personal accounts, or accounts with persons. Inasmuch, therefore, as every entry on the Day Book is posted to the Ledger,'the Day Book, also, conftains only records which pertain to persons. The Day Book records in Single Entry are direct and simple, first expressing the name of the person to be debited or credited on the Ledger, together with the fact of " Dr." or " Cr.," and next the consideration and amount. 8These records are then transferred under the appropriate Ledger accounts, and thus exhibit 9the result of the transactions, so far as persons are concerned. The set here shown exhibits but few transactions, and those of the most simple kind, " and is not intended to show any general result of the business; the main object being to set forth the nature and process of the records which are to appear upon the Ledger. The student is requested to note well the form and expression, that he may correctly render the "Exercises" which follow this set, and become prepared for the progressive labor in the succeeding sets. 20 DAY BOOK,-SET I. // ///v g4ac'(e a, /62 6 /- 2 I//I _u11ea y I /c0 626 /.re,,,, yd. /SdcI'a, I Cc~p 5 6, ///ace/ /e^. c^. I oa ^ r / /7^c i, 26262 /522 _ 5 c2 " ^ j. <, @// 2/5 DAY BOOK,-SET I.,, /a. n f, /.,, y //d 2 vden &o )gywad ia< 16' ~,Z 16V e d /,, /ea. 6 //6 & /62 2' oiAc afi/eidffw Q /2/a al 9 ojc~j on C.... 0a -. /1 c79 6626262 %,2, o /eice 9cel /If62a6, @ a 22 -,FLEDGER,-SET I. &' _ Z. _'/ zd/:XZ^ / / i2 LEDGER,-SET I. f2 G^ ^^^^^^i1/ ^/J A/A ^C^^^c^ 2A/^/ X /^ y ^^(/) 2 /6/ 24 IILEDGER,-SET I. _ _ _ _ _ _ _ _ _ 2 J L?1 _ _ _ J_ _ 25 EXERCISES FOR THE LEARNER.': I R S S ER I:EI S. THE following transactions are to be written up in proper form upon the Day Book, and from thence posted to the Ledger, as in the set preceding. Memoranda. Jan. 1. Sold H. W. Ellsworth on %, 5 Bbls. Flour, @ $10. Sold James Harper 6 lbs. Coffee, @ 11~; 5 lbs. Black Tea, @ 75~; Received Cash on %, $2..... 2. Bought of Geo. A. Crocker on c, 50 Bush. Apples, @ 50; 50 Bbls. Potatoes, @ $2 50..... 3. Sold Geo. H. Brown on %, 10 Bbls. Apples, @ 75~; 3 lbs. Black Tea, 75..... 4. Paid Geo. A. Crocker, Cash on %, $100..... 5. Sold Abraham Lincoln on %, 2 Yds. Broadcloth, G $3; 50 lbs. Iugar, @ 8~; 30 Yds. Sheeting, @ 10~..... 7. Bought of James Madison, on %c, 10 Bbls. Potatoes, @ $2 50..... 8. Sold F. A. Perley, on %, 5 Bbls. Potatoes, @ $3; 10 Bush. Apples, @ 68.... 10. Paid Geo. A. Crocker, Cash, $50...... 11. Sold P. C. Schuyler, 10 Yds. Broadcloth, @ $5; Received in cash, $25.... 12. Sold Peter Cooper on %, 8 lbs. Coffee, @ 12~; 3 lbs. best Black Tea, @ $1; 50 lbs. Crushed Sugar, @ 12~. QUESTIONS FOR REVIEW. 1. What forms are shown in Set I.? 2. For what is this set designed? 3. What is the true purpose of Book-keeping? 4. Is this purpose fully carried out in the exercises of Set I.? 5. What is shown in the Single Entry Ledger? 6. What does the Day Book contain? 7. What is the form of record in the Single Entry Day ook? 8. Where are these records transferred? 9. When so transferred, what do they exhibit? 10. Is there any general result shown in this set? 26 SET II. RETAIL DRY GOODS BUSINESS. DAY BOOK, LEDGER AND CASH BOOK. WITH STATEMENT OF RESULTS AT THE CLOSE. X%^As\vss V ospCXovs, REMARKS. IN this set we are enabled to arrive at more perfect and satisfactory results, and to carry out more fully the true purpose of Bookkeeping,'that of exhibiting, at any time, the condition of the business. By the use of the Cash Book we compass a most important object, in keeping a check on the receipts and disbursements of cash, and showing the amount on hand.' Of all the books used in business none is more essential than this; and no cautious business man will ever attempt to do without it. It is true, the amount of cash on hand may be easily ascertained at any time 4 by counting it; but 5this process affords no test as to improper expenditures or omissions. 6 A faithful record of the receipts and disbursements of cash, however-the difference agreeing with the amount actually on hand-gives a degree of confidence, not only in reference to the cash transactions, but to the business generally, which can be secured in no other manner. 7A Cash Book, properly kept, will, at any time, show the amount of cash on hand; and for this special purpose is it introduced in this connection. The form here used, though perhaps not the best for general purposes, is extremely simple and easily understood. It is customary, in most business houses, to close up the Cash Book s at the end of each business day, and bring the balance down as a basis for the next day's transactions. 9 We have varied this plan to better suit our convenience, closing up each week during the first month's business, and only once in the next month. This is deemed sufficient for the purposes of illustration. The particular advance which is made in this set over the preceding is more apparent in the statement which follows the Cash Book, and which will show, at a glance, the grand design of Book-keeping. Nothing is more desirable in connection with business record than 0 the ability to exhibit results in a clear and unmistakable manner. To this end the learner should be taught to attach much importance to the stctenments given in connection with the various sets, and particularly to the principles deduced therefrom. 28 DAY BOOK,-SET II. 1 2f~y 7e.V.. Mloaled'.0-'_ g o/, / 2 5w20 16 eeZ f o A~ 2 ~~,, /,, 262t,,/0002,, 262,,,,, /62c 2 62 c /5; W'#eie, /600 /5600,, 26,, SJ t,, / 25 256 f 20 a%/62&46. o y, U5. 56 26 2 62 ~Z /2 ^ id ^ ^ /562 /56262,, ~%, ~, ~.ca,,/o 0o 5o ~,, 6,,' ~,,2,,00 6 00 2 | e/n2 ^a/c, | / /2/ 29 DAY BOOK,-SET II. ~~ ~AM, ~. c2 ~12 1 6__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ / 6' _ _ _ _' 00_ _,, 25 2I~. c o~e, 200 f 6200, / 5 62. e, >, / /, s 6 55 _ _/__ _ _. _ _ _ _ _ _ _ /.2,-/_ _ 2 C ~ aa d/ / %, /5 y Qzmed cXi4X^e> /> e' w' e,,,,, Mzc1J7Jam4e,, /6 2/626' 29 5 Gea ayG!.w2Ieg // c/cu e 8 ) / ~ / 6g, ^ /aeu, / 20 ~,, 20%. @5A^ @ /5~ /5 o 9 ^^, ~a} z ^ 22~ ^ 2 30 DAY BOOK,-SET II. ~. e, _ a. zei,.._. o 20 Y,/~., G 9 /K W,, 6'),,-'aideA ~az,, 6d&.,,V py f je^ a/ez z 4l5 a 2(ff. A Ao 9 OR 50,, 26,, naae, /zoe,,, /2 2 062 // / 6 // 6g 626,, 20, SozceP. zgcJ,, A -f 2 W0 631 DAY BOOK,-SET II. 4 // J v< 67oe /A/, 62 3jl~ JZn d ~ ~ ~ ~. -., A~,. e, v e/ ),,, ~ e i,,/,, e ^, 2 6,, tO U L,,, ~ 10 fO Jf XM -e, "& Z % 6 a. cZ aew4oz, @ 62 00 6 2 -T /,'7. _Z /- /9 5 >00,, ft ~. >3ek Zove,,,;'~o d oo50 5,,'a a,i. a,, 2, _ _ _ o; Jaaac d Aeeven, J,,/ /^' ved> /62 /6r62 0~~~ zo... DAY BOOK,-SET II. 5, 2, MW a, /,/ o %. / S2, @ 25~ 0. 6. _ _ _ _ _ _t _ _ _ _ _ _ / 5 0 _ _ 5 0 _ _ _ _ ~,, 2,, X vL e,, /,,' 6 % /5 $2 J^ ^' @ /6 26 2 L~ggy, 662J' c% d^ ~fa~ c~4 2# 626 26 2 62,, %a,, M g 52,, a ^ 4c rv ^ Mif~ c e ~ Jf 5 5-0 SJ Actoc/cZAof z ga/n.,, /0,,,,, 2 00 S 00 2 4 / nc ai^ 2 0 33 DAY BOOK,-SET II... fa F,. ^,, 6etCZ 2/ C6 cS 6t@ eo ^e,, ^ /5,, /^,ac w,, /2 ^:6 9 00 /6 a ed% 26 2 6^ 0 ^ /.., /,, fc - 62 / /c% |o^^u 2xeg< cf66 2-6 2/ _ 34 DAY BOOK,-SET II. 7,, /o. ^)., ^~6 <, 2,?W, e.oc, @ J a 00 e 0 60 /1 // ce/(^ ^i /62^ 0 /626 / | c,' /. ^. 2~ 2 62 ~ /- 2622 f2 6,..-. ^^^^^^ ^ ^ ^ /^ ffff ^ 9~ ZL A X 1 ^ ----------- -^ ^M A1P1 H (H..... _ ___ __________ _ d X'_II''_______ O3 X___.'_C__I d 3 0 8 s ii a -'aa-D-a-i o xa /- -i *II HI~CS-'sawasa? OL" X ^^^I LEDGER,-SET II. 5 %/'a ^ c / 1 Ye. / ^^& 4000 2000 2000 /s0. X a A/a / % f. a / 2/2&O 2' / 7 10 5,7 t l,, l, 6" // "^ /7 /7 1M0O5 /A /2 1. 37 LEDGER,- SET II. 80 00...%4a X, / SW.,../& a 60 50 30~38 85 50 I8 00 38 6~ -r~ — ~j __~~~ S X As *y' -~ - -U"09 91 II'Illir S e X ASSt X ~111 9 a 9''l f 7 1 "" P P{y I,<,oR/{!{ I / /L9R' 11 ~1'.1 0,09' 09 12 O'i7~; FIY/ I09 I S * Uii alas e-gaa LEDGER,-SET II. 4 ^^ ^ ^'696 / ^ o =~~~e W I 1 l 1 k i f/^ 40 CASH BOOK,-SET II. t^^/i-i. ~/ /56Mt2) ow ~ Mw a r Vd/: x a!y.rzgiM.a' Q^cl'^~'an, ^ a M o,2a, (w f 5el 2 f(/ cdeW ance, I% a /6' 262 Sai// Oya e an ~e.&, I ieceec/96'a Eoea'a dc e/ey, i/ie'} *i/ S'c2 2ev oe % / / 9ei, /5 J Szacz (~)ze Jea'^~^a~~n- (0a-e, 2 0f,^ /alv / / Sa Yn ecee// /, a -YTZ < ge.'c / 5,/'i/, 0-, A -d 2562 e //M' ned' ^ ^ ed /< /62 6ece - Y 6Aec'/c / a^o'^-/Wf /. 6 225/\ 22 225/ 22 5i/a /7 g e " g c / / 2vfC5'io[/ <^'^ie/ 26,,,, e vaee l e J /41f6 c eri, 26/6 S 22 26 41 CASH BOOK,-SET II., ='Z^i{G^t O^ ei/ 2-#/S 5> 22 262 tece/'v ec1/ji/ GQ4af a (yl /' ~ 4 /, //2 5/ ^ilaw~ce/. f'22/ 22a 225 2 42 CASH BOOK,-SET II. r22Y i... /ce v, J2/ W gya 2/^ 2S Xa tg @ 5 0/ /f A,, // // // / 2a 25 // // // // <0'A o /5 SS gtJZnc g &adej Ov yac el R ece ~all rly/e e'c 95l1 276 // // // // 75y <'ecewec/(t'l/ Q/awd d%%, // 5 25 Mecee/yccxA?a( 2^o ^e 55.7J a new ~Je Z/ w d 9 r 44 STATEMENT. "TnE facts embraced in the following statement are gathered from the preceding Ledger and Cash Book, and will afford a more concise and satisfactory view of the true purport of Book-keeping than could be enforced by any other form of argument. 2 It must be borne in mind that any statement which shows the condition of business must embrace a list of its property and debts; or, in business language, its resources and liabilities; and, consequently, 1 any system of Book-keeping which will enable one the most easily and certainly to get at these facts, must-other things being equal-be the best system. The variety of resources and liabilities in the business here represented is quite limited, and requires, therefore, fewer aids than would otherwise be essential. In fact, the Cash Book and Ledger, in connection with an inventory of unsold merchandise, afford all the necessary results for the purposes of a statement. Resources. 1. From Ledger Accounts. —4 Balances due from persons. - James Campbell,................. $120 57 David P. Johnson,.! 80 00 Isaac Stevens,.............................. 30 50 Robert Demarest,.................. 28 00 James Atwater,............... 3:1 50 James W. Lusk,................... 37 75 S. S. Packard,...................... 85 05 John J. Howell, Jr.,.......................... 16 50 Robert C. Spencer........................... 69 68 2. From Cash Book. —' Balance of Cash on hand..... 2908 26 3. From Inventory. —' Merchandise on hand..... 1075 45 $443 26 Liabilities. _ 17 From Ledger Accounts.-Balance due Roberts, Rhodes & Company................................ 2000 PRESENT WORT................ $2483 26 * The value of merchandise on hand has necessarily to be assumed. In business it would T,o ascertained by taking an actual invoitory or " Account of stock."45 STATEMENT. From the foregoing abstract we ascertain the present worth or net capital of the concern to be,........ $2483 26 From which, if we deduct the investment at commencing, 1500 We shall show the net gain during the two months to be, $983 26 From these illustrations we gather the following RULES. s 1. To ascertain the NET CAPITAL, or PRESENT WORTH, subtract the liabilities from the resources. 192. To ascertain the NET GAIN during business, subtract the net capital at commencing from the net capital at closing. EXAMPLES FOR PRACTICE. THE following examples are given to make the student more familiar with the principles embraced in the preceding set; and especially to enforce the theory of the foregoing rules. He should be required, not only to produce the proper results, but in each case to render a written statement, similar to that on the preceding page. EXAMPLE I.-A merchant commenced business with a capital of $5000. At the end of the year he gathers from his books the following facts: Amount of Cash received, $15,000; Amount paid out, $10,500; A. B.'s account stands, Dr. $1500; Cr. $1000; C. D.'s, Dr. $4000; Cr. $3500; E. F.'s, Dr. $975; Cr. $450; G. H.'s, Dr. $483 75; Cr. $300; Merchandise on hand, as per inventory, $2750; Amount owing to J. K., $1500. Required, the net capital at closing, and the net gain during business. EXAMPLE II.-A. and B. commence business with the following resources: Cash, $3000; Notes, $1500; Merchandise, $3500; Real Estate, $10,000; Balance due on personal accounts, $12,500. At the end of six months, their resources and liabilities are as follows: Cash on hand, $1500; Cash in Bank, $4000; Notes, $3500; Merchandise, $3750; Real Estate, $15,000; Due on Personal Accounts, $5000; —Amount due from the firm, on their notes, $750; Amount due to persons on account, $1500. Required, the capital at comnmencing; at closing; and the net gain. 46 EXERCISES FOR THE LEARNER. S E CO D SE I E S. THE following transactions should be written up with great care. Let the student use all the books introduced in Set II., and in the same manner. Memoranda. July 1. Commenced Business with Cash on hand, $1500.-Bo't of Harrison Scott on %, 50 Bbls. Genesee Flour, @ $8; 2 H-hds. Molasses, 140 Gals., @ 40~; 12 Boxes Soap, @ $4; 6 Ialf Chests Y. H. Tea, @ $20.-Paid for Stationery and Sundry Expenses, $50. -Rec'd Cash, for Petty Sales, $15.-2. Sold J. V. Husted, on %, 10 Bbls. Genesee Flour, O $9 25; 4 Boxes Soap, @ $4 25.-Paid Drayage, $2.-Rec'd Cash for Petty Sales, $50.-3. Sold John Banks on %, 15 Bbls. Flour, @ $9 50; 3 Half Chests Tea, @ $25.Paid Harrison Scott, Cash on %, $200.-Rec'd Cash for Petty Sales, $75.-4. Bo't of Henry P. Smith, on aT, 10 Hhds. Molasses, 1200 Gals., @ 50~; 12 Boxes Havana Sugar, 3750 lbs., @ 6. —Sold J. C. Hall, on %, 10 Gals. Molasses, @ 75~; 1 Bbl. Flour, @ $9.-Rec'd Cash for Petty Sales, $110.-5. Sold Henry P. Smith, on %, 5 Bbls. Flour, @ $9.-Received Cash on % of John Banks, 850.-Rec'd Cash for Sales this day, $18'5 75.-6. Paid Cash for Stationery, $5 50.-Rec'd Cash for Sales this day, 8110 75.-8. Bo't of C. J. Judd, on %, 5 Bbls. Coffee Sugar, 1000 lbs., @ 6-~; 6 Hhds. Molasses, 4000 Gals., @ 50~.-Rec'd Cash for Sales this day, $75 50.-9. Paid Cash for Clerk Hire, $50.-Received for Sales this day, $50.10. Rec'd Cash for Sales this day, $83 30. —1. Sold John Banks, on %, 10 Gals. Molasses, 60~; 50 lbs. Coffee Sugar, @ 7~; 1 Bbl. Flour, @ $9.-Rec'd Cash for Sales this day, $68 50.-12. Paid C. J. Judd Cash on %, $500.-Rec'd Cash for Sales this day, $75. -13. Rec'd Cash for Sales this day, $117 50.-15. Bo't of Thomas Palmer on %, 3 Bbls. Soda Crackers, 8 $4 20; 12 Boxes Butter Crackers, 360 lbs., @ 6~; 40 Loaves Bread, @ 10. —Paid Porterage in Cash, $3; For Cleaning Store, $5.-Reec'd Cash for Sales this 47 QUESTIONS FOR REVIEW. day, $123 75.-16. Paid James Smith, Cash for Repairing Store, $25.-Sold Rob't Hayward, on %, 1 Bbl. Soda Crackers, @ $5; 3 Boxes Butter Crackers, 90 lbs., @ 7~.-Rec'd Cash for Sales this day, $97 50.-17. Rec'd Cash for Sales this day, $125 75. —18. Sold W. F. Norman on %, 100 lbs. Sugar, @ 7~; 50 Gals. Molasses, @ 60~; 60 lbs. Sugar, @ 7. —Paid Smith & McDougal for Printing Circulars, $5 50.-Rec'd Cash for Sales this day, $88 93.19. Paid Cash for Postage Stamps, $3; Letter Paper, $5.-Rec'd Cash for Sales this day, $98 37.-20. Rec'd Cash for Sales this day, $117 95.-22. Rec'd Cash on % of John Banks, $50.-Sold Robert Hayward on %, 30 Gals. Molasses, @ 60~; 2 H'f Chests Tea, @ $25.-Rec'd Cash for Sales this day, $84 28.-23. Rec'd Cash on % of Rob't Hayward, $30.-Rec'd Cash for Sales this day, $75. -24. Sold J. C. Buttre on %, 1 Hhd. Molasses, 75 Gals., @ 56~.Rec'd for Sales this day, $65 75.-25. Rec'd Cash of Rob't Hayward, in full of %, $49 30.-Rec'd Cash for Sales this day, $78 25. -26. Rec'd Cash for Sales this day, $48 95.-27. Paid Clerk's Salary in Cash, $50.-Rec'd Cash on % of J. C. Hall, $16 50.Paid Henry P. Smith, Cash in full of %, $780.-Rec'd Cash for Sales this day, $81 38.-Mdse. unsold, amounts, per Inventory, to $1500. _. QUESTIONS FOR REVIEW. REMARKS, PAGE 28. 1. What more perfect results are shown in Set II? 2. What important end is accomplished in keeping a Cash Book? 3. What is one of the most essential books in business? 4. How may the amount of cash on hand be ascertained without the use of a Cash Book? 5. What tests are omitted if we depend solely upon counting the cash? 6. What advantages are there in a faithful record of receipts and disbursements of cash? 7. What will be shown at any time by a Cash Book properly kept? 8. Ilow often in business is it customary to close up the Cash Book? 9. How often is the Cash Book, used in this connection, closed? 10. What is a desirable feature in business record? STATEMENT, PAGE 45. 11. From what sources are the facts exhibited in the Statement on page 43 obtained? 12. What is an indispensable requisite to any statement showing the condition of business? 13. What is the sure test of superiority in a system of Bookkeeping? 14. What class of resources are found in the Ledger? 15. Wlhat, in the Cash Book? 16. What ascertained only from Inventory? 17. How are our liabilities ascertained? 18. What is the rule for ascertaining the present worth of a concern? 19. What, for ascertaining the gain during business? 48 SET III. WHOLESALE DRY GOODS BUSINESS. (PARTNERSHIP.) DAY BOOK, LEDGER, SALES BOOK, CASH BOOK, AND BILL BOOK. WITH STATEMENT OF AFFAIRS AT TIIE COMMENCEMENT, AND ALSO AT THE CLOSE.'~s\^.^e^^ S^^^Y^s. REMARKS. IN the set which follows we have enlarged the area of our labor, by enlarging our business, and adding somewhat to the variety of our resources and liabilities. The peculiar feature of this set consists in the auxiliary books, which are introduced for the double purpose of teaching their use, and preserving a more complete record of the transactions. The form of Cash Book given in this connection differs from that in Set II, in its arrangement of receipts and payments. This form is the one in common use, and is preferable to the other, mainly on account of its complete separation of the two conditions named; the receipts being placed on one page, and the payments on the other. The Bill Book and Sales Book will explain themselves. There are more comprehensive forms for the Bill Book in use, but the form here submitted is the one more generally used, and has the merit of simplicity and plainness. The Sales Book is one of the most convenient auxiliaries a merchant can adopt; and particularly where any amount of wholesaling or general credit business is done. It is not absolutely essential that the credit sales should be entered on the Day Book, as they may easily be posted from the Sales Book direct; but as many merchants adopt the plan of posting only from the Day Book, and as there are some very good reasons for adopting this policy, we have here given it practical endorsement. The initials, "D. B.," "C. B.," and " B. B.," in the margin of the Sales Book, (standing for Day Book, Cash Book, and Bill Book) will indicate the books wherein are entered the various resources received for merchandise. The Sales Book is not, properly speaking, a book of results, and is not consulted in making up our list of resources and liabilities. In the former set the result of the business was a gain; in this a loss has been sustained, which is shared equally by the two partners. In writing up this set the student should be required to observe the order of dates in the various books, and complete the record of each transaction before proceeding to the next. For example: On the 1st of July, Robert Van Schaick purchased of us a bill of merchandise for which he paid cash. This entry is first made in the Sales Book, from which the amount is transferred to the Cash Book, and marked "C. B." in the margin of the Sales Book. The succeeding entries in the Sales Book are, in the same manner, transferred to the appropriate books which are indicated in the margin. 50 DAY BOOK,-SET III. ^^^eicnanale ciz/ ~, c, /92 y-ad /1' V // 2y 6 ^&ww'n ceo < n G _ J 4~/J c/ / ^'M2 1/ / / I 0 6 & ^ O 56 Mal. 1; KI, a0O I a^, 29,, LEDGER,-SET III.,~.~ ~2 c~/^/ /$/ ciw1., 2 /)2 __ __ _ __,2 Z I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 57,,^ 2 ^^^. // I/-^ ^^ ________________I_________" _ _ _ ^ G^ ^ ^ ^^^^ ^ 52 LEDGER,- SET III. /6,2,'J 261 2$...... 1 1 58 LEDGER,-SET III. 4 _s li~~d 1d. 59 SALES BOOK,-SET III. ^ /4 2. / a, 16 // /- Y0 75,, ~/, ^,,,,,/ o( 0//, o, el // A~ 0 / Q6x~eJ 2~a/Mn, 6)I~ a/a. ^/. J. I 66 9$^ce~ ~~S> 2762,, // /// 9762 2a' / f e /25, // /c 0 /( a 3 /2, 00 2 e p ie9 5,, // / 656,,, 2,, ce d @ /6,,2( /26 / 5 60 2 ow S~c/4Xs 90 Zoow AS~ 99 J M-g~feS W3~10 12,0 49 ow 2~aS 0 2 ~ ~ c Iicw qe'aod VYd SALES BOOK,-SET III. G^^m^ 1^ // /^ M ______ed ________a_ / _____A____________ 62e,, ^/^aM (2662,,, 59' /c, 62 / 2 X6e ~yi @ %^/,8'/ J6te @ QO d6,^,, ^ee Acnc ^n^ra // //, @ 6 /262 0 /6 2 a d. (^ X. /2 / 622 la r Ceam, in. 126 /2,, ^e I i ^s, 26/2 @ // 56 /626 20 _________________ 262 ______________ /ea. G yGa, /ecc2 Ifa 97l6 dsh. Yy^ /,, L Rcl Jy ad,, I,, /12 7 0 61e.. I SALES BOOK,-SET III. ~3~~~~2 ff, c, 3,d^? 0,,,, f~? f 00 A IAyew 2Y ~aie a ieaq, 2c67. J //6 - c626 2ae,, sy @i,, 9,, 2/ /f /W 2 2e,, /1 W'2 26,,,,2 aaa 2/ 2 / /Y7%d@// I~2 2262 2/^a. C /~ f62rd,, 79 // 62 96 2 /,, efe/,, /62,,,, 5 / 62 00 f g /.fce facc.. 26 2. @ g/ 2 2S 6262 2,7, ai (62,,,, cf s9 2/60 SALES BOOK,-SET III. 4 cg//, ee c/gBfer; tap /kLsh. v'ade, -d cX y e f6/~ @< 7 S6f/' 2,, X ~. @1 //25 6? 00../ 2:, o/ // / 5o 0o /o 2f,, @dca,, 6,,,, /6 260 6: 60 9,,,ied/c Je,:22,,,,2/s 5: 62 2,,'2ee. 5,,, p:/. ~2 6262 2/: 562. ed, @,sh.,, S 2-i <,, 5. 2// 2,, ae,2e~ I 25^, /2eK62 /25. Jfs; Ja6X Se/S~?4v 2622 Afa4. - 6 /Z 262 /6,, dv/c geea< 90,,,, /62 a6l2 96 2 &I 2 ^ awfv-Z (ec4,1 -;^ e6^ / 2,, g$i~xaa 562 / ea@, 0 226262 0 2, ^ae /ae -5, S 5 ^#6 /2 00 p20 63 CASH BOOK,2 /. o~n % Q/^. Y/, /,,2,,o /e~, tya iSnagr dn/,6XC0/ o c %, $ // // S oj/aoi /4h6c e a 500 2///,Yoan c J6 tno deczn // 1/o' S 6CM ^ /2/% -/o 2 2 e5 25,,,,{ fea Be, /6Y 26 // " / X (re, /5 /2/22 2/0 a. e on a /o< Sf6!,64 ^ " "^M^^ ^ " /^a -' ^ ^ ^^ ^ J^ ^/^/^, 2^ ^ ^ " ^^ ^ ^^ ^ "C, ^ SET III.,A /i al, JU1,.qe' f Xd azn-.. l //,, C ~ ~ tea c tJ' /, y /J/? S e /loed /7iS,, ~. J. C ~ ~~. f^ ^, J> /I 2. a a e L, 24, Ov /,5,/ S $SacZac, 5 ] 6 2 mccance',o, Son225/ /9 *L j 6 A t) ^ e.. ^.Q6 na< 5 / / ai ^ tezae' ie cX'J a75 o,,,c ye 7e, 5,; %.co s?, 1/ 6 2S,, ^/ A^.ie 2S &Jgzzce onz 1za< SS/ #d 65 BILL BOOK,-SET III. _ Receivable. No'.~ ~ ~ ~ ~ ~Fhen A t hen and How o. RecTd For what Rsc'd. Drawer or Endorser. Drawee or Maker. Date. Term. e Amoun Wen and How _ Re_______c_______d_ ____ _ Due. Disposed of, /|? /0e/ |/ 6. n 7 ^ice, C/Pn 5 00 |/| I / | 2| / // t6 < | ( 4C4 |, /2 d/0 0. |./ /626262 X S /2 / a enci,46f' zS oanSS J/ /2 |626 (29 | __ __ __ __ __Payable. o. Issued For hat Issued. DrawerorEndorser. Drawee or Maker. Date. Term. When AmountWhen and How WhIssu________end.____ ___ Due. Disposed of. / c2~6 /2 >6<. 3? |? R2 3~encei,. Dt @59, fic/ 62 /62 a /~25| /5 25) 6t~ 2 | X /Sf c% cGa6' %1 |7 ^ 12 ^fa|. lg/ ^ / a 3? /.F / 5/5 el / STATEMENT SHOWING THE CONDITION OF BUSINESS AT THE CLOSE OF SET III. Resources. ___ Dr. Cr. Balance. 1. From Ledger Accounts. Lorenzo Fairbanks................. 50 350 400 James Johnson................... 192 192 Benjamin Payn................... 23 41 23 41 Amos Dean...................... 180 50 130 Victor M. Rice.................. 82.88 30 52 88 James Sheldon.................... 12 24 132 24 William Shepard.................. 37 55 37 55 John Belden...................... 216 0 216 50 Chas. A. Seeley................... 182 40 5 107 40 2. From Cash Book.-Balance of Cash on hand,................. 881 94 3. From Bill Book. S. S. Packard's Note, due Sept. 13...............$1 000 E. H. Bender's, " " " 5................. 108 20 Calvin S. Sill's, " " Oct. 13................. 173 00 Jas. R. Morgan's," " Jan. 25................. 339 00 1620 20 4. From Inventory. Merchandise unsold..................................... 3000 Real Estate............................................ 5000 16794 12 Liabilities. From Bill Book.-Note favor Clafflin, Mellen & Co............... 75 PRESENT WORTH......................... 16219 12 To ascertain the net loss of the concern, and the present worth of each partner, we have the following facts: LH.. Bryant invested...................... $9075 " drew out..................... 75 Net Investment,..................... $9000 II. D. Stratton invested........................... $8000 " drew out.......................... 75 Net Investment.................... 7925 Total Net Investment............. $16925 Deduct Present Worth............. 16219 12 Leaves NET Loss................... $705 88 H. B. Bryant's Net Investment................... $9000 Less i- Net Loss............................. 352 94 Leaves Present Worth....................... 8647 06 H. D. Stratton's Net Investment................... $7925 Less, Net Loss........................... 352 94 Leaves Present Worth........................ 572 06 TOTAL PRESENT WORTH.............. $16219 1.2 67 EXAMPLES FOR PRACTICE. From the foregoing statement we deduce the following RULES. 1. To ascertain the NET LOSS during business, subtract the net capital at closing from the net capital at commencing. 2. To ascertain the NET CAPITAL of each partner at closing, subtract his NET LOSS from, or add his NET GAIN to his NET INVESTMENT. EXAMPLES FOR PRACTICE. EXAMPLE I.-A. commenced business with a cash capital of $8750. At the close of the year his resources and liabilities were as follows: Cash on hand, $3700; Notes on hand, $7000; Merchandise unsold, $2500; Amounts owing on Personal Accounts, $2000;-He owes on notes, $5000; To various persons, $2500. ^Vhat has been his loss? What is his net capital at closing? EXAMPLE II.-E. and F. enter into copartnership on equal terms, each investing at commencement, $10,000; and each withdrawing during the business, $1500. At the close of a certain period the following exhibit shows the true condition of their affairs: Cash on hand, $500; Balance in Bank, $7000; Due them on Personal Accounts, $5783 75, of which $875 is worthless; Due them on Notes, $6750; Merchandise on hand, $2700; Real Estate, $5000; Bank Stock, $3500; They owe to persons on account, $10,000; On Notes, $5600. Have they gained or lost in business, and how much? lVhat is each partner's net capital at closing? EXAMPLE III.-A. B. and C. are partners. A. puts into the concern, $7500; B., $5300; C., $4700. At the close of the year their books exhibit the following results: John Smith, Dr. $1700, Cr. $500; John Parker, Dr. $1100, Cr. $975; Abram Schenck, Dr. $1750, Cr. $2700; Albert Dodge, Dr., $1859 38, Cr. $212 50; Cash received, $125,368 29; Paid out, $122,480 23; Notes received, $1900; Notes disposed of, $1200; Merchandise unsold, $2700; Value of Store and Fixtures, $15,750; A. has drawn out $2000; B., $1500; C., $785; They have issued Notes to the amount of $30,000, of which they have redeemed $25,800. -Required a written statement which shall exhibit all these facts, as also, the amount of gain or loss during the business, and each partner's net capital at closing. 68 EXERCISES FOR THE LEARNER. EXERCISES FOR THE LEARNER. T IIRD) SE RIE S. Memoranda. July 1. S. S. Packard and John R. Penn commence business with the following resources and liabilities; gains and losses to be divided equally. S. S. Packard invests Cash, $4000; lierchandise, $1750; Notes, as follows: one for $500, in favor of S. S. P., signed by H. B. Bryant, and endorsed by W. P. Spencer, dated June 1, ~ 60 ds.; and one for $700, an accepted draft, drawn by L. S. Bliss on George Claghorn, May 1, at 90 ds. sight, and accepted May 3; Personal Accounts, as follows: Henry Fish, $500; Robert Fulton, $750; David Coleman, $900. John R. Penn invests, Cash, $500; Real Estate, $5000.-2. Sold N. Frederick, on %, 2 Doz. Gent's Silk Handkerchiefs, 24, ~ 40~; 6 Pcs. Amoskeag Sheeting, 130 Yds., @ 10; 4 do. Mixed Cassimeres, 100 Yds., @ 50~.-Rec'd Cash of Henry Fish, in full of %, $500.-Paid Cash for Stationery and Printing, $30.-3. Sold Ira Packard on his acceptance, at 10 days, I Case Child's Metallic Tip Shoes, 60 Prs., @ 50~; 2 do. Child's Heel Gaiters, 96 Prs., @ 63~; 3 Pcs. English Tweed, 27 Yds., @ $1.-4. Sold Wm. T. Bush, on %, 4 Cases Men's Congress Gaiters, 96 Prs., a $1 50; 2 do. Gent's Canada Ties, 24 Prs., o $1 75.-Sold James Magoon, for Cash, 1 Piece Striped Velvet, 10 Yds., @ $5; 6 do. Paper Cambrics, 72 Yds., ( 8~; 10 do. Lynn Cottons, 300 Yds., at 11~.-5. Paid Cash for petty Expenses, $3 75. -Sold Robert Smith, on his note at 60 days, 3 Pcs. Lancaster Gingham, 125 Yds., ~ 10~; 6 do. Scotch Plaid, 240 Yds., a 13~.Bought of Star, Barnum & Seeley, Invoice of Merchandise, amounting to $5000; Paid Cash, $2500; Note, at 6 months, $2500.-6. Rec'd Cash on % of David Coleman, $500.-Sold Roger Williams, for Cash, 1 Case Misses Cork Sole Shoes, 60 Prs., @ 75~; 1 do. Gent's Paris Gaiters, 24 Prs., @ $1 75.-Rec'd Cash for petty Sales, $25 50.-7. Sold John Fitch, on %, 3 Doz. Elastic Hoop Skirts, 36, @ $2 50; 1 Doz. "Empress" do., 12, ( $2; 3, Pcs. Check Marseilles, 30 Yds., @ 50~.-Sold Samuel Nash, for Cash, 3 Pcs. English Tweed, 27 Yds., @ $1; 6 do. Corduroy, 250 Yds., a 75. —Rec'd Cash of Wm. T. Bush, on %, $50.-9. Paid John R. Penn, Cash on private %, $100.-Paid Cash for petty Expenses, $7 50.-10. 69 EXERCISES FOR THE LEARNER. Sold John Anderson, for Cash, 3 Cases Ladies' Extra Balmoral Boots, 144 Prs., @ $2; 2 Cases Ladies' "Opera" Gaiters, 48, a $1 75.-12. Paid S. S. Packard, Cash on private %, $75.-Sold Thomas Hunter, on %, 6 Pcs. Merrimack Prints, 210 Yds., @ 9; 5 do. "Union" Prints, 150 Yds., @ 8~; 7 do. Lancaster Prints, 244 Yds., @ 8-; 4 do. Orange Prints, 120 Yds., @ 8]t.-Rec'd Cash for petty Sales, $10 38.-13. Rec'd Cash of David Coleman, in full of %, $400.-Sold John Howard, on %, 3 Pcs. Lancaster Gingham, 125 Yds., @ 10; 2 do. French Merino, 40 Yds., ~ 504; 5 do. Bar. Muslin, 90 Yds., @ 14. —14. Sold Robert Coons, for Cash, 6 Pcs. Fancy Linens, 36 Yds., ~ $2; 5 do. English Prints, 200 Yds., @ 20~; 6 do. Parametta (Maroon), 300 Yds., @ 75. —Paid Cash for Repairing Store, $75.-16. Rec'd Cash of John Fitch, in full of %, $129.-Sold Henry Fish, on %, 5 Pcs. Amoskeag Stripes, 120 Yds., ( 122~; 4 do. Pepperell Sheeting, 160 Yds., @ 10; 4 do. Auburn Sheeting, 120 Yds., @ 15. —17. Rec'd Cash in full of Robert Fulton's %, $750.-Sold Simon Walker, on his note at 60 days, 4 Cases Men's Thick Boots, 48 Prs., @ $1 25; 2 do. Double-Soled Boots, 24 Prs., @ $1 50.-20. Sold Geo. F. Smith, for Cash, 2 Cases Women's Walking Shoes, 120 Prs., @ 50~; 2 do. Jenny Lind Gaiters, 24 Prs., @ $1 15; 2 do. "Opera" Gaiters, 24 Prs., &$1 75. -Paid Clerk hire in Cash, $65.-21. Rec'd Cash of Henry Fish, in full of %, $49. STATEMENT OF RESOURCES AND LIABILITIES, JULY 21. The student should be required to make his books conform to the following statement, and to render the same, according to the Example given in connection with Set III. Resources. ___ Liabilities. Personal Accounts...... $315 54 Notes, payable........ $2500 Notes, receivable........ 1457 18 S. S. P.'s Net Investment 9025 Cash.................. 5286 49 J. R. P.'s............. 400 Merchandise (per Inv.)... 4500 Real Estate............ 5000 NET LOSS.......... 365 79 $16925 00 $16925 00 70 SET IV. FURNITURE AND CABINET BUSINESS. (TWO PARTNERS, ADMITTING A THIRD.) DAY BOOK, SALES BOOK, LEDGER, CASH BOOK, AND TIME BOOK. WITH AN IMPROVED METHOD OF USING THE SALES BOOK AS A PRINCIPAL BOOK, AND EMBRACING VALUABLE INSTRUCTIONS PERTAINING TO A CHANGE IN BUSINESS. B\xiv^^V Vyos evo vv^ RIEMARKS. IT is intended in this Set to realize, as nearly as may be, the capabilities of Single Entry. With this view we have introduced several new features, to which we call special attention. It has been the pleasure of certain authors\and teachers to condemn Single Entry Book-keeping as wholly inadequate to the demands of business, and, therefore, unworthy of consideration; but while we are behind no one in our admiration of the superior facilities and safeguards of Double Entry, we are not at all prepared to conclude that a very extensive business may not be conducted with perfect safety, having no better record than that afforded by an intelligent and faithful application of the principles of Single Entry Book-keeping. This fact, together with another of equfal force, viz., that in many of the first-class houses in our large commercial cities, Single Entry is preferred, affords sufficient cause for attempting to present its strongest points to the public. The materials from which the transactions in this Set are constructed, were obtained from an extensive cabinet warehouse in New York, and the routine has the merit, at least, of being business-like. The forms of the books, and arrangement of the various records, are submitted as the most simple and practical in use. One important feature in this Set is the use of the Sales Book distinct from the Day Book. In Set III, although a Sales Book is used, all sales on credit are first transferred to the Day Book, and from thence posted into the Ledger. Here, however, the credit sales are posted to the personal accounts directly from the Sales Book. This affords a great saving of time, and is, in all respects, quite as satisfactory. The figures in the margin of the Sales Book refer to the Ledger page to which the amounts are posted; the initials " C. B." and " B. B." indicate that the result of the sales thus marked, are shown in the Cash Book and Bill Book. The former of these-is exhibited at length; the latter has been omitted, although it is expected that the learner will supply it, after the form given in Set III. 72 REMARKS. The taking in of a new partner forms another important feature of this Set, and one which will afford the learner some of the most valuable hints connected with Accounts. It is a settled principle il Accounts, or should be, that whenever any change in the business occurs, the existing resources and liabilities of the concern should be made apparent; and, consequently, the proprietors' accounts should represent their net investment at the time of the changc. The same rule holds good respecting the landmarks of business, or the financial eras, such as the close of a fiscal year, or any important event which makes it necessary to exhibit on the main books the exact condition of the business. In the case under consideration, the existing partners, " Lester and Brown," propose to admit a new partner, who shall invest equally with them, and share equally in the gains and losses. The partners' accounts now show only their original investment; and it will be evident that, if the new partner invests an amount just equal to this, he will unjustly become a joint-partner in the gains which have already accrued, but which remain unacknowledged in the business. The original partners, it is plain, are entitled to all the avails of the concern previous to admitting the new partner, and if their own proper accounts do not show what this net amount is, they should be made to. Therefore, before deciding how much the new partner should invest to place him on an equal footing with his associates, it becomes necessary to credit the original partners with their respective gains during business. With this view the statement on the third page of the Day Book is made, and the partners thereafter credited, each with his net gain. The partners' accounts in the Ledger are then closed up, and the balances brought down as a new capital, which is, of course, the amount that the new partner must invest. The general Statement which follows this Set affords, perhaps, as convenient a form for such statements as any in use. The student cannot too carefully study the philosophy of these, nor be too particular in drawing them up, as to their neatness and perspicuity. An obscure or insufficient statement of a business, however prosperous and satisfactory may be the condition which it aims to show, is like a good story so bunglingly told that its chief points are obscured, and its moral entirely lost sight of. For simplicity, directness, and efficiency, the forms and general plan of Set IV are submitted as a model. 73 DAY BOOK,-SET IV. G~iej cITeJ/eci- czln6 c-t/4A Ri4c6n en/bei' wnIa C-/Ig-aeia/~ DV a/ iy al 2ea/iwclf efl/ cluAe e.ez / 0^e i t,eve/' ian'ei e 1 ~w efad /1e ad'/ei // 2226 6269 c^o Gf ec e6in/e, 6262/l 62 62 s//a a el, 6e1 6Wmendla 6 2/ CC / 62/ed ^^^ai~c^^/, 6)6 vo A cAei, C, /, I 4. /62, 2620 6 )3ca/nce'L e &cli cne c %, <2 6262 ^ ~ a ^^ ^^^ e fI a; ^ 67 ~ a e^a/ zcndo C&/c, 20 fi00 0 ^/ / /} I 4 ae /ncei GMe'/ ct, 66, 26 2 4 A F l l 2r, ^ ", 262 CZ td/,,eb~ele)^-,^7 74 DAY BOOK,-SET IV. y$.c./ /ua/ I, ga c lcel acee/' v 2/2 / CM lcl 2 24^ 1 s, 2o6 / I I"C Wa o ^ ^ ^ ^ ^, / J - DAY BOOK,-SET IV. 2 $22 />'/ f / i/.'../4,,,@i/ S' Jc c6, 6 6 62 // /n6nOed'// /,,, /fY 6262, Ma{ anc QeAn c1/ncn, 66262 6262 /56/ &^ s al. ace n /c&idaa/Iacc'J, /ei Secyea /i, 4fePxi/a. n, Sffs2L, /^^ < o ^^~n, ^^), 54 27 a/oime4 4edean 2,, 4,m J/o 542 450/ oa"zM^ i'o ^ s//1 S a??l7 DAY BOOK,-SET IV. 4 2,~e, ~zZJ1, / c5a /C -/ / e Saca/eAX, /5626 ^)IA. to. ~ i ^^ 4. XH'/aa^, aa 7^ ~ / ~/ccXScr7&ej 3eZ1 /^ / of^^^ec WCac^ Z sac5 ~~ / / ^^^c26;n,^ ^? 00 / A ^e ^^uA, L /I^ 626 ~/ / ~X /~ /526~ 2 9 79 SALES BOOK,-SET IV. /2 6LeA. a,, ^. /5 026 12 /, &'c 6, / 0262 /~' /Scr~~~ev S~dax c4, f' 0262':?i.':5 / ~-ne c~6/{ce,, fl XZZ_ Ylln C%-u (s) L. ~ 25 / //2 Baz, tv O @, //f /^ / / A t, ^ A 0 a e / a2~ It4e,,c 2 0Q 0) lcfi. Z n. / A~c /2J, ac., 626262 %5 00 2/ 80 si^gX~e (^'L ^^. /^^^ 82 SALES BOOK, —SET IV. 6 /, /1 5626, 6262, J<4,nv (2X ~aJ, 56262 756262CJ Q/ ai'e-ic/ 2~Aac dle/n P/ 6(26262 #e i) YOi, CJZ a,^ t, ed, 50 1 00 M./ MbaR w S 6262 _ _ _ _ _. _ _ 2 5 (. 6~ S/a/ W a, @ //622 / 2625 / ( x/, e@, / 6gd gO =___ _4ay 7, oAlw r Ve/u i_-~~~~~~~~69 e - _,,,v_ a: c!'/Vegnce, /4 | /d4nce, 6j2-'/ // XtM1 / / // |2D,. j310 ca Sfsce, J 6// /Y cSg|/ dlcy cgaSWce, |l /f 6ta W r l i-X I 2<6ns| rgy Segencew v I ogy'Fll/. 1/1, C/, -Y". ~ ~ ~ ~ ~~i 1~ M, A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 27c 8 =~ --;!- _ =_ 84 LEDGER,- SET IV. /^ - ~ i2/2<.. a. / a /1eA 2A Ay t. _''.. /J.,, 2J — __ _________LX0|_,_____ __ /___ _ Jci. 5c^%c^ a c cJ^2 /5 J a. 0 / 2^Y&,i // _Snce _ /, i~I A la4lP~ ~I i, I/2 6 ^aa(i~d0_ ___ I _ __ ___ Ji./ 2 ^cZ / /2& ^ 9/ ^/ ^ 6/25 c4( // // //J ^0 //j1 26 / 5 MBA/ = _0_ | _ 31,~, 85 LEDGER,- SET IV. f/ X 8 Hi:; /,/ e.f gau 0 50 2.,-// // // |1 / X' aId y -<^, / 2-. j? * j S, 7 Hi mez.a $1g/a 6&ct;46na*/zX 2f w50 C6/2-adAg, S ^d& ^,/;,2 t, 2 5ro ifose,,d aw(/aled'l I", A" ooM: go,/,,,,,, oAim ie aKS /,, ^S/1 /c f,, Jmer 0yeac/a/e,/ cn e, /2 /7 S m az o QWm/o' Sf^a'mai 642 O /Y,, 2,m 6r 1endea/eei Z/en, -o /5 26 26 // 7Ainen ii Jaed,/ei cmne ^^ //2 /7 25,, ae / / e ic,/, go / S 7,, imen o 9Ine 7' ye6,@/ei c ne oo / a/ ASc6ncO ow " any/ y/26 72 9)1(11-,zmeN Id'' cae d-a$ di97l 25 2 Gcojke/c&'y & Ieno,e/eei ~4enN. o / 75 // oy o es> cmne o //7 562 9,., ^^cA,6ffma Pee S / 6/2/ // ^ %/men o % a /ei oce ja /25 75 Ar5~ b men, oyed/ei oAne S4 ~9 562 22// ~ 2 ^ f4/ A ^ /2 7 25 2, eOO< //27 S // (a^ y e/ed>/eWi & Je 2< ____ 25 /SS S 62 89 TIME BOOK.-SET IV. APRIT4 18 6 1. NAMES. 2 3 4 5 6 Amt. 8 9 10 111213 Armt. 151617181920 Amt. 222324252627 Amt. Robert Wood......20 // // 20 // // 20 / / / / / / /20 //4/20 Samuel Burns...... 15 / // 12 50 1/ 1 5 / //// 15 ////// 15 P. O'Toole,......... 10 // 6 67 James Murphy,..... /// 10 Pat. McGann,...... /1o 0 / / / /10 / / 0 3 33 John Turk,........ I 1/3 33 / // / 667 Peter Winns,....... 6 // // 6 // 6 //7/7 / / 6 /////7/ 6 Abel Jones,........ 7 7/ / 6 / 7/ / / /4 / / // 6 A. Jackson,....... /6 / / / / / // ///// R. Porter,..... 6../' // 62 / // / / / 6 // / 4// 6 P. Sanford,......... 6 // / 5 /// /4 // /V6 / 7/// / 6 F. Molloy,......... 6 ///// ////// 6 / // V6 H. Wait,....... 6 / 15 / ///6 Henry Trim,....... 6 / / / / 6 / // /6 P. Bush,....... 5 / 3 / / /333 4 /7/7/ / 5 Aaron Burr,........ 5 /// /// / 5 /5 /5 7/ // 5 Thos. Park,........ /5 / 5 ////5 / / / /V / 5 R. Mann.......... 5 167 /4/5 H.Poore.......... 5 5 5 5 S. Parker,.......... 7 7/ 7 7/ V3 3/ 3/ Total,......... 121 33 113 17 121 STATEMENT SHOWING THE CONDITION OF TIIE BUSINESS ON THE 31ST OF MAY. THE following Statement differs, in no material respect, from those which have preceded it; the only difference being in the form of expressing the gains. There being no debts owing to outside parties, the several amounts due the members of the firm constitute the only liabilities. The sum of these amounts, or the total present worth, must, of course, equal the sum of the resources. Resources. 1. From Ledger Accounts.-Balances duo: A. A. Low,............................... $825 H. W. Clark.........5.........6......... 56 R. Bannister..................... 57 Joseph Brooks.......................... 36 Central Bank............................... 12000 Steamer Isaac Newtonw...................... 455 2. TFom Cash Book.-Balance of Cash on hand...... 1003 02 3. From Bill Book.-Notes on hand............... 1016 50 4. From Inventory.-Valuation of Property: Finished Stock on hand...................... 4000 Unfinished............................... 875 Tools and Implement....................... 500 $20823 52 Liabilities. James Lester's Investment............. $6753 44;" " 1 Net Gain.............. 187 73 Present Worth............ $6941 17 Robert Brown's Investment.............. $6753 44 I" " i Net Gain.............. 187 73 " " Present Worth............6941 17 Robert Lincoln's Investment............ $6753 44 It " a1 Net Gain............. 187 74 I " " Present Worth........... 6941 18 TOTAL PRESENT ORT........ 20823 52 91 EXAMPLES FOR PRACTICE. THE principles applied in the foregoing statement have been already sufficiently announced. The examples which follow are intended to afford the student more ample practice in the important labor of expressing financial facts through appropriate forms. Let the solutions be rendered in the form of a Business Statement. EXAMPLE I.-A and B are equal partners, investing each $10,000. At the end of a year they desire to take C into co-partnership upon condition that he will invest equally with them, and share equally in the results of the business. The following is a statement of their afiairs previous to uniting with C: Personal Accounts, John Jones, Dr. $1500, Cr. $700; Robert Fulton, Dr. $5000; James Webb, Dr. $1750, Cr. $1000; Clarence Shook, Dr. $5000, Cr. $2500; Lewis Lyman, Cr. $4000; Dr. $3000; W. F. Norman, Cr. $2000; Dr. $1500; Merchandise unsold, $7500; Notes on hand, $6000; Notes outstanding, $2500; Cash on hand, $2000. Required, a statement showing the gain or loss during business, and the net capital of each partner at closing. EXAMPLE II.-C and D enter into co-partnership, C to furnish the capital, and D to devote his time to the business-gains and losses to be divided equally. C invests $10,000, and during the year withdraws $2000. D withdraws $1500. At the close of the year, they have: Cash, $3000; Personal accounts, $1500; Merchandise, $10,000; Notes, $1750; they owe, on notes and personal accounts, $5000. What is the gain or loss in business? What is each partner's capital at closing? EXAMPLE III.-J and K enter into co-partnership for the purpose of conducting a Building business; each to receive interest at 7% on his net investment, and the gain or loss to be divided equally. J invests: Materials and Implements, $5000; Unfinished contracts, $6750; Notes, $4800; Personal accounts, $10,000; and the firm assume to pay for him a liability of $1000. K invests: Cash, $10,000; Notes, $15,000. At the close of the year, their books show the following condition: Cash on hand, $15,000; Notes, $5700; Interest on same, $500; Materials and Implements $18,000; Personal accounts, $9400. What is the net gain or loss? What is each partner's capital at closing? 92 EXERCISES FOR THE LEARNER. F O I TIH S ERIES. June 1. William Jones and Thomas Mason, enter into co-partnership. WILLIAM JONES invests: Mdse. $4750; Tools and Implements, $750; Notes, $1500; Peter Filkin's %, $500; Robert Hall's do. $700. —TIOMAS MASON rinvests: Cash, $8200.-Sold WV. D. Packard, on %, I set Enameled Furniture, $75; 2 Hair Maltrasses, @ $12 each; I Mahogany Arm Chair, $15.-2. Paid Cash for Stationery, $20.-Sold Robert Banks, for Cash, 1 doz. Dining Chairs, $20; 1 Hall Stand, $8; 1 Mahogany Bedstead, $12. -Paid Cash for Lumber, $25.-Sold George Chrysler, on his note 6 30 ds., I Child's Crib, B.W. $6; 1 Mahogany Bureau, $25; 1 Tete-a-tete, R.W. $30.-3. Received Cash of Robert Hall, on %, $300.-Sold George A. Crocker, on %, 1 Hall Stand, $6; 2 Light Washstands, 1 @ $5, and 1 @ $7; 12 Kitchen chairs, @ 75~.-Sold John Hall, for Cash, 1 French Bedstead, $15.-5. Paid Workmen, Cash to date, $165.-Sold A. WY. Betts, on %, 10 Cane Bottom Chairs, @ $1 75~ each; 1 Black Walnut Tete-a-tete, $30; 1 Card Table, $10; 3 small Washstands, @ $2 50~ each.-Sold James Morgan, for Cash, 1 Black Walnut Book-case, $40; 1 Double-leaf Secretary, $30.-6. Received Cash for John Jacobs' note, due this day, $500.-Sold Charles Williams, on his note G 60 ds., 1 Pair Ottomans, $12; 1 Piano Stool, $7; 8 Brocatelle Parlor Chairs, @ $4 each; I Sofa Table, $15.-Bo't. of Clark Dunham, on %, 1 Lot Black Walnut Lumber, $900.-7. Sold A. W. Betts, on %, 1 Mahogany Centre Table, $15; 1 Cottage Bedstead, $10; 1 Corner Stand, $5.-Sold James W. Lusk, for Cash, 1 Black Walnut Bookcase, $50.-Received Cash in full of Peter Filkin's %, $500.-8. Sold J. C. Buttre, for Cash, 1 Dressing Bureau, (serpentine fiont) $25; 1 Study Lounge, $12; 1 Extension Dining Table, $17.-Sold Wnm. T. Brooks, on %, I Rosewood Tete-a-tete, $50.-9. Sold James MIoore, for Cash, 1 Quartette Table, $6; 6 Parlor Chairs, @ $5 each; 1 Set Enameled Furniture, $50.-10. Paid Cash for Gas Bill, $14 30~.-Received Cash of A. W. Betts, in full of %,.-12. Paid Workmen, Cash to date, $275.-Sold Geo. A. Crocker, on c, 6 Parlor Chairs, ~ $3; 12 Dining Chairs, @ $1 50; 1 Mantel Clock, $5.-13. Sold Benj. F. Butler, on %, 8 doz. Camp Stools, 96 @ 50' each; 1 Portable Secretary, $25.-Received Cash on %, of W. D. Packard, $75.-15. Sold Robert Hall, on %, 6 Gothic Chairs @ $5 each; I French Bedstead, $15; 2 Washstands, @ $4 93 EXERCISES FOR THE LEARNER. each.-Sold W. J. Curtiss, for Cash, 1 Book-case, $40; 4 Library Chairs, @ $7 each; 1 Large Rocking Chair, $15.-17. Paid Workmen, Cash to date, $218.-Received Cash of Geo. A. Crocker, in full of %, $.-Sold J. C. Banks, for Cash, 1 Double Bedstead, $10; 1 Single do., $9.-18. Paid Clark Dunham, Cash on %, $500. -Sold John Banks, on his note @ 30 ds., 1 Bureau, $30; 1 Sofa Bedstead, $45.-19. Sold W. D. Packard, on %, 12 Kitchen Chairs, @ $1 each; 3 Common Bedsteads, @ $5 each; 1 Office Desk, $15. Sold W. T. Brooks, on %, 1 Carved Rosewood Center Table, $45. -20. Received Cash of W. D. Packard, in full of %, $. —21. Sold Robert Hall, on %, 1 Teacher's Desk, $25; 12 Dining Chairs, ~ $1 75~; 12 Cane Bottom Settees, @ $8 each.-22. Paid Cash, Book-keeper's salary, $75.-Received Cash, in full of William Carter's note, now due, $1000.-24. Paid Workmen, Cash to date, $193.-Sold E. A. Charlton, on %, 50 Double School Desks, @ $9 each; 100 Chairs for same, @ 50~ each.-25. Sold Wim. Johnson, for Cash, I Mahogany Bedstead, $20; 1 Marble top Washstand, $17.-Received Cash of Robert Hall, on %, $200.-26. Sold John S. Williams, on %, 6 Parlor Chairs, Brocatelle, @ $5 each; 1 carved Rosewood Center Table, $50; 1 Piano Stool, $10.-Paid Cash, on Drayage %, $50.-27. Sold Peter Duff for Cash, 6 Office Chairs, @ $2 50t each.-Paid Clark Dunham, Cash in full of X, $. Received Cash of Robert Hall, in full of %, $.-29. Sold William Dallas, on %, I Mahogany Sofa, $35; 1 Rosewood Arm Chair $45, 1 Hall Stand, $7; 1 Tete-a-tete, $30. New Firm. July 1. Jones and Mason have this day associated with them George F. Smith, who is to invest an equal amount with each of the former partners, and share equally in gains and losses. The value of unsold Merchandise is $5500; of Tools and Implements, $750; the other resources and liabilities can be ascertained by reference to the appropriate books. Mr. Smith invests: Cash,* -.-Bo't of Henry P. Smith, for Cash, a quantity of Pine Lumber amounting to $3500.-Paid Workmen, Cash to date, $175.3. Sold John S. Williams, on %, 2 Bedsteads, 1 @ $6, and 1 @ $10; 3 Washstands, @ $2 50 each; 6 Kitchen Chairs, @ $1 50~ each; 1 Lounge, $15; 1 Secretary, $25; I Bureau, $18.-5. Sold E. A. Trotter, for Cash, 1 Black Walnut Book-case, $60.Sold James Thurber for Cash, 6 School Desks, (single) @ $5 each; * In order to ascertain the amount of Smith's investment, it will be necessary to carry the gains to the partners' accounts.-A statement should be made similar to that on page 74. 94 EXERCISES FOR THE LEARNER. 1 Teacher's Desk, $25; 2 Office chairs, @ $7 50~ each.-6. Sold Joseph Wadsworth, on his note @ 30 ds., I Rosewood Tete-a-tete, $65; 2 Ottomans, @ $10 each.-Received Cash, in full of George Chrysler's note of the 2d ult., $61.-8. Paid Workmen, Cash to date, $218.-Sold James McGrath, for Cash, 12 Dining Chairs, @ $2 each; 1 Open Lounge, $17; 1 Bureau, $20.-10. Received Cash, on % of WVm. Dallas, $50.-Sold Steamer Troy, on %, 2 Black Walnut Sofas, @ $45 each; 3 Tete-a-tetes, G $50 each; 24 Chairs, @ $7 each. —11. Received Cash, in full of E. A. Charlton's %, $. -Sold W. F. Norman for Cash, I Black Walnut Book-case, $60; 1 Bureau, $30.-Bo't. of Robert Coon's for Cash, lot of Mahogany Lumber, amounting to $5700 —15. Paid Workmen, Cash to date, $212. —16. Sold Henry Harper for Cash, 50 School Desks, @ $9 each.-Received Cash of John S. Williams, on %, $90.-17. Sold Robert S. Hayward, on %, 1 Gothic Book-case, $75.-Received Cash ofB. F. Butler, in full of %, $.-20. Sold John S.Williams, on %, 12 Parlor Chairs, @ $5 each.-22. Paid Workmen, Cash to date, $175.-25. Paid Gas Billin Cash, $15.-Sold Peter McGrath for Cash, 1 Sofa Bedstead, $50.-29. Paid Workmen, Cash to date, $219.-Paid Cash for rent, $100. STATEMENT. Showing the condition of the business, July 31. Resources._ Mdse. unsold, (per Inventory,) 15000 Cash on hand, 9826 05 Notes " 226 W. T. Brooks, Balance of % 95 John S. Williams, " " 150 50 Wm. Dallas, " " 67 Steamer Troy, " " 408 Robt. S. Hayward, " " 75 Tools and Implements, at valuation. 750 26597 55 Liabilities._____ Wm. Jones, Net Capital, July 1, $8637 35 " 3 Net Gain, 228 50 8865 85 Thos. Mason, Net Capital, July 1, 8637 35 7" a Net Gain, 228 50 8865 85 Geo. F. Smith, Net Capital, July 1, 8637 35 " ~ Net Gain, 228 50 8865 85 26597 55 95 QUESTIONS FOR REVIEW. QUESTIONS FOR REVIEW. REMARKS, PAGE 50. 1. What is the peculiar feature of Set III? 2. How does the form of the Cash Book in this Set, differ from that in the preceding? 3. Which form is preferable? 4. Why? 5. For what purpose is the Sales Book used? 6. Is it essential that the sales should be entered on the Day Book? 7. How posted if not so entered? 8. What do the initials in the margin of the Sales Book indicate? 9. Is the Sales Book used in making up a list of Resources and Liabilities? REMARKS, PAGE 72. 10. What is the purpose of Set IV? 11. Upon what grounds has Single Entry been condemned? 12. Is the objection valid? 13. Is Single Entry used to any extent in first-class Business Houses? 14. What is the important feature in this set? 15. How does the Sales Book differ in its use from that in Set III? 16. What is the advantage? 17. What do the initials in the margin indicate? 18. What other feature than the peculiar use of the Sales Book is prominent in this Set? 19. How must a change in the business be marked? 20. At what periods in business is it proper that the resources and liabilities should be shown? 21. In admitting a new partner with an equal investment, how can the proper amount of the investment be ascertained? 22. What objection to making the new partner's investment equal to the original investment of the old? 96 PART II. DOUBLE ENTRY. PART II. DOUBLE ENTRY. INTRODUCTION. IF the method of keeping accounts by Single Entry may be called a system, that by Double Entry may very properly claim the dignity of an exact science; for, while the former is not devoid of excellence as a means of showing the condition of business, the latter not only affords a proof of its own correctness, but in addition to showing the condition of business, gives, also, with mathematical exactness, an indication of the particular channels through which gains and losses accrue. 2The essential difference in the two systems has reference, mainly, to this latter qualification, and to the fact that in Double Entry all the results, including resources, liabilities, gains and losses, are shown in the Ledger, while in Single Entry, the partial results, at all attainable, are gathered from various auxiliary books, including the Ledger, Cash Book, Bill Book, etc. 3 The precise difference may be appreciated by comparing Set III. in Part II. with the corresponding Set in Part I., the transactions being the same in both cases. 4The term Double Entry, as contradistinctive to Single Entry, has reference to the fact, that for every transaction, two or more entries are made in the Ledger. 5 The condition of these entries is such that each transaction, when properly recorded, will produce on the Ledger equal debits and credits; that is, the same value which is carried to the debtor side of one or more accounts must also be carried to the creditor side of one or more accounts, producing thus a perpetual equilibrium of debits and credits, and affording a distinct test of the correctness of the work. The theory of "equal debits and credits" is the leading feature of Double Entry; and although its application is, in all cases, most 99 INTRODUCTION. reasonable and satisfactory to the accountant, it is often adjudged by those whose general intelligence should cause them to blush for their ignorance in this regard, I as being complex and mysterious, and calculated more to befog the mind of the uninitiated than to subserve the ends of justice. 8 To those who are troubled with these vagaries, it is only necessary to say that Double Entry contains every feature of Single Entry; and, that so far as Single Entry goes, it differs in none of its results from Double Entry; the latter being a continuation, or, rather, a perfection, of the purposes of the former. 9 The main distinction which we shall recognize between the two systems is, that while in Single Entry a record is kept of resources and liabilities only, in Double Entry a similar and additional record is kept of special gains and losses. ~This grand feature of Double Entry should commend it at once to all prudent business men; for while it may properly be regarded as affording a true indication of the comparative merits of the various schemes of profit, it also, in a great measure, guards against errors and omissions which might pass undetected in Single Entry. As in Single, so in Double Entry, the main book of Accounts is "the Ledger. 2 The Single Entry Ledger, however, contains only accounts with individuals, while the Double Entry Ledger shows the result of each transaction, both as regards the character of the exchange and the gain or loss thereby effected. Thus'3an account is kept, not only with persons whom we may owe, or who may owe us, but with every species of property in which we deal, and every cause producing gain or loss. 4 Although it is customary, in connection with Double, as well as Single Entry books, to keep a Cash Book and Bill Book, yet all the essential facts connected with cash and notes are shown in the proper Ledger accounts. 15 The three main books used in Double Entry are the Day Book, Journal, and Ledger. 1 The Day Book and Journal are sometimes combined in one. 7 THE DAY BooK. Is the original book of entry, and contains a consecutive history of the transactions, in the order and date of their occurrence. 1It should be plain, concise, and unequivocal in its statements; neither confusing the mind by redundancy of language, nor leaving room for improper inferences from lack of sufficient explanation. 100 INTRODUCTION.'9THE JOURNAL, When used separately, is the intermediate book between the Day Book and the Ledger. " Its office is to decide upon the proper debits and credits involved in each transaction, preparatory to their entry upon the Ledger. The process of thus classifying the transactions is called "ljournalizing. 2 THE LEDGER, Is the book of results,-the final book of entry. 23Here, under appropriate heads, called accounts, are arranged all the facts necessary for a full and satisfactory statement of the business; including, not only an exhibition of the present resources and liabilities, but a distinct record of particular gains and losses. The process of transferring to the Ledger is called "4posting. The following examples of these separate books, showing their characteristic records of the same transaction, will clearly indicate their use:1.-Day Book. NEW YORK, JANUARY 1, 1861. V Bought of JAMES MONROE, on account, 500 bbls. Flour.................. $10 5000 2 / Sold ANDREW JACKSON, for cash, 100 bbls. Flour................... $10 50 1050 2. —ournal NEW YORK, JANUARY 1, 1861. Dr. Cr. I Merchandise, Dr...................... $5000 2 To James Monroe.... $5000 2 3 Cash, Dr...................... 1050 1 To Merchandise...... 1050 Ledger Titles.-Dr. Ledger Titles.-Cr. 101 101 INTRODUCTION. 3.-Ledger. 1 DR. MERCHANDISE. CR. 1861 1861 Jan. 1 To James Monroe.. 1 5000 Jan. 1 By Cash........... 1 1050 For what d eb4ted or hacredited. _For what debited. For what credited. 2 DR. JAMES MONROE. CR. 1861 Jan. 1 By Merchandise.... 1 5000 3 DR. CASH. CR, 1861 Jan. 1 To Merchandise.... 1 1050 102 THE SCIENCE OF ACCOUNTS. Although the books containing a consecutive history of the business are essential for that purpose, yet 25 the science of Accounts pertains exclusively to the results of the transactions as shown in the Ledger. Particularly is this true in Double Entry, where the Ledger contains all the results necessary for a complete rendering of the condition of the business, at any time. 6 Each Ledger Account is, properly, a statement of some financial fact, and shows one of the four following results, viz.: a resource, a liability, a gain, or a loss. These facts or results are ascertained 7 by taking the difference between the sides of the accounts, thus: DR. CASH. CR. Cash Received. Ca.sh Paid out. 1861 1 61 Jan. I To Stock (Investm't) 5000 Jan. 1 By Merchandise... 2500 6" 15 " Merchandise..... 1500 1".... 1200 30"..... 000 30 " David Brown... 500 $11500 "I " " Expense........ 300 $4500 Total Cash Received,..............$11500 " " Paid out,.............. 4500 Balance on hand —2 RESOURCE,........ $000 DR. MERCHANDISE. CR. Coat of lkerehaniase. Proceeds of Merchandise, 1861 I 1861 Jan. 1 To Cash........... 2500 Jan. 15 By Cash............ 1500. 10 " "........... 1200 30 " "............ 5000 " 14 " David Brown... 1500 $ 0oo $5200 Total Proceeds of Merchandise,......... $6500 " Cost " "....... 5200 Net Proceeds —29 GAIN,........ $1300 103 THE SCIENCE OF ACCOUNTS. DR. DAVID BROWN. CR. His indebtedness to us. Our indebtedness to him. 1861 1861 Jan. 30 To Cash............ 500 Jan. 14 By Merchandise.... 1500 We owe him,................ $1500 He owes us,................ 500 Balance due him —SLIABILITY....... $1000 DR. EXPENSE. CR. Outlay. Jan. 30 To Cash............ 00 Total Outlay for Expenses-" Loss,.....$.. 300 We will suppose the accounts given to comprise all in the Ledger, with the exception of the Stock, or Proprietor's account, which should represent the net investment; and that the net investment, as shown by the first entry in Cash account, is $5000. The following simple statement will sufficiently enforce the leading principles of the science. Resource-Cash on hand.................... $000 Liability -We owe David Brown............ 1000 Net Resources, or Present Worth..... $6000 Gain -On Merchandise............$1300 Loss — On Expense............... 300 Net Gain.................. $1000 Add original Investment..... 5000 Gives Present Worth........ $6000 From the foregoing illustrations we are enabled to deduce the following general facts: 1. An Account is a 3 statement of facts pertaining to some per104 THE SCIENCE OF ACCOUNTS. son, species of property or cause, so arranged as to show an important and specific result. 2. " Every account has two sides, a debtor and a creditor; each containing the results of separate transactions, and showing,- in the difference between the amounts, a general result or fact having an important bearing upon the business. 3.'3Accounts may be divided into two classes; one of which is used to designate the resources and liabilities, and the other, the gains and losses. 4. 5 The net gain or loss in business, as evinced by the general result of all the accounts showing gains or losses, is confirmed by a corresponding increase or diminution of wealth, which is shown in the general result of all the accounts showing resources or liabilities. DEBITS AND CREDITS. 86 One of the great difficulties which beset the teacher of Accounts, lies in the proper definition and enforcement of the terms " Debit and Credit." So thoroughly is this fact appreciated, that ambitious authors have been induced to prepare entire treatises on the science, claiming, as an apology for their appearance, the discovery of some "infallible rule" for journalizing, which, in the author's opinion, would entirely revolutionize the labor and processes of instruction, and open up to all future generations the grand highway of " Book-keeping-made-easy." The anxious student is assured that the whole matter turns upon the simple facts of owing and being owed. "Thus," says the author, " every debit owes you, and you owe every credit;" and from these premises is deduced the infallible and homogeneous corollary, " Debit what owes you, and Credit what you owe." Another class of authors rush to the opposite extreme, basing the whole theory of debits and credits upon their utter lack of theory, announcing, at the very threshold, that "the items of which debits and credits are composed form a list of incongruous facts having no object in common." 3 And yet, these very authors, widely as they differ in the methods used to enforce the truths of science, would not differ in the least as to the truths themselves, when applied to the purposes of obtaining the grand result of any series or combination of transactions involving financial interests. In whatever theory we may advance, therefore, we have no desire to underrate the honest convictions of any one who has made himself master of the subject, or to substitute our reasoning for his. 105 THE SCIENCE OF ACCOUNTS. The question as to the best methods of presenting a truth is purely professional. The main object of every teacher should be the attainment of truth, by whatever method. We believe that every student who will thoroughly familiarize himself with the seven principles which follow, will have no difficulty in deciding upon the proper debits and credits involved in any business record which he may be called upon to make: PRINC I P L E S. 1.-The Proprietor. The person or persons investing in the business should be credited, under some title, for all such investments, and also for his or their share of the gain; on the other hand, he or they should be debited for all liabilities assumed by the concern for him or them, for all sums withdrawn from the business by him or them, and for such loss as he or they are entitled to share. 2. Cash. 29 Cash account should be debited for all cash receipts, and credited for all cash disbursements. 3. —Merchandise. 4 Merchandise, and all species of property, bought upon speculalation, should be debited, under some appropriate head, for the cost of the property represented, and credited with its proceeds. 4.-Bills _Receivable. 41 Bills Receivable account should be debited with other people's notes, acceptances, and other written obligations when they become ours, and credited when they are paid, or otherwise disposed of. 5. —Bills Payable. 49 Bills Payable account should be credited with our notes, acceptances, or written promises to pay, when they are issued, and debited when they are paid or redeemed. 6.-Persons. 43Personal accounts, such as the names of persons, banks, or other institutions, competent to sue or be sued, should be debited under their proper titles when they become indebted to us, or we get out of their debt, and credited when we become indebted to them, or they get out of our debt. 106 THE SCIENCE OF ACCOUNTS. 7. —Expense, Ec. "All expenses, of whatever name, should be debited for the out. lay, and all causes, of whatever kind, producing us value, should be credited under some name, for the amount thus produced. The foregoing principles are all embraced in the following simple Formula. 4' Debit what costs the concern value; and Credit what produces the concern value. QUESTIONS FOR REVIEW. INTRODUCTION, PAGE 99 1. Why has Double Entry better claims to the distinction of an exact science than Single Entry? 2. In what particulars do the two systems differ? 3. How may the precise difference be seen? 4. To what has the term Double Entry reference? 5. What is the condition of every complete entry upon the Ledger? 6. What is the advantage of the equilibrium produced in the Ledger? 7. How is the theory of "equal debits and credits" sometimes viewed? 8. How may these objections be answered? 9. What is the main distinction recognised in this treatise? 10. Why should this feature of Double Entry commend it to business men? 11. What is the main book of accounts in Double Entry? 12. How does the Double Entry Ledger differ from the Single? 13. What beside personal accounts are kept in the Double Entry Ledger? 14. Do the Cash Book and Bill Book alone contain all the facts pertaining to notes and cash? 15. What are the three main books in Double Entry? 16. Which two of these are sometimes combined in one? 17. What does the Day Book contain? 18. What should be its character? 19. What relation does the Journal sustain to the other books? 20. What is its office? 21. What is the process of entering in the Journal called? 22. Describe the Ledger. 23. What does the Ledger contain? 24. What is the process of entering in the Ledger called? THE SCIENCE OF ACCOUNTS, PAGE 103. 25. To what does the " Science of Accounts" exclusively pertain? 26. Of what is each Ledger account a statement? 27. How are these results shown? 28. When the Debit side of Cash account is the larger, what does the difference express? 29. When the Credit side of Merchandise account is the larger, what does the difference express? 30. When the Credit side of a personal account is the larger, what does the difference express? 31. When the Debit side of Expense account is the larger, what does the difference express? 32. What is an Account? 33. What are the characteristics of an Account? 34. Into how many classes may Accounts be divided, and what are they? 35. How is the net gain or loss in business, as shown by the special accounts, confirmed? 36. What is one of the chief difficulties in the way of teaching accounts? 37. Do intelligent authors and teachers differ in their application of the truths of Double Entry? 38. When should the proprietor of the business be debited, and when credited? 39. When should Cash account be debited, and when credited? 40. Merchandise? 41. Bills Receivable? 42. Bills Payable? 43. Personal Accounts. 44. Expense, etc. 45. Repeat the generalformula for debits and credits. 107 ACCOUNTS' CURRENT. AN Account Current in commercial usage, is the statement in proper form of a current or running account. It is usually made with a view to settlement and shows the balance due to or from the party to whom it is rendered. When large transactions are conducted, on credit it is usual in rendering the Account Current to average the time of payment, so that the balance may be paid without either party losing interest. The various methods of averaging are given in most arithmetical works, and thoroughly enforced in the High-school edition of this series. We give below the most common form of an Account Current. MR. JOHN R. PENN, In Account Current witX S. S. PACKARD. 1861. July 1 To 2 doz. Bryant & Stratton's (H.S.) Book-k'ping 30 1 " " " (Primary) " 7 " 12 "6 Webster's Unabridged Dictionary, @ $6 36 " 15 "4 Reams Union Letter Paper @ $3 12 Aug. 10 1 doz. Gross Gillott's 604 Pens (M 75~ 9 " 20 doz. Spencerian Copy Books @ $1 20, 15 "15 Dean's Commercial Law @ $2 30 " 20 "20 Gross Spencerian Pens @ 75~ 15, " 12 Reams Best Wove Cap Paper @ $4 48' 30 "50 Commercial Arithmetic @ 75~ 37 50, " 6 Robinson's Surveying $1 25 7 50, " 12 Well's Science of Common Things @ 50~ 6,,,, " 24 " Natural Philosophy @ 75~ 18,,, " 24 " Chemistry @ 75< 18 294 ____CR.___ July 10 By Cash 10 " 15 " " 145 Aug. 1 " " 60 205 Balance due 89 108 SET I. (INITIATORY.) DAY BOOK, JOURNAL AND LEDGER. WITH EXPLANATIONS FOR JOURNALIZING, STATEMENTS, ETC. \O REMARKS. THE following set comprises the most simple transactions known in business; the main purpose being to illustrate the foregoing principles, and to initiate the student more fully into the processes of Book-keeping. The transactions are first recorded historically in the Day Book, in the order of their occurrence; from thencetransferred to the Journal, and from thence to the Ledger. In journalizing a transaction, the first thing to be considered is, the person or thing affected; next, in what manner affected; and next, the proper application of the principle.. For instance, the first entry is-" Bo't of Smith & Sons, on %, 1000 Bbls. Flour." The things affected are, Smith & Sons, and Flour. We have become indebted to the former, and the latter has cost us value by involving this indebtedness. We turn to the principles, and learn that personal accounts should be credited when we become indebted to the persons (Prin. 6), and merchandise, and all species of property, should be debited under some appropriate head for its cost (Prin. 3). The established form of Journal entries requires the debit expression to precede the credit, and hence we have the Journal entry-" Flour, Dr., To Smith & Sons." In posting this entry to the Ledger, we open separate accounts with Flour, and Smith & Sons, debiting the former and crediting the latter. It is not really necessary that any expression should be made under the Ledger title, the date and amount being sufficient to show the result, but it is usual to insert the opposite Journal expression, as an indication of the transaction. The checkmark (V) in the Day Book is made immediately after the transaction is carried to the Journal, and the post-mark in the margin of the Journal (indicating the Ledger page to which the account is posted), immediately upon its being posted. The numeral in the Ledger column next preceding the amounts indicates the Journal page from which the amount is transferred. The Ledger is left in its current or running condition, the general results being first indicated by pencilfigures on the smaller side of each account, and next, more completely and systematically in the Statement on page 121. The method of showing these results on the Ledger is fully shown in Set II. It is expected that the student will omit no part of the exercises given, nor allow himself to proceed to a new set before fully understanding the former. 110 DAY BOOK,-SET I. NEW YORK, JANUARY 1, 1861. Bought of Smith & Sons, on c, V/ 1000 Bbls. Flour, @ $6 00 6000 / Sold Robert Bates, for Cash, 300 Bbls. Flour, X $6 50 1950 Sold Peter Cooper, on %, 250 Bbls. Flour, X $7 00 1750 Sold John Jones, on his Note @ 30 ds., 150 Bbls. Flour, @ $7 00 1050 Bought of J. R. Wheeler, on our Note X 60 ds., V/ 500 Bush. Wheat, @ $1 00 500 Sold James Turner, for Cash, I/ 100 Bush. Wheat, $1 25 $125 00 100 Bbls. Flour, " 6 75 675 00 800 / Paid Cash for Stationery and Books for use of Store, 50 Bought of Thomas Payne, for Cash, 300 Bbls. Flour, @ $5 00 1500 Sold Patrick Murphy, for Cash, 100 Bbls. Flour, @ $6 00 600 142001_ 14200 DAY BOOK,-SET I. 2 NEW YORK, JANUARY 18, 1861. Amount Forward, 14200 Bought of George Davis, -on ac, / 1000 Bush. Oats, @ 75~ 750 Sold Raymond & Co., on their Note X 5 ds., i/ 500 Bush. Oats, @ 80~ $400 00 100 " Wheat, " $1 15 115 00 515 Sold Abram Fuller, for Cash, V/ 400 Bbls. Flour, @ $6 00 $2400 00 300 Bush. Wheat, " $1 10 330 00 2730 / Bought of James Hathaway, on %, V 1500 Bbls. Flour, X $5 50 8250 Sold Jonas Clark, on c, /V 1000 Bbls. Flour, @ $6 00 6000 Received Cash in full for Raymond & Co's Note, 515 Sold John Drummond, for Cash, i/ 500 Bbls. Flour, @ $5 75 $2875 00 500 Bush. Oats, " 90~ 450 00 3325 Paid Clerk Hire, in Cash, $50 00 " Store Rent, 50 00 100 36385 112 JOURNAL,-SET I. NEW YORK, JANUARY 1, 1861. Dr. Cr. / FLOUR, Dr. 6000 / To SMITH & SONS, 6000 Flour cost $6000, and is debited according to Principle 3. We have become indebted to Smith & Sons, and they are credited according to Principle 6. / CASH, Dr. 1950 / To FLOUR, 1950 Cash is received, and is debited, according to Prin. 2. Flour has produced cash, and is credited with the amount produced, according to Prin. 3. / PETER COOPER, Dr. 1750 / To FLOUR, 1750 Peter Cooper has become indebted to us, and is debited according to Prin. 6. Flour has produced this indebtedness, and is credited, according to Prin. 3. 2 BILLS RECEIVABLE, Dr. 1050 / To FLOUR, 1050 Bills Receivable is debited, according to Prin. 4. Flour is credited, according to Prin. 3. 10750 10750 113 JOURNAL,- SET I. 2 NEW YORK, JANUARY 10, 1861. Dr. Cr. Amounts Forward, 10750 10750 2 WHEAT, Dr. 500 2 To BILLS PAYABLE, 500 Wheat, Dr., Prin. 3. BillsPay'le, Cr., Prin. 5. / CASH, Dr. 800 2 To WHEAT, 125 / " FLOUR, 675 Cash, Dr.,Prin. 2. Wheat&Fl'r, Cr., Prin. 3. 2 EXPENSE, Dr. 50 / To CASH, 50 Expense, Dr., Prin. 7. Cash, Cr., Prin. 2. / FLOUR, Dr. 1500 / To CASH, 1500 Flour, Dr., Prin. 3. Cash, Cr., Prin. 2. -~7 / CASH, Dr. 600 ^~/ TTo FLOUR, 600 Cash, Dr., Prin. 2. Flour, Cr., Prin. 3. | OATS, Dr. 750 a To GEORGE DAVIS, 750 Oats, Dr., Prin. 3. Geo. Davis, Cr., Prin. 6. 14950 14950 114 JOURNAL,- SET I. NEW YORK, JANUARY 20, 1861. Dr. Cr. Amounts Forward, 14950 14950 2 BILLS RECEIVABLE, Dr. 515 2 To OATS, 400 2 " WHEAT, 115 Bills Receivable, Dr., Prin. 4. Oats and Wheat, Cr., Prin. 3. / CASH, Dr. 2730 / To FLOUR, 2400 2 " WHEAT, 330 Cash, Dr., Prin. 2. Flour and Wheat, Cr., Prin. 3. / FLOUR, Dr. 8250 a To JAMES HATHAWAY, 8250 Flour, Dr., Prin. 3. J. Hathaway, O(r., Prin. 6. J JONAS CLARK,,Dr. 6000 / To FLOUR, 6000 Jonas Clark, Dr., Prin. 6. Flour, Cr., Prin. 3. / CASH, Dr. 515 2 To BILLS RECEIVABLE, 515 Cash, Dr., Prin. 2. Bills Receivable, Cr., Prin. 4. / CASH, Dr. 3325 / To FLOUR, 2875 3S^ ~" OATS, 450 Cash, Dr., Prin. 2. Flour and Oats, Cr., Prin. 3. 2 EXPENSE, Dr. 100 / To CASH, 100 Expense, Dr., Prin. 7. Cash, Cr., Prin. 2. 36385 36385 115 LEDGER,- SET I. Dr. Cost. Flour. Proceeds Cr. 1861 1861 Jan. 1 To Smith & Sons 1 6000 Jan. 2 By Cash, 1 1950 " 15 "Cash, 2 1500 " 5 " P. Cooper, 1 1750 " 25 " J.Hathaway 3 8250 " 7 " Bills Rec'ble 1 1050 15750 " 12 " Cash, 2 675 7 17?I " " 600 Proceeds,.. $17300 X" 22 " 3 2400 Cost.. 1550 " 27 " JonasClark, 3 6000 et Proceeds, $1550 29 "Cash, 3 2875 17200 Dr. o, ait Smith & Sons. Thei, againt ua. Cr. 1861 We owe them 6000 Jan. 1 By Flour, 1 6000 Dr. Received. Cash. Paid out Cr. 1861 1861 Jan. 2 To Flour, 1 1950 Jan. 14 By Expense, 2 50 " 12 " Wheat& Fl'r 2 800 " 15 " Flour, 2 1500 " 17 "Flour, 2 600 " 3 " Expense, 3 100 " 22 "Flour&Wh't 3 2730 1c50 " 28 " BillsRec'ble, 3 515 " 29 "Flour, " 3325 Received, $9920 Paid out, 1650 9920 On hand, $8270 Dr. Our against him. IPeter Cooper. i, % againt us. Cr. 1861 Jan. 5 To Flour& Oats, 1 1750 H owes us $1750 116 LEDGER,- SET I. 2 Dr. Oters notes receied. Bills R ec'ble. Others notes disposed of. Cr. 1861 1861 Jan. I To Flour, 1 1050 Jan. 28 By Cash, 3 515 Notes received, $1565 1565 " disp'd oi, 515 " on hand, 10560 Dr. co,. Wheat. Proceeds. Cr. 1861 1861 Jan. 10 ToBillsPayable 2 500 Jan. 12 By Cash, 2 125 " 20 " Bills Rec'ble 3 115 " 22 " Cash, 3 330 Proceeds,. $570 Cost,.. 00 Net Proceeds, 70 70 Dr. Our noteredeemed. B ills Payable. Our notes issued. Cr. 1861 Notes outstand', $500 Jan. 10 By Wheat, 2 500 Dr. Outlafor Expensee. Expense. Cr. 1861 Jan. 14 To Cash, 2 50 Outlayfor Expen.$10 30 " 3 100 150 1 117 LEDER,- SET I. 3 Dr. Cost. Oats. Proceeds. Cr. 1861 1861 Jan. 18 To Geo. Davis, 2 750 Jan. 20 By Billsec'ble 3 400 29 " Cash, 3 450 850 Proceeds,.. 850 Cost,.... 750 Net Proceeds, $100 Dr. Our,7against him. George ]D avis. is % against us. Cr. 1861 We owe him $50 Jan. 18 By Oats, 2 750 Dr. Our c against him. J. H athaw ay. is %c against us. Cr. 1861 1861 Jan. 27 To Flour, 3 6000 H e owes us $6000 118 GENERAL STATEMENT. WE are enabled now to exhibit the current condition of our business during the month, with the results thus far accomplished. The Ledger accounts present the following facts:Dr. Trial Balance,-Face of Ledger. Cr. 15750 Cost.......... FLOUR,...... Proceeds....... 17300 Our % ag'stthem. SMITH & SONS, Their% ag'n8sts. 6000 9920 Received...... CASH,........ Paid out....... 1650 1750 His against us. PETER COOPER, Our% ag'nst him. 1565 Others' notesre'd. BILLS REC'BLE, Other notes disp.of 515 500 Cost......... WHEAT,.... Proceeds.... 570 Our notes redem'd BILLS PAY'BLE, Our notes issued. 500 150 Outlay........ EXPENSE,................ 750 Cost......... OATS....... Proceeds....... 850 Our% ag'nst him. GEORGE DAVIS, His % against us. 750 Our% ag'nsthim. J. HATHAWAY, His a against us. 8250 6000 Our% ag'nsthim. JONAS CLARK, His a against us. 36385..... Equilibrium.....36385 The above statement is called a " Trial Balance" for the reason most apparent; it is a trial to ascertain if the debits and credits on the Ledger are equal, or balance. It does not, as some suppose, prove the e4dger to be absolutely correct, as there are many circumstances under which the Ledger may balance, and yet be wrong. This form of Trial Balance, however, is so nearly a test, that under ordinary circumstances, it may be considered satisfactory. By observing the footings it will be seen that they exactly agree with those of the Journal, which could rarely be the case, were any of the Journal entries oniitted in posting; and as the footings of the Journal columns also tally with that of the Day Book, it is almost 119 GENERAL STATEMENT. conclusive that all the original entries have found their way into the Ledger. There will remain but two chances of error in the accounts, viz: from improper Journal entries, or from posting to the wrong accounts in the Ledger. In order to afford this additional test, we have found it necessary to carry into the Trial Balance the total footings of the Ledger. If we desired only to test the balances of the Ledger, this would not be necessary, as will be seen from the following example: Trial Balance,-Differences. Dr. Cr. I FLOUR,...... Net Proceeds,.. Gain,... 1550 2 SMITH & SONS, We owe them,... Liability, 6000 3 CASH,....... Amount on hand, Resource, 8270 4 PETER COOPER, Be owes us,..... Resource, 1750 5 BILLS REC'BLE, Amount on hand, Resource, 1050 6 WHEAT,..... Net Proceeds,. Gain,.. 70 7 BILLS PAYABLE, Our notes outstg, Liability, 500 8 EXPENSE,.... Otlay,...... Loss,.. 150 9 OATS,....... Net Proceeds,... Gain,.. 100 10 GEORGE DAVIS, Weowe him,...Liability, 750 11 J. HATHAWAY, Weoweehim,...Liability, 8250 12 JONAS CLARK, ie owes s..... Resource, 6000 Equilibrium,... 17220 17220 We have here a test of equal debits and credits quite as satisfac. tory as the other, and much more brief, upon the principle of cancellation; that is, permitting a debt to offset a credit of the same amount, and vice versa. These forms have each its peculiar advantages, and it is often found convenient to combine them in one. Examples of this latter method will be found in a more advanced portion of the book. In the Trial Balance of " Differences" it will be seen that each Ledger account expresses one of the four results previously men120 GENERAL STATEMENT. tioned, viz: a resource, a liability, a gain, or a loss. By a careful classification of these facts we are enabled to present one of the most beautiful and satisfactory theories of Double Entry, viz: that the net gain or loss in business exactly corresponds with the increase or diminution of wealth. The following statements should be carefully studied: Resources and Liabilities. Resources. 3 CASI,........ Am2ount on hand,.. $8270 00 4 PETER COOPER, lie owes us........ 1750 00 5 BILLS REC'ABLE, Yotes on hand,.... 1050 00 12 JONAS CLARK,. lie owes us,...... 6000 00 7'070 Liabilities. 2 SMITI & SONS,. te owe them...... 6000 00 7 BILLS PAYABLE, Our notes outstand'g, 500 00 10 GEORGE DAVIS, TVeowe him...... 750 00 11 J. HATHAWAY,....... 8250 00 15500 PRESENT VWORTII,. 1570 Gains and Losses. _____-_- Gains. 1 Flour,.. yet Proceeds,.. 1550 00 6 Wheat,.. ".. 7. 70 00 9 Oats,.... " ".. 00 00 1720 __ Losses. 8 Expense, Outlty,........ 150 NET GAIN,... 15 70 121 EXAMPLES FOR PRACTICE. By comparing the numerals in these statements with those in the Trial Balance, it will be seen that all the Ledger accounts are used, rnd that the original purpose of each account is fully recognized. The statement of Gains and Losses will afford a more practical idea of the peculiar advantages of Double Entry than could be gathered f:om any other system of logic. The bare assertion that all gains..re the result of an increase, and all losses of a decrease in wealth could not be denied; but the proof of the assertion, drawn from the Ledger itself, as indicated in the above statements, will carry conv iction which must be conclusive and abiding. Commencing business without capital, it will be easily under-,:tood that the present worth, or net ccaital at any time, must exactly correspond with the net gain. From these illustrations we derive the following RULES. 1. To findc thle ~Net Gcain: SUBTRACT THE SUMI OF ALL THE LOSSES FROM THE SUM OF AILL THE GAINS; or, SUBTRACT THE CAPITAL AT COI1MENCING FROM TIIE CAPITAL AT CLOSING. 2. To find the Present V2orth: SUBTRACT THE LIABILITIES FROM THE RESOURCES; 0, ADD THE NET GAIN TO THE NET INVESTMENT. EXAMPLES FOR PRACTICE. ExAMPLEr 1.-A. commenced business with the following investment: Cash in hand, $300; Cash in bank, $4000; MIdse. on hand, (5000; Notes, $2500. His losses and gains were as follows: Gain on mdse., $1575; Do. on Shipmtent speculations, 85000. Loss on expense, $300; Do. on bad debts, $1200. tVhat was his net gain? Whaat his capital at the close of business? Ans.-Net gain, $5075. Cap. at closing, $16,815. EXAMPLE II.-B. commenced business with a cash capital of 83795 83. At the end of the year his resources and liabilities were as follows: Resorrces.-Mdse. unsold, $5725; Cash on hand, 122 EXAMPLES FOR PRACTICE. $3875 90; Notes, $1500; Personal accounts, $8500. LiabilitiesBills Payable, $8000; Personal accounts, $3500. What is he worth at the end of the year?2 How much did he gain? Ans.-Present worth, $8100 90. Gain, $4305 07. EXAMrPLE II.-C. commenced business without a capital. At the end of the year his Ledger exhibited the following balances. Dr. Cr. Cash,........... 4500 iMdse.,.......... 1575 John Johnson,....... 1500 Robert Blake,....... 1200 Silas Burch,...... 1875 Andrew Smiley,....... 4725 Bills Receivable,....... 1900 Bills Payable,....... 1100 Expense,......... 175 9275 9275 What has been his gain? What is his ccpital at the close of the year?' EXAMPLE IV.-The following Trial Balance shows the condition of my business at the close of a year. Required a statement showing gains and losses, resources and liabilities. Dr. Cr. Cash,........... 10397 6792 84 Merchandise,........ 5000 5620 Real Estate,........ 1000 12000 Andrew Simpson,..... 4000 2500 William MAatthews,... 8000 9750 Expense,......... 1200 Bills Receivable,...... i7000 5000 Bills Payable,........ 1500 Henry Martin,....... 500 3434 1 Abram Guilford,....... 1500 1000 47597 47597 00 This and the succeeding example should be rendered in tie form of the Statement on page 12L 123 EXERCISES FOR THE LEARNER. F I I1 S T2 S E R I E S. Memoranda. January 1. Commenced business without capital. Bo't of S. S. Packard on %, Mdse. amounting to $5750.-Sold John R. Penn, for Cash, 10 Yds. Broadcloth, @ $5; 3 do. Vest Satin, @ $8.-Paid Cash for Stationery and Postage, $10.-2. Sold J. 1-. Goldsmith, on %, 1 Vest Pattern, $7 50; Trimmings for same, 82; 50 Yds. Amoskeag Sheeting, @ 12~.-3. Sold J. M. Bradstreet, on his Note @ 60 ds., 1 Case Boots, 24 Pairs, a@ 3 50; 25 Yds. Flannel, @, 50W.Sold E. A. Chariton, for Cash, 1 Box Hosiery, 810; 75 Yds. Lowell Prints, @ 10. —5. Paid S. S. Packard, Cash on, $50. —7. Sold Robert Baker, Invoice of Shirting and Fancy Cloths, for $3700; Received in payment, Cash, 83000; BIalance char ged on'.-9. Paid Store Rent in Cash, $100.-Received Cash in full of J. II. Goldsmith's %, 8. —0. Sold James A. Packard, on %, 20 Yds. Broad loth, @ &3 75; 50 do Cassimeres, @ $1.-132. Sold C. J.'Dietrich, for Cash, 12 Pairs Ladies' Congress Gaiters, @ 82; 1 Case M3isses' Tipped Shoes, 24 Pairs, @ 81 25; 3 Cases Men's Double Sole Boots, 36 Pairs, O@ 4. —14. Paid Clerk's Salary in Cash, $50.Sold J. C. Bailey, for Ca.sh, 1 Doz. Balmoral Skirts, 12 @ $2; 1 Piece MIous. de Laie, 75 Yds., 5 d 20T; 1 do. VWamin stta Sheeting, 50 Yds. @ 10. —15. Bo't of James Dawes, on our Note @ 3 mos., Invoice of Fancy Broadcloth, amounting to $2500.-Sold Rob't C. Spencer,.for Cash, 2 Pieces Broadcloth, 50 Yds., @ $3 50; 1 do. Lowell Prints, 25 Yds., @ 12~.-16. Paid S. S. Packard, Cash on %, $2000.-Sold Henry Ivison, on %, 150 Yds. Waamsutta Sheeting, @ 15T; 50 Yds. Broadcloth, @ $4. —18. Received Cash of James A. Packard, in full of %,~.-Sold Richmond Kin(gman, for Cashlj 3 Doz. Elastic Hoop Skii'ts, 36 ( 82; 4 Doz. Bllmoral do., 48 @ $2 25.-20. Sold Henry Blakeman, for Cash, 1 Piece Irish Linen, 124 EXERCISES FOR THE LEARNER. 60 Yds. @ 75~; 3 do. Lowell Prints, 150 Yds., @ 10~; 5 do. Amoskeag Sheeting, 250 Yds., @ 14~.-21. Sold J. C. Bryant, on %, 2 Cases Ladies' Tipped Gaiters, 48 Pairs,, $2; 5 do. Boys' Doublesole Boots, 60 Pairs, a $1 50. —22. Paid Cash for Petty Expenses, $15 50.-25. Rec'd Cash on Robert Baker's %, $350.-Paid S. S. Packard, Cash on %, $500.-Sold Lorenzo Fairbanks, on %, 50 Yds. Broadcloth, @ $4; 75 do. Cassilmeres, @ $1 25. —27. Sold James Smith, for Cash, 3 Pieces Cambric Muslin, 60 Yds., @ 25~; 3 do. Scotch Plaid, 120 Yds. @ 11~.-Sold J. McMillan, on his Note @ 30 ds., 40 Yds. Black Doeskin, a $1 25; 8 Pieces Merrimack Prints, 250 Yds., G 10~.-30. Sold Peter McGrath, for Cash, our entire stock of Goods, amounting, per Inventory, to $3450.-Paid S. S. Packard, in full of %, $3200. Trial Balance. The following Trial Balance will indicate the condition of the Ledger containing the result of the foregoing transactions. The student should be required to render his statement therefrom after the manner of the statement in connection with Set I. Fiace of Ledqer. Dr. Cr. S. S. Packard,........ 5750 5750 Merchandise,........ 8250 8971 45 Cash,.......... 7747 70 5925 50 Expense,......... 175 50 J. H. Goldsmith,.... 15 50 15 50 Bills Receivable,.... 171 50 Robert Baker,..... 700 350 James A. Packard,...... 125 125 Bills Payable,........ 2500 Henry Ivison,....... 222 50 J. C. Bryant,..... 186 L. Fairbanks,..... 293 75 23637 45 23637 45 125 SET II. (In Colors.) DAY BOOK, JOURNAL, LEDGER AND AUXILIARIES. LEDGER CLOSED, AND RESULTS SIHOWN IN AN IMPROVED FORM OF BALANCE SHEET, WITII FULL EXPLANATIONS. Budv^^ \^ VYO COVL^ REM ARKS. THIS Set is a continuation of Set I., although the nature of the business undergoes a change. The merchandise represented in the previous Set being all disposed of, we now invest in a more miscellaneous stock, comprising a general assortment of groceries and provisions. Instead of keeping a distinct account with each article of traffic, as in Set I., we classify all under the title of " Merchandise." This is the usual business method, and should always be adopted, except where it is essential to know the gains and losses on each particular kind of property. Having a net capital at commencement, the first entry must pertain to the existing resources and liabilities. Stock, or the proprietor, is credited with the total investment, and debited with the liabilities assumed, according to Principle 1. The term " Sundries" is here, for the first time, used in its technical sense. It means, simply, szunzdry cccountss, and is convenient as a Journal expression, and to avoid the necessity of enumerating the items which comprise the totals carried to the Ledger accounts. This convenience will be immediately apparent by comparing the Ledger entries of this Set with those of the preceding. The object and method of "closing the Ledger" is also fully illustrated; a point which the student should not pass lightly over. The great difficulty in learning the science of Accounts from a textbook, exists in the tendency to copy the forms and exercises mechanically without a proper understanding of the principles which give them force. The business aspect presented by the forms of this Set, will at once commend them to the student, as models for his emulation. The red itn entries, in particular, are intended to remove all the obstacles to a full and clear understanding of the instructions given. In short, Set II. is presented as embracing, in the highest degree, the essential qualities of Double Entry; and as such, it is commended to the student's most careful attention. 128 DAY BOOK,-SET II. NEW YORK, FEBRUARY 1, 1861. Commenced Business this day with the following Resources and Liabilities, taken from Ledger A. (See Statement, Page 121.) Resources. Cash on hand, $8270 00 / otes" " 1050 00 Peter Cooper's account, 1750 00 Jonas Clark's " 6000 00 17070 Liabilities. Notes outstanding, $500 00 Smith & Sons' account, 6000 00 George Davis, " 750 00 James Hathaway's " 8250 00 15500 Ax -— 1- I Bo't of Comstock & Co., for Cash, 10 Hhds. N. 0. Mol., 600 gal., @ 401 $240 00 10 " Cuba Sug., 9500 lbs." 5~ 475 00oo 17 Bags Rio Coffee, 1575 " "165 252 00 20 Hf. Ch. Ool.Tea, 1080 " "50~ 540 00 10 Tierces Rice, 5000 " " 4t 225 00 1732 Sold S. S. Randall, on, I 3 Gals. Molasses, 50, $1 50 200 lbs. Sugar, " 6$ 12 00 150 " Coffee, "16$ 24 00 37 50 Sold James W. Lusk, on his Note @ 30 ds., 2 Hhds. Sugar, 2100 lbs., @ 61 $126 00 10 Hf. Chests Tea, 540 lbs., " 55 297 00 423 Paid Cash to Geo. Davis, in full of %, 750 355121 50 129 DAY BOOK,-SET II. 2 NEW YORK, FEBRUARY 4, 1861. amount Forward, 35512 50 /Sold Henry C. Spencer, on %, 2 Hhds. Molasses, 120 Gals, @ 45f 54 Bo't of J. A. Tilford, on our note @ 60 ds., 10 Tubs Lard, 400 lbs, @ 13f 52 00 20 Boxes Soap, 1400 lbs., " 70 98 00 5 Bbls. Pork, 1000 lbs., 10~ 100 00 250 Sold Harmer Smith, for Cash, {/ 2 Bbls. Pork, 400 lbs., @ 1010 42 00 1 Tierce Rice, 500 lbs., " 5 25 00 67 SQld B. F. Carpenter, on, I I/ 2 Tierces Rice, 1000 lbs., @ 51i 55 00 1 Bag Rio Coffee, 150 lbs., " 180 27 00 82 Bo't of Clarence Doubleday, for Cash, j/ 10 Bbls. Potatoes, @ $3 00 30 00 1000 lbs. Eng. Dairy Cheese," 18 180 00 210 7 i Sold James Reed, for Cash, / 10 lbs. Coffee, ~ 18, 180 3 Boxes Soap, 210 lbs., " 8' 16 80 i 18 60 Bo't of Robert Hanaford, for Cash, Bo't of Robert Hanaford, for Cash, i / 10 Hhds.Hav.Sugar, 11000lbs.@ 50 550 00 3 N. O. " 3700 " " 5 203 50'753 50 --- 9 --- Sold Henry Van Dyck, on %, 2 Hhds. Havana Sugar, 1970 lbs., @ 6 I1 118 20 37065 80 130 DAY BOOK,-SET II. 3 NEW YORK, FEBRUARY 10, 1861. 1/ Amount Forward, 37065 80 V Paid James Hathaway, Cash on %, 4000 Sold James Hathaway, on %, / 1 Bbl. Pork, 200 lbs., 11~ 22 00 1 Bag Rio Coffee, 110 lbs, "18~ 19 80 1 Hhd. Hav. Sugar, 900 lbs. " 6 54 00 95 80 Sold L. Fairbanks, on,, / 100 lbs. Eng. Dairy Cheese, @ 25' 25 00 1 Bbl. Potatoes, 4 00 29 Sold Henry Van Dyck, on %, / 10 lbs. Coffee, @ 18e 180 50 " Eng. Dairy Cheese, " 25~ 12 50. + 50 " Rice, " 5 2 75 17 05 / Paid Cash for Rent of Store, 100 --- // Sold J. T. Calkins, for Cash, 150 lbs. Eng. Dairy Cheese, ~ 25~ 37 50 ~ ~ ~ — ~ 7 - _ _ _ _ / Rec'd Cash of Henry C. Spencer, in full of %, 54 Sold S. S. Randall, on n, T / 25 lbs. Tea, 560 1400 50 " Lard, "15 7 7501 20 " Rice, " 5 1 00 1 22 50 i. — ~- -_ —~- I~ Sold Peter Cooper, on c, "' 2 Bbls. Pork, 400 lbs., @ 11 44 I41465 65 131 DAY BOOK,-SET II. 4 NEW YORK, FEBRUARY 22, 1861. Amount Forward, i 41465 65 Sold E. F. Hill, on %, V/ I Hf. Chest Tea, 54 lbs., @ 601 32 40 Received of Jonas Clark, in full of %, t/ Cash, $3000 00 Note, @ 90 ds., 3000 00 6000,' i / Paid Smith & Sons, Cash on 3, 3000 Sold George Davis, on, / 2 Hhds. N. 0. Molasses, 120 Gals. @ 442 53 60 Paid Cash for our Note, favor of J. R. Wheeler, 500 Sold E. C. Bradford, for Cash, 10 lbs. Rio Coffee, @ 19 $1 90 10 " Tea, "50~ 500' 50 " Rice, " 70 3501 10 40 ___0_ Rice____ -- Sold Edwin Morgan, for Cash, 1 Tierce Rice, 500 lbs., s 6+ 30 00 2 Bbls. Potatoes, " 3 00 6 00 361 I/ \ Paid Clerk's Salary, in Cash, i 100 51198' 05 132 JOURNAL,-SET II. NEW YORK, FEBRUARY 1,- 1861. 1 Sundries, Dr. To Stock, 17070 2 Cash, 8270 1 Bills Receivable, 1050 i Peter Cooper, 1750 Jonas Clark, 6000 I Stock, Dr. To Sundries, 15500 3? " Bills Payable, 500 I,8 " Smith & Sons,l 6000 3 " George Davis, 750 >3. " J. Hathaway, 8250 Merchandise, Dr. I 1732 2 To Cash, 1732! I 2_____ ____' ~ ~'~ ~. i 4 S. S. Randall, Dr. 371 50 2 To Merchandise, 37 50 _____I _______. __________II 1 Bills Receivable, Dr. 423 I 2 To Merchandise, I 423 George Davis, Dr. 7 50o 1'2 To Cash, 750 4 Henry C. Spencer, Dr. 54 l 2 I To Merchandise, 54 _____ ____i \ 2 Merchandise, Dr. 250 r ~3 |- -` To Bills Payable, 250 Cash, Dr. ~2 ~ To Merchandise, 67 35883' 50 35883 50 133 JOURNAL,- SET II. 2 NEW YORK, FEBRUARY 6, 1861. Amounts Forward, 3 3588 3 50 35883 5 B. F. Carpenter, Dr. 82 2 To Merchandise, 82 2 Merchandise, Dr. 210 2 To Cash, 210 7~ 2 Cash, Dr. 18 60 2 To Merchandise, 18 60 2 Merchandise, Dr. 753 0 2 To Cash, 753 50 4 Henry Van Dyck, Dr. 118 20 2 To Merchandise, 118 20 3 James Hathaway, Dr. 4000 2 To Cash, 4000 1_-.______ 1 -__~i 3 James Hathaway, Dr. 95 80 2; ^To Merchandise, 95 80 4 L. Fairbanks, Dr. 29 I2 To Merchandise, 29 4 Henry Van Dyck, Dr. 17 051 1 ^ ~2 {ToMdse. 171 05 4 Expense, Dr.. 100 I To Cash, 1 100 2 Casl Dr. 37 50 2 To Merchandise, I 87 I50 413451 15 1 41345 15 134 JOURNAL,-SET II. 3 NEW YORK, FEBRUARY 17, 1861. Amounts Forward, 41345 15 141345 15 2 Cash, Dr. 54 4 To II. C. Spencer, 54 4 S. S. Randall, Dr. 22 50 z'2 }To MIerchandise, 2250 1 Peter Cooper, Dr. 44 | 2! To Merchandise, i 44 E.F. Hill, Dr. 32 40 12 To Merchandise, 32 40! _____-___:1 Sundries, Dr. To Jonas Clark, 6000 2 Cash, 3000 I 1 I Bills Receivable, 3000 I Smith & Sons, Dr. 3000 ~' 2To Cash, 1 3000 ___ 1_ i_ George Davis, Dr. 53 60 i'2 _. _ _ To Merchandise,' 53 60 I ___ __~ 6 —. —---—. — 1 I Bills Payable, Dr. 500 \2 To Cash, 500 2Cash, Dr. I 10140 i1 2 ~ To Merchandise, 10 40 Cash, Dr. 1 36 2 ITo Merchandise, 36 4Expense, Dr. 100 1 2 To Cash, _ 100 I 51198 05 51198 05 135 LEDGER,- SET II. Dr. Stock. Cr. 1861 1861 Feb. 1 To Sundries, 1 15500 Feb. 1 By Sundries, 1 17070 28 " Balance, 2103 05 "Loss&Gain L5 533 05 17603 0 17603 05 Dr. Bills Receivable. Cr. 186'l' 1' i' 1S61 I Feb. 1 To Stock, I j 1050 i' b. 28 -By Balance, 4473 3 " Mdse., 1 423 i " 23 " Jon.Clark, 3 3000i j; 14473 { 4473 Dr. Peter Cooper. Cr. 1861' "" "' "''' T' " l''1861 Feb. 1 To Stock, 1 1750 I b. 28'y B Blance, 1794 " 20 " Mdse., 3 44 i _ _ I'.........'!. 1794 17.94 Dr. Jonas Clark. Cr. 186''' 1861 Feb. 1 To Stock, 1 6000 Feb. 23 By Sundries, 3 6000 136 136 LEDGER,- SET II. 2 Dr. Cash. Cr. T MO_..1861 Feb. 1 To Stock, 1 8270 Feb. 1 ByMdse., 1 1732,) 5 " Mdse., " 67 " 3 " Geo. Davis, " 750 " 7 " 2 l8 60 " 6 "Mdse., 2 210 " 15 ", 37 50 " 8 " ") 5 75350 17 " H. Spencer, 3 54 " 10 "J.Hath'way " 40CO 23 "JonasClark, " 3000 " 15 "Expense, " 100 " 26 "Mdse., " 10 40 " 25 "Smith&Sons 3 3000, 27 " ", 36'" 26 "BillsPay'be " 500 " 28 " Expense, " 100 _,_ " Balance, 84 S 11493 50 11493 50 — 1t 1 10 5 1Xi=~1493 50 Y i/ i I -...i l~ j _ _____________ _ __ ____ _ _ Dr. Mlerchandise. Cr. s1861 i 1 861 5 " Bills Payable " 250 i " 3 " Bills Rec'ble, " 423 6 "Cash, 2 210 " 4 ". C.Spencer 54 ) 8( )"t "1' ] "7535 " 5 "Cash, " 67 " 2 I Lss&Gizn 78303 5 6 B.FCarpnt r 2 82 L G " 7 "Cash, " 18 60 II/ |l l " "H.Van Dvck " 118 20 ~ / " 1 12 " 2 J.HIathaway, " 1 95 80 " 13 "L. Fairbanks, 29 1 /" 14 "H.VanDyck, 17 05 " 5 " Cash, " 37 50 / 18 "S.S. Randall, 3 22 50 " 20 "Peter Cooper" 44 8 I / j 1 1 i" 22 "E. F. Hill, " I 32 40 " 25 "Geo. Davis, " 53 60 " 26 "Cash, 10 j40 " 27 " " " 36 1 28 "Balan., (vli.) " 2), i / 81'3678 651 1 3678 55 137 LEDGER,-SET II. Dr. Bills Payable. Cr. 1861 S-61 Ffb. _ Ip Ch 3 500 Feb. 1 By Stock, 1 500 _^ 12Xu ^ y S0 I__0 " 5 " Mdse., 1 250 _50 1K50 Dr. Smith & Sonis. Cr. 1S61 I i _ _S Fgb. 25 W ah, 3 j3000 Feb. 1 By Stock, 1 ~' 6000 ____ 1 6000 1 Leb I T J I __ iii LI {{F { Dr. OJ eorge Davis. Cr. {1861 I!0 j I {i Feb. 3 To Cash, 0 i Feb. 1 I By Stock, 1 750 Feb. 25 To dse., 3 3 60.':b 128 By Balanc. 5 Dr. James I-athaway. Cr. I -S61 IS6r Feb. 10 To Cash, 2 4000 Feb. By Stock, 1 8250 12 Mdse. 1 95 80 " 28 " Balance, 4154 2 __ I oo8250 8250 00 8250 138 LEDGER,- SET II. Dr. S. S. Randall. Cr. Feb. 2 To Mdse., 1 37 50 k.F 28 By Baance, 60 1I " " 3 22 50 60 60 Dr. Henry C. Spencer. Cr. IS61 1 i 861 Fob. 4 To Mdse., 1 4 Feb. 17 By Cash, 3 54 Dr. Henry Van Dyck. Cr. 1861 I 1 861. Feb. 9 To Mdse., 2 118 20 Fe hb. 28 By Balance, 18 1 25 14 " " 11 05 135 25 1 _135 25 Dr. 1. Fairbanks. Cr. Feb. 113 To Mdse., 2 29 lFeb. 13 By Balance, 29 _ _ I Dr. Expense. Cr. 1861 I ~1 T Feb. 15 To Cash, 2 100 \eb. 28 By Loss & Gain 200 " 28 3 ___ I I 200 I 200 139 LEDGER,-SET 1I. 5 Dr. E. F. Hill. Cr. 1861 [ 181 * 1__1 _ Dr. B. F. Carpenter. Cr. 1861 1 861 Feb. 6 To dse. 2 ] 821 I 28 By R lance, - 8,'......._ Dr. Loss and Gain. Cr. ~186T --— Tr - 1861'[ Feb. 28 To Mdse., 2 200 l, Feb. 28 By Bills Pay'be i Feb. 28 To Expense, L 2 171 9 Feb. 28" By " Mdse., 12} 733 05,,." Cashc, iL2:1 3,18 " |"Stock, L 210 05___ " Go. Davis, L3! 533 0:1 1 3305 Dr, " S. S. R andall, L41 60, L. Fairbanks L4j 29 Dr. Res..u. l. Balance. LiaWI Lie. Cr. F~ii ~ ---.. ---- 1861 —F.Carpen'r L5 82 I... —--- - Feb. 281 ToMdse., L21 2500 Feb. 28 ByBillsPay'be 2501 " " ills Rec'ble, L1 4473 " " "Smith& Sons L3 3000 " "P. Cooper, Li! 1794!S " "J. Hathawayl L3 4154 20 " " "Cash, L2> 318 " " " Stock, L 2103 05 " " Geo. Davis, L31 53 60 S S.SRandall,L4! 60 1 " H.VanDyck, L4 135 2511 " L.Fairbanks, L4i 29 I " E. F. Iill, L5, 32 40,1{ " " B.F.Carpen'r La 82 1,51! l 9507 25i 9507 25 140 S. S. PACKARD'S BALANCE SIIEET.* r~ ~ ~ ~~~~~~-~rvz -7 Trial Balance. Inven Representative. tock. Real. Takien Februar~y 28S, 1S61. ke i1 - -- Stock,.. _____ Trial I try. r. Resourcs Laiiis Dr. Cr. tory. Losses. Gains D C Librili.ie8 Stoc...... t ~ot..oo.........o.0.1570. Bills Receivable,... 1 4473.......;4473 Peter Cooper, 1 79. l....7. 9.'.... 94 Cash,.3....8 C.ash.... 2 11193 50 11145 5.. Merchand.ise, 2i 2945 50 1178 512500 3 5... 34 s, 25050 Bills Payable,... 3' 50 750 25. Smith & Sons,... 3 300 600 I. 3000 George Davis, 3 8036 750 " 53 60 James Hathaway, 3 4095 80 8250.. l 415420 S. S. Randall. 4! 0......... 60 Henry Van iDyck,. 4 15 25 135 25' L. Fairbanks,..4.. 29 Expense..... 4i 20.. 200.... E.F. Hil,,1 1..3.... "..... 3.4 32 40 B. F. Carpenter,... 2 — ZU4 05 514 O To Baklnc* —Xd Capflta4 i103 3 05 21.. 03 05 210305 2103 051 9507 25 9507 25 For full instructions in preparing this Balance Sheet, see page 147, 210_3.[_051I~~`-'~~ -II~~-L~~~ II-~-YUII- ^~I —~I95 7 25 507 2 ORDER AND PURPOSE OF CLOSING THE LEDGER. IN the preceding Set it was thought best to leave the Ledger in its open or current condition, the results of the business being shown in a separate statement. When the object is to know simply the condition of the business, this method is sufficient; but when it becomes necessary to mark the progress of the business in some enduring manner upon the Ledger, the accounts must be " closed," and the balances exhibited, either under the account itself, or in some other account, of similar import. From the statement in connection with the previous set, the student has learned that the Double Ehtry Ledger contains two classes of accounts; one showing the present condition of the business, by representing all its resources and liabilities, and the other showing its progress, by representing its particular gains and losses. For the purpose of distinction, and as a proper designation of their character, we shall call the former of these two classes, PEAL, and the latter REPRESE-TATIVE. By REAL accounts, therefore, is meant those which show, in the difference between their sides, either a resource or a liability; and by REPRESENTATIVE, those which show in the same manner, either a gain or a loss. The student, if he has carefully examined the foregoing instructions, will have no difficulty in making this classification. The object of " closing" the Ledger is to put an end to its current condition by disposing of the REPRESENTATIVE accounts; for inasmuch as the proprietor is to be credited with his net investment, whenever that net investment is increased by gains, his account should get the benefit of it. As it would be impracticable to carry the separate gains and losses to the proprietor's account when they accrue, they are permitted to remain in the accounts producing them, until such periods as may be deemed best to transfer them. This is usually done once a year, and in some establishments every six months, thus making an era in the business, and restoring the Ledger to its proper condition of showing only resources and liabilities. We shall now attempt to take the student carefully through the process of " closing the Ledger." 142 CLOSING THE LEDGER. PROCESS OF CLOSING. It is supposed that the student has gone through with the process of journalizing and posting the transactions in Set II., and that his Ledger accounts present an equilibrium of debits and credits. To test this fact, before proceeding farther, we will take a Dr. Trial Balance. Cr. Differences. Face of Ledger. Face of Ledger. Differences. 15500... Stock,.1.......7... 1 070 1570 4473 4473... Bills Receivable,... 1794 1794... Peter Cooper..... 6000... Jonas Clark,...... 6000 348 11493 50... Cash,.......... 11145 50 1766 95 2945 50... Merchandise,..... 1178 55 500... Bills Payable,.... 750 250 3000... Smith & Sons,.... 6000 3000 53 60 803 60... George Davis,... 750 4095 80... James Hathaway,.. 8250 4154 20 60 60... S. S. Randall,..... 54... Henry C. Spencer,.. 54 135 25 135 25... Henry Van Dyck,.. 29 29... L. Fairbanks,..... 200 200... Expense,........ 32 40 32 40. E. F. Hill,....... 82 82... B. F. Carpenter,... 8974 20 51198 05 -... uilirium...... 51198 05 8974 20 The above form of the Trial Balance is the most comprehensive in use, and one which we would recommend for its utility. It will be seen that the footings of the " Face of Ledger" columns exactly agree with the footings of the Day Book and Journal; which affords conclusive evidence that all the transactions have found their way to the Ledger. The columns of " Differences," which must also balance, will afford a convenient test of the results of each account. Having satisfied ourselves that the transactions have been properly posted, we now proceed to close the Ledger accounts. It must not be forgotten that the object of closing the Ledger is to 143 CLOSING THE LEDGER. present, in a proper manner, both the present condition of our business and its progress. Its present condition can be shown by a list of its resources and liabilities; and its progress by a list of its gains and losses. By a careful examination of the facts, it will be seen that resources are shown by an excess of the debit side of REAL accounts, and liabilities by an excess of the credit side of REAL accounts; and that losses are shown by an excess of the debit side of REPRESENTATIVE accounts, and gains by an excess of the credit side of REPRESENTATIVE accounts. This will suggest the propriety of opening two accounts for these general results: one to contain the resources and liabilities, and the other the gains and losses. We will now open these accounts under the titles of "Loss and Gain," and " Balance," the former to contain the results of the REPRESENTATIVE, and the latter of the REAL accounts. Before proceeding to close the accounts, we must ascertain if they are all in a condition to show the results desired. The Merchandise account, as it nowv stands, shows an excess of the debit side, and would therefore represent a loss, if the merchandise were all sold. The account itself does not show whether the property is all sold; and the only means of ascertaining the facts in the case, is to take an actual inventory, or a valuation of that which remains unsold. When this value is ascertained, the Merchandise account should be credited with it, and Balance account debited. The Merchandise account will then be competent to show the gain or loss on merchandise. AWe have estimated the unsold merchandise in this case to be worth $2500, which amount we enter on the credit side of Merchandise account in red inz;, and transfer the same immediately to Balance account. The accounts are now in a condition to close; and we will take them in their order. The first account (after Stock, which is the proprietor's own account) is Bills Receivable. This account represents a resource consisting of other people's notes on hand; the debit side showing the notes received, and the credit side those disposed of, if any. WVe close the account by entering the difference, i n red ink, on the credit side, and footing up the sides, drawing double red lines underneath. The red ink entry, or balance, is transferred immediately to the d(bit side of * An entry in red ink on the Ledger, denotes that the amount thus writen is to be t'ra'nsfeired, either to some other account, or to another position under the same account. It also shows that the entry is firt mnade in the Ledger, not having passedl tlonugh the usual preliminary books of entry. Red ink entries are always transferred to the opposite side from where they are first written, for the reason that they indicate an excess of that side. 144 CLOSING THE LEDGER. Balance account. The next account, Peter Cooper, is closed in the same way. The next, Jonas Clark, already balances, and we close it by simply ruling the double red lines. The next, Cash account, is closed in the same manner as Bills Receivable, the balance being transferred as a resource to Balance account. The Merchandise account shows a gain, and the balance is transferred to the credit side of Loss and Gain account. Bills Payable account shows a liability, and the balance is transferred to the credit side of Balance account. Smith & Son's account also shows a liability, and thj balance is transferred to the credit side of Balance account. George Davis' account shows a resource, and the balance is transferred t ) the cebit side of Balance account. James Hathaway's account shows a liability, and is transferred to the credit of Balance. S. S. Randall's, Henry Van Dyck's, and L. Fairbank's accounts, all show resources, and are transferred to the debit side of Balance. Expense account shows a loss, and is transferred to the debit side of Loss and Gain. E. F. Hill's and B. F. Carpenter's accounts both show a resource, and are transferred to the debit of Balance. We have now the results of all the accounts exhibited under the heads of Loss and Gain and Balance, and if the balances have been properly transferred, these accounts, together with the (unclosed) Stock account, must be in equilibrium. To test this, we next take a Trial Balance of these three accounts, which we call the Second Trial Balance. Dr. Cr. Stock,......... 15500 17070 Loss and Gain,..... 200 733 05 Balance,90..... 9507 25 7404 20 25207 251 25207 25 Having satisfied- ourselves, by this test, that the balances have been properly transferred, we now proceed to accomplish the grand object of closing the Ledger, by carrying the net gain from the Loss and Gain to the Stock account. The Stock account now contains the capital invested increased by the gain, which must, of course, equal the present worth, as shown by the Balance account. We now close Stock account into Balance, which must produce an equilibrium of the Balance account, and complete, in that account, the record of resources and liabilities. 145 CLOSING THE LEDGER. The Balance account is used in these Sets for its convenience in collecting, under one title, all the resources and liabilities. The s.me effect may be produced by bringing down the balances under the REAL accounts. This latter method is adopted in business, and particularly where the record is continued in the same Ledger. From these remarks and applications we are prepared to submit the following order of closing the Ledger, which the student will do well to observe particularly, and to follow out in practice. ORDER OF CLOSING. First. Open an account with "Loss and Gain" (if not already opened), and another with " Balance," the former to contain the losses and gains, and the latter the resources and liabilities. Second. Ascertain from the inventory if any property remains:nlsold; and, if so, credit each account for which such property was originally debited, with the value of that unsold, making the entry i:a red ink, "By Balance," and transferring the amount directly to the debit side of Balance account, making this entry in black ink. "To Merchandise," or "To Real Estate," or any other account from which the amount is transferred. The Ledger accounts will each show, now, one of the four following results, viz.: a Resource, tI Liability, a Gain, or a Loss. Third. Omitting Stock (or the Partners' accounts), commence wvith the first account in the Ledger. First ascertain which of the above results it shows, and make the closing entry accordingly. If the difference represent a resource or a liability, enter upon the smaller side, in red ink, "To," or " By Balance," as the case may be, and transfer the amount in black ink to the opposite side of the Balance account. If the difference represent a gain or loss, enter on the smaller side in red ink " To" or " By Loss and Gain," and transfer the amount in the same manner to Loss and Gain account. Close all the accounts (except Stock or Partners'), and transfer the balances as directed. The Loss and Gain account will now show on the debit side all the losses, and on the credit side all the gains, the difference being the net loss or net-gain. The Balance account will show on the debit side all the resources, and on the credit side all the liabilities, the difference being the real interest or present investment of the proprietor or proprietors. Fourth. Take a second Trial Balance, or a Trial Balance of the remaining open accounts: Stock (or Partners'), Loss and Gain, and Balance. If the balances have been properly transferred, the debits and credits of these a ccounts, taken together, must be equal. 146 BALANCE SHEETS. Fifth. Close Loss and Gain account into Stock, or, if it be a partnership business, into the partners' accounts, dividing the gain 6r loss, according to agreement. The Stock or Partners' Accounts will now show the original investment increased by the gain, or decreased by the loss; the difference being the present net investment. Inasmuch as the Balance account shows the same thing, they must, of course, agree. Sixth. Close Stock (or Partners' accounts) into Balance account, which must equalize that account, it showing now, on one side, the total resources, and on the other side the total liabilities, and presenting, in the most condensed form, the exact present condition of the business. BALANCE SHEETS. IN commercial language a " Balance Sheet" signifies the systematic arrangement of facts, for the purpose of exhibiting at a view the condition of business. The forms in use are various, according to the necessities of the occasion or the ingenuity of the accountant. Of these the example given on page 141 comprises the most complete and symmetrical of which we have a knowledge. The following explanation will be found serviceable in preparing this sheet for the entries. The method of enforcing the facts will be apparent to any diligent student. 1. Take a sheet of paper of proper size, and for a border, rule double red lines around the margin. 2. Rule the parallel head-lines, leaving proper space for double captions, as in the example. 3. Ascertain the number of Ledger accounts to be represented; which will embrace all the accounts in the Trial Balance that do not cancel.* If the business is that of a single proprietor, usually * Should there be a large number of personal accounts, it will be fonnd difficult to include them all seepatrtely in this form. In such case it is customary to employ the two general titles, "Accounts Receivahle," and "Accounts Payable," the one enmbracing all amounts owing to us on personal %, and the other all amounts owing by us. This curtaillent will enable the facts of any common business to be shown in this form. 147 BALANCE SHEETS. called "Stock" business, rule in pencil as many lines as will contam all the accounts and five additional. If it be a partnership business with two or more partners, rule three additional lines for each partner; thus, for "Stock" business, five lines more than all the accounts; for two partners, eight lines more than all the accounts; for three partners, eleven lines more, and so on. 4. Lay off proper spaces for debit and credit money columns; first for the footings of Ledger Accounts, second for Gains and Losses, third for Stock, or if partners, for each partner-and fourth for Resources and Liabilities; also, for a single money column for Inventories, and for Ledger titles and their Ledger folios. The position of these columns will be seen in the example given. These spaces can best be appropriated by using a pair of dividers, and giving each of the captions its just proportions. 5. After denoting the proper space for each heading, which can best be done with pencil, commence to rule in red ink at the right hand and bring all the lines of the two captions, " Real Accounts" and " Stock," or one of the partners, down to the lower pencil line. For the other partners drop two lines. For Losses and Gains drop two lines in Stock business, and one additional for each partner. 6. Rule the foot lines as shown, and the schedule will be ready to receive the accounts. The process of showing results is precisely similar in its order, and the results the same as in " closing the Ledger," which has already been so fully explained as to need nothing further. There are many kinds of business statements in use, each possessing some peculiar merit, and all having the same general purpose in view, viz: that of exhibiting the real and progressive condition of the business represented. The forms hitherto used in this work, and particularly the one on page 121, are both simple and comprehensive, and would possibly be preferred by one not versed in the processes and technicalities of Book-keeping; but we know of no form that compasses so much within such limited space, as that described above. The example, on page 141, will sufficiently indicate the points of excellence, and give the student a model for his emulation. Let him remember that in no one thing does the proficiency of a practical accountant more plainly manifest itself than in the matter of neatness in arrangement and execution. The art of ruling tastefully, unimportant as it may seem, is one not easily acquired nor overrated. 148 EXAMPLES FOR PRACTICE. THE student is requested to render statements after the form on page 141, from the following materials. EXAMPLE 1. Trial Balance. Dr. Cr. Stock,......... 881 5000 Bills Receivable,...... 1500 1000 John Mason,...... 300 175 Cash,.......... 594 67 4800 Merchandise, (Amount unsold, $1200) 3500 2759 50 Peter Smith,..... 4000 1500 Robert Pendergast,.... 384 Expense,......... 375 83 Bills Payable....... 1500 1750 Charles Ryan,....... 483 17851 50 1-7851 50 EXAIMPLE 2. Trial Balance. Dr. Cr. Stock,....... 141 78 3000 Merchandise, (Amount unsold, $1000.) 1 5000 3700 George Hopkins,...... 1500 953 84 Robert Westcott,.... 753 Abram Woodfall,...... 900 Peter Denyse,....... 110 500 Robert Rantoul,...... 32 98 500 James Jackson,....... 75 E. E. Ellsworth,...... 500 983 Cash,.......... 9753 20 8748 90 Expense,......... 450 Commission,....... 183 22 Bills Receivable,...... 1700 150 Bills Payable,....... 1500 5000 Shipment to Detroit,.... 4000 4598 Edward Rice,....... 700 874 Peter Renwick,...... 50 Edwin C. Packard,.... 900 150 Benj. F. Holmes,..... 75 F. R. Perley,....... 500 29340 96 29340 96 149 EXERCISES FOR TIIE LEARNER. S: C O N ID S E I IE S. Memoranda. February 1. Commenced business with the following resources and liabilities, taken from the Balance Sheet of Ledger A*RESOURCES: Cash, $1822 20; Bills Receivable, $171 50; Robert Barker's account, $350; Henry Ivison's do., $222 50; J. C. Bryant's do., $186; L. Fairbanks' do., $293 75; LIABILITIES; our note favor of James Dawes, for $2500.-Bo't of Springer and Whiteman, on %, 20 Bags Rio Coffee, 16701bs., @ 15~; 15 Tierces Rice, 75001bs., @ 4; 15 Hhds Cuba Sugar, 140001bs., 5~. —2. Bo't of Alex. Cowley, for Cash, 12 Hhds N. O. Molasses, 720 gals @ 40; 20 Boxes Soap, 14501bs., @ 8t, 10 Bbls Pork, 2o001bs, @ 10. —3. Sold Lewis Lyipan on %, 30lbs., Coffee, @ 18~; 20 do. Rice, @ 5I~; 100 do. Sugar, @ 6. —Received Cash of Robert Barker, in full of %, $ -.-4. Paid Cash for Stationery, and incidental expenses, $20.-5. Sold Alonzo Mitchell, on %, 1 Bag Rio Coffee, 80lbs., @ 18~; 20 gals. N. O. Molasses, @ 50; 30lbs. Rice, @ 51 ~.-Bo't of Peter Duff, for Cash, 300lbs., English Dairy Cheese, @ 20~; 2501bs., Butter, @ 18~.-Sold John R. Penn, on his note @ 30 ds., 5 Boxes Soap, 350lbs., @ 10; 6 Bags Rio Coffee, 4851bs., @O 16.- 6. Bo't of S. S. Packard, on our note X 10 ds., 40 Hf. Chests YH Tea, 23561bs., c 35~.-Solc Charles Strong, for Cash, 10 Hf. Chests Tea, 580lbs., @ 38~; lO0lbs. English Dairy Cheese, @ 22~.-9. Sold Samuel Davis, for Cash, 50lbs. Butter, G 20; 50lbs. Coffee, @ 18~; 30 gals. Molasses, @ 50. —10. Sold Henry Dwight, for Cash, 30 gals. Molasses, @ 50~; 10lbs. Rice, @ 6~; I Box Soap, 751bs., @ 10~.-12. Paid Clerk's salary in Cash, $15.-Bo't of James Simpson, on %, 15 Bbls Crushed Sugar, 25201bs., @ 10~.-15. Rec'd Cash on % of Henry Ivison, $100.-Sold Thomas Hunter, on %, 5 Hf. Chests Tea, 2751bs., ( 50~; 50lbs. English Dairy Cheese, 23~; 25lbs. Rice, @ 5~.-Sold Henry Ivison, on %, 20 gals. Molasses, @ 50~; 3 Boxes Soap, 210lbs., @ 10. —16. Rec'd Cash in full of J. C. Bryant's %, $ -.-Sold W. H. Joeckel, for Cash, 2 Bbls. Crushed Sugar, 3301bs., @ 11l.-17. Sold Lewis Lyman on c 50lbs. Rio Coffee, @ 20t; 100lbs. Crushed Sugar, @ 11 ~.-19. Paid Cash in full, for our note, favor of S. S. Packard, dated, Feb. 6, due this day, $824 60.-20. Sold Robert Burns, for Cash, *See Trial Balance, page 125. 150 EXERCISES FOR THE LEARNER. lOOlbs. Crushed Sugar, @ 11~.-wReceived Cash of Henry Ivison, in full of %, $153 50.-22. Paid James Simpson Cash in full of % $252.-Sold Philip Stone, for Cash, 4 Hf. Chests Tea, 2251bs. @ 50. —23. Sold Thomas Hunter, on %, 50lbs. English Dairy Cheese, @ 25; 75 do. Crushed Sugar, @ 11; 15 do. Coffee, @ 20~; 2 Boxes Soap, 140lbs., @ 10. —25. Sold Alonzo Mitchell, on %, 2 Hhds. Cuba Sugar, 18501bs 6~. —Received Cash in full for J. M. Bradstreet's note of the 3d ult., due March 5, $171 50.-27. Paid Cash for Store rent, $100. STATEMENT. The Student is expected to produce the following result from the foregoing transactions:Trial Balance. Stock,.......... 2500 3045 95 Bills Receivable,...... 284 10 171 50 Cash,.......... 3242 50 190 60 L. Fairbanks,.... 293 75 Alonzo Mitchell,...137 05 Merchandise, (Amount unsold, $2500.) 3036 10 961 45 Bills Payable,....824 60 3324 60 Springer & Whiteman,. 1250 50 Lewis Lyman,..... 33 50 Expense,.... 135 Thos. Hunter,.... 188__ 10674 60 10674 60 Balance Account. Resources. Liabilities. Merchandise,....... 2500 Bills Receivable,...... 112 60 Cash,.......... 1321 90 L. Fairbanks,...... 293 75 Alonzo Mitchell,...... 137 05 Bills Payable,....... 2500 Springer & Whiteman,. 1250 50 Lewis Lyman,....... 33 50 Thos. Hunter,....... 188 Stock, (Present worth,).. 836 30 4586 80 4586 80 151 QUESTIONS FOR REVIEW. QUESTIONS FOR REVIEW. APPROPRIATE answers to the following queries may be found on the pages indicated. The more direct reference by figures will be henceforth discontinued. REMARKS, PAGE 128. 1. In what sense is this a continuation of Set I? 2. What different plan is aJopted in the keeping of property accounts? 3. When is it customary to keep olher than a general Merchandise account? 4. When the business commences v: ith a capital, what is the first entry? 5. What account is credited with the i:vestment? 6. What does Stock account represent? 7. What is the technical meaning of the term'"Sundries?" 8. Why is it used in Journal or Ledger entries? ORDER AND PURPOSE OF CLOSING THE LEDGER, PAGE 142. 9. In what condition was the Ledger, Set I. left? 10. Under what circumstances is this sufficient? 11. When is it necessary to "close" the Ledger accounts? 12. When an account is closed how is the balance or difference cxhibited? 13. How many classes of accounts are there in Double Entry? 14. What is the distinction? 15. What are they called? 16. What is meant by REAL accounts? 17. What by REPRESENTATIVE? 18. What is the object of closing the Ledger? 19. Why are the gains and losses in business permitted to remain in tho LEPRESENTATIVE accounts, instead of being carried directly to the proprietor's account? 20. How often is it customary to credit the proprietor with his gains? 21. To what condition is the Ledger restored whven the gains and losses are transferred to the proprietor's account? 22. What is the first thing necessary after posting all the entries to the Ledger? 23. In what sense is the Trial Balance a test of the correctness of the work? 24. What two features are presented by the Trial Balance on page 143? 25. How may the present condition of a business be shown? 26. How are resources shown on the Ledger? 27. How liabilities? ~3. How losses? 29. IIow gains? 30. What two accounts may be opened to to show these results? 31. What is contained in the Loss and Gain account? 32. What in the Balance account? 33. Can you learn from the Merchandise.acount the value of Merchandise unsold? 34. I-low is it ascertained? 35. When the Merchandise account is credited with the inventory of unsold Merchandise, what will the account represent? 36. What is the process of closing an account? 37. In closing an account, why is the difference placed on the smaller side? 33. What test have we for ascertaining if the balances of the accounts are properly transferred? 39. What accounts are contained in the "Second Trial Balance?" 43. Why will the difference in the Stock account, after the gain or loss has been transferred, equal the difference in the Balance account when all the resources and li.bilities have been entered? 41. Is it necessary in closing the Ledger to open a Balance account? 42. How may the same effect be produced? 43. What is the first step in the order of closing? 44. Second? 45. Third? 46. Fourth? 47. Fifth? 48. Sixth? 152 SET III. (Corresponding with Set III, Part I.) DAY BOOK AND JOURNAL COMBINED. WITH FULL STATEMENTS AND EXPLANATIONS, SHOWING THE DISTINCTIONS BETWEEN SINGLE AND DOUBLE ENTIY. ^^^V^.^^^ S^^^^Y^^^ REMARKS. THE transactions comprising this set are the same as those in Set III. Part I. and are selected for the purpose of showing the exact difference between Single and Double Entry. A careful study of the two sets in their similar and dissimilar points will open to the mind of the student a clearer distinction between the two methods of accounts than could be effected by any other form of reasoning. This distinction is most apparent in the Ledger where it will be seen that the additional accounts required by Double Entry relate exclusively to particular speculations, and are useful, mainly, to denote special gains and losses. If our anxiety to keep this fact prominently before the mind should lead us into unnecessary repetitions, we still think this evil less than that of leaving the point obscure. Another decided improvement in this over the preceding Set (II.), relates to the form of the original book of entry, which here combines the Day Book and Journal. There is no doubt as to the preference of this plan over that of separate books. The only objection that can be arrayed against it is the difficulty sometimes of combining the historical with the journal expression in a manner to preserve the unity of the entry without destroying the individuality of its parts. A little practice, however, will remove this difficulty, and lead the student into a concise and symmetrical form of expression, at once comprehensive and business-like. We have not deemed it necessary to repeat the auxiliary forms of Sales Book, Cash Book, and Bill Book, for the reason that we could suggest no improvement. Auxiliary Books are used for theirconvenience in classifying the departments of business, and do not pertain necessarily to any particular theory or method of accounts. In Single Entry, however, they are often essential in preserving a sufficient record of resources and liabilities, which in Double Entry are shown independently in the Ledger. The manner of closing the accounts differs from Set II. only in bringing down the resources and liabilities under the accounts themselves, instead of transferring them to a separate account like "Balance." A few of the accounts, containing only one item, are unnecessarily closed, and the balances brought down. This plan is sometimes adopted in business, for the purpose of exhibiting the condition of affairs on the Ledger at some certain date. The method of showing general results through a detailed statement is commended to the careful attention of the student. 154 JOURNAL DAY BOOK,-SET III. 1 ALBANY, JULY 1, 1861. 1 SUNDRIES, Dr. To II. B. BRYANT, 9075 For Investment, as follows. I MERCHANDISE, As per Inventory, 4750 2 BILLS REC'BLE, " " Bill Book, 1500 2 CASH, " " Cash Book, 1200 2 JOHN R. PENN, Balance of X, 500 3 L. FAIRBANKS, " " 7 50 3 ALONZO GASTON, " " 375 I SUNDRIES, Dr. To H. D. STRAITON, 8000 For Investment, as follows. 3 REAL ESTATE, I-ouse and lot, val. at, 5000 2 CASH,* Am't in Union Bank, 3000 3 EXPENSE, Dr. 5 2 To CASH, 5 Paid for postage stamps, pens, &c., 2 CASH, Dr. 39 1 To MERCHANDISE, 39 Sold Robt. Van Schaick, per S.B., 1 CASH, Dr. 250 2 To JOHN R. PENN, 250 Received on y, //. ~ 3 EXPENSE, Dir. 10 2 To CASH, 10 Paid for printing Hand-Bills 17379 17379 * Some houses keep a regular Bank account in their main books, debiting the bank with depfsits, and crediting it with checks drawn, while others keep the account only in an auxiliary book, and count the cash in bank the same as that in safe. We have in this instance adopted the latter plan. 155 JOURNAL DAY BOOK,-SET III. 2 ALBANY, JULY 3, 1861. Amountts Forward, 17379 17379 4 JAMES JOHNSON, Dr. 192 1 To MERCHANDISE, 192 Per Sales Book, 2 CASH, _Dr. 17 50 1 To MERCHANDISE, 17 50 Petty sales, per C.B., 2 BILLS RECEIVABLE, Dr. 108 20 1 To MERCHANDISE, 108 20 Sold E. H. Bender, per S.B., 3 EXPENSE, Dr. 175 2 To CASH, 175 Paid C. Jones, repair'g store, 1 MERCHANDISE, Dr. To SUNDRIES, 1359 50 To CLAFFLIN MIELLEN & CO., 575 4 Invoice of Boots and Shoes, " A. T. STEWART & Co., Invoice 757 of Dry Goods, 2 " CASH, Paid freight on above, 27 50 4 E. B. RICE, Dr. 42 45 1 To MERCHANDISE, 42 45 Per Sales Book, // 2 CASH, Dr. 375 3 To ALONZO GASTON, 375 Received in full of, 19648 65 1964865 156 JOURNAL DAY BOOK,-SET III. 3 ALBANY, JULY 7, 1861. Amounts Forward, 19648 65 19648 65 3 EXPENSE, Dr. 25 2 To CASH, 25 Paid Clerk hire, 2 CASH, Dr. 19 82 I To MERCHANDISE, 19 82 Sold W. H. Clark, per S.B., 3 EXPENSE, Dr. 15 75 2 To CASH, 15 75 Paid expenses to N.Y., 4 BENJAMIN PAYN, Dr. 23 41 1 To MERCHANDISE, 23 41 Per Sales Book, 2 CASH, Dr. 500 2 To BILLS RECEIVABLE, 500 In full of Robt. Bruce's note, 4 A. T. STEWART & Co., DrP. 300 2 To CASH, 300 Paid them on, 2 BILLS RECEIVABLE, Dr. 173 2 BILLS RECEIVABLE, Dr. 173 1 To MERCHANDISE, 1 73 Sold C. S. Sill, per S.B., 5 3 20705 63 207105 63 157 JOURNAL DAY BOOK,-SET III. 4 ALBANY, JULY 12, 1861. Amounts Forward, 20705 63 20705 63 1 H. D. STRATTON, Dr. 75 5 To BILLS PAYABLE, 75 Accepted draft, favor of P. R. Spencer, per B.B., 2 CASH, Dr. 33 50 1 To MERCHANDISE, 33 50 Received for petty sales, per C.B., 5 AMOS DEAN, Dr. 180 1 To MERCHANDISE, 180 Per Sales Book, 4 CLAFFLIN, MELLEN & CO., Dr. 575 5 To BILLS PAYABLE, 575 Our note to balance c, 4 H. B. BRYANT, Dr. 75 2 To CASH, 75 Paid him on c, 2 CASH, Dr. 350 3 To L. FAIRBANKS, 350 Received on c, 2 CASH, Dr. 252 1 To MERCHANDISE, 252 Sold G. H. Doty, per S.B., 22246 13 22246 13 158 JOURNAL DAY BOOK,-SET III. 5 ALBANY, JULY 19, 1861. Amounts Forward, 22246 13 22246 13 3 EXPENSE, Dr. 15 2 To CASH, 15 Paid for Advertisements in Evening Journal, 5 VICTOR M. RICE, Dr. 82 88 1 To MERCHANDISE, 82 88 Per Sales Book, 2 CASH, Dr. 30 5 To VICTOR M. RICE 30 Received on A, 3 EXPENSE, Dr. 10 2 To CASH, 10 Paid petty expenses per C.B. 2 CASH, Dr. 50 5 To AMos DEAN, 50 Received on ~, 3 EXPENSE, Dr. 183 2 To CASH, 183 Bill of Carpenter work $1 5 Drayage, $5; Porterage, $3 2 BILLS RECEIVABLE, Dr. 339 1 To MERCHANDISE, 339 SoldJ. R. Morgan, per S.B. 22956 I1 22956 01 159 JOURNAL DAY BOOK,-SET III. 6 ALBANY, JULY 23, 1861. Anounts Forward, 22956 01 22956 01 6 JAMES SIELDEN, _Dr. 132 24 1 To MERCHANDISE, 132 24 Per Sales Book, // 2 CASI, Dr. 234 1 To M~ERCHIANDISE, 234 Sold R. Metcalf, per S.B., 2 CASH, Dr. 106 1 To MERCIIANDISE, 10 Sold Chas. Heydon, per S.B. 2 CAsh, Dr. 42 45 4. To E. B. RICE, 42 45 Received in full of %, 5 WILLIAM SEIEPARD, Dr. 37 55 1 To MERCHANDISE, 37 55 Per Sales Book, 2 CASH, Dr. 163 20 1 To MERCHANDISE, 163 20 Sold Robt. Dawes, per S.B., 5 BILLS PAYABLE, Dr. 75 2 To CASI, 75 Paid on Accept. fav. H.D.S. 3 EXPENSE, Dr. 25 2 To CASH, 25 Paid Clerk hire, 23771 45m 23771 45 160 JOURNAL DAY BOOK,-SET III. 7 ALBANY, JULY 26, 1861. Amounts Forward, 23771 45 23771 45 6 JOHN BELDEN, Dr. 216 50 1 To MERCHANDISE, 216 5 Per Sales Book, 4 A. T. STEWART & Co., Dr. 457 2 To CASH, 457 Paid them in full of c, 29y 2 CASH, Dr. 138 72 1 To MERCHANDISE, 138 72 Sold J. H. Lansley, per S.B. 2 CASH, Dr. 154 1 To MERCHANDISE, 154 Sold W. H. Fiquet, per S.B. 2 CASH, Dr. 250 2 To JOHN R. PENN, 250 Received in full of y, 1 SUNDRIES, Dr. To MERCHANDISE, 182 40 Sold Chas. A. Seeley, p'r S.B 2 CASH, Amount received, 75 6 CIAS. A. SEELEY, Balance on, 107 40 2510 07 25170 07 161 LEDGER,-SET III. Dr. H. B. Bryant. Cr. 1861 1861 July 15 To Cash, 4 75 July 1 By Sundries, 1 9075 31 " Loss&Gail L6 352 94 ",,, " Balance, L 1 8647 0 6 9075 00 9075 Aug 1 By Balance, L1 8647 06 Dr. H. D. Stratton. Cr. 1861 1861 July 12 ToBillsPayable 4 75 July 1 By Sundries, 1 8000 " 31 "Loss & Gain, L6 352 94 " 31 ".Balance, L 1 7572 06 8000 00 8000 00 Aug 1 By Balance, Li 757206 Dr. Mferchandise. Cr. S1861 1861 July 1 ToH. B. Bryant 1 4750 July 1 By Cash, 1 39 5 " Sundries, 2 1359 50 " 3 " J. Johnson, 2 192 " Cash, " 17 50 " 4 "Bills Rec'ble, " 108 20 " 7 "E. B. Rice, " 42 45 /" 8 "Cash, 3 19 82 10 "Benj. Payn, " 23 41 " 12 "Bills Rec'ble, " 173 / " " Cash, 4 33 50 " 13 " Amos Dean, | " 180 18 " Cash, " 252 / " 20 "Vict. M.Rice 5 82 88 / 22 " Bills Rec'ble, " 339 23 " Jas. Shelden, 6 132 24 / Cash, " 234 " 24 " l" 6 25 " W. Shepard, " 37 55 " Cash, "' 163 20 /" 26 "John Belden, 7 216 50 /27 " Cash, " 138 72 " 29 " 154 30 " Sundries, " 182 40 / " Balance, L1 3000 / ____ __ | " Loss & Gain, L 2 4 2 13 6109 50 6109 50 Aug 1 To Balance, L1 3000 162 LEDGER,-SET III. 2 Dr. Bills Receivable. Cr. 1861 1861 July 1 To H. B. Bryant, 1 1500 July 10 By Cash, 3 500 4 " Mdse., 2 108 20 31 " Balance, L2 1620 20 " 12 " 3 173 22 " " 5 339 2120 20 2120 20 Aug I TQ Balance, 1620 20 Dr. John ZR. Penn. Cr. 1861 1861 July 1 Toll.B.Bryant, 1 500 July 2 By Cash, 1 250 " 29 7 250 500 500 Dr. Cash. Cr. 1861 1861 July 1 ToH.B.Bryant, 1 1200 July 1 By Expense, 1 5,", " "H.D.Stratton " 3000 " 2 " " 10... " Mdse., 1 39 " 4 " " 2 175 " 2 J. R. Penn, "1 250 i " 5 "Mdse., " 27 50 3 " Mdse., 2 17 50 7 Expense, 3 25 " 7 " A. Gaston, 375 " 8 " 15 75 8 "Mdse., 3 19182 " 10 A.T.Stw.&Co " 300 10 " Bills Rec'ble, " 500 " 15 " H.B.Bryant, 4 75 12 " Mdse., 4 33 50 " 19 Expense, 5 15 16 "L.Fairbanks, 350 20 " " 10 18 " Mdse.,," 2521 | "121" " " 183 " 20 "V. M. Rice, 5 301 " | 25 "BillsPayable 6 75 " 21 " Amos Dean, i" 50 " I " " Expense, " 25 23 " Mdse., 6 234 "' 26 " A.T.Stw.&Co 7 457 241 " ") 106 31 By Balance, L2 5881 94 7" " E. B. Rice, 4245 25 " Mdse., "1 163120 " 27 71 7 138 72 29" " 154 " J. R. Penn, " 250 " 30 "Mdse., " 75 7280 19 7280 19 Au I To Balance, 5881 94 1G3 LEDGER,- SET III. 3 Dr. L. Fairbanks. Cr. iS61 18 61 July 1 ToH.B.Bryant, 1 750 July 16 ByCash, 4 350 31 " Balance, L 3 400 750 750 Aug I To Balance, 400 Dr. A-lonzo Gaston. Cr.'IS6l I I 1861 July 1 ToH.B.Bryant, 1 315 July 7 By Cash, 2 375 Dr. IReal Estate. Cr. 1861! 1861 July 1 To H.B.Bryant, 1 5000 July 31 By Balance, L3 5000 Aug 1 To Balance, 5000 Dr. Expense. Cr. 1861 1861 July I To Cash, 1 5 July 31 By Loss & Gain L6O 463 75 "7,2 10 " " " 2 175 7 " " 3 25 I8" " 1515 8 " ", 15 75 19 " " 5 15 20 10 2 1 1 183 " 25" 6 25 463 75 463 75 164 LEDGER,- SET III. 4 Dr. James Johnson. Cr. 1861 1861 July 3 To Mdse., 2 192 July 31 By Balance, L4 192 Aug 1 To Balance, 192 Dr. Claflin, Mellen & Co. Cr. 1861 1861 July 15 ToBillsPayable 4 575 July 6 By Mdse., 2 575 Dr. A. T. Stewart & Co. Cr. 1861 1861 July 10 To Cash, 3 300 July 5 By Mdse., 2 757 26 ". 3. i. 457r. Dr. E. B. I2ice. C. 1861 1861 July 7 To Mdse., 2 42 45 July 24 By Cash, 6 42 45 Dr. Benjamin Payn. Cr. 1861 1861 July 10 To Mdse., 3 23 41 July 31 By Balance, L4 23 41 Aug 1 To Balance, 23 41 165 LEDGER,- SET III. Dr. Bills Payable. Cr. ]861 T 1861 July 25 To Cash, 6 75 July 12 1By H D. Strat'n 4 75 31 " Balance, L5 575 15 " Claf.M.&Co. 575 650 650 Aug 1 By Balance, L5 5 5 Dr. Amos Dean. Cr. 1 l6161 1S61 July 13 To Mdse., 4 180 July 21 By Cash, 5 50 "7 31 " Balance, 5 130 Aug 1 To Balance, L5 130 Dr. Victor M. Rice. Cr. 1861 1861 July 20 To Mdse., 5 82 88 July 20 By Cash, 5 | 30 ~ Ji~ 1" 31 " Balance, L 52 88 _ I 8 s sI _s_ Aug 1 To Balance, L5 52 } Dr. James Shelden. Cr. July 23 To Mdse.j 6 132 24 July 31 By Balance, |L5 1 2 24 Aug 1 To Balance, L5 132 24 Dr.'William Shepard. Cr. 1861'- I jis5t -a lane,.5__38_ _ __1S July 25 To Mfdse., 6 3 55 July 31 6By Balance, L5 37 55 Aug 1 To Balance, L5 3 55 166 LEDGER -SET III. Dr. John Belden. Cr. ISGli1 1S61 I July 26 ToMdse., 7 21650 July 31 BBalance L6 j216 50 Aug 1 To Balance, L6 216 50 Dr. Cha's A. Seeley. Cr. July 30 ToMdse., o 107 40 July 31 By Balance, L6 107 40 Aug 1 To Balance, LO 101 40 Dr. Loss and Gain. Cr. 1863 1 -- 1861 July 31 To Mdse., L 242 13 July 31 ByH.B.Bryant LI 352 94 "Expense, L3 463 5 H. D. Strat'n L 3 52 94 105 88 105 88 167 167 STATEMENT. THE following detailed statement should be carefully compared with the Single Entry Statement on page 67, that the characteristic features of the two systems may be thoroughly appreciated. WVe have designated the REAL and REPRESENTATIVE accounts in the Trial Balance and have included all the Ledger accounts, that the general footings may be made to agree with the footings of the Journal. In rendering the Statement, those accounts which cancel or balance, are, of course, omitted. With this form of Trial Balance it would scarcely be necessary to do more than carry the balances of the accounts into the statement columns as in the Statement on page 121; but this form gives the philosophy more in detail. Trial Balance. Total Footings. Balances. Di. Cr. D ). C'r. 1 HI. B. Bryant, Real, 75 9075 9000 2 H. D. Stratton, Real, 751 8000 7925 3 Merchandise, Rep., 6109 50 2867 37 3242 13 4 Bills Receivable, Real, 2120 2) 500 1620 20 5 John R. Penn, Real, (Canceled.) 5001 500 6 Cash, Real, 7280 19 1398 25 5881 94 7 L. Fairbanks, Real, 750 350 400 8 Alonzo Gaston, Real, (Canceled.) 375 375 9 Real Estate, Rep., 5000 5000 10 Expense, Rep., 463 71 463 75 11 James Johnson, Real, 192 192 12 Claf., Mellen & Co, Real, (Canceled.) 575 575 13 A. T. Stewart, Real, (Canceled.) 75 757 14 E. B. Rice, Real, (Canceled.) 42 45 42 45 15 Benjamin Payn, Real, 23 41 23 41 16 Bills Payable, Real, 75 650 575 17 Amos Dean, Real, 180 50 130 18 Victor M. Rice, Real, 82 88 30 52 88 19 James Shelden, Real, 132 24 132 24 20 William Shepard, Real, 37 55 37 55 21 John Belden, Real, -216 50 216 50 22 Chas. A. Seeley, Real, 10740 ______ 107 40,25170io107i 25170 07 117500 00 1-175 00 Inventory, AMdse. unsold,................. $3000 Real Estate,................ 5000 168 STATEMENT. Losses and Gains.-Representative Accounts. Losses. Gains. 3 MERCHANDISE, Cost..... $6109 50 Proc.-Sales, $2867 37 Value unsold, 3000 00 5867 37 Net loss,.. 242 13 10 EXPENSE, Outlay for Expenses, 463 5 TOTAL NET Loss,.. 705 S8 II. B. B's., j net lo,. $352 94 705 88 705 88 I.D.Strat., " " 352 94 Resources and Liabilities.-Real Accounts. 1. From Inventories of unsold property. Resources. Liabilities. MERCHANDISE, 3000 REAL ESTATE, 5000 2. From Ledger Accounts. 4 BILLS RECEIVABLE, Others' notes received, $2120 20 dis. of, 500 00 on hand, 1620 20 6 CASH, Amount received,.. $7280 19 " paid out,.. 1398 25 " On hand,. 5881 94 7 L. FAIRBANKS, Our % against him, $750 00 Ils " " us,. 350 00 7e owes s,.s. 400 11 JAMES JOHNSON, ie owes us,... 192 15 BENJ. PAYN,....1 23 41 16 BILLS PAYABLE, Our notes issued,.. $650 00 redeemed, 75 00 " " outstand'g, 17 AMOS DEAN, Our % against him, $180 00 Ilis " " us,. 50 00 lie owes,.... 130 18 VICTOR M. RICE, Our /c against hini, $82 88 His " " ts,. 30 00 Ile owes,.,. 52 88 19 JAMES SHELDEN,.... 132 24 20 WILLIAM SHEPARD, " ".. 3 55 21 JOIN BELDEN, "... 216 50 22 CHAS. A. SEELEY, ".... 107 40 1 H. B. BRYANT, Iis net investment, $9000 00 1'loss,. 352 94 IIs PRESENT INTEREST. 8647 06 2 H. D. STRATTON, iis net investment, $. 925 00 " loss,.... 352 94 IIIS PRESENT INTEREST, 7572 06 16794 12 16794 12 169 EXAMPLES FOR PRACTICE. THE following examples are to be rendered in the form of the Statement on page 169. EXAMPLE 1. Trial Balance. Dr. Cr. Warren P. Spencer, (Partner,).. 00 5724 58 J. C. Bryant,.. do... 5024 [58 Mercthandise, (Amount unsold, $5000,) 12000 7594 Cash,.......... 15752 25 9692 84 Bills Receivable,...... 4000 1500 Bills Payable,....... 9000 12000 E. G. Folsom,....... 750 E. R. Felton,.... 123 75 965 Expense,......... 175 42501 00 L42501 00 EXAMPLE 2. Trial Balance. Dr. Cr. James V. Lusk, (Partner,).. 4500 11. WY. Ellsworth, do.... 398 72 5000 H. C. Spencer,. do... 4500 Cash,......... 7594 28 15329 50 Bills Receivable,..... 7500 4300 Merchandise, (Inventory, $1000,) 6794 5382 50 Real Estate, ( do. 5000,) 5000 125 Expense,........ 150 Bills Payable....... 4000 5700 Robert Paton,...... 2000 Samuel Ogden,....... 1400 44837 00 44837 00 QUESTIONS FOR REVIEW. REMARKS, PAGE 154. 1. What is the purpose of Set III? 2. With what previous set does it correspond? 3. Where is the distinction between Single and Double Entry most apparent? 4. To what do the additional accounts in Double Entry relate? 5. For what are they useful? 6. What improvement has this set over Set II? 7. What is the objection usually urged against combining the Day Book and Journal? 8. What is the general purpose of auxiliary books? 9. For what are they used in Single Entry? 10. In what does the method of closing the accounts in this Ledger differ from the preceding? 11. Is it usual to bring down single items in the Ledger? 12. When is this proper? NOTE.-Let this set be followed by the " Exercises" on page 69. 170 SET IV. GENTLEMEN'S FURNISHING BUSINESS. (PARTNERSHIP.) JOURNAL, CASH BOOK, AND SALES BOOK, USED AS PRINCIPAL BOOKS. \O R E MARKS. TnE characteristic feature of this set consists in the peculiar arrangement and use of the original books of entry. Hitherto the transactions, whatever auxiliary books have been used, have all been entered in the Journal, and from thence posted to the Ledger. This plan, although having some advantages, is objectionable upon the ground of too much labor, nearly all the transactions being entered twice or more before being carried to the Ledger. The plan of posting directly from the original books of entry, such as the Cash Book, Sales Book, etc., is not only practical and business-like, but serves, in the most striking manner to enforce the theory of the science, and to disarm that class of objectionists who insist that Double Entry requires vastly more writing than Single Entry. The only difficulty in the way of posting directly from the original books lies in the danger of conflicting the entries, or posting the same amounts twice. For instance, the debit side of the Cash Book comprises in itself a double entry, which is equivalent to the Journal entry " Cash Dr. To Sundries." In posting from the Cash Book, the total of the debit side is carried to the Cash account in the Ledger, and the item comprising that amount to the credit side of the various accounts mentioned, among which is Merchandise. It is very evident that if all the Merchandise sold be credited from the Sales Book, the amount sold for cash would be credited twice, hence the necessity of an extra column in the Sales Book for Cash sales which are omitted in posting from the Sales Book. The special " Mdse." and " Expense " columns in the Cash Book are to save the necessity of so many special entries to these accounts in the Ledger. The method of posting from the Cash and Sales Books is extremely simple. The amounts in the " General" column of the Cash Book may be posted at any time-the page of the Ledger being indicated in the margin, the " Mdse." and " Expense" columns at the end of the month, or as often as it may be best to close the Cash Book. The sales for Cash are masked " C.B. " in the margin of the Sales Book, and the amounts extended into the "Cash" column. The other accounts from the Sales Book may be posted at any time, the page of the Ledger being indicated in the margin. The sales for notes are marked inside the margin, "B.R." and, of course, posted to Bills Receivable account. Instead of indicating the page from which the transactions are posted, the initials of the original book are given in the Ledger. 172 JOURNAL,-SET IV. CHICAGO, SEPTEMBER 1, 1861. 2 Merchandise, 6750 1 To J. R. Penn, 6750 Am't invested, per Inventory 1 J. R. Penn, 1750 3 To Bills Payable, 1750 Assumed for him, 1 Sundries, To J. C. Bryant, 5900 Amounts invested, I Bills Rec'ble, J. Smith's note, $750 00 H. Young's, " 750 00 1500 1 J. T. Calkins, Balance of %, 500 2 E. R. Felton, do. 376 2 J.H. Goldsmith, " 1170 2 Jas. Atwater, " 1250 3 P.C. Schuyler, " 1104 1 J. C. Bryant, To Sundries, 900 Liabilities assumed, 3 To Chas. Taylor, Bal. of c, 500 3 J. W. Lusk, " 400 3 J. W. Lusk, 400 3 To Bills Payable, 400 Our note @ 30 ds. to Bal. / 1 Bills Receivable, 110-4 3 To P. C. Schuyler, 1104 His note@ 60 ds. to Bal. 16804 0 1 16804 00 16804 00 13 CASH BOOK,1861 ___Cash.__ Dr. Mdse. General. Sept. 1 S. S. Packard,. An't invested,.. 5000 Mdse.,..... T.W.. Sales Book,. 363 72 V Mdse.,.... Petty Sales. P.C. B.,. 54 25 2 1 J. T. Calkins,.. On,....... 200 3 Mdse.,.... D.V.B. Sales Book,. 89," V Mdse.,.... Petty Sales. P. C. B.,. 28 90 5 Mdse.,...." ".. 105 7 V Mdse.,.... J.A. Sales Book,... 73 50 10 2 James Atwater,. On,....... 750 12 Mdse.,.. Petty Sales. P.C. B.,. 58 14 V Mdse.,.......... 138 15 / Mdse.,.. w.B. Sales Book,.. 128 25 16 1 J. T. Calkins,. On,...... 150 17 1 Bills Receivable,.. Smith's note,.... 150 3 Interest,.... On same,..... 3425 18 V Mdse.,.... Petty Sales. P.. B.,. 94 83 22 2 J. H. Goldsmith,. On,....... 1000,, V M/Idse.,...Petty Sales. P.C.B.,. 11244 25 2 E. R. Felton,.. In full........ 376 V MI dse.,.. Petty Sales. P.C. B.,. 83 15 26 V Mdse.,........ 58 94 2 J. H. Goldsmith,. On %,........1 170 27 V Mdse.,... Petty Sales. P. C. B.,. 117 50 " 2 James Atwater,. On %,....... 500 28 Mdse..... McG. Sales Book,. 156 75, Mdse.,.... Petty Sales. P.C.B.,. 87 50 29 Mdse.,......... 112 94 1 Bills Receivable,.. Young's note,... 150 3 Interest,.... On same....... 14 50 30 Mdse.,... Petty Sales. P.C.B.,. 15 2 Total to Merchandise,..... 2702 27 02 27 2 Total to Cash,....... 12397 02 174 SET IV. 1861 ____Cash. Cr. Expense. General. Sept. 1 I/ Expense,... Postage Stamps,.. 3 2 3 Charles Taylor,.. On,....... 300 4 V Expense,... 2 Tons Coal, ( $5,.. 10 6 Expense,... Bill of Stationery,... 15 " Expense,... Iands, for Shop-work,. 150 7 2 Mdse.,.... Invoice Cloths. J. B.,. 3000 10 / Expense,... Gas Bill,..... 1 13 V Expense,....Iands, for Shop-work,. 15 15 3 Bills Payable,..Our note, favor II. B.,.. 1000 3 Interest,... On same,...... 46 5 18 V Expense,... Clerks' Salaries,.... 112 20 / Expense,.... Hands, for Shop-work,. 250 25 / Expense,... Rent to Sept. 30,... 100 26 Expense,... Porterage and Drayage,. 35 28 Expense,... HIands, for Shop-work,. 25 30 Expense,.... Partners' Salaries to date, 606 Total to Expense,... I 14 1746 Total to Cash,........ 6092 15 BALANCE ON IAND,... 6301 27 / ~~175 12397 02 175 SALES BOOK,-SET IV. 1 CHICAGO, SEPTEMBER 1, 1861. Cash. j General. THERON W. WOOLSON, lft. PleaCsant, Ia. ~ 4 Doz. Shirts, 2d quality, 48 a $1 00 $48 00 6 " Union Neckties, 72 " 38~ 27 36 20 " Linen Hdkfs., 240 " 50~ 120 00 7-S S3 pcs. Cassimere, 150 yds " 1 25 187 50 $382 86 Disc. off, 5 1914 363 72 IRA PACKARD, Peru, nd., 50 Boys' overcoats, ( $5 50 $275 00 50 " " 7 50 375 00 650 B.R. ~No0e 6( Gmo. 3. D. V. BELL, Chicago. 1 Dress suit for self, $50 00 1 Overcoat for son, 15 00 1 Box Hldkfs. 6 doz. ( $4 00 24 00 89 J. II. GOLDSMIITIH,.Detroit.'2 2 pcs. Eng. B'dc'th, 100yds @ $4 00 $400 00 50 Military coats, per order, " 10 00 500 00 900 JAMIES ALLEN, zubuGque. 20 Zouave uniforms, G $25 00 $500 00 I Pce. Stri'd Satin, 50yds. " 5 00 250 00 $750 00 Disc. off Satin, @ 5q 12 50 737 50 JA3IES ATWATER, Xladison. 1 Lot ready made clothing viz: 10 Coats, @ $3 00 $30 00 20 " " 350 70 00 Y 50 " " 5 00 250 00 8 Pair Pants, " 3 00 24 00 25 " " 400 100 00 50 Vests, " 1 50 75 00 25 " " 3 00 75 00 1 Overcoat, 15 00 639 11190 22 2189 00 176 SALES BOOK,-SET IV. 2 CHICAGO, SEPTEMBER 15, 1861. Cash. - General. Amounts Forward, 1190 22 2189 WVILLIAM BAKER, Springfield. 5 doz. Cravats, 60 715 $45 00 3 " " 36 " $100 3600 9 " Linen IHdkfs. 108 " 50~ 54 00 $135 00 Disc. off 5s 6 5 128 25 // J. T. CALKINS, North -Bend, Ind. 50 Military C'ts, (Privates)' $10 00 $500 00 5 " " (Officers) " 15 00 75 00 575 C. D. BRAGDON, Rock Island. 50 (Ready made) Coats, @ $5 00 $250 0.0 100 prs. Pants, " 3 00 300 00 50 doz. Collars. " 150 75 00 5 " F. Y. Shirts, 60" 1 75 105 00 730 B.R. Note l' 6m-o. GEORGE E. HARVEY, Green DBay. 100 Zouave Uniforms, @' $20 00 $2000 00 50 Mil. Coats, "Co. I." " 100 500 00 2500 B.R. Note @' 60 ds. JAfMES W. LusIS, Chicago. 3 50 Unif'ms ("Line. Green") @ $25 00 $1250 00 30 " (Zouaves) " 15 00 450 00 1700 ROBERT MIcGRATTh, White Pigeon. 20 (R'dy made) Boy's C'ts, @ $5 00 $100 00 30 " " Vests, " 1 50 45 00' 20 doz. Collars, " 1 00 20 00 ^'^t>X~ ~$165 00 Disc. off 5 8 25 156 75 2 E. R. FELTON, Peoria. 75 Complete Uniforms, ~ $25 00 1875 Sales on time, to credit of Mdse. 9569 T)Z ~ Sales for Cash, posted from C.B. 1475 22 Petty Sales, entered alone on Cash Book. 1227 05 2702 27 Total.Mdse. sold, 122 1 2 177 177 LEDGER,- SET IV. 1861 Sep. I By Cash, cB 5000 Dr. John R. Penn. Cr. 1s861OiI 1861 Sep. 1 ToBillsPayable J. 1150 Sep. 1 By Mdse., J. 6750 Dr. J. C. Bryant. Cr. 1861 1S61 Sep. 1 To Sundries, |J. 900 Sep. 1 By Sundries, j. 5900 Dr. B1ills Receivable. Cor. 1861 1 861 Sep. 1 To J. C. Bryant, J. 1500 Sep. 17 By Cash, CB 750 20 "P.C.Schuyler J. 1104 " 29 " c" I 750 1 " Mdse., SB 650 18 I SB'730 20 ""' sn 2500 Dr. J. T. Calkins. Cr. 1861. 1861 Sep. 1 To J. C. Bryant, j. 500 e Sep. 2 By Cash, CB 200 15 Mdse., sn 575 1 16 1 " CB 150 178 LEDGER,-SET IV. Dr.. Cash. r. 1861 1861 Sep. 30 To Sundries, 1239702 Sp. 30 BySundries, Ce 6092 7 Dr. AMerchandise. C'. 1S61 S1861 Sep. 1 To J. R. Penn, J. 6750 Sep. 30 By Cash, CB 2702 27 7 " Cash, C 3000 "" Sundries, SB 956J Dr. E. J-. Felton. Cr. 1861 s1861 Sep. I To J. C. Bryant, J. 376 Sep. 25 By Cash, CB 376 "4 30 " Mdse., SB 1875 Dr. J. II. Goldsmith. Cr. 1861 [ 1861 Sep. I ToJ.C.Bryant, J. 1170 Sep. 22 By Cash, CB 100') 5 " Mdse., SB 900 " 26 CB 170 Dr. James Aitwater. Cr. 1861 1861 Sep. 1 ToJ. C. Bryant, J. 1250 Sep. 10 By Cash, CB 750 " 12 Mdse., SB 639 " 27 " " CB 500 179 LEDGER,- SET IV. 3 Dr. P. C. Schuyler. Cr. 1861 1 61 Sep. 1 To J. C. Bryant, J. 1104 Sep. 20 ByBillsRe'ble J. 1104 Dr. Charles Taylor. Cr. 1861 1861 Sep. 2 To Cash, CB 300 Sep. ByJ. C.Bryant, J. 500 Dr. James W. Lusk. Cr. 1861 1861 Sep. 15 ToBillsPayable J. 400 Sep. 1 By J. C. Bryant, J. 400 " 25 "Mdse., SB 1700 Dr. Bills Payable. Cr. 1861 s1861 Sep. 15 To Cash, CB 1000 Sep. 1 By J. R. Penn, J. 1750 15 " J. W. Lusk, J. 400 Dr. Interest. Cr. 1861' 1861 Sep. 15 To Cash, B 46 75 Sep. 17 By Cash, CB 34 25 29 " " B 14 50 180 LEDGER,- SET IV. 4 Dr. Expense. Cr. 1S61. Sep. 30 To Cash, CB 1746 EXERCISES FOR THE LEARNER. 0F 7 O It T I]: S E nI I }E S. TtIE following routine is a continuation of the business of Set IV, and the transactions should be entered in the proper books and posted in accordance with the plan and instructions of the Set, using the same books, and producing at the close, a general result of the whole business. As this set is by far the most practical in the treatise, its peculiar points should be thoroughly impressed upon the mind. The student should exercise much care in the symmetrical arrangement of the original Books of Entry. The accompanying initials will indicate the books to be written up, and their order. Memoranda. October 1. Bo't of Dunham & Brokaw on %, Invoice of Mdse. amounting to $6000, (J.)-Sold James Johnson, Freeport, for Cash, 1 doz. Fancy Neckties, @ $1 each; 12 doz. prs. Lisle Thread Stockings, @ $3 per doz., (S.B., C.B.)-2. Paid Shop-hands, Cash, $300, (C.B.)-Received Cash for Petty Sales, $119, (C.B.)-3. Received Cash of J. H. Goldsmith, in full, of %, $900, (C.B.)-Sold E. R. Felton, on %, 6 doz. French Yoke Shirts, G $18 per doz.; 10 doz. Knit Undershirts, @ $7 per doz.; 8 doz. pr. Knit Drawers, @ $8 per doz.,.(S.B.)-5. Received Cash for Petty Sales, $120, (C.B.)-Sold Robert Harmer, Vandalia, for Cash, 15 Summer Coats, @ $2; 20 do. Vests, @ $1 50; 6 doz. Cut-throat Collars, @ $2 per doz., (C.B.)-7. Paid Cash for repairing store, $150, (C.B.)Received Cash for Petty Sales, $94 83, (C.B.)-8. Received Cash of J. T. Calkins, in full of %, $725, (C.B.)-Sold Jacob Horn, Milwaukee, on his note @ 60 ds., 50 Complete Uniforms, @ $20, (S.B.)-Received Cash for Petty Sales, $110, (C.B.)-9. Paid Shophands, Cash, $297, (C.B.)-Sold J. W. Lusk, on %, 2 doz. Ready made Coats, 24 @ $5; 15 prs. Pants, $3 75; 30 Vests, C $2; 1 Fine Overcoat, $25, (S.B.)-10. Received Cash for Petty Sales, $119 50, (C.B.) —12. Received Cash in full for P. C. Schuyler's 181 EXERCISES FOR THE LEARNER. note, $1104, (C.B.)-15. Sold Abraham Jackson for Cash, 5 doz. Byron Collars, @ $2 per doz.; 4 doz. D'Orsay Cravats, @ $12 per doz., (S.B.,C.B.)-Received Cash for Petty Sales, $157 30, (C.B.) -16. Paid Dunham & Brokaw, Cash on %, $3000, (C.B.)-Paid Shop-hands, Cash, $263, (C.B.)-Received Cash for Petty Sales, $85 90, (C.B.) —18. Sold E. R. Felton, on %, 1 Case Overalls, 6 doz. prs. @ $6 per doz.; 2 Cases Summer Frocks, 12 doz. @ $18 per doz., (S.B.)-Received Cash for Petty Sales, $115, (C.B.)-20. Received Cash of E. R. Felton on %, $1500, (C.B.)-Sold Robert C. Spencer, St. Louis, for Cash, 10 Military Coats, @ $15; 5 do. (officers,) @ $25, (S.B., C.B.)-Received Cash for Petty Sales, $143, (C.B.)-21. Paid Cash for salaries, $117, (C.B.)-Sold Chas. Taylor, on %c, 1 Piece French Cassimere, 50 yds. @ $3, (S.B.) Received Cash for Petty Sales, $125, (C.B.)-Paid Dunham & Brokaw, Cash in full of %, $3000, (C.B.)-23. Paid Shop-hands, Cash, $375, (C.B.)-Received Cash for Petty Sales, $75, (C.B.)25. Sold James Atwater, on %, 1 doz. Boy's Frocks, 12, 1 $2; 3 doz. do., 36, @ $5, (S.B.)-Received Cash for Petty Sales, $85 90, (C.B.)-27. Received Cash of James Atwater, in full of %, $843, (C.B.)-28. Paid Cash for Gas Bill, $15; Rent, $100, (C.B.)-30. Paid Shop-hands, Cash $400, (C.B.) STATEMENT. The above transactions properly entered will produce the following result. Face of Ledger. I Balances. Dr. Cr. Dr. Cr. S. S. Packard, 500..... 5000 J. R. Penn...... 1750 6750 5000 J. C. Bryant,..900 5900 500( Bills Receivable, 4. 84 2604 4880 Cash,........ 19272 45 14109 75 5162 70 Merchandise,... 15750 16183 95 433 95 E. R. Felton, 2745 1876 869 Charles Taylor,. 450 500 50 J. W. Lusk,..... 2361 25 400 1961 25 Bills Payable,....1000 2150 1150 Interest,....... 46 75 48 75 2 Expense,.... 3763 3763 55522 45 55522 45 116635 95 16635 95 182 PRACTICAL HINTS FOR TEACIER AND PUPIL. IN the preparation of this book the authors have kept in view one important fact, viz: that in order to become a practical accountant, the student should learn not only to think for himself, but to give his thoughts appropriate form and expression; hence the introduction of intermediate " Exercises for the Learner," and " Examples for Practice," intended to throw him upon his own resources, and rescue him from the too common error of copying. We feel sure that this feature will commend itself to all who use the book, and especially to the faithful teacher who is satisfied with no progress which is not real. The three qualities essential to success in Accountantship are, 1. ACCURACY; 2. NEATNESS; 3. DISPATCH; and these are to be acquired only through practice. Instead therefore, of omitting any of the practical Exercises, or passing lightly over them, they should be regarded as vital and indispensable, and should they not afford sufficient practice, additional exercises should be given by the teacher or self-imposed by the student. The limited space afforded' renders it impossible to carry out in detail, all the labor which actual business would require in the way of filling out notes, drafts, checks, etc., or to suggest appropriate forms for such letters and documents as would be necessary in conducting the business represented; but the student should be required to supply this deficiency, with such aid as the teacher may think prudent to offer. The following brief hints may afford some assistance in carrying out the intention of the work. ORDER AND NEATNESS. There is no error more fatal to the student in Accounts than the impression which so generally prevails, that a theoretical knowledge of general principles will prepare him for the duties of the Counting Room. It is true that without this knowledge, he need never hope to succeed; and equally true that with it, alone, he will be quite as unfortunate. Although in enumerating the neccessary qualifications of an Accountant we have placed NEATNESS, second in the list, it is the first which attracts attention, and is of the utmost importance in establishing a reputation for practical accountantship. Neatness, in Book-keeping is the result of good writing and tasteful arrangement. It is a mistaken idea conceived by ambitious youth and fostered by peripatetic writing masters, that the ability to form a few wondrous curves in the execution of capital letters, or the adornment of a fancy 183 PRACTICAL HINTS. title constitutes the chief qualification of a business writer. Practical men are not apt to appreciate qualifications of this kind, but insist, rather, on the utmost modesty of display and simplicity of arrangement. A professional flourish is as much out of place on a page of business record, as a daub of oil color on a marble statue. Uniformity, legibility, and adaptation to space and purpose should be the characteristics of business writing; and he who fails in these essentials will need something more than a certificate from some professor of the art to save him from just condemnation. These strictures are not in disparagement to any style or system of penmanship, nor designed to underrate the profession which lends such a charm to our thoughts by setting them in graceful symbols; but to exalt the practical above the fanciful; and to insist upon a proper recognition of the standard of taste which the experience and observation of business men have adopted. Rapidity of execution is an essential element in business writing, but even this should be subordinated to neatness. In the selection of script for the principal forms in Part I. reference has been had to the standard of neatness above indicated. It is not expected that the student will attempt to copy the style of the writing, but it is hoped that he may seek to emulate its legibility and taste in arrangement. Particularly should he exercise great care in avoiding errors which will necessitate erasures. Nothing so destroys the beauty of a page as erasures and interlineations. Even occasional blotting is preferable to occasional scratching. Where it is possible, errors should be corrected by counter entries, thus affording an explanation, without destroying the harmony of the page. Finally let the student practice until he becomes proficient in ruling. In using red ink great care should be had to keep it pure; and to that end, it is never allowable to use a pen that has been dipped in black. Even steel pens are thought to destroy tho brilliancy of red ink, and quills are preferred on that account. A steel pen, however, is the best for ruling, and needs only to be kept perfectly clean. For ruling with a common steel pen, no rule is so convenient as the round, but to use it skilfully requires much practice, and a steady hand. PROFICIENCY IN MATHIEMATICS. The processes of Book-keeping seldom call into practice the higher departments of mathematics; albeit a thorough mathematician-other things being equal-will make the best accountant. The kind of proficiency most available to a Book-keeper is facility and accuracy in addition. The ability to add lorw columns of figures with speed and certainty is one of the very best claims a young man can present for a position of trust. So highly is this accomplishment esteemed by business men, that where it is wanting other qualifications sink into comparative insignificance. A clerk who "never makes a mistake " is sure of promotion and remuneration. There are many theories as to the surest and most rapid method of adding, and occasionally some eccentric genius electrifies the world with an exhibition of almost magical power in this direction; but the only thing that can with safety be relied upon is practice-faithful and continued practice. Tlh student should be required to write down long columns of figures of various numerical values, and test his powers by adding, first in one direction and then in the other; occasionally trying two and three columns at a time. WVe give below three simple processes of retaining the figure to be carried-a very important matter with beginners. The first is the usual method of writing the carrying figure small under the unit amount of the 184 PRACTICAL HINTS. column which produced it. The second requires the addition of each separate column to be written down on a waste space commencing with the right hand column and carrying to the next as in the usual method; these separate amounts placed in their order one under the other will present in their unit figures, counting upward, the general result. The third method consists of the proper arrangement of the independent sum of each column, so that, being added, the proper result is secured. EXAMPLES. First Process. Second Process. 7hird Process. 1829 25 1st column, 50 5 0 743 18 2d " 29" 2 4 2562 28 3d " 34 3 2 145 19 4th 39 3 6:: 2823 25 5th " 39 3:: 7574 28 6th " 19 994 90 1 6:: 4291 83 42951 83 119994 90 25 64 19994 90 333 25 The process of adding two or more columns at once is much more simple than is generally supposed; requiring little, if any, more skill than the common method The only point of difficulty is the necessity of adding units to units, tens to tens, etc. To give the student an idea of the process, we will take the two cent-columns in the above example, and add them together. Commencing with the lower amount, we proceed: 64 and 3 are 67, and 80 are 147, and 8 are 155, and 20 are 175, and 5 are 180, and 20 are 200, and 9 are 209, and 10 are 219, and 8 are 227, and 20 are 247, and 8 are 255, and 10 are 265, and 5 are 270, and 20 are 290; which is the sum of the two columns. It will be seen that we separate each amount into units and tens, adding the units to the units and the tens to the tens of the accumulating result. We will now vary the process by commencing at the top and adding downward; and also by adding the tens first: 25 and 10 are 35, and 8 are 43, and 20 are 63, and 8 are 71, and 10 are 81, and 9 are 90, and 20 are 110, and 5 are 115, andt20 are 135, and 8 are 143, and 80 are 223, and 3 are 226, and 60 are 286, and 4 are 290; the same result as before. By continued practice of this kind the student will'soon be able to astonish himself with his own proficiency. Let him practice on two columns, until he becomes thoroughly familiar with the process, and then take three, and four. The necessity of keeping his mind constantly on the alert for fear of adding tens to units, and units to hundreds, will serve to quicken his powers of concentration, and develop the practical resources of his mind. TO DETECT ERRORS IN TIHE TRIAL BALANCE. Undoubtedly the best method for guarding against the trouble of finding errors in the Trial Balance is not to make them; but as this advice is much more easily given than followed, and as, in despite of the best efforts, Trial Balances do frequently 185 PRACTICAL HINTS. fail to equilibrate, a few hints as to the most approved methods of discovering the errors may be kindly received. In the first place let it be remembered that while the Trial Balance is not a sure test of the correctness of the Ledger, no Double Entry Ledger can be correct that does not balance; hence, the necessity of knowing that the sides are equal. The Trial Balance is simply the summing up of the debit and credit sides of the Ledger to ascertain if they are equal. If the trial should prove that they are 7not equal, the cause must exist either in entries being omitted, posted to the wrong side, or in wrong amounts. A little observation will enable the accountant to classify the error under one of the above heads. If the precaution indicated in our first Double Entry sets be taken, viz: to carry the total amounts posted irfto the Trial Balance-and either side agrees with the footing of the Journal columns, the difficulty is easily overcome, as the difference between the sides will show not only the error or combination of errors, but the side of the Ledger upon which they occur. For various reasons, however, it is not always convenient to embrace the total Ledger entries in the Trial Balance:-thereforoefor general purposes, we would suggest the following process for detecting errors: First, make sure that an error exists. It is often the case that an overweening anxiety to have the sides of the Trial Balance equal actually produces a suppositions error, by dissipating the mind while engaged in ascertaining the result, and thus persistently, though erroneously realizing its own fears, by errors in addition. If an error seems to exist, before attempting to find it, go carefully over the work of addition, proving it in every way. If the test should prove that the sides do not equal, refer to the Ledger accounts, and ascertain that the proper amounts have been transferred to the Trial Balance. Foot up the accounts very carefully, and permit no doubt to exist that the exact condition of the Ledger is shown in the Trial Balance.-Second, If the error still exists, ascertain its exact amount, and then look carefully for the same amount in the Journal, which may have been omitted in posting. If no such an amount should appear, or should not prove to have been omitted, next ascertain if any Journal Entry exists of half the amount, which being posted to the wrong side would produce the difference. Should this test prove unsuccessful, ascertain if the difference be divisible by 9, and if so, look carefully for a transposition of some amount posted.*-Third, Should this process fail the last resort is to check the postings. First ascertain that the Journal entries balance and then go carefully over the work, checking in pencil mark, all entries that have been properly posted both on the Journal and the Ledger. The most reliable process of checking is to have one person take the Journal and call off the Ledger titles and amounts, slowly and distinctly-the debits first, and credits next-whilo another examines the Ledger entries to see if they correspond. Many practical accountants adopt the plan of thus checking before attempting to take a Trial Balance, for the purpose, not only of facilitating the labor but of being assured that the Ledger is absolutely correct. We cordially commend the practice, believing that if it is adopted, and faithfully carried out there will be little need of resorting to any other method to ensure a balance. Above all, let the student hunt up his own errors of balance; for while it is true that all such errors are the result of careless* It is a curious fact that the difference between any given amount composed of two or more figures, and the same figures transposed, is divisible by 9. For example, the difference between T7 and 5T is 18; between 120 and 210, 90; between 195 and 159, 36; etc., all of which differences 18, 90. and 36, are divisible by nine, without a remainder. The illustration may be carried to any extent, with the same results. 186 PRACTICAL HINTS. ness, the adoption of means to detect them, will tend, in the greatest degree to perfect his mind in those practical questions and labor, necessary to the full development of his powers. It is the duty of the teacher to open up to the pupil's mind the bearings of the various principles of the science he would inculcate, as well as to aid him in the application of those principles; but practical results should be the student's own work. For these he should be held responsible; and should never be allowed to fall into the loose habit of making errors that his teacher may find them. RESOURCES AND LIABILITIES. These terms are used extensively in this work, and their importance in properly defining the condition of the business has been forcibly set before the student. He has been taught that certain Ledger accounts are used to show resources, and certain others to show liabilities, and that the correspondence between the resources and liabilities thus shown must agree in a certain sense, with the accounts showing gains and losses. Any careful observer, however, must be aware that all classes of resources are not equally valuable; and that, in the course of trade, persons may become indebted to us both on note and account who will never pay; the resource thus represented being absolutely valueless. In estimating the condition of a concern, therefore, it is well to know whether the books are truthful; that is whether the resources exhibited on their pages are absolute or fictitious. (The liabilities are always presumed to be genuine.) The importance of this precaution will be apparent when we consider that all gains in business, as shown by representative accounts, are predicated upon the integrity of the resources. For instance, suppose we sell A, $500 worth of Merchandise, and take his note for it. In recording the transaction, we credit Merchandise, and debit Bills Receivable. In estimating our gains and losses, we, of course include among the proceeds of Merchandise this amount, which adds $500 to our gains. Our Merchandise account is closed, and the result finds its way into the Loss and Gain account, thus having an important bearing upon the apparent prosperity of the business. But suppose this note should prove worthless. It is now evident that the $500 credited to Merchandise account was not a legitimate product, and that all gains predicated upon it are necessarily fictitious. But there are other resources represented in the Ledger, the exact value of which is uncertain, —they may be worth their face, or half of it, or nothing. How shall they be treated in a general exposiion of affairs? Should we consider them all valueless, and close them into Loss and Gain, the error may be as great as to pertmit them to remain and represent actual worth. The most approved method of disposing of this class of accounts, is to permit them to remain upon the Ledger, but to neutralize their effect by opening an account showing fictitious liabilities of the same amount. An appropriate title for this account is " Suspense." When therefore doubtful resources exist on our Ledger, and we do not wish to represent anything more than actual gains, the process should be to debit Loss and Gain, and credit " Suspense " with the amount of the doubtful resources. If any of these are afterwards paid, or their value becomes tangible, it is very easy to restore them by debiting Suspense and crediting Loss and Gain. This method is far preferable to the more usual one of closing up all doubtful accounts into Suspense. The Suspense account in the latter case would represent either a loss or a resource. If a loss the amount may as well go at once to the Loss and Gain account; and if a resource, it 187 EXCHANGE. had much better remain under its own more appropriate title. But the chief objection to this course would be the exhibiting of accounts as closed, which are yet owing and may be paid. If Mr. A, for instance, whom we thus consider doubtful, should desire to see his account in our Ledger, that he may pay it, it might be awkward to inform him that, having considered his account worthless we had carried it to Loss and Gain. He might not desire to change our estimate of the value of his indebtedness. EXCHANGE. Exchange is a term used to denote that commercial usage by which individuals are enabled to cancel debts at a distance without the transmission of money. This is effected through a species of commercial paper known as " Bills of Exchange." A Bill of Exchange is a written order addressed to a person directing the payment of a certain sum of money, either upon its presentation, or at a specified time thereafter. There are two classes of Exchange, domestic and foreign. DOMESTIC EXCIHANGE consists of drafts, notes, checks, certificates of deposits, etc., the parties to which reside in the same country. FOREIGN EXCHANGE is usually represented by drafts, the parties to which reside in different countries. They are usually drawn in sets of three or more, one of which being honored, the others become void. The separate bills are sent by different routes, or at different times, and the first that comes to hand, if either, is honored. Foreign Bills of Exchange are made payable in the currency of the country upon which they are drawn, instead of that where they originate. FORM OF A SET OF EXCHANGE. 1.EXCHANGE FOR ~1000. New York, July 1, 1861. Ten days after sight of this my first Bill of Exchange, (second and third of same date and tenor unpaid) pay to S. S. Packard or order, One Thousand Pounds Sterling, value received, with or without further advice. H. D. STRATTON. To GEORGE PEABODY & CO. } Bankers, London. 2.EXCHANGE FOR ~1000. New-York, July 1, 1861. Ten days after sight of this my second Bill of Exchange, (first and third of same date and tenor unpaid) pay to S. S. Packard or order, One Thousand Pounds Sterling,, value received, with or without further advice. H. D. STRATTON. To GEORGE PEABODY & CO. | Bankers, London. 188 EXCHANGE. -3. EXCHANGE FOR ~1000. New- York, July 1, 1861. Ten days after sight of this my third Bill of Exchange, (first and second of same date and tenor unpaid) pay to S. S. Packard or order, One Thousand Pounds Sterling, value received, with or without further advice. H. D. STRATTON. To GEORGE PEABODY & CO. 1 Bankers, London. FORMS OF NOTES, DRAFTS, CHECKS, ETC. The following forms of notes, drafts, checks, receipts, etc., comprise the great bulk of business paper entering into the various departments of domestic trade. Notes. 1. Jndividual Note.' $500. NEW-YORK, July 1, 1861. One day after date, I promise to pay M. B. Scott or order, Five Hundred Dollars, value received. JACOB HINDS. 2. Joint Note. $1000. BUFFALO, May 1, 1861. Sixty days after date, we promise to pay N. C. Winslow, or order, at New-York and Erie Bank, One Thousand Dollars, value received. J. C. BRYANT, W. P. SPENCER. 3. Joint and Several Note, (with interest.) $1500. CLEVELAND, January 10, 1861. One month after date, we or either of us promise to pay John R. Penn or order, Fifteen Hundred Dollars, value received with interest from date. E. G. FOLSOM, E. R. FELTON, 4. Principal and Surety Note. $600. CHICAGO, July 10, 1861. Thirty days after date, I promise to pay James Richards or order, Six Hundred Dollars, value received. H. B. BRYANT, Principal. E. B. ROCKWELL, Surety. 5. Chattel Note. $400. DETROIT, April 12, 1861. Three months from date, for value received, I promise to pay to John Jones or order, Four Hundred Dollars, in Pine Lumber, at the then market rate, the same to be delivered as per his order, within the limits of the city of Detroit. HENRY P. SMITH. 189 EXCHANGE. 6. Non-negotiable Note. $375. ALBANY, June 10, 1861. One month from date, I promise to pay James Cruikshank, Three Hundred and Seventy Five Dollars at his office. W. H. CLARK. Drafts. 1. Time reckoned from sight. $500. PHILADELPHIA, June 12, 1861. At ten days' sight, pay to the order of Daniel Slote, Five Hundred Dollars, value received, and charge to account of L. FAIRBANKS. To PACKARD & PENN, 18 Cooper Inst. N.Y. 2. Reckoned from Date. $750. WASHINGTON, D.C. April 28, 1861. Ten days after date, pay to Austin Packard or order, Seven Hundred and Fifty Dollars, value received, and charge to my account. ZALMON RICHARDS. To IvISON, PHINNEY & CO. } 48 Walker St., N.Y. Due Bills. 1. For Cash, Drawing Interest. $175 T-. ST. LOUIS, July 1, 1861. Due Henry C. Spencer, on demand, One Hundred and Seventy Five 1-3- Dollars, with interest from date. WM. H. BEEBE, 2. For Merchandise, without Interest. $100. CINCINNATI, June 12, 1861. Due R. M. Bartlett, One Hundred Dollars, payable in Wheat, at market price, on the first day of September next. WILLIAM MOORE. Orders. 1. To apply on Account. BALTIMORE, April 12, 1861. Mr. J. Austin Sperry will please pay to the bearer, Fifty Dollars, in Merchandise, on my account. J. D. HINDE. 190 E-XCHI ANGE 2. In full of Account. GRANVILLE, 0., Sept. 10, 1861. THOMAS PEASE, ESQ. Please pay to John McDonald or bearer, One iHufdred Dollars, from your store, and this shall be your receipt in full of my account. JAMES G. IRWIN. Receipts. 1. On Account. $400.-Received, January 1, 1861, Four Hundred Dollars, on account of James W. Lusk. S. C. GRIGGS & Co. 2. In full of all demands. $575. ROCHESTER, June 19, 1861. Received of Geo. W. Eastman, Five Hundred and Seventy-five Dollars, in full of all demands. D. W. FISH. 3. To apply on Contract. $1000. SYRACUSE, Jan. 12, 1861. Received of S. M. Bassett, One Thousand Dollars, the same to apply on contract for building house, dated Jan. 1, 1861. ROBERT WALLACE. 4. To apply as an Endorsement. $75. July 10, 1861. Received on the within note, Seventy-five Dollars. JAMES SMITH. 5. Receiptfor Property. NEW-YORK, Jan. 15, 1861. Received of Duncan Phyfe, the following enumerated articles to be held in trust for him, and returned on his demand: one Gold Watch (Hunting case), two Promissory notes, each dated Jan. 1, 1861, and signed by William Prentiss-one for Three Hundred Dollars, due in six months from date, and one for Five Hundred Dollars, due in eight months from date. SS. S.PACKARD. Checks. 1. Payable to Bearer. $100. MERCANTILE BANK, NEW-YORK, May 10, 1861. Pay to John Doe or Bearer, One Hundred Dollars. (No. 1963.) PETER COOPER. 2. Payable to Order. $300. MERCANTILE BANK, NEW-YORK, April 10, 1861. Pay to Charles Strong or Order, Three Hundred Dollars. PETER COOPER. 191 EXCHANGE. Certificate of Deposit. $500. EXCHANGE BANK, ALBANY, MARCH 1, 1861. J. T. Calkins has deposited in this Bank, Five Hundred Dollars, payable to C. C. Conant or Order, on return of this certificate. (No. 1900.) CHAS. EDDY, Teller. QUESTIONS FOR REVIEW. REMARKS, PAGE 172. 1. In what consists the peculiarity of Set IV? 2. How have the transactions been entered heretofore? 3. What objection to entering all the transactions in the Journal? 4. What advantage in posting from the original books of entry? 5. What difficulty in the way? 6. How do you avoid posting certain entries twice? 7. When are the amounts in the " General" column to be posted? 8. When the special columns? 9. What reference is made in the Ledger to the book from which the several amounts are posted? PRACTICAL HINTS, PAGE 183. 10. What three qualifications are necessary to good accountantship? 11. How are these to be acquired? 12. In what does neatness in Bookkeeping consist? 13. What are the characteristics of good business writing? 14. What is said of rapidity? 15. What of errors and omissions? 16. Interlineations and Erasures? 17. What precautions should be observed in the use of red ink? 18. What kind of mathematical proficiency is most available to the Bookkeeper? 19. How is facility in addition to be acquired? 20. What is the process of adding two or three columns at once? 21. What is the best method of avoiding the difficulties in getting a Trial Balance? 22. Is the Trial Balance a sure test of the correctness of the Ledger? 23. What is a Trial Balance? 24. Will you give the processes for discovering an error in the Trial Balance? 25. What curious fact connected with the transposition of figures? 26. lWhat plan is recommended to guard against fictitious gains? 27. What does the "Suspense" account show? 28. What is meant by Exchange? 29. What is a Bill of Exchange? 30. Of what does Domestic Exchange consist? 31. Foreign Exchange? 32. How are Foreign bills drawn? 33. Why in Sets? 34. In what currency are they payable? 192 -e ^~~~~~~~~10 I,^ ^~ ^~ \7'"'Nll