/ r; /77 //,. CONCISE TREATISE ON COMMERCIAL BOOK-KEEPING, ELUCIDATING THE PRINCIPLES AND PRACTICE OF DOUBLE ENTRY, AND THE MODERN METHODS OF ARRANGING MERCHANTS' ACCOUNTS. Br B. F. FOSTER. Book-keeping Is an art which no condition of life can render useless, which must contribute to the advancement of all who bu. or sell-of all who wish to keep or improve their possessions —of all who desire to be rich, and all who desire to be wise. Let no man enter into businens while he is ignorant of the method of regulating booleks. -Dr. Johnson. SEVENTH EDITION. BOSTON: PUBLISHED BY T. R. MARVIN, ANtD FOR bAL: BY PHILLIPS-& SAMPSON, CHARLES-TAPPAN, AND B. B. MUS-SEY. 1851. Entered according to Act of Congress, in the year 1836, By PERxINS & MARVIN, In the Clerk's Office of the District Court of the District of Massachusetts. PREFACE. THE utility of Book-keeping is too obvious to be insisted upon. "There is no man," says Dr. Johnson, " who is not in some degree a merchant - who has not something to buy or something to sell, and who does not, therefore, want such instruction as may teach him to preserve his affairs from inextricable confusion." Every individual must keep accounts in some manner; and in a country like ours, where men of enterprise often raise themselves from comparative indigence to affluence and wealth, a knowledge of Bookkeeping is an object of the first importance to the rising generation as well as to the majority of adults. As a general study, this art is too much neglected. It is singular how little care is taken, even among merciants, to come at the right methods of practising it, and how few bestow any thing like that attention which it intrinsically merits. In Holland, it has become a proverb, that the man who fails in business did not understand accounts; and, in fact, nine cases of insolvency out of ten arise from want of method in keeping books. The losses and embarrassments occasioned by its neglect, terminate so often in ruin, that it is equally the interest and duty of every person to make himself master of the most perfect and efficient system before entering upon the active pursuits of life. To the merchant, a knowledge of this art is absolutely indispensable; and the affairs of the mechanic, the lawyer, and the doctor, as well as the man of leisure, require a systematic, self-verifying record of accounts;-a want of which has ruined thousands of industrious and enterprising men. Independently of its pecuniary advantages, the study of Book-keeping recommends itself as a means of intellectual culture, affording, as it 4 PREFACE. does, an ingenious and beautiful illustration of the harmony of method and the use of numbers. A practical knowledge of Book-keeping is considered by many individuals as unattainable, except by attending for years to the daily routine of the Counting-house. This opinion is certainly erroneous. For, although every merchant has some peculiarities in the form or arrangement of his books, yet the essentials are the same in all, and he who has obtained a mastery of the fundamental and established principles of Double Entry, will scarcely find himself at a loss for twentyfour hours in any Counting-house whatever. The principal reason why so few succeed in obtaining a satisfactory knowledge of Book-keeping at school, proceeds from the imperfect manner in which it is taught, little or no pains being taken to illustrate and explain the principles upon which the art is founded, in such a manner that they may be clearly and fully comprehended. The process of balancing the Ledger, and of adjusting the accounts, the most difficult part of the science, is seldom understood. The first and most important object to be attained by the student ot Book-keeping, is a clear and comprehensive knowledge of the nature and arrangement of accounts in the Ledger. "The design of Bookkeeping," says Postlethwayt, " is to exhibit at all times a true state of the merchant's affairs. The book in which this result is shown is called the Ledger, which contains an abstract of every mercantile transaction arranged under distinct heads; so that if the reason of the entries in the Ledger be once understood, the use of the Subsidiary Books and the Journal will be so of course. For it is the Ledger alone that can teach the art, it being the most essential book. The Subsidiary Books may vary in number and form to suit the nature of the business; but, in every instance, the principles and arrangement of the Ledger must be the same. I am persuaded that the easiest, shortest, and most effectual method to become skilled in this art is to obtain a complete mastery of the Ledger first, and then proceed to its details." See Chapter II., and Synopsis, pages'22 and 23. The object of the present work is, to furnish schools and academies with a treatise on Book-keeping, so simple in its illustrations as to be easily understood by those who are unacquainted with the art; ana yet so comprehensive, as to afford all the information requisite for the PREFACE. 5 practical accountant. How far the author has been successful, is for others to decide. His aim has not been to promulgate new or fanciful theories; but rather to select information from the best sources, and to imbody the excellencies of the most approved writers upon the subject. The treatise of MORRISON, which undoubtedly possesses great merit, is the basis of the present publication. The author is indebted to the able work of Cronhelm for many useful hints and much valuable matter. He has also made free use of the article BOOKI-IEEP1NG, in McCulloch's Dictionary of Commerce, -written by one of the officialassignees under the new British bankrupt act, - which, says McCulloch, "exhibits a view of the art as actually practised in the most extensive houses in London." The exemplifications in the following pages are conformable to the system there laid down; and the rules and directions, it is believed, are not only full and explicit, but perspicuous and comprehensive. By divesting the science of numerous intricate terms and complicated entries, which never should be introduced in the puzzling form adopted by some authors, and by retaining such examples only as were necessary to elucidate its theory, the art is so simplified that its principles are easily comprehended, whilst their application to every transaction in trade is rendered apparent. The author has given the most studious attention to the subject, and has availed himself of many favorable opportu'nities of becoming acquainted with the modern improvements in this art. And, in addition to several years' practice as book-keeper in an extensive mercantile establishment, he has had much experience in preparing young men for the business of the Counting-house. In the present work, he has endeavored to unite practical knowledge with elementary instructioni and to illustrate and exemplify the improvements which time and experience have effected in the arrangement and classification of merchants' accounts. *Aa CONTE N TS. Page Definitions,........................................................9 MERCHANTS' ACCOUNTS. I. Bills Parcels,.............................................12 II. Invoices,................................................12 III. Account-Sales,................................... 13 Abbreviations....................................................13 General Principles of Book-keeping,................................ 14 Explanation of the Terms Dr. and Cr................................ 15 Illustration of Double Entry,........................................18 Equilibrium of Debtors and Creditors................................. 19 Distinction between Single and Double Entry,........................21 Classification and Arrangement of the Ledger,........................22 Shipments abroad................................................. 24 Commission Accounts,.............................................24 Profit and Loss, and its Subsidiary Accounts........................... 26 Explanation of the Journal......................................... 27 Rules for Journalizing,............................................34 EXEMPLIFICATIONS OF THE SUBSIDIARY BOOKs AND THE PROCESS OF MONTHLY JOURNALIZING. 1. Cash Book,..............................................38 2. Bill Book,...............................................]39 3. Invoice Book,...................... —.-...............40 4. Book of Shipments.......................................41 5. Sales Book,..............................................43 Form of Accounts Current,.........................................45 Introductory Exercises............................................ 46 Directions for the Learner,..................................... 4( Questions on the Nature and Object of the Ledger.................... 47 Exemplifications............................................. 49 to 82 Analysis of the Ledger,............................................83 Trial Balance,...................................................84 Profit and Loss and Balance Sheets............................... 85 Errors and Frauds,....................................85 7 8 COMMERCIAL BOOK-KEEPING. Page QUERIES AND ANSWERS ON THE PRINCIPLES AND PRACTICE OF BOOK-KEEPING,............................................... 87 I. The Ledger,..................................88 II. Journalizing,............................................. 89 III. Posting and Comparing the Books..........................91 IV. Balancinog the Ledger,..................................... 92 V. General Balance,.........................................94 VI. Merchants' Accounts,...................9................. 95 VII. Partnership Accounts,..................................... 95 SET I. -WHOLESALE DEALERS' BOOKS. Observations on Journalizing....................................... 97 Cash Book,................................................... 101 Remarks on the Cash Book,...................................... 104 Day Book,.......................................105 Journal,...................................... 113 Ledger,......................................................117 Trial Balance,...................................................124 SET II. - MERCHANTS' ACCOUNTS EXEMPLIFIED.'ash Book,......129........................... 129 Day Book...................................................... 133 Journal,.1..........................................13 9 Ledger,..........................................147 Trial Balance, Profit and Loss and Balance Sheets,...........I........158 Bill Book,.................................................... 161 Improved Journal,...................................... 165 Explanation of Commercial Terms,.................................171 Equation of Payments,...................................... 178 Table of Time................................................. 184 BOOK-KEEPING. CHAPTER I. DEFINITIONS - SUBSIDIARY BOOKS -MERCHANTS' ACCOUNTS. BOOK-KEEPING is the art of recording property in such a manner as to show its whole value collectively, and the value of each of its component parts. That system of accounts which is called Double Entry, from the arrangement of its Ledger; and the Italian Method, from the country of its invention, in its primitive form, consisted of three books, viz. I. The WASTE BOOK, which commences with an inventory of the merchant's Effects and Debts, and contains a simple narration of all his transactions, in the order of their occurrence. II. The JOURNAL, which is merely a transcript of the Waste Book, with a formal statement of debtors and creditors resulting from each transaction. III. The LEDGER, or register of the whole capital, as well as of each of its component parts. In the earlier stages of commerce, the transactions of merchants were comparatively on a limited scale. The same individual did business in a variety of articles, but not to an extent 2 10 COMMERCIAL BOOK-KEEPING. to require separate books for any particular branch of his mercantile operations. Hence it was formerly the custom to record all purchases, sales, receipts, or payments, in a diary, which, from the rough manner of making the entries, was called' The Waste Book,' or' Blotter.' But in all well-regulated establishments, at the present time, instead of one, several books are used for the original or primary entries, each appropriated to a distinct class of affairs. For example, the receipts and payments of money are registered, as they occur, in the' Cash Book,' or book for that special purpose; and all bill transactions are first recorded in the'Bill Book.' This arrangement, therefore, always presents an unmixed and uninterrupted view of the cash and bill transactions. The same principle of classification and subdivision is applicable to purchases, sales, shipments, consignments, and, in short, to every department of the most extensive and diversified business. The Subsidiary Books, required by the General Merchant, are - 1. The Cash Book, containing cash transactions only. On the left hand side, or folio, are entered all sums of money received, and on the right hand side, or folio, all sums disbursed or paid out. 2. The Bill Book, in one part of which are enfred all bills receivable, and in the other all bills payable by the oncern.* 3. The Invoice Book, which contains the particulars of goods purchased for exportation or otherwise. 4. The Book of Shipments, in which are entered the.particulars of goods sent off, either in consequence of orders, or consigned for sale. * All written obligations or engagements to pay money at a Nature period, such as bonds, promissory notes, drafts, or acceptances, are, in commercial language, called Bills; those received and payable to the merchant are called' Bills Receiva. ble;' and those issued by him, and for the payment of which he consequently becomes responsible,' Bills Payable.' COMMERCIAL BOOK-KEEPING. 11 5. The Sales Book, in which are entered the sales of goods on consignment, together with the charges incurred upon them, including the agent's commission. The Day Book contains such occasional entries as do not, properly, belong to any one of the Subsidiary Books. It sometimes, however, contains the amount of purchases and shipments, with reference to the subordinate books for details. The books here described are the authorities from which it is now customary to compose the JOURNAL. Their number indicates a division of counting-house work, to a considerable extent, and no where is such repartition productive of greater advantage. How much better is it to enter all bills in one book, and all cash transactions in another, than in any way to blend these very distinct entries! The effect of this subdivision is to simplify the Journal, in a manner highly conducive to accuracy and despatch, and to present such means of checking or examining each item, that transactions may be stated without liability to error. The Subsidiary Books are varied in number, form, and arrangement, in every instance, according to the nature and extent of the business. It must not be supposed that all the books above enumerated are requisite in every establishment. In domestic or inland trade, where transactions are confined chiefly to purchases and sales, the principal books are the CASH BooK, DAY BooK, JOURNAL, and LEDGER. There are, also, in every counting-house, a few books which do not form any part of the materials for the Journal, namely, 1. The Aceount Current Book, containing duplicates of accounts furnished to correspondents. 2. The Letfer Book, containing copies of all important letters. 3. The Petty Cash Book, or account of petty disbursements. 4. The Order Book, containing copies of all orders received. 5. The Cash Sales Book, containing the cash sales of merchandise. 12 COMMERCIAL BOOK-KEEPING. The accounts delivered by merchants to their customers or employers, are, Bills of Parcels, Invoices, Account Sales, and Accounts Current.* I. BILLS OF PARCELS. A BILL OF PARCELS is a particular statement of goods when sold, containing the description, quantity, and price of each article; and the amount, with the place, date, and terms of credit. In making out such bills, the expression Bought of is always used; but for work done, money lent, or the like, the phrase Tio (A. B.) Dr. is substituted, as well as in general accounts. When the articles are sold and delivered at one time, the place and date are written at the top of the account; if not, the different dates are placed in the margin. II. INVOICES. An INVOICE is an account of goods sent off, generally by sea, either in consequence of an order from the person to whom they are sent, and at his risk, or consigned to hiln for sale at the risk of the shipper, with the marks of the packages exhibited on the margin, and the different charges attending the shipment added to the value of the goods, the sum of which is called the amount of the Invoice. The preamble of an Invoice contains the names of the consigner and consignee; the names of the ship and master; the place from which she sails, and destination; and for whose account and risk the goods are shlipped. Sometimes, for the satisfaction of the employers, the seller's Bills of Parcels are sent along with the goods, and only the amount of each bill is stated in the Invoice, withI reference for particulars to the Bill of Parcels. An Invoice ought to be made out with the utmost care, for it is a document of great importance in several respects; — first, between the exporting merchant and his correspondent; and next, when, in the hands of the latter, it generally forms a * For a more extensive exemplification of merchants' accounts, promissory notes, bills, &c., the reader is referred to a work entitled' The Merchant's JManual,' published by Perkins & Marvin, Boston. COMMERCIAL BOOK-KEEPING. 13 voucher for calculating import duty, if any, as well as for the sales effected to retailers or other dealers. The sum insured usually exceeds the amount of the Invoice by two per cent., as the recovery of a loss from insurers involves a charge equal to that amount. It is thus necessary to cover not only the price of the goods and the charges at shipping, but such further sum as may enable the shipper, in case of loss, to recover the amount of the Invoice clear of any deductions. III. AccOUNT SALES. An AcCOUNT SALES is a particular statement of goods sold on commission, transmitted by the agent to his employer, containing the name of the vessel by which the goods were received, and for whose account and risk they have been sold, with the charges attending the sale deducted from the total amount. Goods, when sent to an agent for sale, are said to be consigned to him. The person who sends the goods is called the consigner, the goods his consignment, and he to whom they are sent the consignee. The account transmitted by the consignee to the consigner is called an Account Sales. The sum that remains, after all charges have been deducted, is the net proceeds, which sum is due to the consigner. The following abbreviations are used in merchants' accounts, namely —Bo! for bought; Co. for company; Mdze. for merchandise; B. P. for bill of parcels; Rec. Pay' for received payment; yds. for yards; p. for pieces; hhlds. for hogsheads; bbls. for barrels; cwt. for hundred weight; qrs. for quarters; gro. for gross; ea. for each; ( for at, &c. Shillings are usually expressed by an oblique line, thus, /. C. B. for Cash Book; B. B. for Bill Book; S. B. for Sales Book; I. B. for Invoice Book; Dr. for debtor; Cr. for creditor. B CHAPTER II. GENERAL PRINCIPLES.-EXPLANATION OF THE LEDGER. THE LEDGER is the principal book of reference in the counting-house. It contains a synopsis of the merchant's affairs; the several transactions being classified and arranged under distinct heads or accounts, in order that the state of any particular department, as well as the general result, may be readily ascertained. One object of book-keeping is to show how the merchant's funds have been successively employed; and, as property is in a state of continual change, it becomes necessary to have an exact register of these variations. Another object is to show the state of the concern commencing, the increase or decrease of the capital from time to time, and the sources from which the gains and losses proceed. These objects are accomplished, first, by recording the whole capital collectively, and also the gains and losses; and, secondly, by keeping a register of each investment or speculation, so as to exhibit the outlay and returns. Hence an account must be opened, not only for every individual with whom the merchant has dealings on credit, but for every species of property which forms a constituent part of his capital, or which, by purchase or otherwise, comes into his possession. The personal accounts are opened under their respective names; the receipts and payments of money are classed under the title of'Cash,' the bills and notes received under the title of'Bills Receivable,' and those issued under the title of' Bills Payable.' 14 COMMERCIAL BOOK-KEEPING. 15 When an Inventory of the Effects and Debts is taken, the whole mass or capital, abstracted from its constituent parts, is recorded under the title of' Stock;' and, in order that the capital may be presented in as simple a form as possible, the profits and losses are recorded in a separate account, which receives the double title of'Profit and Loss.' In extensive concerns, accounts are also opened for' Commission,''Charges,''Interest,' &c.; and, as these are, in fact, simply branches of'Profit and Loss,' their balances are transferred, periodically, to the latter account. All purchases and sales of goods may be classed under the general title of' Merchandise;' but, should the result of any particular investment be required, a separate account must be opened for it under some specific title. Each account consists of two distinct parts. The space or folio being vertically divided, the left hand side is denominated DEBTOR, and the right CREDITOR. The positive parts, or Debit items, are entered in the left, and the negative parts, or Credit items, in the right hand money column.* The preposition T7o is prefixed to each entry on the left, and By to each entry on right hand side, thus:Dr. CASH. Cr. 1839. 1839. Jan. 1. To James Harrison,... 500 00 Jan. 8. By Merchandise..... 300 00 "' 15. To Henry Thompson,.. 150 00 As the two sides of an account are of a contrary or opposite nature, to add to the one is equivalent to subtracting from the other. * Positive and negative are relative terms, implying, in this case, that one item is placed in opposition to another. When several quantities enter into a calculation, it is frequently necessary that some parts should be added, and others subtracted. The former are called positive, and the latter negative. For instance, in estimating the profits of a concern, if the gain be positive, the loss will be negative; because the loss must be deducted from the gain, to determine the net profit. A merchant's effects may be considered as positive, and his debts as negative, parts of his capital; for the debts must be subtracted from the effects, in order to ascertain his real worth. 16 COMMERCIAL BOOK-KEEPING. The abbreviations DR. and CR. are used merely to distinguish the left from the right hand side of an account. When applied topersons, Dr. signifies that the individual is indebted for all sums in the left, and Cr. that the concern is indebted to him for all sums in the right hand money column; but, with this exception,* these terms must not be understood to mean, in an absolute manner, that we owe, or that any thing owes us. The accounts of Cash, Bills Receivable, Bills Payable, Merchandise, Stock, Profit and Loss, and the like, simply exhibit the permutations or changes which the capital undergoes in the course of business. Thus the Dr. side of'Cash' shows receipts, and the Cr. side disbursements, of money; the Dr. side of' Bills Receivable' shows the bills received, and the Cr. side the amount of such bills as have been disposed of; the Cr. side of' Bills Payable' shows the bills issued, and the Dr. side all such bills as have been retired from circulation. The Dr. side of' Merchandise' shows its cost or value, and the Cr. side the sales or returns.' Stock' account is designed to exhibit the assets and liabilities of the concern, abstractly considered; and'Profit and Loss,' with its ramifications, is simply a branch of'Stock,' its object being to collect the several augmentations and diminutions of the capital. It is indispensably necessary, therefore, that the nature and purpose of each class of accounts should be distinctly understood, and clearly comprehended, by the learner, at the ouset, without which his knowledge must be superficial, imperfect, and of no practical utility. The mutual relations of Debtor and Creditor are developed in the LEDGER only, - the Subsidiary Books and the Journal being merely preparatory steps, totally unconnected with the principles and proof of accounts; and although, in the order of writing, the Journal precedes the Ledger, yet, from the nature of the case, it is impossible for the learner to comprehend the process of journalizing, unless the arrangement and classification of the Ledger are previously understood. Hence it is this to which *'Bills Receivable,' and' Bills Payable,' are substituted personal accounts, showing the amount due to or by the concern, in the shape of bills. See Note, page 10. COMMERCIAL BOOK-KEEPING. 17 his attention should be first, and chiefly, and most assiduously, directed. The accountant always considers the effect of an entry as it regards the Ledger, which naturally leads him to select the true Debtors and Creditors; therefore, whoever would be fundamentally grounded in this science should not perplex himself with any other book till he is perfectly master of the Ledger. In order to obtain a thorough and satisfactory knowledge of book-keeping, it is important, before we proceed to its details, to investigate the real principles of the art, and to disentangle them from forms, with which they are too often confounded. It is a primary axiom of the exact sciences'that "' the whole is equal to the sum of its parts," and this axiom constitutes the basis of Double Entry. In the classification of this system, property is regarded as a whole, composed of various parts. The component parts are Cash, Bills Receivable, Debts Receivable, Goods, &c. The whole mass is technically called Stock. The Stock Account records the whole capital, without designating its parts; the Money, Personal, and Property Accounts record its constituent parts. Hence the parts and the whole mutually check and verify each other; for, whatever variations they undergo, and whether the capital increase, decrease, or remain stationary, it must constantly equal the collective result of those parts. It is this peculiar arrangement which constitutes what is called DOUBLE ENTRY, and which enables the merchant to ascertain his real worth, or net capital, by two distinct processes; first, by reference to the Stock Account; and, secondly, by a collection of its component parts, - the exact agreement of the two results proving the accuracy of the books. For aiV'illustration of this principle, let us suppose a merchant's capital to consist of the following items, viz. Cash,............ in hand,.............. 10,000 Merchandise,....... valued at.............. 7,000 Henry Brown....... owes................. 3,000 Net Capital,.............. $20,000 In this case, we enter the whole amount, in one mass, to the 3 B IS COMMERCIAL BOOK-KEEPING. credit of' Stock,' and debit' Cash,''Merchandise,' and' Henry Brown,' for its constituent parts, thus:Dr. STOCK. Cr..i~~~ i; i~ I li20,000 00 Dr. CASH. Cr. 10,0O 00 Dr. MERCHANDISE. Cr. 7,000 00 Dr. HENRY BROWN. Cr. 3,000 00 From this view of property, as a whole constantly equal to the sum of its parts, we now ascend to a higher and 4Pore general consideration of it, as a mass of relations between Debtors and Creditors. The application of these terms was:riginally personal; but it is extended by analogy to every part oroperty, and to the whole capital itself. Debtor and Creditor are correlative; — the one implies and involves the other, and cannot exist without it. Hence every transaction in business belongs to at least two accounts, and must be entered to the debit of one, and to the credit of the other. When, for example, a person becomes indebted to me, the sum is entered to his debit. If for money, it is also entered to the COMMERCIAL BOOK-KEEPING. 19 credit of' Cash;' if for goods, to the credit of' Merchandise:' ot, in whatever way the debt arises, it is entered on the credit side of some other account. On the contrary, when I become indebted to an individual, the amount is placed to his credit: if for money, it is also entered to the debit of' Cash;' if for goods, to the debit of' Merchandise.' Consequently, every item in an account has its counterpart; that is, it corresponds to some other item on the opposite side of a different account; and it follows, that if all the accounts be added, the aggregate of the Debtor sides of.the Ledger will equal that of the Creditor sides. In tracing the principle of equality, we have considered property in a state of rest; but we shall find it equally essential to property in motion. This is evident from two considerations. 1. At any two periods —as the beginning and the end of a year - the equilibrium of debtors and creditors exists in the concern, considered in a state of rest. From the axioms, that if equals be added to equals, the sums will be equal; or, if equals be taken from equals, the remainders will be equal; it is evident that the same equilibrium must exist in all the intermediate occurrences. 2. The same thing is apparent from the very nfature of mercantile transactions. The component parts of property are in a state of continual change. In purchases, cash is converted into goods; and in sales, goods are reconverted into cash. Or, if credit is allowed, the changes are still more numerous. Purchases create creditors; sales convert goods into debtors; receipts convert personal debtors into cash, whilst payments destroy cash and personal creditors. The introduction of bills would multiply the changes by an intermediate stage between personal debts and cash. But all these metamorphoses and destruction of the prts, resolve themselves into the single case, that, in every transaction, two accounts are affected, the one receiving what the other communicates... The imparting account is always CREDITOR, and the recipient account always DEBTOR;-SO that debtor and creditor must perfectly equilibrate. We proceed to show that this equality of debtors and creditors is not disturbed by profits and losses, or, in other words, by the augmentations and diminutions of the capital. Each alteration in the whole can be produced only by a correspondent 20 COMMERCIAL BOOK-KEEPING. alteration in one of its parts; and hence two accounts are always affected by the change. Thus, when the sale of goods exceeds the cost,' Merchandise' is debtor for the gain, and' Stock' is creditor; when the sale falls short of the cost,' Merchandise' is creditor for the loss, and' Stock' is debtor. In these cases, there is a transfer between the whole and its parts, the one receiving what the other transmits; but, as it would be inconvenient to record in the Stock account every individual alteration of capital, the transfer is made periodically; and when the profits and losses proceed from various sources, accounts are opened to coilect the particulars and transmit the general result in one entry to' Stock.' Till the time of this transfer, the profits and losses remain latent in the particular accounts, without at all disturbing the equality of debtors and creditors. Thus, goods bought of A fSor $900, and sold to B for $ 1,000, leave a profit of $100, which remains latent in the'Merchandise' account till the periodical transfer. Debtors and creditors are, in the mean time, -perfectly equilibrated; for, in the purchase,' Merchandise' is debtor $900, and A is creditor $900; whilst, in the sale,' Merchandise' is creditor $1,000, and B is debtor $ 1,000. The equilibrium of debtors and creditors having been demonstrated, as well from the nature of these relations as from the axiom that the whole is equal to the sum of its parts; and having been shown to exist essentially in property, in every state, whether of motion or of rest, we may justly lay it down as the Jhtndamental principle of book-keeping - a principle not of art or invention, but of science and discovery; not of mere expediency, but of absolute necessity, and inseparable from the nature of accounts. Without entering into subdivisions, it will be sufficient to enumerate the objects of book-keeping under four general heads, viz. 1. STOCK ACCOUNT. 2. MONEY ACCOUNTS. 3. MERCHANDISE ACCOUNTS. 4. PERSONAL ACCOUNTS. The record of each class of accounts is essential to the cor COMMERCIAL BOOK-KEEPING. 21 rectness of the science; for, whenever one of the parts of property is omitted, the system must, of necessity, be partial and incomplete; there can be no dependence or harmony between the whole and the parts; the stock or capital cannot be ascertained from the accounts alone, and, when it is obtained by valuations and inventories, it will stand unconnected and unproved in the books. The details of book-keeping may be varied according to the nature of the business; but there are, properly speaking, only two methods which differ materially from each other, namely, SINGLE and DOUBLE ENTRY. In Single Entry, an enumeration of the effects and debts is made, in order to discover the Capital. In Double Entry, the Capital is ascertained by two processes; —first, by the STOCK ACCOUNT; secondly, by collecting its component parts. Single Entry is imperfect in some particulars, as it records personal accounts only; hence, the gain or loss cannot be known till the debts and effects are collected, and it is then obtained by a comparison with the original capital. In Double Entry, the gain or loss is declared by the Profit and Loss Account, independently of the general extract or balance. Double Entry has more advantages to a merchant than to a retail deale?, because his transactions are more extensive and complicated; and it shows in what manner his funds have been successively invested. As every debtor has a creditor, no part of his prqperty is unaccounted for; and, when in doubt as to any spe/ific portion, he will find a solution of the difficulty in his own Ledger. Those who know how soon money becomes absorbed, and in how few years large sums may be invested in machinery, shipping, or other fixed capital, are aware that merchants would often be deceived, if they had not, at all times, an unfailing clew to the appropriation of their capital. 22 COMMERCIAL BOOK-KEEPING. SYNOPSIS OF TEf CLASSIFICATION. AND ARRANGEMENT ACCOUNTS IN THE LEDGER. Dr. ST QCK. C'. The object of this account is to exhibit the Assets and Liabilities in one mass. It records the whole Capital, without designating its constituent parts. The total sum of the debts, or liabilities, if any, is The total sum of the assets, or effeots, is entered in entered in the left-hand column, or Dr. side. the right-hand column, or Cr. aide. *** -If the Or. side be greatest, the balance, or difference, is the net capital; but if the Dr. side exceed the Cr., the concern is, of course, insoltent, and the difference shows the deficiency. Dr. PROFIT AND Loss. Cr. The object of this account is to collect the Gains and Losses on the busisess. The several items of loss are entered in the left- The several items of gain are entered in the righthand column, or Dr. side; and hand column, or Cr. side. *** The difference is the net gain or loss, as the case may be, which, at every general balance, is transferred to the Stock account. Dr. MERCHANDISE.. Cr. The object of this account is to show the gain or loss -on Merchandise. The cost, or value of all goods purchased, Is entered The sales of all goods, or other returns, are entered on the Dr. side; and on the Cr. side. %* The value of the goods unsold is the BALANCE, and must be placed on the Cr. side; the difference is gain or loss. COMMERCIAL BOOK-KEEPING. 23 Dr. CASH. Cr. The object of this account is simply to show the Cash in hand. The cash in hand, when the books are opened, and all The several disbtrsements, or sums of money paid out, sums received, are entered on the Dr. side; and are entered on the Cr. side. *** The difference between the two sides is the BALANCE of Cash. Dr. BILLS RECEIVABLE. Cr. The object of this account is to show the Bills,.Notes, Bonds, &c., unpaid. The amount on hand at the beginning, and all bills The amount of every such bill disposed of, or for which the merchant receives, are entered in the Dr. which he receives payment, is entered in the Cr. colculumn; and umn. *** The difference is the amount due to the concern in the shape of notes, bills, &c. Dr. BILLS PAYABLE. Cr. The object of this account is to show the merchant's Liabilities, in the shape of promissory notes or acceptances. The amount'of all such bills as are paid, or retired The amount of all notes or acceptances issued by the from circulation, is entered on the Dr. side. concern is entered on the Cr. side; and * The difference is what the concern owes in notes or acceptances. Dr. # A. B. CB. The object of an individual's account is to show what is due, either to or by him, as the case may be. All sums for which he is indebted are entered on the All sums for which the concern is indebted to him are left-hand or Dr. side of his accoVnt; and entered on the right-hand or Cr. side. *** The difference is what he owes, or what the concern owes him. -24 COMMERCIAL BOOK-KEEPING.'Stock,''Profit and Loss,'' Merchandise,''Cash,''Bills Receivable,''Bills Payable,' and the Personal Accounts, are common to almost every description of commercial business; but when goods are consigned to another for sale and returns, or when a merchant transacts business as an agent or factor, it becomes necessary to create a distinct class of accounts, which are not required in inland or domestic trade. For example, if I intrust goods to a commission house, to sell on my account and risk, or, which amounts to the same thing, ship goods abroad on consignment, it is obvious that the agent, or person to whom they are shipped,' ought not to be debited for the cost of such shipment; he is only responsible for the goods he sells, after deducting his commission, &c. In this case, however, the property has gone out of my possession, and must be recorded in sluch a manner as to show its-cost, and the circumstances under which it is situated. For this purpose, it is usual to open an account for each consignment under some appropriate title - such as,' Shipment to,' or'Adventure to,' (naming the place,) or'Consignment per,' (naming the ship,) - which is debited for the cost or value of the goods and all charges incurred upon the shipment, and credited, when the account sales is received, for the returns or net proceeds. On the contrary, if goods are consigned to me for sale, on behalf of an employer, it is evident, as they do not belong to me, that their cost should not be entered on the Dr. side of my Ledger; but when I sell any quantity of these goods, I am then accountable for the amount sold, after deducting commission and charges. In such transactions, an account is usually opened for each individual's consignment under some definite title - as,'A. B.'s Sales,' or'Sales No. 1,' Sales No. 2,' &c.; o'Sales per Ship,' (naming her) - which accounts are debited for the several charges incurred, including commission, and credited for the sales as they occur. Instead of opening separate accounts in the Ledger for each consignment, some book-keepers open only one account for all goods sold on commission, under the general title of' Sales of Consignments,' and refer to the Sales Book for the particulars. COMMERCIAL BOOK-KEEPING. 25 The following will serve to exemplify the arrangement of this class of accounts: - Dr. ADVENTURE TO. Cr. The object of this account is to show the gain or loss on the shipment or adventure. The whole cost of the goods, including charges, is en- The returns, or net proceeds, are entered on the Cr. tered on the Dr. side; and side. *** The difference, when all the goods are sold, is the gain or loss. In joint adventures or company accounts, when you are the manager, and furnish the goods, debit your partners personally for their respective shares, and the shipment, under its proper title, for your share; but when you are not the manager, enter your share only. Dr. A. B.'s SALES. Cr. The object of this account is to ascertain the net proceeds of A. B.'s consignment. All charges incurred on such goods, including cornm. The amount of sales, or other returns, is entered on mission, are entered on the Dr. side. the Cr. side. *** The difference, when the sale is adjusted, is the net proceeds due to A. B., the consigner. Every description of outlay, for which no return is to be received, or of income, for which no property is exchanged, — such as store-rent, postages, interest, commission, &c., - must have an account opened for it in the Ledger; but if the general result only is required, this class of receipts and expenditures may be entered at once in the general account of'Profit and Loss.' 4 c 2'6 COMMERCIAL BOOK-KEEPING. The accounts of'Commission,'' Interest,'' Charges,' and the like, are merely subdivisions of' Profit and Loss,' and the latter is simply a branch of'Stock.' On the Cr. side of' Commission' are entered all sums received for transacting business for others. There are seldom any entries on the Dr. side; the result is, therefore, gain, and is transferred to' Profit and Loss.' On the Dr. side of' Interest' are entered all sums paid, and on the Cr. side all sums received, by the merchant for interest or discounts. On the Dr. side of' Charges' are entered all sums paid for rents, clerks' salaries, postages, advertising, &c., and on the Cr. side all sums which are charged to correspondents for postages, &c. The result of the two last accounts is transferred, at every general balance, to' Profit and Loss.' Every amount, or sum, entered in the Ledger, must be placed on the Dr. side of one or more accounts, and on the Cr. side of some other account or accounts. This rule is absolute and universal. One of the fundamental and indispensable laws of Double Entry is, that every discharge must be specific. When the account is with persons, the discharge answers in value to the charge; but when the account is of things, the discharge must answer in kind. Thus, in opening an account for any species of property, the name or title is, in the first instance, perfectly arbitrary; but; when a title is once selected, all subsequent entries which relate to it must be made in accordance with the original entry. For instance, suppose I purchase 500 barrels of flour, I may place the cost or value to the debit of the general account of'Merchandise,' or open a particular account for this article alone, under the title of' Flour;' but when I dispose of this flour, I am not at liberty to credit, at pleasure, either of these accounts for the returns — I must credit the one originally charged. CHAPTER III. JOURNAL ENTRIES. -GENERAL RULES FOR JOURNALIZING. THE JOURNAL contains a concise statement of the several transactions which are recorded in the daily or subordinate books, with the Drs. and Crs. so arranged that each amount may be easily transferred to the Ledger. The process of transcribing the entries into this book is technically called Journalizing. The indispensable condition of every Jourbal entry is, that the debit and credit amounts must be exactly equal. When a transaction is to be Journalized, first consider to what account in the Ledger it must be placed, both on the Dr. and Cr. sides, which will immediately suggest the correct form and arrangement of the entry; and, although the term Cr. is never expressed in the Journal, yet it is always understood to follow the preposition to. Thus the entry, CASH Dr. to MERCHANDISE,.............................$ 500 signifies that'Cash' is to be debited $500, and' Merchandise' credited for the same sum. All the difficulties of Journalizing will be overcome, as soon as the learner obtains clear and definite notions of the scheme and arrangement of the Ledger. EXAMPLE S. 1. —Bought a quantity of goods, for cash, amounting, P invoice, to................................... $1,000 All purchases of goods are entered on the Dr. side of' Merchan27 L'8 COMMERCIAL BOOK-KEEPING. dise,' and all disbursements of money onr the Cr. side of' Cash;' therefore, in Journalizing this entry, we say, MERCHANDISE Dr. to CASH, Purchased this day, r invoice.......................... $1,000 The simple meaning of this entry is, that, in the Ledger,'Merchandise' is to be debited *' To Cash, $1,000,' and' Cash' credited' By lllerchandise, $ 1,000.' 2.- Sold, for cash, a quantity of goods, amounting to.......$ 1,500 All moneys received are entered on the Dr. side of'Cash,' and all sales of goods on the Cr. side of' Merchandise;' hence, in Journalizing the second entry, we say, CASH Dr. to MERCHANDISE, For sales this day,...$......................$1,500 the meaning of which is, that' Cash' is to be debited' To Merchandise, $1,500,' and'Merchandise' is to be credited'By Cash, $1,500.' a —Bought of Charles Harrison, on credit, sundry goods, amounting to............$....................... 800 In this transaction, I am indebted to Harrison $800, for which value has been received in goods. The Journal entry is, MERCHANDISE Dr. to CHARLES HARRISON, For goods purchased of him,....................... $ 800 The Cr. side of each individual's account shows what the concern owes him; and hence this entry signifies that' Merchandise' is to be debited' To Charles Harrison, $800,' and that Harrison is to be credited' By Merchandise, $800.' * To debit an account means, to enter a sum on the Dr. or left-hand side of thf Ledger; and to credit an account means, to enter the sum on the Cr. or right hand uid&e. COMMERCIAL BOOK-KEEPING. 29 4. - Sold James Bruce & Co., at 90 days' credit, 15 pieces Broadcloth,.......;.......................... 1,350 When a person gets into my debt, the amount must be placed on the Dr. side of his account; therefore, in Journalizing this sale, we say, JAMES BRUCE & Co. Dr. to MERCHANDISE, For 15 pieces Broadcloth, amounting to.................$ 1,350 which signifies that James Bruce & Co. are to be debited'To Merchandise; $1,350,' and'Merchandise' credited'By J. Bruce ~ Co., $1,350.' 5. - Accepted Charles Harrison's draft on me, payable at 30 days' date, due Feb. 4th,.........................$ 800 All notes, drafts, or acceptances, which the merchant issues, are entered on the Cr side of' Bills Payable.' The Journal entry is, CHARLES HARRISON Dr. to BILLS PAYABLE, For my acceptance, at 30 days,..........................$ 800 The meaning of this entry is, that Charles Harrison is to be debited' To Bills Payable, $800,' and'Bills Payable' credited' By Charles Harrison, $800.' This transaction is merely a transfer of a debt from Harrison, with whom it was originally contracted, to the holder of my acceptance. I therefore debit the former in the account bearing his name, and credit the latter in a general account, which I open for all such obligations.'Bills Payable' is managed precisely like a personal account; namely, it is credited for all the merchant's liabilities, in the shape of notes, acceptances, &c., and debited for such of these as are paid or withdrawn from circulation. It need scarcely be observed, that nothing can be entered to the debit of' Bills Paypble,' except what has first been placed to its credit; for, before a bill can be redeemed, it must have been issued. 6. — eceived of James Bruce & Co. their promissory note, at 90 days' date, due March 3d,.....1........$ 1350 30 COIMMERCIAL BOOK-KEEPING. All notes, drafts, or acceptances, which the merchant receives, are entered on the Dr. side of' Bills-Receivable.' Bruce & Co. have cancelled their book debt, and are responsible only to the holder of their note for this amount. Hence, in Journalizing the preceding entry, we say, BILLS RECEIVABLE Dr. to J. BRUCE & CO. For their bill, at 90 days' date, due 3d March,............. $1,350 This is merely a transfer between two accounts, and means that' Bills Receivable' is to be debited' To J. Bruce & Co., $ I 1,350,' and that J. Bruce & Co. are to be credited' By Bills Receivable, $ 1,350.' 7. — Paid my acceptance in favor of C. Harrison, due Feb. 4th, $ 800 When a debt or obligation is entered on the Cr. side of any particular account, it must be entered on the Dr. side of the same account, when it is paid or otherwise discharged; and vice versa. This bill, when issued, was entered on the Cr. side of'Bills Payable;' and therefore, in the Journal, we say, BILLS PAYAIBLE Dr. to CASH, Paid my acceptance favor Harrison.........$..............$ 800 It is obvious that this, like the above, is simply a transfer between two accounts: the meaning is that' Bills Payable' is to be debited' To Cash, $800,' and' Cash' credited' By Bills Payable, $800.' 8. -James Bruce & Co. have paid their promissory note, due March 3d, in cash,................................ $1,350 This transaction is also a simple transfer between two accouents, namely, the receipt of cash and the disposal of a bill. The Journal entry is, CAsH Dr. to BILLS RECEIVABLE, Received for Bruce & Co.'s bill,........................1,350 COMMERCIAL BOOK-KEEPING. 31 The foregoing examples are simple Journal entries. A compound entry is one in which there are two or more debtors to the same creditor, or two or more creditors to the same debtor, as is often the case when five or six sales are made to as many different persons, or a like number of purchases, payments, &c., occurring at the same date, or even at different dates. For instance - 9.-Sold goods this day to the following persons, at 90 days' credit, p Sales Book, viz. James Thompson,.....$................... $ 150 Henry Brown,................................. 365 Thomas Smith................................ 485 1,o000 In this transaction,'Merchandise' is to be credited for the amount sold, $ 1,000, and each personal account debited for its respective share. In the Journal, we say, SUNDRIES Dr. to MERCHANDISE, For sales this day, vp S. B. James Thompson,..................................... $ 150 Henry Brown........5......................... 365 Thomras Smith,....................................... 485 $ 1,000 The term Sundries, in all such cases as the above, means two or more accounts. Thus, instead of saying,'J. Thompson Dr. to Merchandise,''Henry Brown Dr. to Merchandise,' and'Thomas Smith Dr. to Merchandise,' we avoid this repetition by using the word Sundries; and then each individual is debited for his particular proportion, and'Merchandise' credited for the whole amount. 10. -Bought goods of the following persons, this day, on credit, as r invoices, viz. C. Hammond,...............1............... 100 Buchanan & Co............................. 1,200 James Finlay & Co......................... 1,300 $ 2600 32 COMMERCIAL BOOK-KEEPING. In Journalizing this transaction, we say, MERCHANDISE Dr. to SUNDRIES, For purchases this day. To C. Hammond...................................... 100 To Buchanan & Co................................... 1,200 To James Finlay & Co................................ 1,300 $ 2,600 The term Sundries is here used merely to avoid recapitulating the same creditor, and, of course, no such account is opened in the Ledger as'Sundries.' The obvious and only meaning of the foregoing entry is, that the account of' Merchandise' must be debited' To Sundries,.$2,600,' and each of the Personal Accounts credited'By Merchandise,' for its proportion, so that the aggregate of the credit items will equal the debit amount. In complex entries, it is often expedient to class two or more debit items against several credit items, -even when the respective amounts are various, - by prefacing the entry thus,' Sundries Dr. to Sundries,' and then describing three or four debtors against eight or ten creditors. The following will serve as an exemplification: — 11. — SHIPPED %- the Spooner, for Jamaica, by order, and on account and risk, of the following persons, p Invoice Book. For John Stirling, Goods,...........amounting to........... 2,050 Charges..........paid at shipping,........ 225 Commission,......on goods, &c.,.......... 52 Insurance,........ on $ 2,400,............. 50- 2,377 00 For Murray r Co., Goods,........... amounting to...........4,000 Charges,.........paid at shipping,........ 314 Commission,......on goods, &c.,.......... 100 Insurance,....... on $ 4,600,............. 86-4,500 00 $ 6,877 00 The above shipment might, withW propriety, be Journalized similar to example 10, by making J. Stirling Dr. to Sundries for the amount of his invoice, and Murray & Co. Dr. to Sundries for the amount of their invoice; but several postings to the Ledger COMMERCIAL BOOK-KEEP'ING. 33 are avoided, and the Journal entry made equally simple, by the following arrangement:SUNDRIES Dr. to SUNDRIES.* For shipment p+ Spooner. -Drs. - John Stirling,.........for amount of invoice,.......... 2,377 00 Murray & Co......,.......... 4,500 00 $ 6,877 00 - Crs. To Merchandise,........................ 6,050 00 To Charges........................... 539 00 To Commission,.......... 152 00 To Insurance,.......... 136 00 $6,877 00 By the above arrangement, it will be seen that the goods, charges, &c., form but one sum in the Cr. items; that is, the goods shipped to Stirling, and to Murray & Co., amount, when added, to the sum of $6,050; the charges paid for both firms, to $539; the commission to $152; and the insurance to $136. The title or preface to the Journal entries always has reference to the Ledger. For instance, in posting the last example, we turn to Stirling's account, and enter on the debit side,' To Sundries, $2,377;' and also to Murray & Co.'s account, and enter, as before,' To Sundries, $4,500.' We next turn to the accounts which are to be credited, and write'By Sundries,....,' each for its respective amount. To find the Drs. and Crs., observe, in every transaction, whether a person has become indebted to you, or you to him; whether property has been received or delivered; and whether you have gained or lost upon any account. The following rules *This is an abbreviated title. Its full meaning is,'Sundry Accounts Dr. to Sundry Accounts,' 5 34 COMMERCIAL BOOK-KEEPING. being applied to the result of these observations, the debtors and creditors may easily be ascertained:G-ENERAL RULES. The thing received is Dr. to the thing delivered; or, The thing received, or person accountable to you, is................. Dr. The thing delivered, or person to whom you are accountable, is....... Cr. 1. The Accounts of Persons are debited when persons become indebted- to you, and credited when you become indebted to them. 2. The Accounts of Money are debited for all sums received, and credited for all disbursements or sums paid. 3. The Accounts of Property are debited when, by purchase, property comes into your possession, and credited when it goes out of your possession. 4. Profit and Loss, (Or its Subsidiary Accounts,) is debited for every loss or charge against the business, and credited for every gain. The rules for distinguishing the Drs. and Crs. in any particular entry, are inferred from the nature of the accounts in the Ledger; but rules should never usurp the place of reasons. The student of book-keeping must be made to think for himself. That plan of instruction which dwells long on first principles will be the most effectual. Experience has shown, that, whenever a question arises which is not anticipated in the book, none but the student whose mind has been exercised in the investigation of truth, - who is the master, and not the slave, of rules, - will solve an unexpected difficulty by a novel application of the principles of the science. CHAPTER IV. EXEMPLIFICATIONS - SUBSIDIARY BOOKS - MONTHLY JOURNALIZING. THE JOURNAL, being an abstract of the Subsidiary Books, is completed monthly. While, in the Cash Book, every receipt or payment is entered the day it takes place, and, in the Bill Book, every bill is entered the day it is received or issued, the Journal entries are classified and condensed so as to comprise in one amount a number of similar transactions occurring at different dates. Thus, the collective entry of' Cash Dr. to Sundries' exhibits, successively, all the receipts of money during the month, the total of which is carried to the debit of'Cash;' and the collective entry of' Sundries Dr. to Cash' exhibits, in like manner, all the payments of money, the aggregate alone being posted to the credit of'Cash.' The same combination of entries is made in reference to every department of business: all similar items relating to each account are classed together, and posted in one sum to the Ledger. By this arrangement, the Ledger is so abridged that, in most cases, not more than twelve lines are required for each account, though the transactions be ever so numerous; the effect of which is to lessen the labor of posting, and to render the process of balancing comparatively easy - an advantage of no trifling importance. We cannot, therefore, approve of the practice of those bookkeepers, who, to save themselves the trouble of transcribing the Cash transactions, post each separate item directly from the Cash Book to the Ledger. They thus avoid, it is true, the labor of copying a few folio pages; but, by giving up the advantage of combining the different items, they have to post 35 36 COMMERCIAL BOOK-KEEPING. to the Ledger, during the month, above one hundred entries, instead of perhaps thirty or forty. The old method of Journalizing and posting each transaction separately -except in very limited concerns, where a Journal may be dispensed with altogether —is both tedious and inconvenient. It unnecessarily swells the accounts with a multiplicity of figures, which greatly increases the difficulty of balancing at the end of the year; and, to say nothing of labor and loss of time, the liability to error is always in proportion to the number of entries, and vice versa. If a hundred sums are posted when one would answer, then a hundred chances of error are incurred where only one was necessary; and, in the event of an error, a hundred entries must be examined, in many cases, instead of one. The only way to render the irksome and difficult process of balancing easy, is, to keep the Ledger in such a concise form that it may be considered an index to the Journal, as the Journal is to the Subsidiary Books. " The book-keeper who aims at making the Ledger supply the place of an Account Current Book," says Mr. Booth, after thirty years' experience, " will make himself a slave to no purpose, without ever having the satisfaction of seeing his books kept up; and, instead of balancing them in two or three days, may spend as many months before it is effected, which I have frequently known to be the case." The apparent inconvenience of Journalizing monthly, occasioned by delay in posting, is amply compensated in the subsequent stages of the work; and, independently of its other advantages, the Journal becomes to its owner a valuable abstract of his mercantile transactions. Book-keeping by Double Entry, however familiar to merchants and accountants, appears intricate and difficult to almost every person who has not made it a subject of study and reflection. For the purpose of presenting a synopsis or comprehensive view of the art, we shall here give a practical exemplification of its arrangement and routine, by exhibiting examples of the subordinate books, and also of the manner of classifying entries in the Journal, conformably to modern practice. COMMERCIAL BOOK-KEEPING. 37 The Journal of a mercantile establishment ought to contain, at the beginning of each year, a summary statement of its assets and liabilities,* thus: — 1 JANUARY, 1839. SUNDRIES Dr. to Stock, For the assets and balances in our favor, 31st ult., transferred from Ledger A. Cash,........................................ 10,000 00 Bills Receivable,.............................. 5,000 00 Merchandise,............................ 8,000 00( $ Richard Conder,............................... ],500 00 O William Simpson,.............................. 1,750 00 26,250 00 STOCK Dr. to Sundries, For the balances against us, 31st ult. To Bills Payable,.............................. 3,000 00 To William James,.............................. 1,200 00 To James Brown,............................... 800 00 5,000 00 CASH BOOK. - The Cash Book is perfectly simple in its form and arrangement. Each folio consists of two pages. The lefthand page, or Dr. side, exhibits a statement of the cash in the mercliant's possession at the beginning of the month, and all sums received; and the right-hand page, or C(r. side, exhibits a statement of all payments or disbursements for the same period. No man can disburse money that he never received: hence it follows that the Dr. side of the Cash Book, when correctly kept, can never amount to a less sum than the Cr. side. The difference, if any, between the totals of the two sides, is the balance, or cash in hand. * The several items which constitute the merchant's entire capital, are called Ins assets or effects; and the sums owing by him, lis liabilitiesor debts. The difference between the effects and debts, at any time, is called his net capital or present worth. D) 38 COMMERCIAL BOOK-KEEPING. The following is an example of the receipts and payments which daily occur in the counting-house - Dr. CASH. Cr. 1839. 1839. Jan. 1. Balance on hand,...... 10.00000 Jan. 2. By Bills Payable, No. 9,.... 500 00 Ad 5. To Jas. Kent, on account,.. 387 88,, 4. By Jamres Wilson, paid hinm, 75 87 t, 10. To Interest froln Hume&Co. 13 50', 8. By Robert Hall,, 375 00,, 15. To Jas. Kent,.... in full,... 112 12 it 10. By Hunle & Co.,....in fill, 1,185 75 i, 25. To Bills Receivable, No. 71, 178 00, 20. By Bills Payable, No. 10,... 250 25,, 30. To Interest,...dividerd.... 150 00 i,,,, Ly J. WTilson, paid hi.... 1,000 0,,,'l To Bills Receivable, No. 72, 500) 00 i 31. By R. Hall,.....in full,.... 41000 Balance to Feb. 7544 63 11,341 50 11,341 50 I!r The manner of Journalizing the Cash Book is as follows: — 1 JANUARY, 1839. CASH Dr. to Sundries, Received this month, Vp Cash Book. To James Kent,.......... 5th,.......... 387 88 15th,......... 112 12 500 00 ~ To Interest,.............. 10th,....... 13 50 30th,.......... 150 00 163 50 5 To Bills Receivable,....... 25th,.......... 178 00 30th,.......... 500 00 678 00 _____________________________________ 1,341 50 SUNDRIE.S Dr. to Cash, a Paid this month, be Cash Book. 2 Bills Payable,.......... 2d,.......... 500 00 20th,......... 250 25 750 25 James Wilson,.......... 4th,.......... 75 87.s 20th,.......... 1,000 00 1,075 87 Robert Hall,............ 8th,.......... 375 00 31st,.......... 410 00 785 00 Hume & Co.............. 10th,................... 1,185 75 3,796 87'rhe above exemplification will serve to convey an idea of the facilities afforded by monthly Journalizing. In the first collective COMMERCIAL BOOK-KEEPING. 39 entry,'CASH' is made debtor to sundry accounts for all the money received; and in the second, sundry accounts are made debtor to'CAstH' for all payments during the month. On comparing the Cash Book with the Journal, it will be seen that tile several receipts and payments for each separate account are comprised in one entry; so that, if there were fifty sums received at different dates, and as many distinct payments, on any one account in the same month, it would require only two postings to the Ledger; and if there were five hundred receipts and payments, they would all be comprehended in two lines in the' Cash' account. BILL BOOK.- The Bill Book is ruled with columns for the different details, such as, the number of the bill; on whose account; when received or accepted; the date, and term of payment; on whom drawn, or to whom granted; when due; the amount; and the event - that is, whether paid or discounted, &c. - thus: - BILLS RECEIVABLE. No. received. of Drazn by Date. Term. Drawn on When due. Amount. 1639. 1839. 1839. 1 March 8. J. Bailey. W. Adams. liarch 1. 60 days. T. Jones. May 1-4. $587 78 i,, 10. T.Wato,!. J. Jones., 3. 30,e J. Adams. April 3-6. 325 00 3,, 12. J. Bailey. R. James. [ 5. 90 A D. Hill. June 5-8. 240 55 BILLS PAYABLE. No. Deawn by Date. To order of On accountl Term. When When due. Amount. o. IDunby[ ae. Toaorder!of Of accepted.. 1839. 1839. 1839. 1 J. Allen. March 10. J. Jones. J. Allen. 90 days' sight. March 12. June 10-13. 235 25 2 Chas. Fox.,e 7. J. Brown. C. Fox. 15,, date. if 14. March 22-95. 145 75 3 J. Clark. I 5.. H. Clay. J. Clark. 30 days. I 16. April 5-8. 341 25 ~ For the convenience of printing, several columns, which are used in business, are omitted in the above examples. It is customary to keep a distinct register of both Bills 40 COMMERCIAL BOOK-KEEPING. Receivable and Bills Payable in the same book. The Journal entries for the preceding bills are as follows: — MARCH, 18'39. BILLS RECEIVABLE Dr. to Sundries, Received this month, b Bill Book. To James Bailey,....... 8th,...... No. 1,.....587 78 12th...... No. 3,....240 55 828 33 To T. Watson,........ 10th...... No. 2,. 325 00 1,153 33 SUNDRIES Dr. to Bills Payable, Accepted this month, If Bill Book. James Allen,.......... 12th,.... No. 1,............. 235 25 Charles Fox,......... 14th,....No. 2,............. 145 75 James Clark,......... 16th,.... No. 3,............. 341 25 722 25 Inland bills are divided into two sorts, -Drafts or Acceptances, and Promissory Notes, - the former containing an order, the latterka promise, both being of equal obligation. Most mer cantile payments are made in drafts, promissory notes, or bills of exchange, which pass from hand to hand till due, like any other circulating medium. They are assignable and indorsable, and, in all respects, nearly assimilated. INVOICE BOO. - In former times, it was the practice to fold the Invoices in a uniform size, and, after writing on the back the name of the seller, date, &c., to put them away in bundles. But, whenever the purchases are extensive and numerous, the better mode is to paste them into a blank book made of cartridge paper. This book should have its pages numbered, and an index, with columns for dollars and cents. Arrange the Invoices, or Bills of Parcels, one under the other, in regular order, and place the totals in the column ruled for that purpose, COMMERCIAL BOOK-KEEPING. 41 taking care that each amount is placed opposite to its respective bill. The following will serve as a specimen:NEW YORK, MJarch 1, 1839. Messrs. JAMES BROWN & Co. Bought of R. Johnson, 170 00 20 ps. fine Linen,.......... () 4 75.......... 95 00 15 it of do............ (- 5 00,..... 75 00 170 00 NEW YORK, March 4, 1839. Messrs. JAMEs BROWN & Co. Bought of Robert James, 172 80 2 doz. Youths' Hats,......... 24 00,......... 48 00 2 l- Men's do......... i) 60 00,........ 120 00 4 cases, and packing,..(...... 1 20......... 4 80 172 80 NEW YORK,.March 9, 1839. Messrs. JAMES BROWN & CO. Bought of R. Johnson, 268 75 11 ps. Linen, 25 yds. ea. —275 yds. i 75 cts...... 206 25 5 -I do. 25 - ea.- 125 II - 50 cts...... 62 50 268 75 611 55 The above purchases are Journalized as follows: — MARCH, 1839. MERCH&NDISE Dr. to Sundries, o. Purchased this month, p Invoice Book. To R. Johnson,.............. 1st............ 170 00 E~ 9th,........... 268 75 438 75 To Robert James,............ 4th,................. 172 80 611 55 BOOK OF SHIPMENTS. — Some houses enter the particulars of the Shipments in the Day Book; but the practice, in well6 Do 42 COMMERCIAL BOOK-KEEPING. regulated establishments, is to keep the Invoice Book Outward as a book of record for Shipments, and to Journalize it monthly in the same manner as the Cash or Bill.Books. The following specimen will serve as an exemplification of the general form of Invoices: -- INVOIcE of Goods, shipped by James Brown; Co. in the Venus, John King, JMaster, for JNew Orleans, by order of R. Johnson, Merchant there, for his account and risk, and to him consigned. R. J. 48 ps. Cambric Check, 1,344 yds. () 40 cts..537 60 No. 1. Trunk, and packing,.............. 5 25 542 85 2. 51,, Calico Check, 1,428 yds.. ( 25 cts..357 00 Trunk, and packing,.............. 4 75 361 75 3. 15,, Fine Calico, 360 yds..... 2 40 cts..144 00 6, Cambric Check, 144 yds..) 50 cts.. 72 00 20,, Muslin Check, 560 yds...(a 30 cts..168 00 Trunk, and packing.............. 3 50 387 50 1,292 10 CHARGES. Cartage, shipping charges, &c............. 4 03 Commission, 2j j cent on $1,296,........ 32 40 Insurance, and Policy,.................. 27 61 Commission, j ~t cent on Insurance,........ 6 59 70 63 1,362 73 NEW YORK, JMarch 15, 1839. The Journal entries are as follows: MARCH, 1839. R. JOHNSON Dr. to Sundries, For Goods pt Venus, t Book Shipments, To Merchandise,............15th,................292 10 To Charges,........................... 4 03 To Insurance,............................... 27 61 To Commission,.............,................ 38 99 1,362 73 COMMERCIAL BOOK-KEEPING. 43 SALES BOOK.- The arrangement of the Sales in extensive commission houses, is similar to that of Cash. The details of each separate and distinct consignment are recorded upon opposite pages, with a preamble over both, setting forth the description of the goods, the name of the party from whom received, &c. The left-hand page contains a statement of all charges attending the sale, such as Insurance, Freight, Duty, and the like, including the agent's commission; and the right-hand page contains the particulars of the Sales, that is, the quantity, price, the amount, and to whom sold. The difference between the two sides, when the Sales are completed, is the net proceeds, due to the consigner. The following is the usual form in which an Account Sales is rendered: ACCOUNT SALES of 200 pieces Linen, received p Union from Dublin, on account James Forbes, of that place. 1839. Sold to BARCLAY & Co., at 4 months, March 9. Linen, No. 1,...... 20 pieces,...... ( 44/..... 110 00 2,......30...... rO 53/..... 198 75 3,......25...... a 481.... 150 00 4,......17,......e 20/..... 110 50 5,......23........ 54/..... 155 25 6,......25....... - 44/..... 137 50 7,......60...... 60..... 450 00 200 pieces. 1,312 00 CHARGES. Freight, Custom-House Fees, &c........ 38 50 Cartage and Porterage,................. 1 25 Storage and Advertising,................ 4 75 44 50 Commission on $1,312, at 5 V cent,...... 65 60 110 10 To JAMES FORBES, for net proceeds,........ 1,201 90 NEW YORK, JMarch 11, 1839. Errors Excepted, A. B. There is no necessity thatthe different items of an Invoice or 44 COMMERCIAL BOOK-KEEPING. Account Sales should be arranged in the books in the same order as in the document transmitted. For example, though an Account Sales be kept by debtor and creditor in the books, yet the document is seldom transmitted to the consigner in this form, the sales being first stated, and the charges deducted at the foot, as above. In the books, the different articles are necessarily entered as they occur; but in the account as rendered, they are combined and arranged in any way that perspicuity or custom may dictate. The entries, which arise from adjusting the above sales, are Journalized as follows: MARCH, 1839. BARCLAY & Co. Dr. to Sales of Consignments, For 200 ps. Linen, account J. Forbes,............... 1,312 00 SALES OF CONSIGNMENTS Dr. to Sundries, For adjustment of sales Linen r Union. To Charges,........... freight, &c................. 44 50 To Commission,....... on sales,................... 65 60 To James Forbes,...... net proceeds,............. 1,201 90 1,312 00 We have now given an exemplification of the Subsidiary Books commonly made use of in the counting-house of a general merchant, and which form the ground-work or materials for the Journal. But particular concerns require a variety of different books, according to the nature of the business in which the parties are engaged. ACCOUNTS CURRENT.- Accounts Current are rather the result than a constituent part of book-keeping, being written out from the Ledger, with very slight variation or addition. An Account Current is a statement of the mercantile transactions between two persons, disposed in the form of'debtor COMMERCIAL BOOK-KEEPING. 45 and creditor, which exhibits the state of their affairs up to any given date. The term Dr. is to indicate that the correspondent is debtor for the sums on the left, and the term Cr. to indicate that the correspondent is creditor for the sums on the right. The difference between an Account Current and any other is, simply, that the former is an account of continuous transactions from one period to another, while other accounts embrace only particular things, of which the Account Current is the general depository. The word current is, in this case, used to imply the present state of an account, in its course or continued progression. Accounts Current are generally rendered every six or twelve months; and it is common to charge interest on such sums on the debtor side as fall due prior to the time of making up the account, and to allow interest on such sums on the creditor side as are payable prior to the time of making up the account. The following is an example: — Dr. JAMES THOMPsoN, Esq.,.N'ew Orleans, in Account Current with A. B.,.JNe York. Or. 1839. 1839. June 30. To Balance of ac't. rendered, 325 26 Aug. 15. By net proceeds of Cotton, July 14. To Goods, J invoice....... 750 33 f Cuba, die Sept. 15. 875 50 t 2:3. To Cash, t receipt,........ 325 00 Sept. 30. By proceeds of Sugar, V LouOct. 12. To Goods, V- invoice........ 150 45 isa, due Oct. 15,.......... 578 25,, 18. To your Draft paid Hill,..... 125 00 Dec. 31. By Balance, carried to new Dec. 31. To Postage to date,......... 1 50 account,................. 2'23 79 1,677 54 1,677 54 NEW YoaR, Dec. 31, 1839. Errors excepted, A. B. CHAPTER V. INTRODUCTORY EXERCISES -JOURNAL ENTRIES FOR the purpose of initiating the learner into the practical details of the art, we have given, in the present chapter, a series of transactions of a simple nature, which are placed on the lefthand page; and the Journal entries for each are seen on the opposite or right-hand page. In these preliminary exercises, the several transactions are Journalized singly, as affording the most obvious illustration of the manner of arranging the Journal entries; but, however excellent as an initiatory process, this method is by no means recommended as being applicable to real business. DIRECTIONS FOR THE LEARNER First copy the following' Transactions' into a suitable book, leaving the right-hand page blank for the'Journal Entries.' This done, the learner must endeavor to Journalize each transaction according to the best of his skill and knowledge; and, whenever he is at a-loss, he should refer to the instructions contained in Chapter III. In the first instance, the entries should be written upon a slate, and examined by the teacher, or compared with the exemplifications in the printed work, and then, if found correct, transcribed upon the page which was left blank for the purpose. The nature and classification of the accounts in the Ledger should be thoroughly understood by the learner, 46 COMMERCIAL BOOK-KEEPING. 47 before he attempts to Journalize; and hence the Synopsis, on pages 22, 23, must be diligently and attentively studied in the outset. QUESTIONS. When the learner is able to answer the following questions, he will experience no difficulty in Journalizing the most complicated transactions. - See Synopsis. What is the object of'Stock' account? What do you enter on the Cr. side? What on the Dr. side? What does the difference between the two sides show, when the Cr. is the greater? What does it show when the Dr. side exceeds the Cr.. What is the object of' Profit and Loss' account? What do you enter on the Dr. side? What on the Cr. side? What does the difference between the two sides of' Profit and loss' exhibit? What is the object of the general account of' Merchandise'? What do you enter on the Dr. side of this account? What on the Cr. side? What is the balance? What does the difference between the two sides show, when the goods are all sold? What is the object of the' Cash' account? What do you enter on the Dr. side? What on the Cr.? What does the difference between the two sides of' Cash' show? What do you mean by' Bills Receivable'? (See Note, p. 10.) What is the object of this account? What do you enter on the Dr. side? What on the Cr. side? What does the difference between the two sides show? What are' Bills Payable' What is the object of this account? What is entered on the Cr. side? What on the Dr. side? What does the difference between the two sides show? What is the object of Personal.Accounts? What is entered on the Dr. side? What on the Cr. side? What does the balance show? When goods are consigned, or sent abroad as an adventure, how are such transactions recorded? When you receive goods to sell on commission, how do you arrange the account? What are the subdivisions of' Profit and Loss 48 COMMERCIAL BOOK-KEEPING. What do you enter on the Cr. side of' Commission'? To what account is the result transferred? What is entered on the Dr. side of' Interest,' and on the Cr. slae? What do you enter in the account entitled'Charges'? What account shows the receipts and payments of cash? Where do you enter the sales and purchases of goods? When you receive a bill, to what account does it belong? When you accept a draft, or issue a note, where must it be entered? What is a simple Journal entry? What do you understand by a compound entry? What is the meaning of the word Sundries, as applied to the Journal entries? The learner should be continually questioned, in this manner, during the whole course of his studies, and made fully to unde — stand the reasons - the why and wherefore of all that he does. INTRODUCTORY SET. 50 COMMERCIAL BOOK-KEEPING. [TRANSACTIONS.] 1 NEW YORK, January 1, 1839. CASH in hand this day, which constitutes my Net Capital in trade,........................................... 15,000 00 Paid for Stationery, Blank Books, &c., p Cash Book... 325 38 4 4 Bought of Charles Hammond, Goods, p Invoice, amounting to................ 8.. 8,151 25 6 Sold James Bruce & Co., 15 pieces Broadcloth, r Sales Book,................. 957 12' 7 Paid cash for Goods bought this day, p B. P............. 2,125 75 9. Bought Goods of Hone & Co., for which I gave my Acceptance, at 30 days' date,........................... 857 75 12 Paid for Advertising, Postages, &c., r Cash Book........ 25 18 15 Sold Goods to James Hill, as p Sales Book. Received in settlement his Bill, at 90 days,..................... 785 50 18 Sold Goods for cash, r- Cash Book,..................... 280 31 19 Accepted Charles Hammond's Draft favor of Smith & Co., at 90 days' date,................................. 4, 00 COMMERCIAL BOOK-KEEPING. 51 [JOURNAL ENTRIES.] JANUARY 1, 1839. 13 CASH Dr. to Stock, For Net Capital,................................. 15,000 00 3 CHARGES Dr. to Cash, For Stationery, &c............................... 325 38 2 4 MERCHANDISE Dr. to C. Hammond, Purchased, i Invoice,............................ 8,151 25 6 4 2 J. BRUCE & Co. Dr. to Merchandise, For 15 pieces Broadcloth, t B. P................... 957 12 2 MERCHANDISE Dr. to Cash, Purchased this day, p B. P....................... 2,125 75 9 2 3 MERCHANDISE Dr. to Bills Payable, For Acceptance favor Hone & Co................. 857 75 12 3 1CHARGES Dr. to Cash, For Advertising, Postages, &c..................... 25 18 15 2- BILLS RECEIVABLE Dr. to JMerchandise, For J. Hill's Note, at 90 days' date................. 785 50 1 - 18-__ 3 2 CASH Dr. to Merchandise, For sales this day,................................ 280 31 19 _ 3 C. HAMMOND Dr. to Bills Payable, Accepted his Draft, at 90 days' date, for.......... 4,000 00 52 COMMERCIAL BOOK-KEEPING. [TRANSACTIONS.] 2 NEW YORK, January 25, 1839. I have drawn on J. Bruce & Co., at 10 days' sight, for amount of purchase 6th inst........................ 957 12 28 Sold Goods to James Brown & Son, and received in payment their Note, at 90 days,............ 600 00 Cash for the balance,.......................... 600 00 1200 00 29 Paid Charles Hammond, p Receipt, Cash in full,..................................... 4,151 25 80 - Sold James Bruce & Co. Goods, + Sales Book,........ 989 75 Paid Postages, &c., this month, q Cash Book,............ 15 78 FEBRUARY 1, 1839. Bought of Charles Hammond, Goods, p Bill Parcels,............................. 583 40 Sold Goods this day, p Sales Book, viz. to James Peters,................................. 350 22 Rufus Dean,................................ 575 88 Henry Pope................................... 829 75 1,755 85 6 - Received Cash for Bruce & Co.'s Acceptance, t Cash Book, 957 12 COMMERCIAL BOOK-KEEPING. 53 [JOURNAL ENTRIES.] 2 JANUARY 25, 1839. 34 BILLS RECEIVABLE Dr. to J. Bruce S' Co. 4 For my Draft on them, at 10 days' sight............ 957 12 28 2 SUNDRIES Dr. to JMerchandise, Sold J. Brown & Son, 9 S. B. 3 Bills Receivable,........... B. B................ 600 00 3 Cash,.................... C. B................ 600 00 1,200 00 2 _29_ 4 CHARLES HAMMOND Dr. to Cash, 3 Paid him in full,......... 4,151 25 30 4 JAMES BRUCE & Co. Dr. to Merchandise, 2 Sold them, V S. B.............................. 989 75 CHARGES Dr. to Cash, 3 Paid Postages, &c.......................... 15 78 FEBRUARY 1, 1839. 2 MERCHANDISE Dr. to C. Hammond, Purchased this day, p B. P...................... 583 40 4 2 SUNDRIES Dr. to Merchandise, For sales this day. 4 James Peters,........... B. P................ 350 22 4 Rufus Dean,........................... 575 88 5 Henry Pope............................... 829 75 1,755 85 6 3 CASH Dr. to Bills Receivable, 3 Recd for Bruce & Co.'s Acceptance,................ 957 12 54 COMMERCIAL BOOK-KEEPING. [TRANSACTIONS.] 3 NEW YORK, February 8, 1839. Received the following Bills, dated the 4th inst., at 30 days, ve B. B., viz. James Peters's,................................ 350 22 Rufus Dean's,................................. 575 88 Henry Pope's,................................. 829 75 1,755 85 10 Bought Goods as follows, vp Invoice Book, viz. of Charles Hammond,............................. 387 97 Buchanan & Co................................ 78 25 James Flnlay & Co............................. 51 75 517 97 Paid Postage, Cartage, &c., t Cash Book,.............. 8 25 The Bank of Commerce has discounted Henry Pope's Note, due March 8, Cash received,........................ 826 20 Discount allowed,.............. 3 55 829 75 Transferred to C. Hammond, J. Hill's Note, due April 18,.. 785 50 Paid my Acceptance favor of Hone & Co., due this day, p Cash Book,.................................... 857 75 -25 - Bought Goods of Simpson & Co., pt Invoice; gave them in settlement my Note,........ at 60 days,........... 1,000 00 Cash,......... for balance,.0...... S0 00 1,800 00 COMMERCIAL BOOK-KEEPING. 55 [JOURNAL ENTRIES.] 3 FEBRUARY 8, 1839. 3 BILLS RECEIVABLE Dr. to Sundries, For Bills received this day, t B. B. 4 To James Peters................................ 350 22 4 To Rufus Dean,............................ 575 88 5 To Henry Pope,............................... 829 75 1,755 85 10 2 MERCHANDISE Dr. to Sundries, For Purchases this day, 4 To Charles Hammond,........................... 387 97 4 To Buchanan & Co...........................8 25 5 To James Finlay & Co......................... 51 75 517 97 CHARGES Dr. to Cash, For Postage, &c................................. 8 25 3 SUNDRIES Dr. to Bills Receivable, For Pope's Note, discounted at the Bank of Commerce, 3 Cash,......................................... 826 20 1 Profit and Loss,................................. 3 55 829 75 4 C. HAMMOND Dr. to Bills Receivable, For Hill's Note, transferred,....................... 785 50 3 BILLS PAYABLE Dr. to Cash, 3 Paid Acceptance to Hone & Co................... 857 75 25 2 MERCHANDISE Dr. to Sundries, Purchased this day, 3 To Bills Payable,............................ 1,000 00 3 To Cash, 800...................................... 8 00 1,800 00 o6 COMMERCIAL BOOK-KEEPING. [TRANSACTIONS.] 4 NEW YORK, February 28, 1839. Sold James Bruce & Co. Goods, p Sales Book.............................. 1,579 23 Paid charges on shipment, &c., t Cash Book,............ 58 97 MARCH 1, 1839. Effected Insurance with the Globe Insurance Co. on Goods shipped v- Jane for New Orleans. Gave my note for Premium and Policy................... 27 14 Shipped # Jane for, New Orleans, on account and risk of J. Dana & Co., 17 Invoice Book, Goods,......... amounting to............. 975 84 Charges,........ at shipping............... 31 42 Insurance,.......... as above,................. 27 14 Commission,......... on Insurance,............. 5 52 1,039 92 2 Insured with Hope Insurance Co., account of George Smith, $3,240 00, on 15 hhds. Sugar and 20 bales Cotton, consigned P the Ann. Paid Premium and Policy in cash,................. 77 28 Commission,................................ 16 20 93 48 3 Received James Bruce & Co.'s Acceptance, at 30 days' date, 989 75 4 Paid charges on Produce consigned W the Ann, in cash,... 220 27 5 Sold James Peters, 20 bales Cotton, r Ann,....... (Smith's Sales,)...... 896 75 COMMERCIAL BOOK-KEEPING. 57 [JOURNAL ENTRIES.] 4 FEBRUARY 28, 1839..4 JAMES BRUCE & Co. Dr. to MIerchandise, 2 P Sales Book,................................... 1,579 23 CHARGES Dr. to Cash, 3 Paid on shipment, &c............................. 58 97 MARCH 1, 1839. 2 3 INSURANCE Dr. to Bills Payable, For Note to Globe Insurance Co................... 27 14 5 J. DANA & Co. Dr. to