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Progressive Business 
 Accounting 
 
 An Elementary Course in Bookkeeping, Busi- 
 ness Practice, Forms and Usages for Com- 
 mercial Schools and Individual Reference 
 
 Prepared and Illustrated by 
 
 LLOYD E. GOODYEAR 
 
 Author of Goodyear's Baak Accounliog 
 
 Joint Author of Goodyear's Higher Accountiag 
 
 THE WATERLOO SYSTEMS CO. 
 Waterloo, Iowa 
 
ti • » • fl • • 
 
 • •-••*•• • 
 
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 Ckjpyritrhted Ity 
 
 LLOYD E. GOODYEAR 
 
 1910 
 
 eOUCATlON DEPT, 
 
PREFACE 
 
 In our judgment, the call for new work in elementary bookkeeping 
 refers to a course arranged in direct illustrative lines. Bookkeeping is an 
 applijcation of arithmetic. It would be useless to attempt to discover any- 
 thing in the principles of single or double entry bookkeeping that is not well 
 established. It would be equally useless to carry a student through the forms 
 of such discovery. The land-marks of accounting have been definitely placed, 
 the principles have been clearly defined. It is the part of a course of this 
 nature to so arrange the facts that in a progressive order each may follow 
 as a result of that which has preceded. 
 
 This course consists of twenty-five graded exercises beginning with 
 the ledger form, from that passing to its use, from that to the rules governing 
 its use, and to the other forms contributing to it. The trial balance, state- 
 ment, and ledger closed are the natural and necessary sequt-nces of the line 
 of demonstration commenced. The subject matter of these exercises has 
 always been chosen with reference to the previous experiences of those 
 taking the course. 
 
 Following exercises ten. fifteen and twenty are business practice sets 
 A, B and C. These subject the knowledge acquired in the exercises to a fair 
 business test. The introduction of transactions and forms, outgoing and 
 incoming, used in A, B and C, gives to the accounting principles and facts 
 learned a business setting. 
 
 It is claimed for results in the course as here arranged that the student 
 has a more definite knowledge of what to do. and a clearer perception of 
 completion when his task is finished, than in other similar courses now in 
 use. Likewise, the teacher has the maximum control of the students' work 
 with the minimum effort on his part. The slow student cannot seem to be 
 rapid, nor can the progress of the rapid student be covered if the work is 
 taken as outlined, and the accompanying automatic check is used. This is 
 a consideration of importance where one teacher has charge of a large depart- 
 ment. A teacher does not want to do any work that a prepared system can 
 do. He wants to teach, not tinker. 
 
 The established principles and bookkeeping rules are arranged in num- 
 bered information topics, to which reference is constantly made. The forms 
 are reproductions of the work of a practical writer and accountant who 
 neyer hesitated to allow his work to undergo the test of the first-class busi- 
 ness office in first-class competition. The variety of forms will be found 
 extensive. 
 
 Exercises I. to X., inclusive, provide a four Aveeks' course for those who 
 do not intend to pursue the subject further. 
 
 It will take the average commercial worker six months' time to complete 
 the entire course. 
 
 5415^49 
 
CONTENTS 
 
 Exercise I. Ruling the Ledger. 
 
 II. Debits and Credits. Tlie Cash Account. 
 
 III. Double Entry. Xicdger of Four Accounts. 
 
 IV. Account Titles. Nature and Division. 
 
 V. Ruling the Journal. 
 
 VI. Journalizing. Posting. Trial Balance. 
 
 VII. A Journal-Ledger Group. Opened, Continued, Closed. 
 VIII. A Journal-Ledger Group. Opened, Continued, Closed. 
 
 IX. A Journal-Ledger Group. Opened, Continued, Closed. 
 
 X. A Journal, Cash, Purchase, Sales, Ledger Group. Opened, Continued, 
 Closed. 
 
 Set A. Business Practice. Sole Proprietor. 100 Transactions. 
 Exercise XL Statements of Business. 
 
 XII. Drills in Miscellaneous Journal Entries. 
 
 XIII. Drills in Miscellaneous Journal Entries. 
 
 XIV. Drills in Partnership Opening Entries. 
 
 XV. Journal, Cash, Purchase, Sales, Ledger Group. Pai-tnership. 
 Set B. Business Practice, Partnership. 100 Transactions. 
 Exercise XVI. Partnership Statements. 
 
 XVII. Drills in Miscellaneous Journal Entries. 
 
 XVIII. Ruling Special Column Books. 
 
 XIX. Special Column Group. Opened, Continued, Closed. 
 XX. Corporation and Joint Stock Features. 
 Set C. Business Practice, Corporation. 100 Transactions. 
 Exercise XXI. Single Entry. 
 
 XXII. Six-Column Journal. 
 XXIII. Departments and Divisions. 
 XXIV. Outlining Books. 
 XXV. The Bookkeeper's Day's Work. 
 
Introduction 
 
 The principles of accountancy should be understood by every person 
 who aspires to economic independence. The art of bookkeeping is one 
 thing; the science of accounts is another. The former is in the nature of 
 a trade which a person may follow profitably and which, from its close 
 relation to business affairs, may lead to commercial opportunities. The latter 
 is the measure by which the business man from time to time examines the 
 progress of the parts of his business and determines its course. By the 
 accounts kept, the business man should know which of his investments of 
 money or effort are profitable and which are unprofitable, what his property 
 consists of and what his debts are. Knowing these facts, he can discontinue 
 those investments showing losses or small gains, and invest more largely in 
 those showing comparatively greater profits. 
 
 In the earlier history of our country, business was quite simple and the 
 profits of all undertakings were large, so that one could often accumulate 
 much wealth without any regard to bookkeeping. Conditions have since 
 changed. "With the growing density of population, profits in all departments 
 of trade have become smaller and more intelligence in business affairs has 
 become necessary. Now, the successful man can no longer profitably carry 
 his business in his head, but must carry the facts of his business in his books, 
 leaving his mind free to give its entire power to new achievements rather 
 than to have it hampered by an attempt to carry a mass of details already 
 in hand. 
 
 It is the added power to accomplish results which gives to the person 
 skilled in accounts the great advantage over the person deficient in this 
 branch. Throughout history, the persons who have given their attention to 
 the cost and the returns of given lines of action have been the leaders and 
 commanders of the business world. Those who through lack of knowledge 
 or sluggishness have neglected account-keeping have been the servants, often 
 the poorly paid servants of those better informed. 
 
 All orderly bookkeeping entries, in whatever books originally made, are 
 entered with a view to their final effect upon ledger accounts. The vital dif- 
 ference between good and bad bookkeeping depends on the clearness or vague- 
 ness of the accounts derived from the first records. Hence, it is essential that 
 a bookkeeping student should, first of all ideas, grasp the idea of an account. 
 
 Most persons who study beginning bookkeeping need practice in business 
 forms, commercial and legal papers which they will receive and make out 
 for others in business transactions. The papers used, should be associated 
 with the transactions involved and should be practiced in connection with the 
 entries until the one will immediately suggest the other. This consideration 
 calls for much of practice and detailed drill in the earlier part of the work. 
 As the student progresses, all needless writing of forms will be dropped. The 
 student should feel, however, that every detail as presented is to be mastered, 
 for only by a thorough mastery of each part can the whole be accomplished. 
 
 "With this thought in mind, we may safely say that every young person 
 should apply himself diligently to the study of account-keeping. "We trust 
 that the person who enters upon this work may realize its relation to his 
 future success, and give to it his closest attention. 
 
6 PROGRESSIVE BUSINESS ACCOUNTING 
 
 TO THE STUDENT 
 
 You are required to write several exercises before beginning transactions 
 in actual business. These exercises are in the nature of tests by which you 
 will show that paper, blotter, ruler, pens, pencils, etc., are properly used, 
 and, later, that a knowledge of records and accounts is acquired sufficient to 
 enable you to proceed. Comply with the directions exactly as given. Always 
 think before doing. If at any time errors or blots appear, discard the paper 
 used and prepare another paper so that you can submit to your teacher your 
 best work. These first steps must be taken not hurriedly but carefully. 
 
 EXERCISE I 
 
 INFORMATION #1. Bookkeeping paper is ruled in two standard ways 
 called ledger and journal. There are many varieties of each, but the two- 
 column ledger paper and the two-column journal paper are the common 
 forms. At the top of all varieties of ruling are placed three lines running 
 from left to right called headlines. These are ruled very closely together, 
 and are placed about one and one-half blue line spaces above the first writing 
 line. The center one of the three headlines should be heavier than the other 
 two. All ruling should be in red ink. From the headlines to the bottom of 
 the sheet are ruled vertical lines, which divide the space into columns suited 
 for journal or ledger entries. 
 
 EXPLANATION. The purpose of this exercise is to fix in mind the 
 lines and spaces of the ledger ruling and the use of the columns. 
 
 DIRECTIONS. Rule a sheet of writing paper in ledger form. To rule 
 the headlines, lay the ruler across the paper with the in-slanting or bevel side 
 downward, so that the edge will not touch the paper. Press the ruler firmly 
 with the left hand and draw the pen evenly from left to right so that the 
 right hand draws a light line. Without lifting the ruler, commence with the 
 pen at the left, turning the pen point inward, drawing the second line some- 
 what heavier than the one above. Draw the lines as closely together as pos- 
 sible without touching. Draw the third line below the second, making it no 
 heavier than the first. 
 
 Next, place the ruler across the top of the paper and make pencil dots 
 exactly in center from left to right, also place dots at bottom of sheet in the 
 same way. Reverse the ruler as before and draw three lines from the head- 
 lines to the bottom of the sheet, using the pencil dots as guide, dividing the 
 page vertically into two equal parts. (The left side is called the debit side; 
 the right, the credit side.) 
 
 Measure and rule double vertical lines one and three-eighths inches to 
 the left of the right margins of the debit and credit sides and a single line 
 three-eighths inch to the left of each right margin. (These are the debit and 
 credit money columns; the double line preceding dollars and the single line 
 separating dollars from cents, together make one money column.) 
 
 Rule a vertical line three-eighths inch to left of each money column. 
 (The space thus made is called the folio column.) 
 
 Rule two vertical lines five-eighths and one inch from the left margin of 
 the debit and credit sides. (The spaces thus made are date columns. The first 
 space for year and month, the second for day of month, are considered one 
 column. The wide space following the day of the month is for explanation. 
 The width of this space depends on the width of the entire sheet.) 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
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 Year 
 &. Mo. 
 
 lay 
 of 
 No. 
 
 DEBIT SIDE 
 
 Explanation 
 
 Folio 
 
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 Cts 
 
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 Year 
 & No. 
 
 day 
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 CREDIT SIDE 
 
 Explanation 'olio 
 
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 Dollars 
 
 Cts 
 
 On the reverse side of the ruled ledger sheet, write answers to the follow- 
 ing questions, numbering the answers to correspond with the question numbers. 
 All written answers should be in the form of complete sentences, as shown 
 in the model answers given below. The questions should not be copied. 
 
 QUESTIONS. 1. What two common forms of ruling are used in book- 
 keeping ? 
 
 Ans. 1. The ledger and journal are the common forms of ruling used 
 in bookkeeping. 
 
 2. Describe the headlines. 
 
 Ans. 2. The headlines are the ruled lines running from left to right 
 at the top of the written portion. 
 
 3. The center vertical ruling of the ledger divides the page into what 
 two parts? 
 
 4. Name in their order the four columns in each side of the ledger. 
 
 5. Why are the date columns divided into two parts? 
 
 6. Why are the money columns so divided? 
 
 DIRECTIONS. When you have completed these requirements, write at 
 the top of the ruled page the exercise number, your name, and date, thus : 
 
 and pass to your teacher for inspection. If the form and answers are incor- 
 rect, the paper will be returned to you for correction. If it is correct, the 
 paper will be placed in the college file as a specimen of j'our work. 
 
^'l'',' "I le,' '• ■ PROGRESSIVE BUSINESS ACCOUNTING 
 
 EXERCISE II 
 
 INFORMATION #2. Business is the process of changing one kind of 
 value into another kind of value. 
 
 #3. The purpose of the business man is to exchange things of less value 
 for things that he values more highly, thus making a profit. 
 
 Example: A farmer exchanges with a miller a quantity of wheat for a quantity 
 of flour. The farmer has made a profit because the flour is worth more to him than 
 the wheat. The miller has made a profit because the wheat is worth more to him than 
 the flour. 
 
 4^4. The value of anything in business is measured by the amount of 
 money required to buy the thing. 
 
 #5. The amount of profit is shown by the money cost of the thing 
 exchanged as compared with the money value of the thing received for it. 
 
 Example: A man buys several automobiles for cash $10,000, or for other property 
 worth $10,000 in cash. He sells them, receiving in exchange cash or property worth 
 $12,000. By exchanging these values in this way his profit is $2,000. 
 
 #6. Persons conduct business by changing their property of one kind 
 into property of another kind, or by exchanging their property with other 
 persons for cash or other property. 
 
 Example: A man owns timber land worth $2,000, and cuts from it wood worth 
 $1,000, leaving the land of as great value as it was before. This is a business trans- 
 action in which no dealing is carried on with other persons. The man simply changes 
 one kind of property into another kind. He now sells the wood to another person 
 who pays him cash $1,000 for it. This is also a business transaction. 
 
 #7. The entire property and indebtedness of any commercial enterprise 
 is referred to as the business. 
 
 #8. All records of a business are divided for the purpose of inspection 
 and comparison into different parts called accounts, each of which is con- 
 sidered separately from the whole. 
 
 #9. An account is a complete entry of all transactions as they pertain 
 to a given part in the business. 
 
 #^0. At the head of each account is the title; below to the left are 
 placed the values which the remainder of the business has contributed to this 
 part (debits) ; to the right are placed the values which this part has conrtib- 
 uted to the remainder of the business (credits). 
 
 #11. The ledger is the book of accounts. 
 
 4itl2. The following general rule governs debit and credit. It should 
 be committed to memory: Debit the receiving account; credit the giving 
 account. 
 
 EXPLANATION. One account in every buiness is the cash account. 
 This account is important because it shows when and from whence the store 
 of cash at hand receives more cash, or when and for what the store of cash 
 parts with some of the money held. It is necessary to keep this account 
 with great care, because by it one should be able to tell the amount of money 
 available for use. 
 
 DIRECTIONS. Rule a sheet of ledger paper as directed in Exercise I. 
 and open a cash account by writing the title Cash in the center at the top as 
 shown in the model. The following transactions involve the use of more than 
 one account, but only the one with cash will be considered in this exercise. 
 Write the cash account from the transaction given below, referring to the 
 model as you proceed. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
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 TRANSACTIONS. Sept. 1, 1909. Henry Miller placed $1,000 into a 
 cash account for use in business. 
 
 Debit cash, because cash is the receiving account. (See Infor. 12.) Notice the 
 place for the year, which should always be entered at the beginning of an account. 
 Notice that the explanatory space shows from what source the cash was received. 
 The folio column is not used because this entry is not posted from another book, 
 but is entered directly from the transaction in this place. Notice that the amount is 
 placed in the space of the money column provided for dollars. The place for cents 
 is not used. 
 
 Sept. 2. Paid cash for 100 Sk. Pearl Flour @ $1.65 per sack. 
 
 As this is the first entry on the credit side, enter the year as shown. The abbre- 
 viation "Sk." stands for sacks or sack. The sign @ means at or each. Enter as 
 shown in the model. Cash is credited because cash is the giving account. Repeat 
 the rule above. (Infor. 12.) 
 
 Sept. 3. Keceived cash for 10 Sk. Pearl Flour @ $1.75. 
 
 Notice that the abbreviation Sept. is not repeated. Any entry following is con- 
 sidered September until a change of month is reached. Notice especially that the 
 figures 17.50 are written exactly in column with figures of same order above and below. 
 
 3. Received cash for 50 Sk. Pearl Flour @ $1.70. 
 
 4. Paid cash for 50 brl. XX Flour @ $5.50. 
 Enter as above. See that the figures are in column. 
 6. Paid cash for 100 brl. XX Flour @ $5.45. 
 
 Henry Miller places $500 additional into the cash account. 
 
 Paid cash for 100 brl. XX Flour @ $5.50. 
 
 Sold 250 brl. XX Flour @ $6.00 per brl., receiving cash. 
 
 Henry Miller took back $500 from the cash for use of the business. 
 
 Sold for cash 40 Sk. of Pearl Flour @ $1.80. 
 
 Bought for cash 20 T. of Timothy Hay @ $12. 
 
 Sold for cash 5 T. Timothy Hay @ $15. 
 
 Bought for cash 10 T. Blue Stem Hay @ $11. 
 
 Sold for cash 15 T. Timothy Hay @ $16, 10 T. Blue Stem Hay (g 
 
 15. 
 
 18. 
 
 21. 
 
 25. 
 
 27. 
 
 Oct. 5. 
 
 7. 
 
 10. 
 
 15. 
 $13.50. 
 
 DIRECTIONS. At this point the student will subtract the total of cash 
 payments from the total of cash receipts to see the amount of cash that should 
 be on hand. Use a sharp pointed, medium hard pencil with which place the 
 footings of both sides of the account in small, neat figures. (See model.) 
 
10 PROGRESSIVE BUSINESS ACCOUNTING 
 
 From examination of the form it will be seen that the receiving side of cash 
 shows $3,624.50 taken in at various times. The credit total $2,385 subtracted 
 from the debit total gives the amount, $1,239.50, which should equal the 
 amount on hand, if the cash were counted. 
 
 On the reverse side of the account sheet, answer in full by sentences the 
 following 
 
 QUESTIONS. 1. What is meant by the term business? 
 
 2. Why do men engage in business? 
 
 3. What is the measure of values? 
 
 4. How is the amount of profit in any one thing measured? 
 
 5. In what two ways are values in a business changed? 
 
 6. How is a busines divided for purposes of inspection and comparison? 
 
 7. What is an account? 
 
 8. What is meant by the title of an account? 
 
 9. What is the name of the book in which accounts are kept? 
 
 10. Give the general rule for debit and credit. 
 
 11. What does the debit side of the cash account show? 
 
 12. What does the credit side of the cash account show? 
 
 13. What does the credit subtracted from debit total of cash show? 
 Having completed the answers to above questions, at the top of the 
 
 account side write exercise number, your name, and the date, as directed 
 before, and pass the paper to your teacher for inspection. 
 
 EXERCISE III 
 
 INFORMATION # 13. In every transaction, value is changed from one 
 or more parts of the business into one or more other parts of the business, 
 therefore 
 
 # 14. In every transaction one or more accounts must be debited, and 
 one or more other accounts must be credited, 
 
 4^ 15. The debits and credits must be in equal amounts. 
 
 qijt 16. Double entry bookkeeping is the keeping of books in such a way 
 as to show all debits and corresponding credits in their respective accounts. 
 There must be at least one debit and one credit. 
 
 :^ 17. The sum of all debit footings will be equal to the sum of all 
 credit footings if the work is correct. 
 
 EXPLANATION. The same transactions as given in Ex. II. will be given 
 in this exercise. In this exercise it will be necessary to make entries in all of 
 the accounts affected, instead of in the cash account only. Kemember that 
 every transaction involves a debit in one account and a credit in another 
 account. Form the habit of determining which account to debit first, then 
 select the account to credit. /Iways apply the rule given in Infor. #12. 
 
 DIRECTIONS. Take a sheet of ledger paper from your supplies, and 
 open four accounts (see model) : Henry Miller, Proprietor, at top ; Cash, five 
 lines below; Flour account, twelve lines below, and Hay account, seven lines 
 lower. 
 
 TRANSACTIONS. Sept. 1, 1909. Henry Miller invests cash in flour and 
 
 feed business, $1,000. 
 
 "What account should be debited? CASH, because cash is the receiving account. 
 Make the debit entry as in previous exercises, but be careful to enter on line below 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
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 "Cash" in the ledger, not on the line below "Henry Miller." Notice that the 
 year is placed at the beginning of all accounts. Notice that in the ledger are some 
 additional blue vertical lines called unit rules. These are to aid in keeping the 
 column straight. The explanatory space in the ledger contains memoranda suited 
 to the transaction. No set form for the memoranda is required. What account 
 
12 PROGRESSIVE BUSINESS ACCOUNTING 
 
 should be credited? Henry Miller account, because this is the giving account. This 
 credit represents Henry Miller's interest in the business. The proprietor's account 
 is usually placed first as here shown. 
 
 Sept. 2. Bought for cash 100 Sk. Pearl Flour @ $1.65. 
 
 What account should be debited? FLOUR, because flour is the receiving account. 
 The student may write in the explanatory space such memoranda as will serve to 
 explain best the transaction to him. What account should be credited? Cash. Why? 
 The amounts are omitted in some of the model forms, but should be entered correctly 
 by the student. 
 
 Sept. 3. Sold for cash 10 Sk. of Pearl Flour @ $1.75. 
 
 What account should be debited? Cash. Why? Because cash is the receiving 
 account. Why credit flour account? 
 
 Sept. 3. Sold for cash 50 Sk. Pearl Flour @ $1.70. 
 
 Remember to enter the debit first, then the credit. Use ditto marks in the 
 explanation column to save writing. 
 
 Sept. 4. Bought for cash 50 brl. XX Flour @ $5.50. 
 
 See transaction on Sept. 2, above. 
 
 Sept. 6. Bought for cash 100 brl. XX Flour @ $5.45. 
 
 Sept. 15. Received from Henry Miller cash to be added to his invest- 
 ment account, $500. 
 
 Debit Cash; credit Henry Miller, Investment. 
 
 Sept. 18. Bought for cash 100 brl. XX Flour @ $5.50. 
 
 Sept. 21. Sold for cash 250 brl. XX Flour @ $6.00. 
 
 Sept. 25. Henry Miller takes back $500 in cash on his investment 
 account. 
 
 Debit Henry Miller, Prop.; credit Cash. Why' 
 
 Sept. 27. Sold for cash 40 Sk. Pearl Flour @ $1.80. 
 
 Oct. 5. Bought for cash 20 T. Timothy Hay @ $12. 
 
 What account is to be debited? Hay account. Why? Because Hay is the 
 receiving account. 
 
 Oct. 7. Sold for cash 5 T. Timothy Hay @ $15. 
 
 Oct. 10. Bought for cash 10 T. Blue Stem Hay @ $11. 
 
 Oct. 15. Sold for cash 15 T. Timothy Hay @ $16, and 10 T. Blue 
 Stem Hay @ $13.50. 
 
 DIRECTIONS. After the above entries are completed, pencil foot the 
 debit and credit sides of all accounts. Notice that no pencil footing is 
 required where there is but one item, as in the debit side of the proprietor's 
 account. If correct entries have been made for all transactions, the footings 
 of the debit side of all the accounts should equal the footings of the credit 
 side of all the accounts. Total these footings as suggested and if the debit 
 total equals the credit total, you can consider that the items have been 
 entered in both debit and credit sides correctly. Make these footings using 
 pencil in the explanation space at the foot of the page, placing the debits 
 and credits in their respective sides. 
 
 If correct, w^rite on the opposite side of the ledger sheet the answers to 
 the following 
 
 QUESTIONS. 1. What is the effect of every transaction on the busi- 
 ness ? 
 
 2. "What sort of entries does every transaction require? 
 
 3. What is said of the equality of debits and credits? 
 
 4. What is the characteristic of double entry bookkeeping? 
 
 5. By what process is one led to believe that all posting has been made 
 in a ledger. 
 
 Having completed all entries, if the work is correct and neat, place at 
 the top of the account forms the regular heading and pass to the instructor 
 at once. 
 
PROGRESSIVE BUSINESS ACCOUNTING 13 
 
 EXERCISE IV 
 
 INFORMATION # 18. The Merchandise account is the account with 
 movable goods which are bought to be sold at a profit. 
 
 Remark: In exercise III. the accounts with flour and with hay could have been 
 placed in one account called Merchandise. Where many different things are bought 
 and sold it is not advisable to keep an account with each of them. In a store, 
 instead of keeping accounts with each of the small articles, as tea, sugar, starch, 
 raisins, etc., one account called Merchandise includes all of them. In a business 
 wthere Furniture, Hardware, Saddlery and Funeral Supplies are dealt in, each of 
 these divisions is of enough importance to be considered separately, and to have 
 separate accounts rather than to call all Merchandise. 
 
 # 19. The Real Estate account is the account with houses and lands. 
 
 Remark: As with merchandise, if several pieces of real estate are owned 
 for speculative purposes, it would be better to keep an account with each piece 
 separately, giving it a distinct title showing its location. If one property is considered 
 which may be added to or taken away from at different times, the title Real Estate 
 is preferable. 
 
 EXPLANATION. In the following transactions John Sawyer invests 
 cash in a business in which Merchandise and Real Estate are bought and 
 sold for cash. These transactions will give additional drill in debit and 
 credit. Refer to Infor. ^^12 when in doubt as to debit and credit. 
 
 DIRECTIONS. Take a sheet of ruled ledger paper from your supplies 
 and open accounts as follows : John Sawyer, Proprietor, on the first line : 
 Cash, fifth line from top; Merchandise, tenth line below Cash; Real Estate, 
 tenth line below Merchandise. As you take up the transactions that follow, 
 remember that every transaction affects a receiving account (to be debited) 
 and a giving account (to be credited). Remember to always enter the debit 
 first, then the credit. 
 
 TRANSACTIONS. Nov. 1, 1909. John Sawyer invests in business 
 $10,000 in cash. (Enter as in previous exercise. The student need not make 
 explanatory entries until instructed to do so in a more advanced part of 
 the book.) 
 
 2. He bought for cash sundry merchandise, paying $6,590.50. 
 Remark: In this exercise the exact articles bought and sold will not be considered. 
 
 They are assumed to be entered on bills when the sales are made, which should be 
 kept so that they can be referred to at any time. The student will give his entire 
 attention to debiting and crediting the accounts affected. 
 
 3. Sold for cash merchandise per bill rendered, $1,320.60. 
 
 4. Bought for cash merchandise per bill rendered, $520.98. 
 
 4. Sold for cash merchandise per bill rendered, $4,291.85. 
 
 5. Bought for cash a house and ground for $6,500. 
 
 The student at this point may pencil foot the cash account to see how 
 much cash remained. Remember to make the pencil footing so small and 
 so close to the figures just above, that there will be room for an entry on 
 the following line. 
 
 Nov. 7. Bought merchandise per bill rendered, paying for it all cash 
 on hand except $500.97. 
 
 7. Paid cash for the improvements of the real estate, $150. 
 
 8. Sold merchandise for cash, per bill, $32.09. 
 
 9. Sold a lot from the real estate for cash, $800. 
 
 10. Paid cash for the additional improvements on the real estate, $300. 
 
 11. Sold merchandise, per bill, for cash, $650.42. 
 
14 PROGRESSIVE BUSINESS ACCOUNTING 
 
 The student will now find the amount of cash on hand by pencil footing 
 the debit and credit sides of the cash account. Add the previous pencil 
 figures to the amounts that follow, thus the total of the debit column is 
 $17,094.96. 
 
 12. John Sawyer withdrew from the business all cash on hand except 
 $33.48. 
 
 Caution: Compute the amount on a separate sheet of paper, so as not to spoil 
 the ledger sheet. 
 
 13. Sold all the remaining merchandise for cash, $2,200. 
 15, Sold all Oie real estate remaining for cash, $7,500. 
 DIRECTIONS. Pencil foot the columns in each account, and see that 
 
 the sum of the debit footings equals the sum of the credit footings as in the 
 previous exercise. 
 
 QUESTIONS. 1. What does the merchandise account represent? 
 
 2. When should the merchandise account be divided? 
 
 8. What does the real estate account represent? 
 
 4. When should the real estate account be divided? 
 
 5. How can the amount of cash at any time be found? 
 
 6. When pencil footing a second time, are the pencil footings above 
 included in the total? 
 
 After answering the above questions fully on the reverse side of the 
 exercise, place heading at top of exercise, and submit the work as before. 
 
 EXERCISE V 
 
 INFORMATION # 20. The ledger contains all the entries grouped with 
 reference to the accounts affected. 
 
 The student will readily see that while the ledger shows the results of the 
 business transactions, it does not give a complete record of all the facts pertaining 
 to any transaction, for three reasons: (1) Any transaction appears in at least two 
 different places in the ledger, so that it cannot be seen there in its entirety in onQ 
 place. (2) There is not room in the ledger to record all the facts relative to a given 
 transaction. (3) It would be impossible to take the time to turn to the ledger accounts 
 and make the required entries when the transactions are being carried out unless 
 the transactions are very few. Therefore, the original entries are not as a rule made 
 in the ledger, but are made in some book of first or original entry and from that book 
 carried to the ledger. 
 
 4^ 21. The journal or daybook journal, as it is sometimes named, is the 
 book of original entry. 
 
 In the journal, entries are made in the order of their occurrence. It contains 
 room for a full explanation of the transactions so that reference can be made to it 
 to refresh one's memory with reference to the exact terms, amounts, a:nd persons 
 involved. Later the student will find that it is advantageous to divide the journal 
 entries according to their kind among other books of original entry, as the cash 
 book, the sales book, the purchase book, but when such books are kept they are to 
 be regarded as parts of the journal, and entries made in them are properly termed 
 journal entries. 
 
 # 22. The journal entry consists of the date of the transaction, the 
 ledger titles affected, a complete memorandum of the transaction, and the 
 amounts. 
 
 The journal may be submitted as evidence in case of a dispute requiring legal 
 settlement. For this purpose it is not satisfactory if it shows any erasures, any missing 
 pages, or other indications that entries have been altered after being made. Journal 
 entries should be made immediately after the occurrence of the transaction. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 15 
 
 fin. 
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 Titles 
 
 2 inches 
 
 Explanation 
 
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 1 in. 
 
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 EXPLANATION. The student is required to rule a journal in this exer- 
 cise. Refresh the memory by referring to ruling directions in Exercise I. 
 
 DIRECTIONS. Take a sheet of writing paper and rule headlines across 
 the top. 
 
 Rule vertical lines, spacing as shown in the form. 
 
 After ruling, answer on back of sheet the following 
 
 QUESTIONS. 1. Why is a complete record of the transaction not 
 found in the ledger? 
 
 2. In what order do entries appear in the ledger? 
 
 3. What is the book of original entry? 
 
 4. What does the journal contain? 
 
 5. What can j'ou say of the erasures in the journal ? 
 
 6. When should journal entries be made? 
 
 Head this exercise as usual and submit vour work. 
 
 EXERCISE VI 
 
 INFOHMATION #23. JournalLzing is the process of selecting the 
 proper titles to be debited and credited in a given transaction, and of enter- 
 ing them, together with necessary explanation, in a journal, or other book 
 taking the place of a journal. 
 
 # 24. Posting is the process of transferring the debits and credits of a 
 journal to the respective accounts of a ledger. 
 
 # 25. Folio columns are columns found in all books to or from which 
 posting is done. In the folio column of the ledger is placed the journal page 
 from which an entry has been posted; in the folio column of a journal is 
 placed the ledger page of the account to which the entry is posted. The 
 same is true if posting is done from other books than the journal. 
 
 # 26. Posting is generally done periodically ; as, once a day, once a 
 week, or once a month. 
 
 # 27. Any one account can be posted before the others, if it is desirable 
 to do so. 
 
 # 28. The difference between the debit and credit footings of any ledger 
 account is called the balance of the account. 
 
 # 29. A ledger balance showing the debit side greater than the credit 
 side is called a debit balance: if it shows the credit side greater, it is called 
 a credit balance. 
 
16 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 # 30. The sum of all debit balances in a ledger is equal to the sum 
 of all credit balances, if the posting is correctly done. 
 
 # 31. A list of all the open ledger accounts with debit balances in 
 one column and credit balances in another column is called a trial balance, 
 and if the two columns foot equally the ledger is said to be in balance, and 
 hence the posting is assumed to be correct. 
 
 The trial balance is sometimes taken daily, as in a bank, but more often 
 monthly. It may be taken at any time desired. 
 
 # 32. The Live Stock account is the account with domestic animals, 
 as horses, cattle, sheep, etc. 
 
 EXPLANATION. In this exercise the student will be required to enter 
 the transactions of a certain business in the journal, to post from the journal 
 to the ledger, and to take a trial balance of the ledger. The ledger posting 
 is to be done daily ; that is, all entries of a given date are to be posted before 
 passing to the next date. 
 
 
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 DIRECTIONS. Rule a sheet of writing paper in journal form, both sides, 
 and page the sides 1 and 2. Remember that the odd number pages are 
 always at upper right hand corner, even pages always at upper left hand 
 corner. Rule a sheet of paper in ledger form, both sides, and page the sides 
 1 and 2. Rule a sheet journal ruling on one side to be used for trial balance. 
 On page one of ledger open an account with Robert Browning, Proprietor, 
 at top, and five lines below an account with Cash. Page 2, open an account 
 at the top with Merchandise, and one-third way down the page an account 
 with Real Estate; two-thirds down the page open an account with Live 
 Stock. 
 
 Date your journal at top as in model, using the date there given, 
 
 TRANSACTIONS. Sept. 1, 1909. Robert Browning commenced a gen- 
 eral business, investing cash $15,000. 
 
 Determine what ledger account must be debited and what account 
 credited. 
 
 Enter in the journal, observing closely the form given in the text. Note that 
 the date is given first. Tien passing the folio column, enter in the next column 
 the ledger titles affected. The title to be debited is entered on the first line to the 
 extreme left of the space, and corresponds with the amount found in the left or debit 
 money column. The title to be credited is placed one-half incli to the right of the 
 debit title on the line below and corresponds with the amount placed in the credit 
 money column. In the space following the titles write an explanation clear and 
 complete enough to show the facts of the transaction. The explanatory part is in 
 a column by itself and may occupy many more lines than the titles and amounts, 
 if necessary. 
 
 Sept. 1. Bought certain buildings and ground, as per deed, of 0. Nelson 
 for cash, $4,850. 
 
 First determine the accounts to be debited and credited. 
 
 It is not necessary to repeat the same date on journal except when forwarded 
 to a new page, when the date should be repeated. 
 
 Enter the titles on the line below the last line used for (previous entries or 
 explanation. Remember to enter the debit title and amount first, then the credit 
 title and amount. See model. 
 
18 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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 Bought of Grant & Williams a bill of merchandise as per invoice dated 
 today for cash, $2,960.51. 
 
 Bought of Oscar Nelson three heads of horses for cash, $480. 
 
 Debit Live Stock account, because the live stock part of the business receives 
 this value. 
 
 Sold R. W. Emerson for cash 10 brl. salt @ $1.70. 
 
 Sold Thomas Stone a horse for cash, $175. 
 
 Sold Samuel Huntington for cash a lot from the real property, as per 
 deed given, for cash, $950. 
 
 DIRECTIONS. As the above closes the first day's entries, the accounts 
 will be posted. Place the journal to the left and the ledger to the right. 
 With blotter on journal under the left hand, move down the column until 
 you arrive at the first debit title. Cash. Post this debit to the Cash account 
 as shown in model, entering the date as there shown. In the folio column 
 place figure 1, with "J" 'before to indicate that the posting was done from 
 page 1 of the journal. Enter the amount in the money column. Then turn 
 back to the journal and place in the folio column of the journal the ledger 
 page 1 on which the cash account appears. Remember that the post marks 
 must be entered at the time of the posting or they will be of little value, as 
 will be shown later. 
 
 Next drop your blotter on your journal until you arrive at the following 
 cash debit of $17, which post to the Cash account also. Be sure to enter the 
 page of the journal in the ledger and the page of the ledger in the journal 
 when the posting is done. Pass down to the other Cash debits of $175 and 
 $950, which post as before. (See model.) 
 
 After cash debits are posted, post the next unposted debit. It is the debit 
 of Real Estate $4,850. This account is on page 2 of the ledger, hence, when 
 you have posted to this account, place 2 before the title in the journal. 
 
 Post the next debit, Mdse., as before. Post the last unposted debit, Live 
 Stock, to the Live Stock account. Look up the folio column to see if each 
 of the seven debit titles is preceded by a post mark. If so, proceed to post 
 the credits. 
 
 Begin with Robert Browning credit, which post to that account on page 
 1 of ledger. Next post all the Cash credits — three in number. After that 
 to Merchandise, Live Stock, and Real Estate. 
 
 Read Infor. # 27, 28, 29, 30, 31. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 19 
 
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 After you have posted the ledger, take a Trial Balance, heading your 
 Trial Balance sheet as shown in the model form. (1) Enter all the ledger 
 titles with their pages on the trial balance sheet. (2) Find the debit or 
 credit balance of each account and place that balance in the debit or credit 
 column of the trial balance sheet. Pencil footing need only be done in the 
 cash account. After the balances are entered, foot and rule a single addition 
 line above the footing and double closing lines below the left side of the page 
 and the footings, as shown. 
 
 The books being found in balance, the student will proceed to journalize 
 the transactions of Sept. 2. Continue on page 2 of the journal. 
 
 TRANSACTIONS. Sept. 2. Sold George Taylor, for cash, 2 brl. salt 
 @ $1.70, 20 sk. flour @ $1.45, 5 sk. sugar @ $5.95. Make journal entry. Why 
 is Cash debited? Why is Merchandise credited? 
 
 Bought of Wm. Floyd, 7 head of horses for cash, $1,150. 
 
 Sold to John Hart for cash, 8 head of horses for $1,650. 
 
 Paid Clayton Smith, cash for repairs to building, $42.90. 
 
 Debit Real Estate. Why? 
 
 DIRECTIONS. The student will now post the ledger as before, and 
 after posting, pencil foot all the accounts having more than one item and 
 take a trial balance. Rule a heading across the page below that already 
 made. No space should be wasted, as three trial balances are to be taken on 
 this sheet. 
 
 The student will observe on examining the trial balance that on this 
 date three accounts show that these divisions of the business have received 
 more value than they have given. Which are they? Two accounts show 
 
20 PROGRESSIVE BUSINESS ACCOUNTING 
 
 two divisions of the business have given more value than they have received. 
 Name them. 
 
 TRANSACTIONS. Sept. 3. Sold to O'Keen & O'Keen for cash all mer- 
 chandise on hand, per bill, receiving $3,000. 
 
 Bought of George Taylor, for feed of live stock, 30 bu. corn @ 50c, 2 T. 
 hay @ $12.50, paying cash. 
 
 Debit Live Stock. Why? 
 
 Bought of William Floyd, as per deed, adjacent real estate for cash 
 $5,000. 
 
 DIRECTIONS. Post the entries of the 3d to the ledger accounts, pencil 
 foot, and take a third trial balance, recording it below the trial balances of 
 the first and second. 
 
 On the reverse side of the trial balance sheet write answers to the fol- 
 lowing 
 
 QUESTIONS. 1. What is journalizing? 
 
 2. What is posting? 
 
 3. Explain the use of the folio column. 
 
 4. What do you understand by the balance of an account? 
 
 5. What are the two kinds of ledger balances? 
 
 6. What is the trial balance? Of what value is it? 
 
 7. How often are the trial balances most frequently taken? 
 
 8. When are post marks to be entered? 
 
 9. What does a debit balance show with reference to an account? 
 10. What does a credit balance show? 
 
 DIRECTIONS. After answering the above questions, write the transac- 
 tion number, your name, and date at the top of first page of journal, first 
 page of ledger, and trial balance sheet, and pin these three sheets together 
 in the upper left-hand corner, having the pin at the angle shown in the illus- 
 trated journal, and hand all in for inspection. 
 
 EXERCISE VII 
 
 INFORMATION #33. The Furniture and Fixtures account is the 
 account with movable property of permanent value purchased for the general 
 use of the business; as, chairs, tables, stoves, shelves, counters, etc. 
 
 # 34. The Teams account is the account with horses, wagons and the 
 like, used for delivery of goods or other work. 
 
 # 35. The Expense account is the account of things to be consumed 
 for the general benefit of the business; as, books and stationery, fuel, hired 
 help, rents, etc. 
 
 # 36. The cash value of an account is the selling worth of the remain- 
 ing property charged to that account. This is found by making a list of the 
 property and its worth, called an inventory. 
 
 # 37. The gain of an account is the excess of the sum of its total credits 
 and its cash value over its total debits. 
 
 # 38. The loss of an account is the excess of its total debits over the 
 sum of its total credits and its cash value. 
 
 # 39. Once each year (or other period) the losses and gains are carried 
 from the commercial accounts to the proprietor's account. This process is 
 called closing the ledger. 
 
 # 40. The balance of the proprietor's account after the transfer of 
 gains and losses from the other accounts shows the net worth. 
 
PROGRESSIVE BUSINESS ACCOUNTING 21 
 
 EXPLANATION. In the following, accounts will be opened with Pro- 
 prietor, Cash, Merchandise, Furniture & Fixtures, Teams, and Expense. The 
 student will be required to post certain entries of transactions to these 
 accounts, after which he will take a trial balance to verify his posting. He 
 will then close the ledger, after which he will take a second trial balance 
 after closing. 
 
 DIRECTIONS. Take a sheet of journal and one of ledger, paging them. 
 Open accounts in the ledger with H. A. Oliver, Proprietor, allowing 10 lines ; 
 Cash, 15 ; Merchandise, 10 ; Furniture & Fixtures, 10 ; Teams, 10 ; Expense, 10. 
 
 In the purchase or sale of merchandise the student will not be required 
 to write any items or prices, as it is assumed that all items are entered on 
 bills, copies of which are retained for reference. 
 
 TRANSACTIONS. Dec. 1, 1909. H. A. Oliver begins business with fol- 
 lowing property: Cash, $2,560; Merchandise, cash value, $6,290; Teams, cash 
 
 value $725. 
 
 In this transaction, three accounts receive values. These should be journalized 
 as shown in model form on page 69. One account (Proprietor) gives the entire value. 
 This account should be credited with their sum. 
 
 Paid Edward Reed for rent of store room to January 1, 1910, $30. 
 
 Debit Expense. Why? Expense is the receiving account. 
 
 Paid the Eastern Mfg. Co. for furniture and fixtures as listed on their 
 bill, $269.40. 
 
 2. Sold O. 0. Wolcott, for cash, merchandise per bill, $69.54. 
 Sold Geo. Gerry, for cash, merchandise per bill, $132.60. 
 Sold James Smith, for cash, merchandise per bill, $16.47. 
 Paid cash for books and stationery for store use, $23.90. 
 Paid cash for feed and care of horses, $10. 
 
 4. Bought of Gwinnet, Lyman & Co. merchandise per bill, for cash, 
 $1,231.60. 
 
 4. Paid Oscar Anderson, cash for wages to date, $6. 
 (Debit Expense.) 
 
 6. Sold Frank Lightfoot, for cash, merchandise per bill, $295.81. 
 
 15. Sold to Edward Read the property charged to Teams, receiving in 
 payment a refrigerator and other fixtures per bill valued at $800. 
 
 18. Paid Oscar Anderson, wages to date, $24. 
 
 20. Sold Samuel Huntington, merchandise per bill rendered, • $650.29, 
 receiving cash in payment. 
 
 30. Paid John Sawyer cash for fuel, per bill, for heating purposes, $42.80. 
 
 DIRECTIONS. After above entries have been journalized correctly, 
 post, pencil foot the ledger, and take a trial balance, dating the trial balance 
 Dec. 31, 1909. Use a separate sheet of paper for the trial balance. 
 
 Read Infer. # 37, 38, 39, 40 again. 
 
 INFORMATION # 41. When the ledger is closed, the losses and 
 gains from all accounts are posted to one account called the Loss & Gain 
 account. This account shows all losses on the debit side, and all gains on 
 the credit side. The difference between the total losses and total gains is 
 called the net gain or the net loss. The net gain or loss is posted to the 
 proprietor's account or otherwise disposed of. 
 
 # 42. When a ledger is closed, and at other times to be mentioned later, 
 entries are made directly in the ledger account; i. e., they are not posted 
 
22 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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24 PROGRESSIVE BUSINESS ACCOUNTING 
 
 to the ledger from some other book. Such entries are made in red ink, the 
 red indicating that the entry is to be posted to the opposite side of some 
 other account or to the opposite side of the same account below the ruling. 
 When a red ink entry is posted to the opposite side of some different account, 
 post marks should invariably be placed in the folio columns of both accounts. 
 When the entry is posted below tbe ruling in the same account, the post 
 mark is not needed. Sometimes the posting of a red ink entry in a ledger 
 is called "carrying" the amount. This term is properly used when it refers 
 to posting from one side to the other of the same account. 
 
 # 43. To close a ledger, six steps are required. 
 
 First Step. Enter (red ink) the cash values of accounts showing loss 
 or gain, using the explanation "Inventory." 
 
 Second Step. Enter (red ink) the difference of accounts showing loss 
 or gain in the lesser side, writing In the explanatory space the title "Loss 
 and Gain." 
 
 Third Step. Rule the loss and gain accounts; carry (black ink) the 
 inventories to the opposite side below the ruling; post (black ink) the Loss 
 and Gain entries to the opposite side of Loss & Gain account, using for 
 explanation the name of the account you are closing. 
 
 Fourth Step. Enter (red ink) the difference of Loss & Gain account in 
 the lesser side, writing in the explanatory space the title (usually proprietor) 
 of the account to which the net gain or loss is to be posted, and rule the 
 account. 
 
 Fifth Step. Post (black ink) the entry of Loss & Gain account to the 
 opposite side of proprietor's account. Enter (red ink) the difference of pro- 
 prietor's account in the lesser side, using explanation "Net Worth," rule 
 the account, and carry (black ink) the net worth to opposite side below the 
 ruling. 
 
 Sixth Step. Enter (red ink) the difference of accounts that do not show 
 loss or gain in the lesser side, using the explanation "Balance," rule the 
 accounts, and carry (black ink) the balance to the opposite side below the 
 ruling. 
 
 As a proof of work, trial balances should be taken before and after 
 closing. The form and method of taking inventories are explained in A 95. 
 
 DIRECTIONS. After taking the trial balance, proceed to close the ledger. 
 
 Find the cash value of each account except the proprietor's. 
 
 Cash — ^By counting the cash we could find that the amount held is 
 $2,087.01, which is equal to the balance shown by the ledger account. The 
 account, therefore, shows neither loss nor gain. 
 
 Merchandise — By taking an inventory or list of all merchandise on hand 
 we could find that the cash value of goods not sold is $6,850. 
 
 Furniture & Fixtures — By taking an inventory of property charged to 
 this account, we could find that it is now worth $1,050. 
 
 Teams — No property remains in this account. 
 
 Expense — Of the property charged to this account, we could find that 
 what remains has a cash value of $40. 
 
 As directed in the first step, the student will now enter the present inven- 
 tories to the credit of Mdse., Furn. & Fixt., and Exp., as shown in the model, 
 using red ink. 
 
 As directed in the second step, enter the differences of Mdse., Furn. & 
 
PROGRESSIVE BUSINESS ACCOUNTING 25 
 
 Fixt., Teams, and Expense, using the posting title Loss & Gain. 
 
 Open an account with Loss & Gain, five lines below the last account. 
 Rule the loss and gain accounts as directed in the third step, observing closely 
 the model. Place footings between the addition lines and the double closing 
 lines showing the accounts in balance. Carry the inventories down in black 
 ink under the date Jan. 1, 1910. Notice there is no inventory to carry down 
 in Teams account. Post the Loss & Gain entries. 
 
 As directed in step four, enter the difference of Loss & Gain account, 
 placing in explanatory space the title of the proprietor's account; rule and 
 foot the account. 
 
 As directed in the fifth step, post to proprietor's account and close that 
 account. 
 
 The sixth step requires accounts not showing loss or gain to be balanced. 
 There is but one such account in this set, Cash. Rule, foot, and carry balance 
 down as in model. Be particular about the dates. 
 
 Take a second trial balance after closing, under date Jan. 1, 1910. 
 
 Write on the back of the trial balance paper the answers to the following 
 
 QUESTIONS. 1. What kind of property is represented by Furniture & 
 Fixtures account? 
 
 2. What does Teams account represent? 
 
 3. What does the Expense account represent? 
 
 4. What is the cash value of an account? 
 
 5. How is the gain of an account found? 
 
 6. How is the loss of an account found? 
 
 7. What is meant by the term Inventory? 
 
 8. How is an account showing gain or loss closed? 
 
 9. What is the purpose of opening the Loss & Gain account? 
 
 10. What does the balance of the proprietor's account show after receiv- 
 ing the net gain or loss? 
 
 11. Why are original entries in the ledger made in red ink? 
 
 12. How is a ledger account ruled to show that it is closed? 
 
 13. What are done with inventories and balances of accounts after the 
 accounts are closed? 
 
 14. Under what date is it customary to carry down the proprietor's 
 net worth, the account balances and the inventories. 
 
 15. Give the six steps of closing a ledger. 
 
 DIRECTION. Submit your work for inspection as instructed in pre- 
 vious exercises. 
 
 EXERCISE VIII 
 
 INFORMATION # 44. Purchase or sale of property refers to one 
 person exchanging value with another person. 
 
 # 45. Property is purchased or sold in exchange for cash, or for other 
 property, or for claims against others. 
 
 i^ 46. The usual business claims against others are notes or accounts. 
 
 # 47. Our ledger title for claims held against others in form of notes 
 is Notes Receivable. 
 
 # 48. Our ledger title for claims not in writing against others is the 
 name of the person against whom the claim is held. 
 
26 PROGRESSIVE BUSINESS ACCOUNTING 
 
 # 49. Our ledger title for claims in the form of notes held by others 
 against us is Notes Payable. 
 
 # 50. Our ledger title for the claims not in writing in favor of others 
 is the name of the person who has the claim against us. 
 
 # 51. Accounts with notes and with persons, like the cash account, are 
 assumed to have a fixed cash value, as they represent an actual amount in 
 money neither more nor less to be paid or received, hence they are not expected 
 to show losses nor gains. For this reason they are called financial accounts, 
 as opposed to the accounts representing things for which money is given or 
 received called commercial accounts. 
 
 # 52. For convenience in handling accounts, place the commercial 
 account first in a ledger, and the financial account in a second division. 
 
 The cash account is a financial account, but as it represents actual value in hand, 
 it is placed among the commercial accounts. In a business requiring comparatively 
 many cash entries, the cash account is placed in a separate cover from the rest of 
 the ledger accounts. 
 
 # 53. When closing a ledger, the financial accounts are left standing 
 without any change other than to balance them, unless their values have been 
 impaired. 
 
 EXPLANATION. The following exercise will as briefly as possible give 
 the opening, journalizing, posting, and closing of business transactions involv- 
 ing both commercial and financial accounts. 
 
 DIRECTIONS. Open a ledger of two pages, placing on the first page 
 the titles, J. B. Emery, Proprietor, 6 lines. Cash 8 lines. Merchandise 8 lines, 
 Furniture & Fixtures 5 lines. Expense 5 lines. On page 2, Notes Receivable 
 5 lines, Notes Payable 5 lines. Below the Notes Payable account enter the 
 personal accounts as they are opened, allowing 5 lines to each. Use a sheet 
 of journal paper, first page for journal entries and reverse page for trial 
 balance and answers. 
 
 TRANSACTIONS. June 1, 1909. J. B. Emery began business, investing 
 cash $3,000 and one note against D. Minkler for $1,000. 
 
 Debit Cash, and Notes Receivable. Be sure to give the name of the payer of the 
 note, as this name is to be carried to the explanatory space in the ledger when the 
 posting is done. 
 
 Paid to Geo. Coleman, store rent to July 1, $40. 
 
 2. Bought of Grant & Williams, on account, Mdse. per their invoice 
 dated June 1, $1,850.12. 
 
 Credit Grant & Williams' account, because that title represents a claim against 
 us given to others in exchange for the Mdse. received. 
 
 3. Bought of P. Keenan & Co., furniture and fixtures for store use, per 
 their bill of June 2, amounting to $360.49, giving our 30-day note in payment. 
 
 Credit Notes Payable, because that account represents a written claim given in 
 exchange for the property. 
 
 4. Sold 0. 0. Wolcott, on account, a bill of goods amounting to $69.42. 
 Debit O. O. Wolcott, because that title represents a claim received in exchange for 
 
 the property. 
 
 6. Sold Thomas Stone for his 10-day note, bill of goods amounting to 
 .$211.64. 
 
 Debit Notes Receivable, because that title represents written claims received. 
 
 7. Paid Grant & Williams on account, $500 cash. 
 
 Debit G. & W., because this is the title of the claim receiving the cash. 
 
 8. Received cash of D. Minkler, $1,000, in payment of his note. 
 Credit Notes Receivable, the giving account. 
 
PROGRESSIVE BUSINESS ACCOUNTING 27 
 
 10. Sold Geo. Taylor, on account, Mdse. per bill, $650.91. 
 
 10. Bought of Grant & AVilliams, Mdse. per invoice, on account, $729.40. 
 
 30. Bought of Gwinnett, Lyman & Co., for our 60-day note, Mdse. per 
 bill, $2,640.30. 
 
 DIRECTIONS. After the journal is correctly completed, post all ac- 
 counts, remembering to open accounts with Grant & Williams, 0. 0. Wolcott, 
 and Geo. Taylor. 
 
 After posting, take a trial balance on reverse side of journal paper, 
 dating the trial balance June 30, 1909 ; then close the ledger. 
 
 Enter inventories as follows: Merchandise, $4,325; Furniture & Fix- 
 tures, $360.49. The financial accounts are considered worth face. 
 
 Merchandise and Expense are the only accounts showing losses or gains. 
 Close them into Loss & Gain account, and balance Cash, Notes Receivable, 
 and Notes Payable. Rule only double closing lines when the columns do not 
 require totals to show equality in closing. 
 
 Post the inventories to the debit of the accounts, under date July 1. 
 Take a trial balance, July 1, using the same balances in the financial accounts 
 on page 2 as in previous trial balance. 
 
 QUESTIONS. 1. In what three ways is property sold? 
 
 2. In what forms are the two usual business claims against others? 
 
 3. What is our ledger title for notes in our favor? For notes against us? 
 
 4. What is the ledger title for claims against persons on open account? 
 
 5. What are financial accounts? 
 
 6. What are commercial accounts? 
 
 7. How are financial accounts treated when closing the ledger? 
 
 8. Why do we debit the name of the person who buys of us on account ? 
 
 9. Why do we debit Notes Receivable when a person buys of us for 
 a note? 
 
 10. What are included under the title of Notes Payable ? ^ 
 DIRECTIONS. Having completed the work, write the heading at top 
 
 of the two papers, placing journal above, ledger below; pin carefully as 
 before and pass in for inspection. 
 
 EXERCISE IX 
 
 INFORMATION # 54. Labor is a valuable thing which may be ex- 
 changed for cash. A person's labor value is measured commercially by the 
 amount of money he can earn in one year. 
 
 # 55. Interest or the use of money is a valuable thing measured by the 
 amount of money that one dollar will earn in one year. 
 
 # 56. Labor account and Interest account enter largely into many kinds 
 of business. 
 
 4^ 57. Persons who keep books to show the general results of their labor 
 or business should make a monthly journal entry which shows the result of 
 a month's transactions in labor, cash, etc., and should close the books once 
 each year. 
 
 :^ 58. The lousiness year does not necessarily begin on January 1. It 
 may begin on the month which makes the starting date most convenient for 
 the work in hand. 
 
 # 59. A person's small daily receipts and disbursements of cash should 
 be kept in a meorandum book from which the items are to be totalled and 
 charged to the appropriate accounts at the end of the month. 
 
28 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 EXPLANATION. In the following exercise the student will keep the 
 books of a capable young person, showing his accounts with labor and his 
 receipts and disbursements of cash during the year in which he takes the 
 course in a commercial college. Accounts are to be kept with Proprietor, 
 Cash, School Expense, Living Expense, Labor, Interest and Notes Payable. 
 The accounts here kept in a small way are like in nature to accounts of 
 similar titles if kept in a large business. 
 
 DIRECTIONS. Use a folded sheet of journal paper ; page it 1, 2, 3, and 
 4. And a folded sheet of ledger paper, paging it 1, 2, 3, and 4. 
 
 Open accounts in the ledger, allowing John Manning, Proprietor, 10 
 lines, Cash the remainder of page 1 ; School Expense 15 lines from top of 
 page 2, and Living Expense the remainder of page 2. Labor 15 lines from 
 top of page 3 ; give Interest and Notes Payable equally the remaining space 
 on page 3. Post the entries monthly. 
 
 TRANSACTIONS. On Sept. 1, 1909, John Manning begins a year's 
 business, the purpose of which is to devote his time in such a way as to make 
 the most use of it. He is a young man who is able to earn $6 per week or 
 $312 per year. "We will consider his coming year's work worth $300. He 
 has on hand cash, $100. He invests the cash and the year's work. Make an 
 opening journal entry, debiting cash $100, Labor $300, and crediting John 
 Manning, Proprietor, $400. 
 
 Remark: It will be noticed that the proprietor gives to the coming year's work 
 a cash value based on what he could earn as shown by the previous year. If he is 
 able to get more than that amount from his labor, the Labor account at the close of 
 the year will show a gain over expectation. If he gets less than that amount, the 
 result will show a loss. He should so direct his labor as to make it more valuable 
 than it was the year before. 
 
 
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 He buys a nine months' scholarship in a business college for $90, 
 and text books and stationery for $10, paying cash. (Debit School Expense, 
 because that part of the business receives value.) 
 
 Borrowed of his father, Ezra Manning, $150, on a note payable two 
 years from date with interest at 6 per cent, payable semi-annually. 
 
 Paid Mrs. Close, cash for board and room one month, $13. (Debit Living 
 Expense.) 
 
 Sept. 30. The Cash memorandum book shows that during the month 
 cash was paid for clothing, for room and board to Jan. 1, 1910; this does 
 not include the first month's board; for entertainments, for society, dues, 
 etc., $55,45, to be charged to Living Expense. There was paid for a diction- 
 ary and a penman's paper, $1.50. Charge to School Expense. During tht» 
 month no time was lost. One month's labor, valued at $25, was therefore 
 given to School Expense. The month's entries of debits and credits are to 
 be grouped in one entry, thus : 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 29 
 
 Note that the total debits equal the total credits. As this completes the 
 entries of the month, post to the ledger accounts. 
 
 Oct. 31. The memo, book shows paid during the month of October for 
 Living $5.30, for School Expense $2. One week's work in school was lost, 
 so that $20 will be considered the amount to pass from Labor account to 
 the School Expense account. (Make a journal entry as in September. Post 
 as before.) 
 
 Nov. 30. The memo, of cash payments this month shows Living Expense 
 to be $4.20, and School Expense $.30. A full month's labor was passed to 
 School Expense at $25. 
 
 Dec. 31. Cash payments for month per memo, are : Living Expense 
 $33.90, School Expense $27.80, which includes $22.50 passed from Labor 
 account as two days' school work was lost on account of sickness. (Journalize 
 and post.) Pencil foot the cash account to show amount now remaining. 
 Is the amount there shown $29.05 ? If so, the account is correct. 
 
 As your business year closes Aug. 31, 1910, instead of Dec. 31, 1909, place 
 the year date 1910 in the date column of all accounts under the last date. 
 Place year under the blue line in about the same way a pencil footing is 
 placed, so as not to interfere with the entry on the next line. 
 
 Jan. 31, 1910. The cash payments for the month, including three months' 
 board, as per memo, book, are: Living Expense $40.16, School Expense $3.80. 
 One full month's labor is given to School Expense $25. On Jan. 3, borrowed 
 cash $40 of father, Ezra Manning, giving a demand note for the amount.- 
 During the month there was received cash, per memo., for work done on 
 Saturdays, $5.50. The correct entry is as shown below. 
 
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 Feb. 28. Cash payments for February, per memo, book, are Living 
 Expense $8.50, School Expense $.80, one-half year's interest on father's 
 note $4.50. Labor passed to School Expense $25. Cash was earned by extra 
 labor during the month $8. (Journalize as in model.) 
 
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30 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Pencil foot the cash account to see the amount of cash on hand. If $24.79 
 is shown, the amount is correct. 
 
 March 31. The cash memo, shows paid for Living Expense $3.13, School 
 Expense $.80, Labor passed to School Expense $25. Cash was earned during 
 the month by extra labor, $7.50. 
 
 April 30. The cash memo, shows paid for Living Expense $15.20, School 
 $.20. Passed to School Expense from Labor account, $25. Earned during 
 the month by extra labor $8. Is the cash on hand shown to be $20.96? 
 
 May 31. Living Expenses in cash for month $15.50, School Expenses 
 $30.50, of which $5.50 is credited to Cash and $25 to Labor.- Earned during 
 the month, $7.25 in cash. 
 
 The nine months' course in college is now completed. Compare cash 
 receipts with cash payments to see amount on hand. If correct, the books 
 should show a balance of $7.21. 
 
 June 6. Began work for the Drew Manufacturing Co., as assistant book- 
 keeper, receiving a temporary salary of $9 per week. (Copy this memo, in 
 the explanatory space of the journal, entering the date but no titles or 
 amounts.) 
 
 June 30. From the memo, book appears the following cash and labor 
 items for the month : Paid for sundry items to be charged to Living Expense, 
 $21. Received month's salary in cash, $27. (Debit Living Expense and 
 Cash; credit Labor and Cash.) 
 
 July 31. Received July salary in casli, $38. 
 
 Paid during the month, cash for Living Expense, $19.50. 
 
 Aug. 31. Received August salary in cash, $40. 
 
 Paid for living expenses during the month, $20.25, and for the demand 
 note to Ezra Manning, $40; also interest on the demand note, $1.59, and six 
 months' interest on the $150 note, $4.50, making the interest in all, $6.09. 
 After all entries are posted, take a trial balance on an extra half sheet of 
 the journal paper. 
 
 The Drew Mfg. Co. have offered John Manning a salary of $60 per month 
 for the ensuing year, which he has accepted. (Make memo, in journal.) 
 
 Preparatory to closing ledger, account of cash on hand is made showing 
 $5.37. The salary earning capacity for the ensuing year is $720, to which 
 an inventory value of $700 is given. Enter this inventory to the credit of 
 Labor account, and carry the gains or losses of School Expense, Living 
 Expense, Labor, and Interest through Loss and Gain account to the pro- 
 prietor's account and close that account. Close the proprietor's account, 
 carrying down the net worth. 
 
 Take a trial balance. 
 
 On the reverse side of the trial balance, write answers to 
 
 QUESTIONS. 1. Has labor a cash value in business? 
 
 2. How is the value of labor measured? 
 
 3. How is the use of money valued? 
 
 4. How often should the earnings of labor and the personal expenses 
 be entered in the journal? 
 
 5. Does a business year always begin on January 1? 
 
 6. How often should the ledger of one's personal business be closed? 
 DIRECTION. Submit your work for examination. 
 
PROGRESSIVE BUSINESS ACCOUNTING 31 
 
 EXERCISE X 
 
 INFORMATION # 60. The common transactions in a mercantile busi- 
 ness are of three kinds: (1) the purchase of merchandise, (2) the sale of 
 merchandise, (3) the handling of cash. 
 
 #G1. In addition to the above kinds of transactions, there are a number 
 of unclassified transactions. 
 
 #62. A standard system of bookkeeping divides the original entries 
 among four books, viz. : the Purchase Book, the Sales Book, the Cash Book and 
 the Journal. 
 
 #63. The Purchase Book contains the entries for the purchases of mer- 
 chandise. 
 
 #64:. The Sales Book contains the entries for all sales of merchandise. 
 
 #65. The Cash Book contaihs the entries for all receipts or payments 
 of cash. 
 
 #66. The Journal contains all entries not provided for in the other 
 three books. 
 
 #61. By dividing the original entries among four books, the amount of 
 posting can be reduced, the entries can be more conveniently made, and the 
 records of past transactions can be found more readily. 
 
 #68. In a mercantile or buying and selling business, the accounts with 
 persons require the most careful use of explanatory columns in the ledger, 
 because the facts of an account are repeatedly referred to when paying or 
 collecting bills. 
 
 #69. The ledger should be divided into three parts: (1) general ac- 
 counts, (2) purchase accounts, (3) sales accounts. When a business becomes 
 large enough, these three parts are placed in three separate ledgers. 
 
 #10. All purchases of merchandise are footed in the purchase book and 
 the total is posted to the debit of the Merchandise account on the last day of 
 the month. 
 
 #11. The cash book is so arranged that the debit and credit footings 
 are the same as they would be if posted to the ledger, hence no cash account 
 is required in the ledger. 
 
 EXPLANATION. In this exercise the student will make illustrative 
 entries in the four books of original entry above outlined, will post same 
 and will take a trial balance. Keep clearly in mind that every transaction 
 involves a debit and a credit.. Also keep inniind that where there are many 
 debits to Merchandise in the purchase book, or many credits to Merchandise 
 in the sales book, much time and labor can be saved by posting all of the 
 entries in one total rather than by posting one at a time. 
 
 DIRECTIONS. Take one folded sheet and one half sheet of journal 
 paper. Page the folded sheet 1, 2, 3, and 4, and the half sheet page 1. Use 
 page 1 of the folded sheet for the purchase book, pages 2 and 3 for a cash 
 book, and page 4 for a sales book. Use page 1 of the half sheet for the 
 journal and head them as shown in model. 
 
 Take a folded sheet of ledger paper and page it 1, 2, 3, and 4. Use pagt-s 
 1 and 2 for general accounts, 3 for purchase accounts, and 4 for sales accounts. 
 "Write these headings on the ledger as on the other books. Divide the ledger 
 space equally among the six accounts on pages 1 and 2. Clayton Smith, 
 Propr., Merchandise, Furniture & Fixtures, Expense, Notes Payable, Notes 
 
32 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Keceivable. Space the personal accounts one-third page each as required. 
 It is important that the student follow all instructions as outlined in the 
 notes following the transactions. 
 
 
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 TRANSACTIONS. July 1, 1909. Clayton Smith began business as a 
 dealer in galvanized grain bins used by farmers for storing wheat, oats, barley, 
 etc. He invested cash $500. 
 
 A memo, of the opening should be made in the journal. (See model.) The cash 
 invested should be entered in the debit side of the cash book. This entry has the 
 effect of debiting Cash because the cash book is the cash account. The account of 
 Clayton Smith, the proprietor, is credited from the cash book. Notice that there is 
 space in the cash book for title to be posted, and for explanation. After making the 
 entry debiting Cash, post from debit side of cash book to credit side of proprietor's 
 account. In the ledger folio space write "C2" to show that the posting was taken 
 from the cash book page 2. After posting, place the ledger page in the folio column 
 of the cash book. 
 
 Paid cash for rent of ware house one month $15. 
 
 This should be entered in the credit side of the cash book, thus crediting the 
 Cash account. The debit title, Expense, is written in the title column and the 
 explanation follows. (See model.) After entry, post at once to the debit of Expense. 
 Post mark in cash book. What account is debited? What account is credited? 
 
 Bought an office desk and chairs for cash $12. (Enter in cash book an^ 
 post to Furniture & Fixtures.) 
 
 Purchase of property other than merchandise cannot be entered in the purchase 
 book as the total purchases charge to Mdse. 
 
 Paid for a desk room in an office one month $6. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 33 
 
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 Paid for lumber for shelving in ware house, $18.50, (Charge Furniture & 
 Fixtures.) 
 
 Sent an order to Waterloo Metal Culvert Co., for a 1000 bu. galvanized 
 grain bin enclosing in the order cash per draft for $54, to apply on the 
 purchase price. 
 
 This purchase is not made until the article ordered is sent. The only entry 
 required is the payment in the cash book. Debit Waterloo Metal Culvert Co. Open 
 this account at the top of page 3 of ledger. 
 
 Pencil foot the cash book to show the amount on hand. If the amount 
 shown is $394.50 the work is correct. 
 
 July 5. Received from Waterloo Metal Culvert Co., by freight, 1 grain 
 bin, 1,000 bu., billed at $108, account 10 days. 
 
 This purchase of merchandise should be entered in the purchase book as shown 
 in model on page 34. 
 
 After entry is made, post the amount to the credit of the firm from whom pur- 
 chased. As 10 days' time of payment is allowed, write "acct. 10 da." in the explanatory 
 space of ledger. After posting, be sure to post mark the folio column of the purchase 
 book. 
 
 July 10. Paid for livery hire in soliciting orders for grain bins, $12. 
 (Charge Expense.) 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
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 x^Lg.g,g^g^<;:::^t:-^^^itv<-^^ f /> aL-^>t^zi. ' 
 
 ^y kjT'-- /i^-.>-^^^C^'^^pz^'4-r--tx.<:<,,^~^^ a^ /o. 
 
 w 
 
 / — 7^' 
 
 / a o — 
 
 // 
 
 / yJ^-tzL..^^ oA^ 
 
 J^ 
 
 ^^^ 
 
 @ $108 
 @ $120 
 @ $132 
 to pay balance due on bill 
 
 July 12. Received invoice from Waterloo Metal Culvert Co., on 30 days 
 account consisting of 
 
 6 metal grain bins 1000 bu. 
 4 '' " '' 1250 bu. 
 
 1 '' '' " 1500 bu. 
 
 July 14. Sent cash to Waterloo M. C. Co. 
 of July 5, $54. 
 
 Enter in cash book as before and post to debit of Waterloo Metal Culvert Co. 
 Observe that the two debits of $54 each equal the one credit of $108. This shows that 
 the bill is paid. When a bill is paid make X mark opposite the credit and the balancing 
 debit amounts to show that settlement of that part has been made. (See model.) 
 
 July 15. Sold AVilliam Floyd 1 grain bin, 1000 bu., on account, $135. 
 
 Enter in sales book as shown in model. Open account with William Floyd at top 
 of page 4 of ledger. Enter ledger page in sales book after posting. 
 
 Sold Frank Lightfoot, on account, 3 grain bins, 1250 bu., @ $150, 1 grain 
 bin, 1,500 bu., @ $165. (Open account page 4, one-third down the page.) 
 
 Received of Frank Lightfoot, cash to apply on above purchase, $350. 
 
 Enter in the debit side of cash book as in model and post to the credit of Frank 
 Lightfoot's account. 
 
 July 16. Bought of Manning, Dale & Co., 2 metal grain bins, 1,200 '.u., 
 @ $112.50; 2 metal grain bins, 800 bu., @ $90.00, on account. 
 
 Enter in purchase book and open account as before. Remember that purchase 
 accounts are on page 3 of ledger. 
 
 Paid Waterloo Metal Culvert Co., on account, $500. 
 
 Enter in cash book; post to ledger. 
 
 Paid xVTanning, Dale & Co., cash on account, $50. 
 
 July 17. Sold George Taylor, on his 30-day note, 2 M. D. & Co. 800 Ini. 
 bins @ $112.50. 
 
 Enter in sales book as in model. Post to Notes Receivable account in ledger. 
 
 Sold George Gerry on account 1 M. D. & Co. 1200 bu. bin @ $140. 
 
 Open account on page 4. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 35 
 
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 Sold Edward Read for his 6 months' note, 3 AV. M. C. & Co. 1000 bu. bins 
 @ $135, 1 M. D. & Co. 1200 bu. bin @ $140. 
 Enter and post to Notes Receivable. 
 July 22. Sent AVaterloo M. C. Co. a 60-day note for $760 to balance 
 
 their account. 
 
 A journal entry is required. Debit W. M. C. Co.; credit Notes Payable. See model 
 entry. When posting, use X marks. 
 
 Received cash of William Floyd in full of account, $135, 
 
 Place X marks before the amounts to show payment. 
 
 July 24. Sold William Floyd on account 2 AV. M. C. Co. 1000 bu. bins 
 @ $135, 1 W. M. C. Co. 1250 bu. bin @ $150. 
 
 Bought of Waterloo Metal Culvert Co., giving in payment a 90-day note, 
 5 W. M. C. Co. 1000 bu. bins @ $108, 1 W. M. C. Co. 750 bu. bin @ $100. 
 
 Post to credit of Notes Payable. 
 
 July 31. Paid for livery hire $18, cash. (Charge Expense.) 
 
 DIRECTIONS. As this is the close of the month, totals are to be posted 
 and a trial balance taken. Rule an addition line at the foot of the amounts 
 in the purchase book, foot and double rule as shown in model. All of the 
 items in this book have been posted to the credit of the firms from whom the 
 purchases were made. The total is to be posted to the debit of the merchandise 
 account. Indicate this posting and post mark as there shown. 
 
 Foot, rule, and post total of sales book to the credit of the Merchandise 
 account. Pencil foot the debit and credit columns of the cash book, and 
 carry the pencil footings to the second line. The total receipts less the 
 footings to the second line as shown in model. The total receipts less the 
 
36 PROGRESSIVE BUSINESS ACCOUNTING 
 
 total payments, shows a cash balance of $245.50 remaining. Enter this bal- 
 ance in the credit side in red ink and rule addition lines on the final debit 
 and credit column. Be sure to rule the addition lines at equal distances 
 from the top,, not one above the other. After ruling, carry the balance below 
 the ruled space as in model. 
 
 Take a trial balance, entering the cash balance first, and the ledger 
 accounts after. This is to be placed below the entries on page 1 of the journal. 
 
 Close the ledger; the financial accounts following expense need not be 
 balanced. The inventories are: 
 
 Mdse. 6—1000 bu. W. M. C. Co. bins @ $108, 1—750 bu. W. M. C. Co. 
 bin @ $100. Furniture & Fixtures, valued at $20. Place the Loss & Gain 
 account at foot of page 2. Take a trial balance after closing and copy it 
 below the trial balance already taken. 
 
 On the back of the journal sheet write answers to the following 
 
 QUESTIONS. 1. What are the three common kinds of transactions 
 in a mercantile business? 
 
 2. Are there occasionally other kinds of transactions? 
 
 3. What four books of original entry may be used? 
 
 4. What entries does the purchase book contain? 
 
 5. What entries does the sales book contain? 
 G. What entries does the cash book contain? 
 
 7. What entries does the journal contain? 
 
 8. By dividing the original entries among four books, what three 
 advantages are secured? 
 
 9. What can you say of the use of the explanatory column of the 
 ledger in personal accounts. 
 
 10. The ledger is divided into what three parts? 
 
 11. When a purchase book is used, how is Mdse. debit posted? 
 
 12. When a sales book is used, how is the Mdse. credit posted? 
 
 13. Why are the cash book totals not posted to the cash account in the 
 ledger ? 
 
 14. How is the cash book balanced? 
 
 15. What two books must be referred to in taking a trial balance? 
 DIRECTIONS. After answering the above questions, pin your work as 
 
 before directed, purchase book at top, then ledger, then journal, with ques- 
 tions at back, and submit for inspection. 
 
 " "^vjvi^i 
 
PROGRESSIVE BUSINESS ACCOUNTING 37 
 
 Set A 
 
 BUSINESS PRACTICE 
 
 TO THE STUDENT : 
 
 If you have mastered the principles presented in the preceding ten exer- 
 cises, you will find the following work not only comparg-tively easy, but very 
 profitable as well. At this point, you are to begin business transactions in 
 your own name. You will make business papers, handle cash, buy and sell, 
 collect accounts and in other ways conduct your business as a business man. 
 If you are independent in action, if you use your own mind to think out 
 your problems, if you are industrious, patient and thoughtful, you will 
 develop into one of the most valued members of society — a well-poised 
 business man. Kindly remember that however important a person's work, 
 he cannot afford to slight the details, for the little things like small coins 
 will eventually amount to important values. Never avoid any sensible 
 problem, however hard. Grind the rough kernels of the business world into 
 the finest flour. Remember that of the thousands that have a smattering of 
 bookkeeping knowledge, very few are masters of accounting. The few that 
 are masters can command business success at almost any time, almost any- 
 where. 
 
 EXPLANATION. You are to begin a jobbing business which you will 
 own as sole proprietor. You will be instructed, as each transaction arises, 
 how to conduct it in the proper way, how to prepare the proper papers, etc. 
 You will begin business with a capital in cash. This you will take care of 
 exactly as a good business man should. The work is divided into periods 
 for the purpose of measuring your progress, but these periods need not inter- 
 fere with your always using the current date for your transactions. Keep 
 your desk, books, papers, etc., in such a condition that any matter of past 
 business can be referred to promptly when desired. 
 
 DIRECTIONS. Have journal, cash book, purchase book, sales book, 
 and ledger ready for use. 
 
 The Journal, Cash, and Trial Balance will be a book of twelve pages. 
 Use pages 1, 2, and 3 for Journal; 4, 5, 6, and 7 for Cash Book, and pages 8, 
 9, 10 and 11 for Trial Balances and Statements. 
 
 The Purchase Book, Sales Book and Inventory Book will be in one cover. 
 Use twelve pages, 1 and 2 for the Purchase Book, 3 to 10 for the Sales Book, 
 and 11 and 12 for Inventories. 
 
 The Ledger will require four folded sheets with the index at the front. 
 Page it 1 to 14, beginning with the sheet following the index. Allow pages 
 1 to 6 for general accounts, 7 to 9 for purchase accounts, and 10 to 14 for 
 sales accounts. 
 
 INFORMATION # 80. In a ledger of any size it is necessary to transfer 
 all of the titles to an alphabetical list called an index. (See model.) The 
 titles are entered as written in the ledger with the page on which the account 
 may be found following, so that the page on which any desired account is 
 kept may be promptly found. In the case of the names of persons or firms, 
 the surname is placed first, followed by the initials or given name. A book- 
 keeper should form the habit of indexing accounts as soon as entered. 
 
38 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 INDEX. 
 
 1 & J 
 
 R 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 39 
 
 DIRECTIONS. Place the following general accounts in your ledger and 
 index them when placed: Student's name, Proprietor 1, Merchandise and 
 Furniture & Fixtures 2 (each one-half page), Expense 3, Interest & Dis- 
 count and Merchandise Discount 4 (each one-half page), Notes Payable and 
 Notes Receivable 6 (each one-half page). 
 
 When purchase or sales accounts are opened, allow each one-third page, 
 beginning with the first page of the purchase or sales divisions. 
 
 EXPLANATION. Your business in the following transactions is that 
 of Jobber, a person who buys from manufacturers or importers and sells to 
 dealers certain commodities in quantities. Your location is that of an im- 
 portant trade center and your dealings will be with city customers. 
 
 A 1. Begin business with a cash capital of $5,000. 
 
 DIRECTIONS. The currency for opening is at the desk of the teacher, 
 who has it in charge for you. Count the money carefully and if correct, 
 make the opening entry. Use the local address and the current date. Make 
 memo, of the opening in the journal (see form in Ex. X). Make entry for 
 posting in cash book as in Ex. X, and post to the credit of the proprietor's 
 ledger account. Do not forget to post mark. Place the currency in your 
 cash drawer. Do not proceed until you are sure that you actually have the 
 right amount of cash, and that the journal, cash book, and ledger records 
 are correct. 
 
 INFORMATION # 81. It is the principal business of a bank to keep 
 on deposit the cash of business men and to lend them money when they 
 require it. Business men usually deposit the greater part of their cash on 
 hand, so as to avoid the risk of carrying any large amount of money in the 
 cash drawer. The money deposited remains in the bank subject to the order 
 of the depositor. The banks require that when cash is deposited, the depos- 
 itor make a deposit ticket on which is given the date, name of depositor, 
 
 OSITIiO BY 
 
 DEPOSITED IN THE 
 
 Citizens Savings Banii 
 
 WATERLOO, lOfVA 
 
 :Z 190-^ 
 
 FIRST NATIONAL BANK 
 
 OF WATERLOO, IOWA 
 
 By 
 
 Specify the banks on which check* are drawn 
 Dollars Cents 
 
 Banlc Kotf \^iP ^ 
 
 Gold 
 
 Silver 
 
 Check$ 
 
 PLEASE LIST EACH 
 
 CHECK SEPARATELY 
 
 
 DOLLARS 
 
 CENTS 
 
 
 f 
 
 /^ 
 
 
 
 
 
 ^o 
 
 :? / 
 
 
 / ^2. 
 
 f "^ 
 
 
 J^ 
 
 t^<3 
 
 ' 
 
 
 
 
 V 
 
 
 
 
 
 ^ 
 
 
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 7^' 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 and the amount and kind of money deposited. The bank provides a pass 
 book, to be held by the depositor. In this book the bank teller places the 
 date and amount of each deposit. These entries in the pass book are in the 
 nature of a receipt for all moneys left. The pass book is carried by the 
 depositor and should always be taken to the bank when a deposit is to be 
 made. 
 
 A 2. Deposit in the bank all cash on hand, $5,000. Place the bills neatly, 
 right side up, with deposit ticket at top, and all in the pass book. Secure a 
 package of deposit tickets and pass book of your banker. 
 
 In passing any papers out, write the transaction number in the upper 
 left corner. 
 
 The teller of the bank will require you to leave your signature in a 
 book or on cards kept for that purpose, to compare with other signatures 
 of yours on other papers. Having made the deposit, examine the pass book 
 to see that the teller has entered the amount correctly. 
 
 INFORMATION # 82. A check is an order drawn on a bank, directing 
 the bank to pay a certain sum of money to the proper person presenting it. 
 The bank, after paying the check, charges the amount against the amount to 
 the credit of the depositor. The check should be filled in writing with great 
 care, to guard against its being altered by any persons who handle it. 
 A check is usually made payable to the order of some person, which signifies 
 that the person to whom it is written (called the payee) can either present 
 it to the bank, or he can pass it as cash to some other person by indorsement ; 
 i. e., writing name across the back, and the latter person can present it for 
 payment. The person , drawing or signing the check is called the drawer. 
 The bank on whom the check is drawn is called the drawee. 
 
 Checks are most conveniently kept in books, from which they may be 
 removed as issued. The part remaining in the book is called the stub, and 
 on it is the full record of the check. The stub should also show the balance 
 in the bank, each check amount being deducted from the previous balance 
 and the remainder carried forward to the next stub. 
 
 The check stub should be filled before filling the check. See model stub 
 and check. 
 
 Ko.-ZL- 
 
 
 FOR 
 
 Bro't (or'd 
 Deposited 
 Total 
 
 This Check 
 C«r'd for'd 
 
 <^^/l? 
 
 Walerloo, Iowa, J^"4v^^ / , 19^2^ 
 
 No.^ 
 
 Pay tn <^^-^g'<^-^>'3^t-^g^o-t-^:^^-.g-^^ (£U^z:Lr!L:zl^ (^ nr Order, $!^^!£J3i: 
 
 y^ j^ "^.^ — ■ — — 
 
 Dollars 
 
 i^r4g*^€<>^^x^>^-gZ<?-Z-'?^---fc-^^^ 
 
 A3. Rent of your real estate company a store room and basement at 
 168 Market St. for a period of one year, paying cash by check for one month's 
 rent, $50. 
 
PROGRESSIVE BUSINESS ACCOUNTING 41 
 
 DIRECTION. Fill out stub and check as shown in model, detach 
 the check and carry the balance of your deposit left in the bank forward to 
 the next stub. At the real estate office, inform the agent that you desire to 
 rent the property as mentioned. Hand him the check for the first month's 
 rent and take his receipt for the amount. The receipt which he gives you 
 should state what the payment is for. The real estate agent will prepare 
 and hand you a copy of the lease (the contract between landlord and tenant) 
 as soon as practicable. 
 
 INFORMATION # 83. Vouchers in business are the written evidence 
 of business transactions. The receipt given you above is a voucher showing 
 that you have paid a certain amount of cash for a certain purpose. 
 
 DIRECTIONS. Stamp the receipt on the back with the voucher stamp, 
 giving it the voucher "No. 1." Show the debit and credit titles affected 
 by this transaction on the back of the voucher. Make entry in the cash book, 
 charging Expense. For explanation write ''Rent one month V. #1" to 
 indicate that a full record of the transaction will be found on voucher No. 1. 
 Place the voucher in the paid vouchers file, and post the cash book entry to 
 the ledger. The payment of cash by check has the same effect on your cash 
 balance as a payment in currency would have. 
 
 A 4. Pay the Acme Furniture & Fixtures Co. a bill of office and store 
 furniture and services amounting to $362. Give your check for the amount 
 and take a receipted bill. Stamp this bill on the back V. #2, show debit 
 and credit titles and make a cash book entry charging Furniture & Fixtures, 
 and post the entry to the ledger. File voucher No. 2 away after folding it 
 in such a way as to place the number uppermost. 
 
 A 5. Draw from the bank $50, to be spent in sundry small cash pay- 
 ments; about ten bills of currency. 
 
 DIRECTIONS. Write a check payable to "Cash" and place on the back 
 of the check the denominations of the bills wanted. Deduct this check from 
 your bank balance, but make no cash book entry, since this is simply 
 changing the kind of cash you hold without changing the amount. 
 
 A 6. Pay Martin Cole $4.25, and Evert Houser $4 for help in arrang- 
 ing store. Take $8.25 to the general agency and hand the cash with a ticket 
 explaining the transaction to the clerk. There is no voucher required for 
 this transaction. (Charge Expense.) 
 
 A 7. Buy of the Mullen Stationery Co. books and stationery for office 
 ase amounting to $28.75, for which pay by check. Receive their receipted 
 bill, which stamp on back and number V. #3. Enter in cash book to debit 
 of Expense, and post. 
 
 A 8. Buy a cash register of A. DeVoe, paying for it by check, $90. 
 Receive receipted bill as usual, which number "V. #4." Enter and post. 
 
 A 9. Buy of the City Ice & Fuel Co. coal amounting to $28.60, for which 
 give your check. (Number and file their voucher; charge Expense.) 
 
 AID. Balance the cash book: (1) Pencil foot the credit side and sub- 
 tract from the total of the debit side on loose paper. (2) Count the cash 
 on hand and add it to the amount in the bank. (3) The two together should 
 equal the balance shown by the cash book. If correct, the balance is. $4,432.40. 
 Write the balance in red ink, rule, foot, and carry down, as you were 
 instructed in Ex. X. 
 
42 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Cut a ticket from your writing paper exactly four inches from left to 
 right and three inches from top to bottom. Fill this card as shown in model 
 form and pass it to the teacher's desk. 
 
 ^2> 
 
 Ot-t^^'-i^ / f^ / f d? f. 
 
 ^ /. 
 
 7 
 
 ^=.^-Ei:«e.>^ 
 
 
 A 11. Buy of Kuhn, Aldrich & Co. the following goods : 
 20 bx. #1 Chocolate. 
 20 cs. Condor Coffee. 
 10 cs. Gem Glucose Syrup. 
 10 cs. Good Quality Ground Pepper. 
 25 pi. Town Talk Mixed Candy. 
 
 Milwaukee, Wis. Q^^^n^ /^r'/^/?a. 
 
 Please deliver 
 
 ^ k/^—^J^. ^^z^*t22iL 
 
 ./^TZ-C^-^f-^-^ C-^t!g-<;>-Z.--g:tS^ 
 
 Terms ^^''^^^z^ 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 43 
 
 DIRECTIONS. The order for the goods should be written on an order 
 sheet, of which a carbon copj^ is to be retained in the office. Insert the 
 carbon carefully between the sheets and write the order with pencil as shown 
 in the form. 
 
 Kemove the upper sheet and take it to the office of Kuhn, Aldrich & Co., 
 who will bill the goods to you at ten days. On receipt of the bill, compare 
 it with the order, and if the goods delivered are as ordered, compute the 
 extensions and addition. If found correct, write O. K. and your initials at 
 the bottom of the bill. Fold the bill so that it will easily slip into your 
 voucher file, stamp it with a voucher stamp on the back, and show that the 
 debit title is Mdse. and the credit title is K. A. & Co. Enter the bill in your 
 purchase book, as in model, and place the bill (V. #6) in the file for 
 vouchers payable. 
 
 
 ■%>^^ • 
 
 Cht-t=^.^.^.e^ yi.^^ 'Z/'^ X 
 
 'J_J_J- 
 
 ro 
 
 Open an account with the firm of whom purchased at the top of page 
 7 of your ledger, index the account, and post the credit, writing in the 
 explanatory space of ledger "V. :^6 a/c 10 da.," folio mark in ledger and 
 in purchase book. 
 
 A 12. Buy of Esmond Canning Co. on account: 
 15 cs. Ideal Tomatoes. 
 15 cs. Red Raspberries. 
 50 cs. Royal Sweet Corn. 
 50 cs. Lima Beans. 
 10 cs. Holt Co. Gooseberries. 
 DIRECTIONS. Fill the order sheet, present it, and receive bill, which 
 you will audit, and enter as before. Be careful that no mistakes in billing 
 are made. Note carefully the terms. Stamp "V. #7" and show debit and 
 credit titles as instructed in A3. Enter in the purchase book and file the 
 vouchers with vouchers payable. Open an account with Esmond Canning 
 Co. on page 7, one-third from top. Index, post, and post mark. Notice that 
 the terms of this bill differ from the terms of the previous bill. 
 A 13. Buy of the Ajax Biscuit Co. on account: 
 10 doz. 1:;^ Box Oatmeal Crackers. 
 20 doz. 1# Box Graham Crackers. 
 20 cs. Big White Elephant Biscuit. 
 50 doz. 3# Soda Crackers. 
 10 doz. 1# Delicoes. 
 5 can 12# Emperor Bars. 
 5 can 10:#: Mapline Wafers. 
 Proceed as before. The character # after a number moans pounds. 
 A 14. Sell to W. A. Damon, 129 Sixth St., on account 10 days: 
 
 1 bx. #1 Chocolate 
 
 2 pi. T. T. Mixed Candy 
 
 1 cs. 10# G. G. Syrup 
 5 cs. Royal Sweet Corn 
 
 2 cs. B. AV. Elephant Biscuit 
 
 @ 
 @ 
 @ 
 (5) 
 
 $4.20 
 $2.40 
 $2.50 
 $2.05 
 $2.35 
 
44 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 DIRECTION. Make a full entry of this sale in Sales Book as shown in 
 the model form below: 
 
 
 £_/_£. 
 
 ^^r>^^:l^^->-^-.^^^^^y 
 
 ^a^/ ,1 ^i^y 
 
 / ^ ^ 
 
 ■Qg^l^^-g^^.^^ 
 
 ^ 
 
 i 
 
 Ji ^-^iii^ -^^ ^fe.<,^<t:.c-»/ . 
 
 -? *^f 
 
 ■^ fa 
 
 / (£</. /O^-^^. J2/C^<-.-i.-<^ 
 
 J^ 
 
 c?,^ ^cS»-»^-»g-^^ I 
 
 .^=^:±^2:i22^±:Jx. 
 
 / c 
 
 J? <w 
 
 2->J^y~ , 
 
 J. / ^AJ- 
 
 Copy this sale on a bill head, using one of your bills received as a 
 model. When the bill is correct deliver it to W. A. Damon. Open an account 
 with W. A. Damon at the top of page 10 and index it. Do not forget to 
 place the street number after the name of the account. The street number 
 may not be mentioned again in future transactions, but should be found 
 by referring to the ledger. Post the sale to the debit of this account, naming 
 the terms as in purchase entries. 
 
 A 15. Sell Cole & Camp, 38 Market St., at 10 days net: 
 
 10 cs. Lima Beans @ $1.90 
 
 2 cs. Condor Coffee @ $8.20 
 
 5 doz. !:#: Graham Crackers @ $1.30 
 
 8 doz. 3# Sodas @ $3.00 
 
 1 can 12# Emperor Bars @ $1.68 
 
 1 can 10# Mapline Wafers @ $1.80 
 
 Enter and bill as before. Open the account on page 10, one-third from 
 top. Hereafter bill sales at 10 days net until otherwise directed. 
 A 16. Sell DeLong & Co., 1248 Ebersole Ave., 
 
 2 cs. Holt Co. Gooseberries @ $2.60 
 1 cs. Red Raspberries @ $2.90 
 
 1 cs. 1/4 # Extra Pepper @ $3.00 
 10 cs. Ideal Tomatoes @ $2.60 
 
 2 doz. 1# Oatmeal Crackers @ $1.30 
 Enter and bill as before. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 45 
 
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 A 17. Buy of Sunset Fruit Co. on account: 
 40 bx. #1 D. Peaches. 
 40 bx. AA Prunes. 
 40 cs. 4^1 Raisins. 
 40 bx, Evap. Apples. 
 Fill order sheet, which present and receive bill as usual. 
 A 18. Sell Courtney & Son, 427 Sixth Ave., on account: 
 
 5 OS. Condor Coffee @ $8.20 
 
 10 pi. T. T. Mixed Candy @ $2.40 
 
 5 cs. 10# G. G. Syrup @ $2.40 
 
 5 cs. Ideal Tomatoes @ $2.60 
 
 3 cs. Red Raspberries @ $2.90 
 10 bx. D. Peaches @ $5.40 
 
 4 bx. Evap. Apples @ $4.60 
 Complete the transaction as usual. 
 
 A 19. Write a check in payment of voucher payable #6. Take the 
 bill and check to the firm to whom payment should be made and request 
 the representative of that firm to receipt the bill when you present the 
 check. Return the receipted bill to the file for vouchers paid. Make entry 
 in the cash book and post to the account affected. 
 
 CAUTION. Be careful to keep both paid and unpaid vouchers in numer- 
 ical order with the last number at top, so that any one can be readily found 
 if desired. Remember to cross off the paid bills from the ledger as shown 
 in a previous model. 
 
 A 20. Examine your cash book. Pencil foot the purchase and sales 
 books. Prepare and head a ticket 3 in. by 4 in., as in A 10, and write on it 
 answers as follows: 
 
 Cash in drawer $ 
 
 Cash in bank $ 
 
 Total cash $ 
 
 Total purchases to date $ 
 Total sales to date $ 
 
 A 21. Buy of Kuhn, Aldrich & Co., on account, 
 50 bx. Mint Lozenges. 
 50 bx. Wintergreen Lozenges. 
 20 cs. P. C. Syrup. 
 DIRECTION. Carry the total of sales book forward to top of next page, 
 as shown in the form. 
 
46 PROGRESSIVE BUSINESS ACCOUNTING 
 
 A 22. Sell Mussett & Dennis, 420 Eighth Ave., on usual terms: 
 20 bx. Mint Lozenges @ $ .80 
 
 5 es. Red Raspberries @ $2.90 
 
 1 OS. H. C. Gooseberries @ $2.60 
 8 doz. 1:^ Graham Crackers @ $1.30 
 
 4 cs. Big White Elephant @ $2.40 
 
 5 bx. D, Prunes @ $4.25 
 A 23. Sell Chase Bros., 562 Walnut St., on usual terms: 
 
 12 es. #1 Raisins @ $2.25 
 
 12 cs. Evap. Apples @ $4.60 
 
 4 cans 12# Empire Bars @ $1.68 
 
 5 doz. 1# Delicoes @* $1.30 
 12 doz. 3# Sodas @ $3.00 
 
 7 cs. H. C. Gooseberries @ $2.60 
 
 A 24. Sell Mary E. Curley, 468 Walnut St., on usual terms: 
 
 5 bx. 12# Chocolate @ $4.20 
 
 6 cs. Condor Coffee @ $8.20 
 20 bx. Wintergreen Lozenges @ $ .80 
 
 5 cs. P. C. Syrup @ $1.85 
 
 6 cs. Red Raspberries @ $2.90 
 
 A 25. Sell to Eagle Hotel Co., 588 La Fayette St., on usual terms: 
 
 25 cs. Royal Sweet Corn @ $2.05 
 
 10 cs. Lima Beans @ $1.90 
 
 2 doz. 1# Oatmeal Crackers @ $1.30 
 2 doz. 1# Graham Crackers @ $1.30 
 2 bx. #1 D. Peaches @ $5.40 
 2 bx. Prunes @ $4.25 
 
 DIRECTION. When the bottom of the sales book is reached, foot the 
 sales and carry forward to the next page, as before. 
 
 A 26. You are out of Ideal Tomatoes, Red Raspberries, and 11. C. Goose- 
 berries. Buy 50 cases each of the firm who last sold them to you. 
 A 27. Sell M. C. Remington, 29 River St., usual terms: 
 
 10 cs. Ideal Tomatoes @ $2.60 
 
 5 cs. Red Raspberries ' @ $2.90 
 
 7 cs. Condor Coffee @ $8.20 
 
 5 bx. 12# Chocolate @ $4.20 
 
 1 es. 1/4 # Extra Pepper @ $3.70 
 
 6 doz. 1# Oatmeal Crackers @ $1.30 
 A 28. Sell W. B. Bennett, 37 River St., usual terms : 
 
 5 doz. 3# Sodas @ $3.00 
 
 5 doz. 1# Delicoes @ $1.30 
 
 5 cs. Big White Elephant @ $2.40 
 
 2 cs. #1 Raisins @ $2.70 
 
 3 pi. T. T. Mixed @ $2.40 
 
 A 29. Collect cash from Courtney & Son in full payment for the invoice 
 charged against them. 
 
 DIRECTIONS. Fill a receipt form showing not only the amount of cash 
 received, but also exactly what it was to pay. Sign the receipt with your 
 usual signature. See form. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 47 
 
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 Waterloo. KnsKit^, CJz^-t^^ J? -^ J! 9^!^. 
 
 v-^^z.^. J^^i^-T-i^ J2 J2 _ / 4^ ^4'. 
 
 After you have collected the cash, count it so as to verify the amount, 
 make entry in cash book, and post to the ledger. 
 
 A 30. Make pencil footings of purchase and sales books and prepare 
 ticket as in A 10,. answering the following questions: 
 
 1. Amount of cash in drawer. 
 
 2. Amount of cash in bank, 
 
 3. Total cash. 
 
 4. Total purchases. 
 
 5. Total sales. 
 
 Submit the ticket when filled as usual. 
 
 A 31. You are out of Condor Coffee. Buy on usual terms of the firm 
 keeping this article, 24 cases, together with 
 24 bx. 12# Chocolate. 
 30 pi. T. T. Mixed Candy. 
 20 cs. 10# G. G. Syrup. 
 A 32. Receive cash of W. A. Damon in full of his account. (Give a 
 properly written receipt, enter the currency in the cash book and post.) 
 
 A 33. Receive of Chase Bros., to apply on account, $100. (In the exi>lau- 
 atory part of the receipt write "To apply on account.") 
 A 34. Sell Courtney & Son, usual terms: 
 
 4 bx. D. Peaches (g $5.40 
 
 1 can 10# Mapline Wafers @ $1.80 
 
 2 cs. Big W. Elephant @ $2.40 
 6 cs. Red Raspberries (5) $2.90 
 2 bx. 12# Chocolate @ $4.20 
 
 INFORMATION # 84. The Merchandise Discount account is kept to 
 show the amounts allowed for the payment of bills before they are due. 
 Wholesale houses bill their sales on 30 days, 60 days, 4 months, 6 months 
 or other period of time, the period usually being governed by the kind of 
 goods sold. Quick payment is desirable. To encourage the customer to pay 
 promptly, an allowance of 1%, 2%, 6%, or other rate according to contract, 
 may be deducted from the bill. The amount paid in settlement is called 
 the net amount, and the amount deducted is called the Merchandise Dis- 
 count. If you owe Esmond Canning Co. $259.00 for goods billed 2/10 n/60 
 (2% discount if paid in 10 days or full amount if paid in 60 days), the dis- 
 count if paid within the 10 days period would be $5.18 and the cash 
 payment would be $253.82. The journal entry for the payment would be as 
 shown in model. 
 
 The debit would be posted to the Esmond Canning Co. 's account in the 
 ledger. The cash credit would be posted to the cash book without using 
 the title column as in model, and the Mdse. Disc't would be posted to the 
 ledger. 
 
48 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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 A 35. Write a cheek in full for voucher payable #10, present the check 
 and have the voucher receipted, enter in cash book and return the voucher 
 to paid file, post and X mark. 
 
 A 36. "Write a receipt in favor of Cole & Camp for the amount due, 
 and collect the cash. 
 
 A 37. Sell Chase Bros., on usual terms: 
 
 8 bx. Prunes @ $4.25 
 
 4 bx. Evap, Apples @ $4.60 
 
 5 doz. 1# Graham Crackers @ $1.30 
 10 cs. Lima Beans @ $1.90 
 
 A 38. Sell W. A. Damon, on 10 days' account: 
 
 10 cs. H. C. Gooseberries @ $2.60 
 
 10 cs. Royal Sweet Corn .@ $2.05 
 
 2 pi. T. T. Mixed Candy @ $2.40 
 
 4 bx. Wintergreen Lozenges @ $ .80 
 
 4 bx. Mint Lozenges @ $ .80 
 
 A 39. Pencil foot the first column, debit side of cash book. Does it show 
 
 that you have received $366.93 since the last balance? If so, deposit this 
 
 amount. (Review Infor. #81 and A 2.) 
 
 A 40. Balance your cash book. (Review A 10 and the directions after 
 July 31, in Ex. X.) 
 
 Prepare a ticket as before instructed, on which answer questions as 
 follows : 
 
 1. Amount of cash in drawer. 
 
 2. Amount of cash in bank. 
 
 3. Total cash. 
 
 4. Total purchases. 
 
 5. Total sales. 
 
 INFORMATION #85. Any entry affecting 
 accounts, that cannot be entered in one place (i. 
 cash book, should be entered in the journal, and the cash portion posted to 
 the cash book, using the post mark "J" in the cash book and '"C" in the 
 journal. 
 
 A 41. Pay voucher payable #7 by check. 
 
 DIRECTIONS. Take V. #7 from your file and under the total of the 
 bill, in red ink, write Less 2% $5.18, subtracting the discount, write below 
 $253.82, the net amount. 
 
 cash and several other 
 e., in its entirety) in the 
 
PROGRESSIVE BUSINESS ACCOUNTING 49 
 
 Write a check for the net amount, and take the bill and check to the 
 Esmond Canning Co., who will retain the check and return the bill to you 
 receipted. 
 
 Journalize and post as explained in Infor. #84. Write in explanatory 
 space of ledger "Cash & Discount." 
 A 42. Pay Voucher #8 by check. 
 
 Notice on the bill that the discount allowed is 1% or $2.37. When computing 
 discount, if a half or larger fraction of a cent remains, count the remainder as an 
 additional cent discount. Be careful to keep the paid vouchers in numerical order 
 so that the last number shows at top. 
 
 A 43. Look over your vouchers payable to see if any other bills are 
 subject to discount for cash. You will find one. Pay it as before. 
 Are you careful about post marks? 
 A 44. Buy of Ajax Biscuit Co., on usual terms: 
 10 cans 12# Emperor Bars. 
 10 cs. Big W. Elephant. 
 40 doz. 1# Oatmeal Crackers. 
 50 doz. 1# Graham Crackers. 
 30 doz. 1# Delicoes. 
 5 cans Mapline Wafers. 
 A 45. Pay Samuel Hunt in currency for wages, $12. No voucher need 
 be made for transaction. 
 
 A 46. Pay cash for sundry small expense items, $1.29. 
 EXPLANATION. Cole & Camp have made arrangements to buy goods 
 in quantity so that you can allow them a discount of 3%. Hereafter bill 
 goods to them 3/10 n/60. 
 
 A 47. Sell Cole & Camp on account, 3/10 n/60: 
 
 10 cs. Royal Sweet Corn @ $2.05 
 
 40 cs. H. C. Gooseberries @ $2.60 
 
 24 bx. D. Peaches @ $5.40 
 
 26 cs. #1 Raisins @ $2.70 
 
 15 cs. Condor Coffee @ $8.20 
 
 8 cs. Extra Pepper @ $3.70 
 
 A 48. Receive of Chase Bros, cash enough to finish payment of their 
 
 first bill, $49.62. 
 
 A 49. Receive of Cole & Camp cash in payment of their last bill. A 
 deduction of 3% is made. 
 
 A 50. Make a ticket showing: 
 
 1. Cash received since balance. 
 
 2. Cash paid since balance. 
 
 3. Cash balance. 
 
 4. Total purchases to date. 
 
 5. Total sales to date. 
 
 If amounts are correct, balance the cash book. 
 
 Post total of purchase book to debit of Merchandise and total of sales 
 book to credit of Merchandise, ruling and postmarking as shown in Ex. X. 
 
 Take a trial balance on a loose sheet of paper, head as usual and pass 
 in for inspection. If correct, copy it on page 8 following the cash book. 
 
 INFORMATION #86. Cash sales may be posted to the individual 
 account to the debit of a customer, if it is desired to keep a ledger record 
 
50 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 of his purchases. There are, however, many cash sales which require no 
 personal ledger account. The latter sales should be entered in the sales book, 
 as in model here given. 
 
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 The amount of cash is immediately carried to the cash debit in the 
 cash book, the letters "C" and "S" being used in the folio columns, as above. 
 
 The effect of these two entries is to debit Cash in cash book and to credit 
 Mdse. in the total to be posted from the sales book at a later time. 
 
 INFORMATION # 87. Cash purchases which require no personal 
 account are entered in the purchase book as in model. 
 
 From the purchase book they are transferred to the cash book. 
 
 The effect of these two entries is to debit Mdse. in the total from the 
 purchase book and to credit Cash in the cash book. 
 
 A 51. Sell Henry Kuba, 49 La Salle St. (with whom keep no account), 
 for cash, 1 cs. G. G. Syrup @ $2.50, 6 bx. Wintergreen Lozenges @ $ .80. 
 
 Start new sales record at top of page 7. See model Infor. #86. Make out bill 
 receipted and hand to Kuba. 
 
 A 52. Sell D. G. Joslyn (no account), for cash, 5 bx. 12# Chocolate 
 @ $4.20. 
 
 A 53. Buy of the Treadles Commission Co., 60 brl. Vinegar as per their 
 bill, and pay for same by check. (Enter on page 2 of purchase book. No 
 ledger account.) 
 
 A 54. Buy of Eubenstein & Slossen, for cash (no account), 20 R. N. Y. 
 Cheeses. Take their receipted bill. 
 
PROGRESSIVE BUSINESS ACCOUNTING 51 
 
 A 55. Sell Cole & Camp, on account, 3/10 n/60: 
 
 10 brl. Vinegar, 542 gal. @ $ .34 
 
 10 R. N. Y. Cheeses, 621# @ $ .ISi/o 
 
 20 bx. Evap. Apples @ $4.60 
 
 A 56. Buy of Sunset Fruit Co., on account: 
 40 bx. #1 D. Peaches. 
 40 cs. #1 Raisins. 
 60 bx. Evap. Apples. * 
 
 A 57. Pay voucher #9. (Do not overlook any of the details.) 
 
 A 58. Collect of Mussett & Dennis cash in full of account. (Give receipt.) 
 
 A 59. Deposit in bank $620. 
 
 A 60. Pencil foot cash, purchase, and sales, since last ruling. 
 
 Prepare and submit a ticket showing: 
 
 1. Cash received since ruling. 
 
 2. Cash paid since ruling. 
 
 3. Purchases since ruling. 
 
 4. Sales since ruling. 
 
 Add cash in bank to cash in drawer and compare with balance shown 
 by cash book. If correct, balance the cash book. 
 
 INFORMATION # 88. Sales for notes may be posted to the individual 
 account in the ledger, the sale to the debit and the note given in exchange 
 to the credit of the customer, if it is desired to keep a ledger record of his 
 purchases. There are many sales of this kind which require no personal 
 ledger account. The latter sales should be entered in the sales book as in 
 model on page 33. 
 
 The amount of the note is posted to the debit of Notes Receivable, to 
 balance the credit which is included in the Mdse. total. 
 
 INFORMATION #89. Purchases for a note, when the individual 
 account is not desired, may be entered in the purchase book as in model and 
 posted to the credit of Notes Payable. The corresponding debit is included 
 in the Mdse. total. See model on page 32. 
 
 A 61. Sell William Floyd, 420 Fifth Ave., on his demand note drawing 
 interest from date at 6 per cent: 
 
 2 R. N. Y. Cheeses, 101# @ $ .ISVa 
 
 5 cs. Lima Beans @ $1.90 
 
 5 bx. #1 D. Peaches @ $5.40 
 
 5 cs. Prunes @ $4.25 
 
 5 cs. Evap. Apples @ $4.60 
 
 DIRECTIONS. Bill the goods as shown in Infor. #88, receipting the bill 
 in the following form: 
 
 Settled by note, 
 
 John Manning. 
 Fill out a note as shown in the following form except the signature, 
 which William Floyd will attach to the note in his own handwriting. 
 
 Secure the signature of William Floyd on the note, and deliver to him 
 the receipted bill. Place the note in the file for notes receivable. Remember 
 to place the payer of the note in the explanatory space of the ledger. 
 
52 PROGRESSIVE BUSINESS ACCOUNTING 
 
 
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 A 62. Sell Edward Read, on his 30-day note, at 6 per cent: 
 
 20 brl. Vinegar, 1088 gal. @ $ .34 
 
 A 63. Sell John Hart, for cash (no account) : 
 
 50 bx. Mint Lozenges @ $ .70 
 
 A 64. Sell Cole & Camp, on account, 3/10 n/60: 
 
 15 cs. Lima Beans @ $1.90 
 
 15 cs. Ideal Tomatoes @ $2.60 
 
 6 R. N. Y. Cheeses, 372# @ $ .131/^ 
 
 6 cs. Evap. Apples @ $4.60 
 
 5 brl. Vinegar, 253 gal. @ $ .34 
 
 A 65. Buy of the Esmond Canning Co., on usual terms : 
 100 cs. Ideal Tomatoes. 
 200 cs. Royal Sweet Corn. 
 100 cs. Lima Beans. 
 10 cs. H. C. Gooseberries. 
 A 66. Buy of Spanish-American Imp. Co., giving in payment a 30-day 
 note drawing 6 per cent interest: 
 20 hhd. Olives. 
 Write the note carefully as soon as you learn the amount of the bill. 
 Make entry in the purchase book and post to the credit of Notes Payable. 
 Remember to give the payee's name in the explanatory space. 
 
 A 67. Sell to R. W. Emerson, receiving in payment his 10-day note : 
 2 brl. Vinegar, 102 gal. @ $ .34 
 
 1 hhd. Olives, 125 gal. @ $ .72 
 
 A 68. Pay voucher #17 by check. (Make journal entry.) 
 A 69. Settle voucher #16 with your 30-day note with interest at 6 
 per cent. See that the voucher is properly receipted. (Enter in journal.) 
 A 70. Prepare a ticket answering the following: 
 
 1. Amount of cash balance. 
 
 2. Purchases since last posting. 
 
 3. Sales since last posting. 
 
 4. Total of the debit column of journal. 
 
 5. Total of credit column of journal. 
 
 EXPLANATION. The student will observe that all entries made in the 
 four books of original entry which he uses could have been made in a journal. 
 But the labor of posting item by item from a journal forbids its use in this 
 way. The labor of entry would also be greater. The number of books in 
 which the original entries are made might be increased if there were a suffi- 
 
PROGRESSIVE BUSINESS ACCOUNTING 53 
 
 cient number of special kind of entries not provided for to justify the use 
 of some other special book. In a general buying and selling business, the 
 books here used may be considered the best arrangement. Whether one or 
 more special books are used, the following rule is observed : 
 
 INFORMATION # 90. The journal takes all entries not provided for 
 in any other book. 
 
 A 71. Collect cash of M. C. Remington, Mary E. Curley and De Long 
 & Co., in full of their purchases. 
 
 Instead of writing receipts, they hand you the bills, which you passed to them 
 when you sold the goods. If they cannot produce any of the bills, write receipts as 
 before. Post to their accounts and X mark ledger to show full payment. 
 
 EXPLANATION. Hereafter in Set A, the student will bill all goods 
 2% higher than heretofore, and will allow all ledger customers terms 2% 
 10 days or net 30 days, with the exception of Cole & Camp, who will be 
 allowed 5% 10 days, net 60 days. 
 
 A 72. Sell Eagle Hotel, on account, 2/10, n/30 : 
 
 3 doz. 1# Oatmeal Crackers @ $1.33 
 1 cs. B. W. Elephant @ $2.44 
 1 bx. #1 D. Peaches @ $5.50 
 
 1 hhd. Olives, 63 gal. @ $ .74 
 A 73. Sell Mary E. Curley, on account, 2/10, n/30: 
 
 6 bx. 12# Chocolate @ $4.28 
 
 5 cs. Condor Coffee ' @ $8.36 
 
 6 cs. R. C. Syrup @ $2.10 
 20 cs. Royal Sweet Corn @ $2.45 
 
 2 R. N. Y. Cheeses, 124# @ $ .15 
 A 74. Sell M. C. Remington, on account, 2/10, n/30 : 
 
 2 brl. Vinegar, 103 gal. @ $ .35 
 
 20 cs. H. C. Gooseberries @ $2.65 
 
 10 cs. Lima Beans @ $1.95 
 A 75. Sell Frank Lightfoot for cash (no ledger account) : 
 
 5 hhd. Olives, 310 gal. @ $ .71 
 A 76. Sell Oscar Anderson, on his demand note drawing 6% from date. 
 (Fill out the note for his signature.) 
 
 150 cs. Royal Sweet Corn @ $2.05 
 
 50 cs. Lima Beans @ $1.90 
 A 77. Sell Mussett & Dennis, account 2/10, n/30: 
 
 12 doz. 1# Delicoes @ $1.32 
 
 6 cans Emperor Bars @ $1.70 
 
 6 cans Mapline "Wafers @ $1.85 
 
 4 pi. T. T. Mixed Candy @ $2.45 
 
 A 78. Sell to the Alaska Outfitting & Supply Co. for cash (no account) : 
 100 cs. Ideal Tomatoes @ $2.45 
 
 4 hhd. Olives, 252 gal. @ $ .70 
 
 A 79. Deposit in the bank all cash received since the cash book was 
 balanced. 
 
 A 80. Balance the cash book. (Do not forget to prove balance by com- 
 paring it with the sum of cash in bank and cash in drawer.) 
 Prepare the following report ticket: 
 
 1. Cash balance. 
 
 2. Total purchases since posting. 
 
 3. Total sales since posting. 
 
54 PROGRESSIVE BUSINESS ACCOUNTING 
 
 A 81. Buy of the Esmond Canning Co. on account: 
 50 cs. Lima Beans. 
 100 cs. Royal Sweet Corn. 
 50 cs. Red Raspberries. 
 100 cs. Ideal Tomatoes. 
 A 82. Buy of Kuhn, Aldrich & Co. on account : 
 20 cs. Condor Coffee. 
 20 cs. 14# Extra Pepper. 
 40 cs. P. C. Syrup. 
 A 83. Pay Samuel Hunt, wages to date, in currency, $12. 
 A 84. Pay Burrows Transfer Co. by check, drayage account for delivery 
 of outgoing merchandise, $21.43. (Charge Expense.) Take their receipted 
 bill. 
 
 A 85. Collect cash from the Eagle Hotel Co. for the first bill sold them. 
 Receipt the bill. 
 
 A 86. Settle with "W. B. Bennett, by taking his note at 30 days with 
 6% for the amount due. Receipt his bill. (Enter in journal.) 
 
 A 87. Give your 30-day note at 6% to Kuhn, Aldrich & Co. in settle- 
 ment of voucher #12. 
 
 INFORMATION #91. When a note is paid, the holder of the note 
 writes "Paid" with his signature across the face and surrenders it to the 
 payer. This is a sufficient receipt, as the evidence of the indebtedness passes 
 into the payer's hands. 
 
 A 88. Collect cash of Oscar Anderson for his demand note, $402.50, 
 and interest to date $.27. 
 
 The time will be considered 4 days in order to secure uniform results. Enter 
 in the cash book, crediting two accounts, Notes Rec. and Interest. When posting to 
 ledger, X mark the note paid. 
 
 A 89. Give your check for the note due the Spanish A. Importing Co., 
 $696.08, and interest computed at 6 days $.70. (Receive the cancelled note 
 and paste it to the stub of the note in the note book. Make two entries in 
 cash book, titles: Notes Payable and Interest.) 
 A 90. Make a report ticket showing: 
 
 1. Cash receipts since last balance. 
 
 2. Cash payments since last balance. 
 
 3. Footing of purchase book. 
 
 4. Footing of sales book. 
 
 INFORMATION # 92. A statement to a customer is a form in which 
 are listed all his debits and credits as they appear in the customer's ledger 
 account. It is advisable to send statements to customers on the last day 
 of each month. The statement shows his dealings for that period and the 
 balance due. The customer, on receiving the statement, should check it with 
 his books and should report to the one issuing the statement any discrep- 
 ancies, if such occur. Customers, when they settle the account by paying 
 the balance shown on the statement, frequently have the statement receipted 
 as a bill would be receipted, and use the statement as a voucher. The model 
 statement of Cole & Camp's account illustrates the form to be used. 
 
 INFORMATION #93. The term accounts receivable includes all 
 accounts with persons who buy of us and who have debit balances. Accounts 
 of this nature should be given a separate place in the ledger, or, if they are 
 many, a separate ledger should be kept for them. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 55 
 
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 A 91. Receive statements from Kuhn, Aldrich & Co., Esmond Canning 
 Co., and Ajax Biscuit Co. Compare these statements with the accounts in 
 your ledger and if they agree, place them in j^our file of miscellaneous papers. 
 
 A 92. Make out statements for all of your customers showing unsettled 
 accounts, eight in number, and present the statements. 
 
 A 93. Receive cash of W. A. Damon in full of his account. Receipt the 
 statement which you handed him. 
 
 A 94. Balance your cash book and take a trial balance of your accounts. 
 Record the trial balance on page 9 of the trial balance book. Remember that 
 totals of purchase and sales books must be posted before taking trial balance. 
 
 Review in Ex. VII. Infor. #36, 37, 38, 39, and 40. 
 
 INFORMATION # 94. An inventory is a list of property or value at 
 hand pertaining to any given account. Merchandise or other chattels are 
 
56 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 j7^L^.^t.^£.4...*:i..ri.-C^^^^.^^^^ / ^^^. 
 
 inventoried from an actual count of the items on hand listed on journal 
 ruling. After the list is taken, a price is placed on each kind. This price 
 is the present market value, or what it would take to replace the goods — not 
 the selling price. The extensions are then made, and the total is called the 
 inventory value or cash value of the account. 
 (For liability inventory, see Infor. #140.) 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 57 
 
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 A 95. Find the cash value of the Merchandise, Furniture & Fixtures, 
 and Expense accounts. 
 
 The items of the inventories and the prices are shown in the model form. 
 Copy these inventories on page 11 of the purchase and sales book, extend the prices 
 where needed and find the totals. 
 
 Caution: It is advisable to make these difficult lists on loose paper until they 
 are found to be absolutely correct. They can then be copied in the permanent books. 
 
 INFORMATION # 95. When the books are to be closed, in addition to 
 the inventories of property, there should be taken lists of the notes receiv- 
 able, accounts receivable, notes payable and accounts payable. These, to- 
 gether with the cash balance, should be placed in the inventor}^ book, so 
 that complete detailed lists of all resources and liabilities may bo found, if 
 looked for, in one place under one date. 
 
58 PROGRESSIVE BUSINESS ACCOUNTING 
 
 A 96. Place the cash balance in page 12 of inventories as in model. 
 
 Make a list of the notes which you received and now have on hand on 
 the same page, total the list and compare the total with the Notes Receivable 
 balance in the trial balance. 
 
 Make a list of the Accounts Receivable balances from the ledger. Total 
 the list and compare the total with the total of accounts due you in the trial 
 balance. Make a list of the notes payable from the stubs of the notes payable 
 book. Omit the one that is paid. Compare this list with the balance of 
 Notes Payable in the trial balance. 
 
 Make a list of the Accounts Payable, taking the amounts from the 
 vouchers payable tile. Compare this list with the total of balances due others 
 found in the trial balance. 
 
 INFORMATION # 96. A Statement of the Business is a formal list of 
 all resources and their total, of all liabilities and their total, and the differ- 
 ence between totals of resources and liabilities showing the net worth. 
 Statements aie made periodically to show the progress or condition of the 
 business to those who are financially interested. 
 
 A complete statement requires also a detailed exhibit of the gains and 
 losses. The model form is a correct statement of the present business. 
 
 A 97. Make a statement of your business : 
 
 On journal paper, after writing the heading, copy the resources 
 and liabilities from your inventory book and find the difference, which is 
 your net worth. 
 
 You will observe that five of the commercial accounts show a balance 
 on the ledger either greater or less than the cash value of the inventory. 
 These are 
 
 Merchandise, ledger Dr. balance $2,320.68 Inventory $2,812.45 
 
 Furniture & Fixtures, ledger Dr. balance 452.00 '' 295.00 
 
 Expense '' " " 162.32 " .... 25.50 
 
 Interest & Discount " " " .43 " none 
 
 Mdse. Disci " Cr. " 20.14 " .... none 
 
 Remember that a resource inventory is properly an additional credit 
 to an account; therefore, those accounts having resource inventories plus 
 credit total greater than the debit totals show gains. 
 
 Those accounts having a debit total greater than the resource inventories 
 plus the credit totals (if any) show losses. 
 
 Thus, the following accounts show gains : Merchandise and Merchan- 
 dise Discount. 
 
 The following show loss: Furniture & Fixtures, Expense, and Interest 
 & Discount. Place the gains first on the statement, as follows: 
 
 Mdse. sales from ledger $4,230.67, plus Inventory $2,812.45, less Mdse. 
 purchases $6551.35. 
 
 Mdse. Disct. received $34.45, less allowed $14.31. 
 
 Afterward place the losses as follows : 
 
 Furn. & Fixt. purchases $452, less inventory $295. 
 
 Expense, purchases $162.32, less inventory $25.50. 
 
 Int. & Disct. allowed 70 cts., less received 27 cts. 
 
 From the total gains subtract the total lo.sses. The result is the net gain. 
 
 To the net gain add the proprietor's worth at starting. The result is 
 the present net worth, equal to the net worth shown by the difference between 
 resources and liabilities given above. 
 
 Rule and finish the statement as in model. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 59 
 
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 TO THE STUDENT. A thorough understanding of a business statement 
 is one of the necessary accomplishments of a business man. Master each 
 step until you can tell not only how but why it is taken. Copy the statement 
 on page 11 of the journal, cash, and statements book. 
 
60 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 A 98. Close the ledger and take a trial balance after closing. Record 
 the trial balance on page 10 of trial balances. 
 
 A 99. Deposit all cash. Leave your bank pass book at the bank to be 
 balanced and the checks returned. Request the teller not to have the account 
 written up until a check for $2,296.09, which you will issue later, is presented 
 and paid. 
 
 INFORMATION # 97. The bank usually balances a depositor's account 
 and returns the vouchers or checks on the last day of the month. On re- 
 ceiving his book returned by the bank, or his statement, the depositor should 
 compare it with his own bank balance and record of deposits and checks 
 to see if any error has been made. If all is correct, the checks issued and 
 paid should be pasted to their original stubs as with notes explained in A 89. 
 
 A 100. You will now sell your entire business as it stands to your 
 teacher on the terms mentioned in the following journal entry to be copied 
 in the journal: 
 
 The business of (student's name) has this day been sold and transferred 
 to (teacher's name) for a consideration of $6,000 cash in hand paid. 
 (Teacher's name) will collect all outstanding accounts and pay all outstand- 
 ing liabilities of the business. 
 
 In accordance with the above, make out a bill of sale in favor of the 
 teacher. (See legal forms.) 
 
 Write a check in his favor for the bank balance. 
 
 Indorse all notes receivable to him, using form No. 4 below. 
 
 INFORMATION # 98. Transfer indorsements are written in several 
 forms. The most common of these are illustrated in the above five speci- 
 mens, numbered 1 to 5. No. 1 is an indorsement in blank. "When the payee 
 indorses it thus, the paper becomes payable to bearer. No. 2 is an indorse- 
 ment for deposit. It is used when paper is to be deposited at the bank. 
 Paper thus indorsed is not payable to bearer. 
 
 No. 3 is a restrictive indorsement, as its effect is to make the paper 
 payable to one certain person. 
 
 No. 4 is an indorsement in full. It has the effect of making the paper 
 payable to the indorsee or to any person to whom he may indorse it. 
 
 No. 5 is an indorsement without recourse. The intention of the indorser 
 is to pass the title in the paper while he at the same time releases himself 
 from liability for its payment. 
 
PROGRESSIVE BUSINESS ACCOUNTING 61 
 
 Pin the check, notes, and bill of sale together. Make a neat package of 
 your vouchers paid and payable, using a rubber band around all the papers. 
 
 Remove the contents of the books of record. Pin each at the back. At 
 the front top of each write a heading similar to those used in submitting 
 previous exercises and pass the entire work to the teacher for inspection. 
 
 QUESTIONS. 1. What is a jobbing business? 
 
 2. For what purpose is a ledger index used? Describe it. 
 
 3. What is a voucher? 
 
 4. What is a receipt? How used? 
 
 5. What is the principal business of a bank? 
 
 6. How is a deposit ticket used? 
 
 7. How is a bank pass book used? 
 
 8. What is a bank check? How used? 
 
 9. What is a check book? 
 
 10. What is a bill? 
 
 11. Describe the duplicate order blanks. 
 
 12. Describe the purchase book. 
 
 13. Describe the sales book. 
 
 14. What is meant by terms of a sale? 
 
 15. What is the process of having a bill receipted when paid? 
 
 16. Explain the Merchandise Discount account. 
 
 17. Where should a combined entry affecting cash and other accounts 
 be made? Why in the journal? 
 
 18. What is a cash discount? 
 
 19. What two methods of entering cash sales in the sales book may be 
 used? 
 
 20. What two methods of entering sales for notes in the sales book may 
 be used? 
 
 21. How is a bill receipted to show settlement by note? 
 
 22. What entries are to be placed in the journal when other books of 
 original entry are used? 
 
 23. What voucher is received by the payer of a note? 
 
 24. Describe a statement to a customer. 
 
 25. What is meant by the term accounts receivable? 
 
 26. Is it customary to receipt a customer's statement when payment in 
 full is made? 
 
 27. How are inventories taken? 
 
 28. Why are lists of notes and accounts payable and notes and accounts 
 receivable taken when closing a ledger? 
 
 29. What is a statement of the business? 
 
 30. How should a depositor compare a bank statement of account when 
 the latter is returned? 
 
 31. What is a bill of sale and when used? 
 
 32. Why is a notice to interested firms sent when a change occurs in 
 the ownership of a business? 
 
 33. Name the books used in the jobbing set. 
 
62 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 EXERCISE XI 
 
 INFORMATION # 100. A statement of any business showing resources 
 and liabilities, losses and gains and net worth can be made from a trial 
 balance and inventories. It is more satisfactory to have, in addition to these, 
 the footings of the ledger accounts, because the footings show the amount 
 of business, while the trial balance and inventories show merely the results. 
 
 # 101. In making a statement of the business, if it appears by inspec- 
 tion that the sum of the gains will be found to exceed the sum of the losses, 
 place the gains above and the losses below, as in A 97. If it appears that 
 the sum of the losses will exceed the sum of the gains, place the losses above 
 and the gains below. 
 
 # 102. A statement of the business is to show the amount and kind of 
 resources and liabilities, and the net worth, the amount and kind of losses 
 and gains, and the volume of business transacted in a given period. 
 
 EXPLANATION. In this exercise, the student will be given the ledger 
 footings and the inventory totals of two business concerns. From each of 
 these he will be required to make a statement, one of which will show a net 
 loss and the other a net gain. 
 
 DIRECTIONS. Take a half sheet of journal. At the top of one side 
 write "Statement of John Doe." At the top of the reverse side, "Statement 
 of John Moe. " One sheet only is to be handed in at the close of this exercise. 
 All other preliminary work necessary to making the statement can be written 
 on loose paper and destroyed after it has served its purpose. Below are given 
 the footings of John Doe's ledger: 
 
 John Doe, Proprietor Dr. 
 
 Cash 
 
 Mdse 
 
 Furniture & Fixtures 
 
 Expense 
 
 Notes Payable 
 
 Notes Receivable 
 
 Dollman & Co , 
 
 Martin & Camp 
 
 Parker & Son 
 
 James & Co 
 
 Smith & Son 
 
 C. W. Brown 
 
 )r C 
 
 r. $ 4,000.00 
 
 " $ 1,325.82 
 15,421.90 
 
 18,624.70 
 
 429.89 
 4,281.73 
 
 
 
 4,281.70 
 
 5,923.40 
 
 7,481.30 
 
 4,783.26 
 
 231.80 
 
 1,527.30 
 
 14.80 
 
 329.60 
 
 597.42 
 
 1,287.16 
 
 1,789.63 
 
 247.80 
 
 587.93 
 427.90 
 
 
 148.60 
 
 The cash values of the commercial accounts per inventory are as follows : 
 Merchandise, $7,521.80; Furniture & Fixtures, $400.00; Expense, no value. 
 All other accounts are valued at face. 
 
 First, satisfy yourself that the ledger is in balance. Next, make a total 
 of the balances of accounts payable, three in number, and of accounts receiv- 
 able, three in number. List all resources and total. List all liabilities, except 
 proprietor, and total. Find present worth. Find gains and losses as in 
 model A 97. Find net gain and net worth. The latter should prove with 
 net w^orth as shown above. 
 
PROGRESSIVE BUSINESS ACCOUNTING 63 
 
 The ledger footings for the second statement are as follows: 
 
 John Moe, Proprietor Dr Cr. $4,000.00 
 
 Cash " $ 384.38 
 
 Merchandise " 18,427.60 " 12,427.68 
 
 Furniture & Fixtures " 1,728.90 " 12.60 
 
 Expense " 2,174.20 
 
 Merchandise Discount ...... " 17.38 
 
 Notes Payable " 500.00 
 
 Martin & Camp " 120.00 
 
 Parker & Son " 1,260.93 
 
 Perkins, Winn & Co " 4,291.60 
 
 Garmore & Co " 357.90 
 
 Peter Moore " 873.99 
 
 169.20 
 6,921.40 
 1,387.60 
 2,067.93 
 2,729.50 
 
 420.97 
 
 The cash values of the commercial accounts per inventory are: Mer- 
 chandise, $6,590.15; Furniture & Fixtures, $1,500; Expense, $74. All other 
 accounts are valued at face. Reread Infor. #101. Complete a statement. 
 
 DIRECTION. AVhen both statements are complete, head the work, and 
 pass it in for inspection. 
 
 QUESTIONS. 1. What records are necessary to refer to in making a 
 statement of any business? 
 
 2. If the total gains exceed the total losses, in what order should the 
 commercial accounts be placed in a statement? 
 
 3. If the losses exceed the gains, what order is used? 
 
 4. What does a statement of the business show? 
 
 5. May a statement of the business be made without closing the ledger? 
 
 EXERCISE XII 
 
 INFORMATION # 103. Every business transaction should present to 
 the mind a clear cut picture of certain debits and credits. No matter what 
 books may be used, the bookkeeper who has formed the habit of placing 
 any doubtful entivy in journal form on a slip of paper before trying to place 
 it in cash book or other books, will be able to make a correct entry in a satis- 
 factory way. Many who have failed to acquire this habit have found the 
 entries in advanced bookkeeping difficult, and have often spent much un- 
 necessary time in confused efforts to grasp the situation. When in doubt, 
 form the habit of arranging entries in journal form. 
 
 EXPLANATION. The journal entries which follow are not a connected 
 record of any business. They give transactions which are similar to those 
 introduced in the preceding set. They are dated in January and numbered 
 1 to 31, the numbers to be entered like days of the month. Nos. 1 to 25 
 require one debit and one credit only. Nos. 26 to 31 have two debits or 
 credits. The memoranda of the transaction are given in the form to be used 
 in the explanatory part of the journal and should be copied by the student 
 word for word, with the exception that abbreviations may be used. After 
 copying the memoranda, he can complete the entry. 
 
 DIRECTIONS. Take a folded sheet of journal paper and page it 1, 2, 
 3, and 4. Enter the work as explained above. 
 
64 PROGRESSIVE BUSINESS ACCOUNTING 
 
 TRANSACTIONS. Jan. 1. II. Bradford began business, investing cash 
 $5,000. 
 
 2. Bought of Geo. Adams on account, Mdse. per bill amounting to 
 $487.20. 
 
 3. Bought of Henry Johnson for cash, Mdse. per bill, $520.60. 
 
 4. Bought of Kalph Henry, giving in payment a demand note, Mdse. 
 per bill, $600. 
 
 5. Sold to Peter Minkler on account, Mdse. per bill, $129.60. 
 
 6. Sold to Talbott & Co., for cash, Mdse. per bill, $537.80. 
 
 7. Sold to Peterson & Adams, receiving in payment their demand note, 
 Mdse. per bill, $400.50. 
 
 8. Paid George Adams, cash to apply on account, $300. 
 
 9. Received of Peter Minkler, cash in payment of his bill of 5th, $129.60. 
 
 10. Paid Ralph Henry, cash in full of his note, $600. 
 
 11. Received of Peterson & Adams, cash in full of their note, $400.50. 
 
 12. Paid George Adams, cash for balance to his credit, $187.20. 
 
 13. Bought of Acme Fuel & Ice Co., a book of ice tickets for use in 
 store, paying cash, $10. 
 
 14. Bought of Edwards & Co. a bill of furniture for use in office, paying 
 cash, $27.80. 
 
 15. Bought of Richards & Lane, on account, coal for fuel, as per their 
 bill, $30.75. 
 
 16. Bought of John Woodley, as a speculation, paying cash. Lot #3 
 in Block #29 of Central City for $350. (Debit L. 3, B. 29, Central City.) 
 
 17. Bought of Wm. Roberts, for cash, one wagon for use in delivery 
 of Mdse., paying $110. 
 
 18. Sold to Henry Grayson, on account, Mdse. per bill, $700. 
 
 19. Sold to Walter Everson, on account, Mdse. per bill, $345.25. 
 
 20. Henry Grayson settles his account by giving his 30-day note for 
 the amount, $700. 
 
 21. Bought of J. M. Cushman, on account, Mdse. per bill, $429.80. 
 
 22. Sold to K. Garmore, Mdse. per bill $120, receiving in payment a 
 horse for use of the business. 
 
 23. Settled J. M. Cushman 's credit of $429.80 by deeding to him Lot 
 #3 in Block #29 of Central City at same valuation. (Credit the account 
 debited in Jan. 16.) 
 
 24. H. C. Bradford, proprietor, withdrew cash $2,000 from his invest- 
 ment account. 
 
 25. Paid bill of Wright & Ames for an addition to the building owned 
 by the firm, $942.70. (Debit Real Estate.) 
 
 26. Bought of Henry Coleman, for $6,000, property to be known on the 
 books as "Maplewood Farm," giving in payment cash $1,000, and a note 
 drawing 6% interest for $5,000. 
 
 27. Sold George Dunning, for $7,000, the Maplewood farm, receiving in 
 payment cash $4,000, and a note drawing 6% for $3,000. 
 
 28. Paid note favor Henry Coleman, giving cash for face of note $5,000, 
 and for interest to date, $1.67. 
 
 29. Received cash of George Dunning in payment of his note. Face of 
 note, $3,000. Interest to date, $1. 
 
 30. Paid Courtney & Bliss, their bill of $591.40, subject to 2% discount, 
 giving cash $579.57. Discount, $11 83. 
 
PROGRESSIVE BUSINESS ACCOUNTING 65 
 
 31. Received of J. M. Paulson, in payment of his bill of $980, cash 
 $970.20, allowing discount 1% $9.80. 
 
 DIRECTIONS. After the work is completed, write the heading as in 
 previous exercises, and pass the work in for inspection. 
 
 QUESTIONS. 1. What suggestion is made with reference to fixing in 
 mind doubtful entries? 
 
 2. Can the entries of any book of original entry be placed in journal 
 form if desired? 
 
 3. Is L. 3, Blk. 29, Central City, a commercial or a financial account title ? 
 
 4. Is Real Estate a commercial account title? 
 
 5. When does Interest & Discount account show a gain? When a loss? 
 
 EXERCISE XIII 
 
 INFORMATION # 104. An order is a written form by which one party 
 directs another party to deliver to a party named in the order, property or 
 cash. It is assumed that the party ordering has with the party ordered 
 credit to cover the amount called for. 
 
 4^ 105. A draft is an order written by one party (the drawer) requiring 
 a second party (the drawee) to pay to a third party (the payee) a certain 
 sum of money at a certain time. The assumption is that the drawee owes the 
 drawer the amount of the draft, and that the drawer may have the drawee 
 pay this sum to the party whom the drawer names. 
 
 For example, Jones In Boston owes Smith in Cnicago $1,000. Smith in Chicago 
 owes Brown in Boston $500. Smith sends Brown a draft for $500 on Jones. Brown, 
 on receiving the draft, presents it to Jones who pays Brown the cash $500 called 
 for and keeps the draft as a receipt. By this means Smith has paid Brown, without 
 actually sending the money, by taking the amount from what Jones owes Smith. 
 
 # 106. The draft principle is used in several ways in business transac- 
 tions. We have, first, the bank draft, which is drawn by one bank upon an- 
 other for the purpose of sending money away from the drawer's town. The 
 drawer bank has cash on deposit with the drawee bank against which the 
 former draws drafts which are sold to persons who wish to send money to 
 some out-of-town person. These drafts are safely placed in any ordinary 
 letter without registration, as they are made payable to the order of a certain 
 person named in the draft and could not be collected by an unauthorized 
 person. 
 
 Second, the merchant's draft, which is drawn by one merchant upon an- 
 other in payment of a credit arising frOm sale of goods, as of a shipper 
 who ships merchandise to a commission house and draws against the house 
 consigned to, in order to secure ready cash by selling the draft. 
 
 Third, the collection draft, which wholesale houses and others draw on 
 delinquent customers to secure payment of bills which the customers have 
 neglected. Such drafts, although in the same form as merchant's drafts, 
 are regarded as of no value until they are paid, as their payment is not 
 guaranteed by the drawer. 
 
 # 107. The payee of a draft need not present it in person. Drafts 
 usually contain the direction "Pay to the order of," which means that the 
 payee can order it paid to any person desired by indorsing on the back the 
 directions as to whom payment shall be made. A draft may pass through 
 many per.-^ons' hands by being indorsed from one person to another person. 
 The persons passing it in this way are called indorsers. 
 
66 PROGRESSIVE BUSINESS ACCOUNTING 
 
 A bank check is of the same nature as a draft with this exception, that a check 
 assumes ordinarily that the drawer, drawee and payee reside at the same place, while 
 a draft is ordinarily mailed from one place to another. 
 
 # 108. The note and check, with which the student is already familiar, 
 also the draft, are called negotiable paper, a kind of paper that may be trans- 
 ferred from one person to another by indorsement. 
 
 # 109 Transfer indorsements may be either in blank or in full. By 
 indorsement in blank is meant the written name of the payee across the back 
 of the paper, which has the effect of making it payable to the bearer, who- 
 ever he may be. By indorsement in full is meant a direction in writing to 
 pay to some particular person or his order. 
 
 ij: 110. Drafts are drawn payable at sight (that is, when presented to 
 the drawee), a certain number of days or months after sight, or a certain 
 number of days or months after the date of the draft. When payable at 
 sight they are called sight drafts; when payable after sight they are called 
 time drafts. 
 
 # 111. If the drawee promised to pay a time draft at maturity, he 
 accepts the draft by writing "Accepted" with the date and his signature 
 across the face of the draft. A draft when accepted becomes to the acceptor 
 a note payable and to the holder a note receivable. 
 
 # 112. Banks are the regular agents for the collection of all varieties 
 of drafts. If a holder of a draft in one place desires it presented to tho 
 drawee in another place he will leave the draft with his banker, who will 
 forward it to a bank located in the drawee's city. The latter bank will 
 collect the cash called for and make returns. Thus drafts on any town can 
 be presented and collected through the banks. If the drafts are cash items 
 (on the face of them collectible at once) the bank first receiving the draft 
 ordinarily cashes it at once and makes collection afterward. Sometimes a 
 charge is made for doing this. If it is a collection item, the bank will 
 forward as explained above and pay the person for whom collected after the 
 collection is made. 
 
 # 113. The business man who desires to send money out of town can 
 purchase of his banker a bank draft which is payable in the place desired. 
 The bank charges a small fee called exchange for this service in addition to 
 the face of the draft. 
 
 # 114. The business man who draws time drafts on customers f re- 
 quently sells these drafts before they mature to a bank in order to obtain 
 the ready cash. The bank deducts a certain per cent from the face of the 
 draft called discount, and pays the seller the difference. 
 
 EXPLANATION. In this exercise, journal entries with reference to 
 drafts will be made. The forms of drafts, acceptances, etc., are given in 
 Set B as they are used, where they may be found. The entries are not a 
 continuous record of any business, but for the sake of a correct form are to 
 be dated beginning with Feb. 1st. Use a half sheet of journal paper. 
 
 TRANSACTIONS. Feb. 1. Gave C. S. Huntington, on account, an 
 order for goods amounting to $40 on W. B. Lamb. 
 
 Debit C. P. Huntington, the receiving account; credit W. B. Lamb, the giving 
 account. 
 
 2. Drew on Thurston & Co. for $500 at sight and sent the draft to 
 "W. B. Collins for credit. 
 
PROGRESSIVE BUSINESS ACCOUNTING 67 
 
 3. Our 60-clay draft for $624.50 on Carson & Son has been returned 
 by them accepted. 
 
 4. Seymour Eaton presents A. A. Caldwell's order for goods on us 
 amounting to $12.80 and we have sold him the goods as per bill. 
 
 5. We have accepted and returned to Henry Parker his draft on us 
 at 30 days, on account, for $300. 
 
 6. Received cash of Carson & Son, in payment of their acceptance 
 previously received, $624.50. 
 
 7. J. J. Dolliver has indorsed to us on account a 30-day acceptance 
 which he holds against P. Minkler for $350. 
 
 8. Paid by check a sight draft on us for $75, drawn by E. E. Rehard 
 in favor of Samuel Paulson. 
 
 9. Paid our acceptance favor Henry Carson, in cash, $300. 
 
 10. We are notified by our bank that an acceptance against Cass & 
 Dale for $450, left for collection, has been paid and placed to our credit. 
 
 11. Our bank returns accepted a 30-day draft for $225 against William 
 Clute, on account, left for presentation to drawee. 
 
 12. Henry Parker remits, on account, a sight draft on Paul Davis for 
 $378.40 which we have presented to the drawee who has placed the amount 
 to our credit. 
 
 13. Drew a collection draft on J. S. Paull for $80.50 and left it at the 
 bank for presentation. 
 
 This requires a memorandum only, as no values have been passed until the draft 
 is accepted or paid. The memo, of a sight draft drawn should always be carried to the 
 ledger account. 
 
 14. Received notice from the bank that the J. S. Paull collection of 
 $80.50 has been paid, and that the amount, less a collection charge of 25 cts., 
 has been placed to our credit. (Debit Cash and Expense. Why?) 
 
 15. Received credit at the bank for S. Benington's acceptance, our 
 favor, $400, left for collection, less charges, 50 cts. 
 
 16. Sold to the bank, acceptance Henry Close, our favor, for $800, 
 receiving credit for face less discount $12. (Debit Cash and Interest & 
 Discount. Why?) 
 
 17. The bank has given us credit for our sight draft on American Imple- 
 ment Co. for $300, less a collection charge of 75 cts. 
 
 18. Discounted at bank acceptance of Paul Richards, our favor, for 
 $175, receiving credit $172.42; discount $2.58. 
 
 19. Received of Perry Peterson, on account, J. P. Colgrove's acceptance, 
 his favor indorsed to us, $186.75, for which we allow him credit $185, deduct- 
 ing $1.75 Interest & Discount. 
 
 20. Bought a bank draft for $200, paying in addition to face, 20 cts. 
 for Exchange, and sent same to Henny Buggy Co. for credit. 
 
 21. Bought a bank draft for $730, and exchange 75 cts. Sent draft to 
 St. Louis Paper Co. in payment of our acceptance, their favor, for same 
 amount. 
 
 DIRECTIONS. After completion of entries and full memoranda, submit 
 your work. 
 
 QUESTIONS. 1. AVhat is an order? 
 
 2. What is a draft? 
 
 3. Name three ways in which the draft principle is used. 
 
 4. Define drawer, drawee, and r>ayee. 
 
 5. Define indorser. 
 
68 PROGRESSIVE BUSINESS ACCOUiNTING 
 
 6. What is meant by the term negotiable paper? 
 
 7. Define sight draft ; time draft. 
 
 8. Define indorsement in blank ; indorsement in full. 
 
 9. How is a draft accepted? 
 
 10. How are drafts collected? 
 
 11. What is a cash item as applied to drafts? 
 
 12. When is a draft a collection item? 
 
 13. What is the usual method of sending cash by mail? 
 
 14. What ledger title is used to indicate accepted drafts by the acceptor? 
 
 15. How does a bank check differ in use from a draft? 
 
 EXERCISE XIV 
 
 INFORMATION # 115. Persons invest in business not only cash, but 
 any other kinds of value they may possess. Frequently several kinds of 
 property are invested. When such is the case, an account is opened with 
 each part invested, and the proprietor is credited with their sum. 
 
 # 116. Frequently the proprietor has debts to pay which are included 
 as liabilities of the business. When such is the case, the liabilities are cred- 
 ited to the appropriate accounts and the proprietor is debited with their sum. 
 
 :^117. The difference between the resources and the liabilities included 
 in the proprietor's investment is his net worth and should be placed to his 
 credit. 
 
 4^ 118. Frequently a large number of accounts or notes receivable, or 
 accounts or notes payable are entered in the investment. When such is the 
 case, the titles of the accounts are not entered in the journal, but are grouped 
 and the accounts are opened in the ledger from a list which should accom- 
 pany the inventories of other property. 
 
 EXPLANATION. This exercise presents to the student a number of 
 opening entries to be journalized but not posted. The first one will be dated 
 Feb. 22, and those following may be numbered consecutively from 22 upward. 
 
 DIRECTIONS. Page a half sheet j-ournal, and enter each investment as 
 given. Remember that each is assumed to belong to a separate business; 
 i. e., that no entry has any connection with the other entries. 
 
 TRANSACTIONS. Feb. 22. Henry Patterson opens a grain and feed 
 business at 158 Quincy St., investing the following: Cash, $820.60; Mdse. 
 per inventory, $1,398.20; Furniture & Fixtures per inventory, $129.50. 
 
 Enter the full memoranda, then debit the three accounts mentioned and 
 credit the proprietor with their sum. 
 
 23. W. B. Jones begins business as dealer in coal and wood, investing 
 stock on hand per inventory, $4,291.80; coal yard and buildings, $3,000; 
 forty-eight accounts receivable in ledger as per list, $1,429.80. 
 
 Skip two lines between opening entries. 
 
 24. Thomas Hunter opens a hotel business, investing cash $2,500; build- 
 ing and ground, $7,500; Furniture & Fixtures per inventory, $3,490; fifteen 
 notes due from others as per list, $2,140.60. 
 
 25. John Erickson begins a farming business, investing cash $42.90; 
 160 acres of land and buildings, $12,800; live stock, per inventory, $2,140; 
 machinery and tools, $742.60. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 69 
 
 26. Conrad Oliver opens a grocery store, investing as follows: Cash, 
 $300; building and grounds, $2,750. He owes the following to be paid out 
 of the business: Note due the bank, $600. 
 
 27. Henry Ahlman begins the hardware business, investing cash, $492.81 ; 
 stock of goods per inventory, $6,291.83; Furniture & Fixtures per inventory, 
 $320.80; sundry notes receivable per list, $2,942.80. He owes sundry notes 
 per list $1,291.80, and sundry accounts per list $1,692.41. 
 
 28. H. A. Smith begins a dry goods business, investing cash $1,205; 
 stock of goods, $7,390.40; sundry accounts receivable, $500.59. He owes 
 sundry notes payable $3,491.60, and sundry accounts payable $2,691.49. 
 
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 DIRECTIONS. 
 QUESTIONS. 
 
 Head the exercise and pass it in for inspection. 
 
 1. May a person invest more than one kind of property 
 in business? 
 
 2. When different resources are invested, what account is credited? 
 
 3. "When both resources and liabilities are invested, how is proprietor's 
 credit found? 
 
 4. How are open accounts entered in an investment? 
 
 5. How are notes receivable and notes payable entered? 
 
 EXERCISE XV 
 
 INFORMATION # 119. A partnership is an association of two or more 
 persons in one business. Each contributes some value to the business and 
 each shares in the gain or loss. 
 
70 PROGRESSIVE BUSINESS ACCOUNTING 
 
 :#: 120. The relations of each partner to the firm should be clearly stated 
 in a written contract between the partners called agreement of co-partnership. 
 This contract should specify the amounts contributed by each, the amount 
 of time to be given by each to the business, the manner of the division of 
 profits, and the other matters which concern their legal relations. 
 
 # 121. Ordinarily, each partner has power to bind the other in firm 
 contracts, each is liable personally for the debts of the entire firm, a relation 
 of trust exists between the partners, so that it may be said that it is unwise 
 for any person to join business interests with persons in whom there is any 
 lack of confidence, or with whom there is no positive agreement. 
 
 # 122. Beginning a partnership, the property invested by each should 
 be charged to the account to which it belongs as in any other opening entry, 
 and the partners contributing should be credited with the total value of their 
 investment. If liabilities of any partner are assumed by the firm, the partner 
 bringing the liability should be debited and the accounts representing the 
 liability should be credited. 
 
 # 123. After investments are entered, the books are conducted as in 
 any business until they are to be closed. 
 
 # 124. At closing, the losses and gains of the business are carried to 
 the Loss & Gain account and the net gain is there divided among the partners 
 in the proportion agreed upon. An entry is made for each partner in the 
 Loss & Gain account. The sum of these entries equals the net gain or loss. 
 The account is then balanced, and the net gain or loss entries are posted to 
 the opposite side of the partners' accounts. 
 
 EXPLANATION. This exercise is to give the form for opening and 
 closing partnership books. The commercial transactions are simple and few, 
 so that the journal and ledger are the only books required. 
 
 DIRECTIONS. Prepare a half sheet of journal paper, which may be 
 paged 1 and 2. A half sheet of journal, headed trial balances on one side 
 and statement on the other, and a half sheet of ledger, paged 1 and 2. Divide 
 page 1 of the ledger equally among four accounts: H. C. Collins, Partner; 
 George Dunn, Partner; Samuel Coe, Partner; and Loss & Gain. Divide page 
 2 equally among seven accounts: Cash, Merchandise, Real Estate, Furni- 
 ture & Fixtures, Expense, Notes Receivable, and Notes Payable. 
 
 TRANSACTIONS. Nov. 1. H. C. Collins, George Dunn, and Samuel 
 Coe have this day formed a partnership under the firm name of Collins, 
 Dunn & Coe, for the purpose of engaging in the furniture and decorating 
 business. H, C. Collins invests Cash, $529.40; Merchandise per inventory, 
 $6,521.80; Furniture & Fixtures per inventory, $725. George Dunn invests 
 a store building and lot valued at $8,800. The firm assumes payment of his 
 note favor W. H. Dorr for $1,000. Samuel Coe invests cash, $4,000, and a 
 note against C. B. True for $1,500. The firm assumes a note given by him 
 to Allison & Co. for $800. 
 
 The conditions of the partnership are given in detail in articles of co- 
 partnership, a copy of which is in the hands of each partner. 
 
 Enter above in the journal, referring to the model form. Post entries 
 to the ledger. 
 
 Nov. 5. Paid cash for sundry expenses per bill, $87.50. 
 
 17. Bought of Grand Rapids Furniture Co., Mdse. for cash, $2,951.80. 
 
 19. Paid freight bill of invoice above, $32.59. (Charge Mdse. for pay- 
 ments of freight on merchandise received.) 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 71 
 
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 25. Paid W. H. Dorr cash in full of his note, $1,000. 
 
 30. Sold J. B. Elliott, for cash, merchandise per bill rendered, $1,329.68. 
 
 Dec. 2. Paid cash for insurance of building and merchandise, $118. 
 
 19. Keceived cash for merchandise sold to the Palace Hotel Co., $7,462.40. 
 
 20. Sold the building and lot owned by the firm to M. C. Remington, 
 receiving in payment cash $2,000 and notes for $8,000. 
 
 DIRECTIONS. Dec. 31. Take a trial balance before closing. 
 
 Make a statement of the business. The statement will not differ in 
 arrangement from the form given at close of set A, except that the final 
 division of the net gain among the partners should be in the form given here- 
 with. According to the contract, the gains and losses of the business are 
 to be divided among partners as follows: H. C. Collins, 2/5, George Dunn, 
 2/5, Samuel Coe, 1/5. Inventories are as follows: Merchandise $2,850, 
 Real Estate none. Furniture & Fixtures $700, Expense none, other accounts 
 at face. 
 
72 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 73 
 
 Close the ledger. The gains and losses are closed into Loss & Gain 
 account as before. The net gain is divided and carried to the partners' 
 accounts as shown in the model form. 
 
 Take a trial balance after closing under date Jan. 1. Record it below 
 the trial balance previously taken. 
 
 Pin the work in the order journal, ledger, trial balance and statement, 
 place heading at top, and submit it for inspection. 
 
 QUESTIONS. 1. Define partnership. 
 
 2. What is meant by agreement of co-partnership? 
 
 3. "What can you say of the power of one partner to bind the others 
 with reference to contracts? 
 
 4. How are the opening entries in a partnership made? 
 
 5. How does the closing of partnership books differ from the closing 
 of the books of a sole proprietor? 
 
 Model Journal Entry for Closing a Consignment Account 
 
 Model Shipment and Consignment Accounts 
 
 
 
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74 PROGRESSIVE BUSINESS ACCOUNTINa 
 
 SET B 
 
 BUSINESS PRACTICE 
 
 EXPLANATION. You are to form a partnership or co-partnership with 
 George A. Finney for the purpose of conducting a business as implement 
 dealers and grain buyers and shippers under the firm name of (student) & 
 Finney. You are to contribute your cash on hand. George A. Finney con- 
 tributes a stock of implements which he now has on hand, a lease for the 
 office and warehouse now occupied. The firm assumes sundry book accounts 
 which he owes. Finney is to contribute in cash enough to make the invest- 
 ments equal. It is agreed that you shall conduct the business, receiving 
 for services a salary of $200 per month. All losses and gains are to be shared 
 equally between the partners. 
 
 DIRECTIONS. Prepare books for use as follows: Journal, cash and 
 trial balances will be a book of 16 pages. Use pages 1, 2, 3, and 4 for journal ; 
 6 to 9 for cash, and the remainder for trial balances and statements. The 
 purchase book, sales book, notes receivable book, and inventories will require 
 16 pages. Use pages 1 to 7 for merchandise sales book, 8 and 9 for notes 
 receivable, 10 and 11 for grain purchase book, and 12, 13 and 14 for inventories. 
 For convenient reference, write at the upper left corner on heading line the 
 names of Journal, Cash, Purchase, Sales, Notes Receivable, on all the pages 
 assigned for these books. The ledger will be a book of 10 pages and index. 
 Divided into general accounts, pages 1 to 6 ; accounts payable, pages 7 and 8 ; 
 customers' accounts, pages 9 and 10. Give general accounts one-half page 
 each, with exception of Notes Receivable, which will take two-thirds of 
 page 6, leaving the remainder for Notes Payable. Give personal accounts 
 one-third page each. 
 
 TRANSACTIONS. B 1. The student and George A. Finney form a co- 
 partnership on the terms outlined in the explanation above. Invest your 
 cash on hand, $6,000. 
 
 The investment of George A. Finney follows: 
 
 Merchandise: 3 Cutler Co. Nar. Tr. Wagons and Dumps @ $59.15; 
 
 3 Top Boxes, 12 in., @ $4; 2 Henny A8 Surreys @ $92; 4 Studebaker #108 
 Wagons, box seat, @ $46; 1 Illinois Buggy Co. #512 R. Wagon, blue cloth 
 trimmings, @ $70 ; 1 New Steinway Wagon, 3i4xlO H. T. @ $59.50 ; 5 New 
 Steinway Wagons, 31/4x10, truck 3% in., @ $58; 6 New Steinway Wagons. 
 31/4x10, truck 3 in., @ $53 ; 1 N. S. Handy Truck, 3 in., @ $28 ; 4 Collinswood 
 Mounted Stackers @ $40 ; 6 Linn Grove Push-off Rakes @ $17.50 ; 8 Moline 
 Plows, N6, @ $13.20 ; 2 Moline Plows, N7, @ $15.20 ; 3 Prairie Queen Breakers, 
 14 in., @ $13.40; 2 Prairie Queen Breakers, 16 in., @ $16; 4 Shaker Diggers 
 @ $13; 1 Pipe Bar Harrow, 90th 1/2 in., @ $12.40; 4 Flex. Harrows, 120th, 
 16 ft. cut, @ $14.60; 12 Moline Sulkies N116 @ $47.80; 3 Moline Gangs N128 
 (a) $59.75; 5 Moline Cultivators A17 @ $15.50; 7 Moline Cultivators RA32 
 @ $24.60; 1 Moline Clod Crusher, 8 foot, @ $21.60; 5 Cedar Gate Co. #8 
 Gate, mesh bottom, @ $3.70; 3 American Ideal Binders AS291 @ $105; 
 
 4 Adams & Co. #603 Plush Robes @ $4.25; 2 Adams & Co. #217 Manitoba 
 Plush Robes @ $4.80; 1 Adams & Co. #369 Beverly P. Robe @ $6.50; 7 Allen 
 
PROGRESSIVE BUSINESS ACCOUNTING 75 
 
 #4 Drills @ $12.90; 2 Allen #13 Dbl. Wheel Hoe @ $7; 8 sets Kipple #110 
 Harness @ $38; 5 sets Kipple #112 Harness, 1%-in. traces, @ $41; 1 doz. 
 Kipple #17 Collars for $29.50 per doz. ; 1 doz. Kipple #461 Hitch Straps, 
 % in., for $2.40 per doz. ; 1 Champion Steam Thresher and attachments, 
 $1,960; 1 Freeport Steam Thresher and attachments, $2,180. 
 
 Expense: 6 months' rent prepaid, $480; Books and stationery for office 
 use, $30. 
 
 He owes the following firms on open account, which are assumed by the 
 firm: 
 
 Moline Plow Co., Moline, 111 $1,291.60 
 
 Cutler Wagon Co., Chicago 729.58 
 
 Henny Mfg. Co., Waterloo, Iowa 527.89 
 
 Wisconsin Buggy Co., Sheboygan, Wis 158.70 
 
 South West Saddlery Co., St. Louis 481.96 
 
 He is to invest cash sufficient to make a net credit of $6,000. 
 
 DIRECTIONS. Enter an inventory of merchandise on page 10 of in- 
 ventories. Enter expense inventory and list of accounts on page 11. Then 
 find how much cash should be contributed by Mr. Finney to give him the 
 credit agreed upon. 
 
 Draw up articles of co-partnership in duplicate, embodying the foregoing 
 facts and agreements. Attach your signature to both and secure Mr. Finney's 
 signature. Leave one copy with him and retain one for your own files. 
 
 Write a receipt in his favor for the amount and collect the cash. Sign 
 the receipt (student and Finney). Make an opening journal entry. Post 
 cash debits to the cash book. Open in the ledger accounts with partners on 
 page 1, Mdse. and Expense on 2; post the accounts payable to pages 7 and 8 
 of the ledger from the inventory book. Remember that posting these item 
 by item from the inventory book has the same effect upon the ledger balance 
 as posting their total from the journal would have. Check "Accounts 
 Payable" in journal to show that the posting has been done. These balances 
 should show in explanation column of ledger "Bal. per list page 11." 
 
 After completion of the posting, take a trial balance and record it on 
 page 8 of trial balances. 
 
 B 2. Open an account at the bank and place all cash on hand to the 
 credit of (student) & Finney, the name you will use in signing checks. 
 
 Use the pass book you have in your outfit. The bank will provide you 
 with a check book and deposit tickets. 
 
 B 3. Sell Elmer McKeown, on his four-months' note, 1 Moline Sulky 
 Plow, Nil 6, for $62.50. 
 
 Enter in sales book. No account will be kept with customers unless mentioned. 
 Bill on short bill head, fill out loose note drawing 6% from 'date. Receipt the bill 
 and secure his signature to the note. Record the note in the notes receivable book 
 (see model), giving it the No. 1. Place the number on the note in red ink, place the 
 note in the file for Notes Receivable. Post sales book to debit of Notes Receivable 
 in ledger. No use need be made of explanation column, as a full record of the note 
 has been made. 
 
 B 4. Sell William Hauser, on two-months' note, at 6%: 
 
 1 Moline 8 ft. Clod Crusher for $26. 
 
 1 set Kipple #110 Harness for $45. 
 (Proceed as in B3. Give the note No. 2.) 
 
76 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 NOTES 
 
 5*?^ 
 
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 B 5. 'Sell Ezra Hoffman, on his three-months' note at 6%. 
 1 New Steinway Wagon, 3i/4xlO H. T., for $78. 
 
 1 Pipe Bar Harrow, 90th 1/2 in., for $15.50. 
 
 2 Kipple #17 Collars, 22 in., for $6.50. 
 (Proceed as before.) 
 
 B 6. Sell Roy Hodges, for cash: 
 
 1 Adams & Co. #603 Plush Robe for $8.00. 
 
 2 Kipple #461 Hitch Straps for $ .50. 
 1 Top Box, 12 in., for $5.00. 
 
 (Receipt the bill, collect cash, post to cash book.) 
 
 B 7. Sell Walter Bye, for cash, 1 New Steinway Wagon, 31/4x10 H. T., 
 for $67.50 ; 1 Shaker Digger for $16. 
 
 B 8. Sell Harry Bahr, on account, 1 set Kipple #112 Harness, 1'%-in. 
 traces, for $41 ; 4 Kipple Collars, 4/20, for $10. 
 
 (Open the account on page 9.) 
 
 B 9. Sell F. J. Mixdorf, on account, 1 Moline Gang N128 for $70; 
 1 Henny A8 Surrey, $92; 2 Hitching Straps for 50 cts. 
 
 B 10. Sell Earl Arthur, 1 Champion Steam Thresher for $2,500; 2 sets 
 Kipple #110 Harness (S> $38 ; receiving in payment cash $576 and four notes 
 Eor $500, payable in 1, 2, 3, and 4 months from date with interest at 6%. 
 
 Fill out four notes for Arthur's signature, also a bill which receipt and 
 deliver when you receive the cash and signed notes called for. This entry 
 will be posted from the sales book to the debit of Cash, and of Notes Receiv- 
 able. Where a sales book entry is to be posted to the debit of two or more 
 accounts, the posting titles should be shown as in the form below. 
 
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 B 11 ^end $500 per draft to Moline Plow C(i., Moline| 111., proceeding 
 as follows: Write a check payable to ''Chicago Draft, our order, $500 Exch. 
 50 cts." This check is to be passed in at the bank in payment of a draft for 
 $500 and for exchange on the draft 50 cts. Show on the stub of the check 
 book that Moline Plow Co. is to be charged the face of the draft, and 
 Expense the amount of the exchange. After you have purchased the draft, 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 RECEIVABLE 
 
 77 
 
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 indorse it in full, write a letter like the model form, and place it in a 
 properly directed envelope. 
 
 Transfer from the stub of the cheek book to the credit side of the cash 
 book two entries, one debiting Moline Plow Co., the other debiting Expense. 
 Check mark the stub to show that entry has been made. Post. 
 
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 B 12. Purchase a draft $300, Exchange 30 cts, as above, and send it to 
 the South AVest Saddlery Co. for credit on account. 
 
 
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78 PROGRESSIVE BUSINESS ACCOUNTING 
 
 B 13. Order by mail of the Simplex Separator Co., 817 Monroe St., 
 Chicago, 5 No. 6 Tubular Hand Separators, billed on usual terms. Write 
 letter as in moJel, page 77, and make a memo, of the order in the journal. 
 In this set, orders for supplies are to be written on the usual letter-heads, and 
 a memo, of the order made in the journal. In the machinery business, many of the 
 order blanks, as well as other contracts, notes, etc., are required to be on the manu- 
 facturer's printed forms, so that it is generally only the unusual or small orders 
 that are to be filled on hurry demand during the season. 
 
 B 14. Order, by mail, of the Ayers Horse Blanket Co., Cumberland & 
 3d Sts., Philadelphia, Pa., by fast freight, on usual terms: 
 2 doz. Virginia Blankets. 
 2 doz. Brigand Blankets, 
 2 doz. Vanity Blankets. 
 2 doz. Mogul Blankets. 
 2 doz. Essex Blankets. 
 2 doz. Queen Blankets. 
 1 doz. Jumbo Blankets. 
 4 doz. Storm King Blankets. 
 Do not overlook making a memo, of the order in the journal. 
 B 15. Sell Edward Alderman, for his two-months' note, no interest 
 until maturity, 6% thereafter: 1 Illinois Buggy, #512, blue cloth trimming, 
 for $95. 
 
 Is the note #8 recorded in the notes receivable book? 
 B 16. Sell Claude Sawyer, on his note at 60 days, with 6% interest from 
 date, the items listed below. Require also the signature of J. P. Hess, who 
 is willing to sign the note as an accommodation to Sawyer. 
 1 Cutler Wagon, Nar. Tr. & Dump, for .$74.50. 
 1 set Kipple #112 Harness, 1% trace, for $56.00. 
 1 set Kipple Collars 2/21 for $6.50. 
 1 Allen #4 Drill for $16.50. 
 B 17. Sell Paul Landy for cash $20, and his 30-days' note at 6% for the 
 balance : 
 
 1 Collinswood Mounted Stacker for $55, 
 
 2 Linn Grove Push-off Rakes for $25. 
 
 1 New Steinway Wagon, 31^x10 truck 3 in., for $67.50. 
 
 B 18. Sell Freeman High for cash $50, balance on 90-day note at 6%, 
 with additional signer B. Bodholdt. 
 
 2 Moline Cultivators A17 @ $26. 
 
 1 Cedar Gate #8, mesh bottom, for $5.50. 
 1 Studebaker #108 Wagon for $65. 
 B 19. Sell Frank Cotter, receiving in payment two notes for equal parts 
 due 2 and 4 months respectively, at 6% : 
 
 1 Studebaker #108 Wagon for $65. 
 1 Linn Grove Push-off Rake for $25. 
 1 Flexible Bar Harrow 120th for $18. 
 1 set Kipple #110 Harness for $45. 
 B 20. Deposit in the bank all cash on hand. 
 
 EXPLANATION. In this set the student will buy grain for shipment, 
 paying market prices. Grain is bought in many small lots and shipped by 
 the car load to the general grain markets or to mills located in towns and 
 cities throughout the country. A ledger account will be kept with Grain, 
 and the purchase book will be kept for grain purchases. Purchases of mer- 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 79 
 
 chandise, being few in number in this business, will be entered in the journal. 
 The total of the grain purchase book will therefore be charged to Grain, not 
 Merchandise account. 
 
 INFORMATION # 125. The transfer of the real property is of so great 
 importance that a special instrument called a deed is used to evidence the 
 conveyance. A deed is a sealed instrument used to convey real estate. It is 
 signed or acknowledged in the presence of a justice of the peace, notary 
 public or other officer empowered to certify to the genuineness of the 
 instrument. After its delivery, the grantee should have the county recorder, 
 or the public official whose duty it is to make a public record of all titles 
 in land in a given county, record it. This record is official notice of the 
 change of ownership. Before buying lands, the intending purchaser should 
 have prior records thoroughly examined by a competent person, as an attor- 
 ney-at-law or an authorized abstract company, to make sure that the grantor 
 has good legal title to the property to be conveyed. Deeds and conveyances 
 are of ditferent kinds. The two common forms of deed are the quit claim 
 deed and the warranty deed. In the former the grantor conveys his interest, 
 whatever that may be. In the latter the grantor, in addition to conveying 
 his interest, undertakes to warrant that the title is good and complete. 
 
 B 21. Buy of Stephen Brown and his w^ife, Lillian Brown, lots 3 and 4, 
 in block #39 of the recorded plat of your city, on which a grain elevator 
 stands as part of the property, for cash $3,800. 
 
 Fill out a warranty deed (see legal forms), and secure the signatures 
 of the grantors, acknowledged by a notary public. On receipt of the deed, 
 write a check for $3,800, payable to Stephen Brown, and deliver it. Charge 
 Real Estate. 
 
 Write a check favor Claude Parker, county recorder, for $1, and hand 
 it to him to pay the recording fee for the deed. The deed is left with this 
 official for record. Charge Expense. 
 
 When the deed is returned, see that the date of record is plainly indorsed 
 on the back. File the deed with miscellaneous business papers. Enter in 
 cash book and open account with Real Estate on page 3 of ledger. 
 
 B 22. Buy of William Weaver, giving check in payment: 
 2 loads of wheat, 58 bu. and 64 bu., @ 81 ets. 
 
 Enter in grain purchase book as shown in the model entry. Make memo, 
 in lower left corner of the check for Weaver, thus: "122 bu. wheat at 81 cts. " 
 When transferring from check stub to cash book, do not use the title column 
 as the posting to the debit of Grain account will be taken from the total of 
 the grain purchase book. 
 
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 B23. Buy of F. E. Lucas, paying by check, 1 load wheat, 49 bu., @ 
 81 cts. 
 
 B 24. Buy of F. J. Mixdorf, to apply on his account, 571/2 bu. wheat 
 @ 81 cts. 
 
 Enter the purchase and post to credit of F. J. Mixdorf 's account on 
 page 9 of ledger. 
 
80 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 B 25. Submit a ticket as in set A, showing 
 
 1. Amount of cash invested. 
 
 2. Amount of cash received since investment. 
 
 3. Amount of cash paid since investment. 
 
 4. Amount of cash balance. 
 
 5. Amount of merchandise sales. 
 
 6. Amount of grain purchases. 
 
 Balance the cash book and compare the balance with balance on check 
 stub. 
 
 B 26. Receive invoice in response to order sent to Simplex Separator 
 Co. (The articles billed have arrived and have been taken from freight 
 house and placed in the warehouse by the Curtis Transfer Co.) 
 
 Observe that the invoice shows the price at which you are to sell the 
 items $115. From this is deducted the trade discount, 25%, which is your 
 profit, leaving a net amount to credit of the shipper of $431.25. Observe that 
 in selling the Simplex Separator, it may be necessary to exchange it for Lulu 
 Separators, with which the Simplex is in competition. If such exchange is 
 necessary, the Simplex Separator will allow you credit for the exchanged 
 article as shown on the invoice. 
 
 Enter Merchandise purchases in the journal in this set. Voucher num- 
 bers are not given to incoming bills in this business for the reason that the 
 settlement of accounts is governed by special contracts, and in some cases is 
 made annually. 
 
 INFOHMATION # 126. Railroad companies render expense bills for 
 the transportation charges on goods shipped by freight. These expense bills 
 are written on forms prepared by the railroad company. It is customary 
 for the local transfer company when delivering in-freight to take up the 
 expense bill, add their drayage charges to it, and present all in one amount 
 to the consignee (party to whom the freight is shipped) for payment. 
 
 :j^ 127. The in-freight and drayage charges are debited to the account 
 to which the property received is charged, . 
 
 B27. The Curtis Transfer Co. present the bill for freight and drayage 
 on invoice received in B26. $4.02. 
 
 Pay by check in their favor, enter, and post. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 81 
 
 B 28. Receive invoice in response to order sent to Ayers Horse Blanket 
 Co. (The invoice checks with the goods delivered from freight house). The 
 invoice calls for payment by 60-day note. "Write a note in favor of the 
 shipper for the amount of their bill for the given time, without interest. 
 Record the note in the notes payable book and number it 1 ; enter it in 
 the journal to the credit of Notes Payable (there will be no ledger account 
 with this firm) ; write a letter similar to the model on page 80, and mail 
 letter, invoice, and note accordingly. 
 
 B 29. The Curtis Transfer Co. present railroad expense bill, drayage 
 charges attached, for the last delivery of merchandise. Pay by check. 
 
 B 30. Send Henny Mfg. Co., by mail, your note at 30 days drawing 6%, 
 in full of account. Write a letter. Record in notes payable book, make 
 journal entry. 
 
 B 31. Sold Vernal Arthur, on account : 
 
 1 #6 Tubular Hand Separator #59783 for $115. 
 1 Prairie Queen Breaker, 14 in., for $16.50. 
 1 American Ideal Binder AS291 for $105. 
 B 32. Received of Vernal Arthur, to apply on purchase price of hand 
 separator sold him, 1 Lulu Separator, for which allowed on account, $25. 
 
 Enter in journal. Debit Simplex Separator Co., credit Vernal Arthur. 
 B 33. Sold H. L. Howard, on account: 
 
 1 #6 Tubular Hand Separator #59784 for $115. 
 
 1 Shaker Digger for $16. 
 
 1 Collinswood Mounted Stacker for $55. 
 
 1 Linn Grove Push-off Rake for $25. 
 
 B 34. Sold to sundry cash purchasers the following items. Enter in 
 the sales book and carry total to the cash book. 
 
 2 Virginia Blankets. 80x84, for $6.00. 
 
 1 Cutler Nar. Tr. Wagon and Dump for $74.50. 
 
 1 314x10 Steinway Hand Truck, 3 in., for $38. 
 
 2 Mogul Blankets, 80x84, for $8.50. 
 1 Moline Plow N6 for $17. 
 
 1 Prairie Queen Breaker, 16 in., for $18.25. 
 
 1 Essex Blanket, 84x90, for $4. 
 
 1 #6 Tubular Hand Separator #59785 for $115. 
 
 2 Moline Cultivators RA32 for $63. 
 
 1 Cedar #8 Gate, mesh bottom, for $5.50. 
 
 2 Adams & Co. #217 Manitoba Robes for $15. 
 2 Jumbo Blankets, 90x96, for $9. 
 
 2 Kipple Horse Collars, 22 in., for $6.50. 
 
 B 35. Richard Hall makes arrangements with us to purchase his wheat 
 at market price. We are to give him credit on open account as received. 
 Open his account in ledger, page 10. 
 
 He sends today 5 loads, 54, 56, 61, 49, and 52 bu. respectively, for which 
 give him credit at 82 cts. per bu. 
 
 B 36. Buy of Robert Weatherwax 2 loads of wheat, 58 and 42 bu. 
 paying by check at 82 cts. 
 
 B 37. Buy of G. F. Foley 137 bu. wheat at 81 cts., paying by check. 
 
 B 38. Sell Arthur Diekman and Henry Diekman, on their five joint 
 notes maturing in 1, 2, 3, 4, and 5 months respectively, at 6%, one Freeport 
 Steam Thresher and attachments for $2,625, ■ 
 
82 PROGRESSIVE BUSINESS ACCOUNTING 
 
 B 39. Send a draft to Cutler Wagon Co. for $200, exchange 20 cts., to 
 apply on account. (See Bll.) 
 
 B 40, Richard Hall delivers 1,039 bu. wheat for which give him credit 
 at 811/2 cts. 
 
 B 41. Sell Richard Hall, on account: 
 
 2 Studebaker #108 Wagons, box seat, for $130. 
 2 Top Boxes, 12 in., for $10. 
 B42. Sell to Harry Shaw, receiving cash $100 and his note at 30 days 
 drawing 6% for the balance : 
 
 1 American Ideal Binder for $130. 
 
 1 Adams #369 Plush Robe for $9.50. 
 
 2 Hitching Straps for 60 cts. 
 
 1 #6 Tubular Hand Separator #59756 for $115. 
 
 INFORMATION #128. A part payment of a note is acknowledged by 
 the holder's indorsement written on the back of the note. Indorsements 
 may be in cash or in other value. The indorsements of a part payment 
 should be written across the note at the "end opposite to the one on which 
 transfer indorsements are written. The indorsements of payment are written 
 at the reverse side of the right end of the paper; the transfer indorsements 
 are written at the reverse side of the left end of the paper. 
 
 B 43. According to agreement, Harry Shaw delivers a second-hand 
 Lulu Separator, for which he is allowed $25 to apply on his note given in B 42. 
 
 Indorse on the note words in the following form: ''Aug. 2, 1909. 
 Received to apply on within, 1 Lulu Separator for $25." Write opposite 
 the amount of the note in the notes receivable book, above, not on, the blue 
 line on which the note is recorded, words in the following form: "Aug. 2, 
 1909. Indorsed $25." When a final payment of any note is made, the 
 annotation is written on the blue line. 
 
 Make the correct journal entry for this and post. 
 
 B 44. Collect cash $20 from Paul Landy in part payment of our note 
 #10 against him. 
 
 Indorse on note thus: ''Aug. 2, 1909. Indorsed cash $20." Show 
 payment in notes receivable book, enter in cash book, and post. 
 
 B45. Received of Richard Hall 788 bu. wheat, for which give him 
 credit at 82 cts. 
 
 B 46. Pay to Richard Hall, check to balance account. 
 
 B 47. Deposit the cash on hand. 
 
 B48. Send Wisconsin Buggy Co. a bank draft for $100 to apply on 
 account. 
 
 B 49. Buy of William Putnam, 329 bu. wheat @ 821/2 cts., giving check 
 in payment. 
 
 B 50. Balance the cash book, and leave your bank pass book at the 
 bank to be balanced. Open an account with Grain on page 3 of ledger and 
 post the total grain purchases to this account. 
 
 Post total merchandise sales to the credit of Mdse. 
 
 Enter a trial balance on page 8 of trial balance book. 
 
 Submit a ticket showing 
 
 1. Cash balance. 
 
 2. Merchandise sales to date. 
 
 3. Grain purchases to date. 
 
 4. Number of bushels of wheat on hand. 
 
PROGRESSIVE BUSINESS ACCOUNTING 83 
 
 INFORMATION # 129. Grain, cotton, live stock, vegetables, fruits, 
 poultry and other commodities are purchased in the communities where 
 produced and sent in quantity to commission houses in the larger business 
 centers to be sold on the market. The price that they will bring cannot be 
 definitely stated until the goods arrive at the place of sale. Goods sent 
 thus to commission merchants are called shipments by the shipper (con- 
 signor). A ledger account is opened with the property sent to any one firm. 
 For example, if a shipment is sent to Goodyear Commission Company for 
 sale on your account and risk, you should open an account with "Shipments 
 to G. Com. Co." in the ledger. Under this general title each shipment should 
 be given a few lines space and should be referred to as #1, #2, etc., refer- 
 ring to the order in which they were sent. These divisions of the general 
 shipment account should be charged with the cost of the shipment and with 
 any subsequent charges paid by the consignor pertaining to the shipment. 
 When the consignee has sold the shipment, he makes a report called an 
 account sales for the consignor. This account sales shows the price and 
 amount secured for the goods shipped, together with a deduction from that 
 amount, of the consignee's charges for services in handling the goods and 
 conducting the sale. After deducting the charges, the net proceeds remains. 
 This is remitted to the consignor with the account sales by cheek or is placed 
 to his credit to be drawn against. The consignor, on receipt of the account 
 sales, credits the shipment account by number with the net proceeds and 
 charges the account indicated. In some kinds of shipments the consignor 
 is allowed to draw drafts on the commission house against the proceeds of 
 the shipment, at the time he ships. This he does that he may cash the drafts 
 at a bank and thus secure ready money. In order to do this the shipper 
 secures from the railroad company a bill of lading (see 4^130), which is 
 evidence that the shipment has been made; and sends this bill of lading to 
 the consignee, either in the letter of advice or he may send it pinned to the 
 draft. If the shipper cashes a draft against the shipment, he credits the 
 shipment by number with the amount of the draft. In that case, after sale, 
 the consignee remits or credits the net proceeds of the sale after the amount 
 of the draft is deducted. After full returns, each shipment account shows 
 a loss or a gain, and the account is closed into the Loss & Gain account. 
 
 #130. A bill of lading is a written contract between a railroad or other 
 common carrier and a shipper describing goods received for shipment, stating 
 terms of shipment and to whom delivery is to be made. Copies are kept by 
 the shipper and the agent of the transportation company. It is presented 
 by the consignee to show title to the goods shipped. 
 
 B 51. Consign to the Gregory Commission Co. one car load, 600 bu., 
 wheat for sale on our account and risk, freight unpaid, by Commercial 
 Railway Co. 
 
 Receive a bill of lading from the railway Co. Write a letter of advice 
 like the form on page 84, and make a journal entry debiting "Shipt. Gregory 
 Com. Co. #1," and crediting Grain, 600 bu. wheat @ 82 cts. Open the 
 new ledger account at top of page 4. Observe the model on page 73 closely. 
 
 B 52. Consign to Mead & Beach, Chicago commission merchants, for 
 sale on our account and risk, 1,330 bu. wheat, freight prepaid, by Railway. 
 (Open account with "Shipments to Mead & Beach.") Pay freight as shown 
 on bill of lading, by check. Charge the shipment to Mead & Beach #1 with 
 the wheat at 82 cts. per bu. through the journal, and the freight paid through 
 the cash book. 
 
84 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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 B53. The Oakdale Milling Co., Oakdale, Neb., offer you 4 cents above 
 market price for No. 2 wheat billed f. o. b. (free on board) your station. 
 Ship them one car load, 620 bu., at 86 cts. and charge their account. This 
 is not a consignment but a sale. It must be entered in the journal, not 
 sales book, because merchandise sales only are entered in the sales book- 
 Secure bill of lading and send with bill. Open Oakdale Milling Co. account 
 on page 10 of your ledger. 
 
 INFORMATION # 131. A consignment account is an account kept with 
 goods sent by others for sale on their account and risk. The commission 
 houses to whom you sent shipments in B51 and B52 will keep consignment 
 accounts with your shipments. Manufacturers who offer new products for 
 which there is a doubtful market may be unable to sell their goods to dealers. 
 But dealers frequently take such goods on consignment (on sale), that is, 
 with the understanding that they are not to be remitted for until sold. The 
 consignor is not credited when the goods arrive, but is credited with sales 
 as they are made. At the close of the season, if any articles consigned remain 
 unsold, they are to be accounted for and may be returned to the consignor 
 or kept until sold as agreed upon, 
 
 4^ 132. The consignments account with any firm should show a memo, 
 of goods received, each consignment being numbered as with shipments in 
 the credit explanation column. Sales as made should be posted to the credit 
 of the consignment to which they belong, and fully explained. When any 
 one consignment is closed, the amount due should be remitted and charged, 
 thus balancing the account. See model on page 73. 
 
 # 133. Goods consigned may be entered on a regular form bill, terms 
 ''on sale," and a price may be placed on the items sent. This may be the 
 net price or the list price. If they are thus billed in memo, at net price, the 
 dealer will make his profit by selling above that price. If they are billed at 
 list or selling price, the dealer will make his profit by deducting a com- 
 mission from that price. 
 
 B54. Receive invoice from Waterloo Gasoline Engine Co., who have 
 sent you two items on sale. Open an account in ledger, page 5, with "Con- 
 signments from W. Gas. Eng. Co.," and in the credit side enter the date, 
 the number of the consignment and explanation "2 R. E. Engines @ $90." 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 85 
 
 B 55. Pay Curtis Transfer Co., by check, $1.10 for delivering the engines 
 from freight house. (Charge Const. W. G. E. Co. #1.) 
 
 B 56. Sell A. C. Hoenig, for cash $90, one R. E. Gasoline Engine from 
 this consignment. Bill as usual, but do not enter in sales book, for a con- 
 signment is to be credited, not Merchandise. Make the entry in the cash 
 book, and post to credit of Const. W. Gas. Eng. Co. #1. 
 
 B57. Sell to E. Yearsley, on his 30-day note at 6%, 1 R. E. Engine 
 from Const. W. Gas. Eng. Co. #1 for $90. 
 
 Enter in journal and post. 
 
 INFORMATION # 134. Commission is an allowance made for buying 
 or selling property belonging to other persons. It is usually computed at a 
 certain per cent of the amount bought or sold. The commission account in 
 the ledger shows on the credit side a gain, representing the amount that the 
 operations in commission have given to the business. 
 
 # 135. When a consignment is all sold, close the account by debiting 
 against it the commission earned, and any other charges connected with it. 
 The difference between these charges and the amount of sales is called net 
 proceeds, which should be remitted to the consignor, or credited to his per- 
 sonal account according to agreement. 
 
 B58. As Const. W. Gas. Eng. Co. #1 is sold, close the account. The 
 entire sales amount to $180. Your commission at 25% is $45. This with the 
 drayage charge of $1.10 already made leaves the net proceeds $133.90. 
 
 Buy a bank draft for this amount, giving the check for 20 ets. additional 
 exchange. 
 
 Make a journal entry as in model, and after posting, foot and rule 
 Const. W. Gas. Eng. Co. #1, for it should be in balance. 
 
 Inclose the draft in a letter like the model reporting the sale. 
 
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 INFORMATION # 136. Consignment accounts, as well as all other 
 accounts requiring itemized statements, should show, in the explanatory col- 
 umns of the ledger, memoranda sufficient to make a clear explanation of all 
 entries. If this is not done, time and patience will necessarily be expended 
 in looking up the original entries. 
 
66 PROGRESSIVE BUSINESS ACCOUNTING 
 
 B 59. Receive an invoice of shipment from the Columbus Automobile 
 Co. The Curtis Transfer Co. have delivered the items listed in the invoice. 
 
 EXPLANATION. By arrangement with a traveling repi^esentative of 
 this company, your firm has agreed to receive on consignment 3 Columbus 
 High Wheel Runabouts to be sold at $550 each. You are to deduct from the 
 proceeds of sales all necessary charges connected therewith, including freight, 
 repairs, and a commission of 20% on gross sales. At settlement, you are to 
 remit cash for the proceeds, or you may remit not over one-half of the pro- 
 ceeds in good notes indorsed by your firm. 
 
 Open an account with "Consignments from Columbus Automobile Co." 
 and enter memo, of goods received as in previous consignment. 
 
 B 60. Pay freight and drayage bill presented by the Curtis Transfer 
 Co. and charge to Const. C. A. Co. #2. 
 
 B 61. Buy of E. J. Gilleas 443 bu. wheat @ 84 cts., paying by check. 
 
 INFORMATION # 137. Business men when short of immediate cash 
 usually borrow money from a bank, giving their short time notes. These 
 advances by the bank are called either loans or discounts. When the bank's 
 customer gives his interest-bearing note for which the bank allows him the 
 face of the note in cash or credit, the transaction is called a loan. 
 
 When the bank's customer presents his non-interest-bearing note and 
 the bank deducts from the face the interest for the term, and gives him cash 
 or credit for the proceeds (remainder after deducting the interest), the 
 transaction is called a discount. 
 
 In addition to getting cash by loan or discount on his own notes, the 
 business man frequently discounts at the bank notes that he holds against 
 other persons. 
 
 When a loan or discount is made, the borrower, if he has an account at 
 the bank, should enter the note or notes on a deposit ticket and make a total 
 of the proceeds. On receiving this, the bank teller will credit the amount 
 as in any other deposit. When the note becomes due, it should be paid by 
 check. 
 
 B 62. Write a note at thirty days in favor of your bank, for $1,000, 
 without interest, and record it in the Notes Payable book. Enter it on a 
 deposit ticket showing the face less discount for thirty days at 6%, and 
 deposit the proceeds. Make a journal entry debiting Cash, Interest & Disc't, 
 crediting Notes Payable. Post, enter the deposit in the check book, and 
 show the bank balance. 
 
 B 63. The commission company to whom you sent shipment in B51, send 
 you an account sales and a bank draft for the proceeds of the sale of the 
 grain. 
 
 After examination of the report and draft, if found correct, enter the 
 amount of the draft to the credit of shipments to Gregory Commission Co. 
 4^1, enter in cash book, place the draft in the cash drawer, and post the 
 entry. 
 
 After the entry is posted, you will observe by comparing the debit and 
 credit amounts of this shipment, that the result is a gain to you of $11.75. 
 Enter in the debit side of the shipment account, in red ink, the date, "Loss & 
 Gain $11.75," foot and rule the account. Open an account with Loss & Gain 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 87 
 
 on the lower one-third of page 5, and post the Loss & Gain entry to the 
 credit of this account, using the explanation "Shipt. G. C. Co. #1." 
 
 B 64. Ship to the Gregory Commission Co. a car load of wheat, 580 bu., 
 at 83 cts., for sale on your account and risk, freight unpaid. Follow routine 
 given in B51. 
 
 Turn to Shipt. G. C. Co. account in ledger, and below the ruling, enter 
 a memo, of the shipment ^2 as shown in the model form. 
 
 B 65. The commission firm to whom you sent a shipment in B52, send 
 you an account sales showing that they have sold the grain and have placed 
 the proceeds to your credit subject to sight draft. Make a journal entry 
 debiting Mead & Beach (personal account), and crediting Shipt. M. & B. :^1, 
 and post. Open the account with Mead & Beach at foot of page 10. 
 
 Close Shipt. M. & B. #1 into Loss & Gain as you closed Shipt. G. C. 
 Co. #1. 
 
 B 66. Send by mail a sight draft on Mead & Beach in favor of the 
 Cutler Wagon Co. for the balance due the latter firm (read Infor. ^106-2d). 
 
 The amount of the draft may be found by reference to the ledger account. 
 
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 Waterloo.Iowa. ^^^^^'^- ^ ^f/^- 
 
 VALUE RECEIVED AND CHARGE TO ACCOUNT OF 
 
 
 Fill the stub and draft as shown (see model), write a letter (see model), 
 make the journal entry, and mail the remittance. Post the entry. 
 
 fiS^C^-^/ 
 
 
 ^(2^^-.:z^<^ -/-^f^i^ 
 
 
 B 67. Draw at sight on Oakdale Milling Co. for the amount of their 
 account. Deposit the draft, less a discount of $1.00, in the bank. (Read 
 Infor. #112.) Journalize, post, enter the deposit in check stub. 
 
88 PROGRESSIVE BUSINESS ACCOUNTING 
 
 B 68. The Southwest Saddlery Co., of St, Louis, have drawn on you 
 to balance your account. The draft has been forwarded to your bank for 
 collection. Call at the bank, and after seeing the draft, compare the amount 
 with the balance to the credit of that company in your ledger. If the amount 
 is correct, write a check in favor of your bank for the face and a collection 
 charge of 30 cts. which your bank adds for their services. Enter in cash 
 book (two titles) and post. See that the sight draft has been marked "paid" 
 by the bank, then file it as a receipt. 
 
 B 69. Pay, as in B68, the sight draft drawn on you by the Wisconsin 
 Buggy Co. to balance account. The exchange added to the draft is 15 cts. 
 
 B70. The Waterloo Gasoline Engine Co. sends you a second consign- 
 ment (see B55), as per invoice of shipment. The items called for have been 
 delivered at warehouse by the Curtis Transfer Company, to whom pay cur- 
 rency for drayage, $2.75. 
 
 B71. Bought of Richard Hall, on account (see B35), five loads of wheat, 
 58, 56, 64, 59, and 62 bu. respectively, 84 cts. per bu. 
 
 B 72. Sell to Herbert Jordon, for cash $200 and his 90-day note at 6% 
 $350, one Columbus Runabout from Const, from Columbus Automobile Co. 
 #1. Enter in journal. Why? See B56 and B57, also Infor. #85. 
 
 B 73. Sell to F. J. Mixdorf , on account : 
 
 1 Cutler Nar. Tr. Wagon & Dump for $74.50. 
 
 1 Moline Plow N6 for $17. 
 
 1 Cedar Gate #8, mesh bottom, for $5.50. 
 
 Enter in sales book, page 4. 
 
 B74. Sell to Vernal Arthur, on account: 
 
 1 American Ideal Binder AS291 for $105. 
 1 Allen #13 Dbl. Wheel Hoe for $10.50. 
 1 Henny A48 Surrey for $115. 
 
 INFORMATION # 138. It is well to form a habit of completing all 
 entries and computations correctly before proceeding with work. A first- 
 class bookkeeper will make a correct trial balance on the first addition more 
 frequently than he will miss making it. For those who sometimes fail in 
 this respect, a few rules for detecting errors in trial balances are given: 
 
 1. Make the trial balance as complete and perfect as possible, using 
 pencil footings. 
 
 2. On a loose slip of paper compute the amount of the discrepancy, 
 
 3. If you are conscious of a tendency to make several errors in the 
 amount of posting since last trial balance, check the posting. Begin with 
 the journal and see that all debit entries are posted to the ledger on the 
 debit side. As each entry is compared, plr.ce a small neat pencil check mark 
 on the double ruling before it in both journal and ledger. Next, check journal 
 credits, cash book debits and credits, and continuing check all books of 
 original entry with the accounts. If no error is discovered, review all the 
 amounts supposed to be posted and see if any are not checked. An entry 
 not checked, may be some item posted a second time by mistake. If at any 
 time part of the desired amount is found, deduct that part from the amount 
 first sought so that the exact difference may be alwaj^s in mind. 
 
 4. If the books do not balance when checked back, there may be an 
 error in addition. Review all footing, and transferring of amounts. 
 
PROGRESSIVE BUSINESS ACCOUNTING 89 
 
 If you think that you have probably made only one error, apply the 
 following : 
 
 5. Look for one-half of the amount desired, in the greater side of the 
 ledger. You may have posted an item to the wrong side, which would result 
 in a difference in the trial balance of double the amount mis-posted. 
 
 6. If the discrepancy is divisible by 9, look for a reversal of figures 
 in posting or in transferring amounts. For example, $95 posted for $59 would 
 make the trial balance out of balance the difference between them, $36, a 
 number divisible by 9. $529.61 posted for $569.21 would make a discrepancy 
 of $39.60, a number also divisible by 9. Likewise any reversal of figures 
 will cause a discrepancy divisible by 9. 
 
 7. If the discrepancy is a single figure with any number of ciphers, as 
 1, 10, 1,000, 500, 90,000, it would be well to review the footings. An error 
 in addition is probable. 
 
 8. Persons who make numerous mistakes have discovered other ways 
 of finding them. If the bookkeeper would form the habit of understanding 
 and doing all his work correctly as he proceeds, he would have no mistakes 
 to discover, 
 
 B 75. Balance the cash book and prove the balance to be correct. Carry 
 the balance to top of page 6. 
 
 Foot and post the Merchandise sales book. 
 
 Foot and post the Grain purchase book. 
 
 Make a trial balance and record it on page 9 of trial balances. 
 
 Deposit all cash on hand and leave the bank pass book at the bank for 
 balancing. 
 
 Pass a ticket to teacher's desk showing: 
 
 1. Amount of cash in drawer. 
 
 2. Amount of cash in bank. 
 
 3. Amount of Notes Receivable on hand. 
 
 4. Bushels of wheat on hand. 
 
 5. Bushels of wheat in shipment not sold. 
 
 B76. Sell to Charles Deeming, for cash, $550, one Columbus Runabout 
 of Const, from Columbus Automobile Co. #1. 
 
 B 77. Collect cash of Harry Bahr in full of account, and give him a 
 receipt, 
 
 B 78. Collect cash of Henry & Arthur Dickman in full payment of their 
 note (your No. 14) and interest computed at 20 days. 
 
 Compute the interest, add it to the face of the note. Receive the cash, 
 mark the note "paid" on notes receivable book and on the face of the note. 
 Surrender the note. Enter in cash book, crediting two titles, Notes Receiv- 
 able and Interest & Discount. Post. 
 
 B 79. Collect cash of H. L. Howard, in full of account, giving a receipt. 
 
 B 80. Draw on Mead & Beach for the balance due in favor of Columbus 
 Automobile Co., and remit the draft (write letter) to the latter firm to apply 
 on their consignment. 
 
 B81. Sold Edward licit, for cash $550, one Columbus Runabout from 
 Const. C. A. Co. #1. 
 
 B82. Close the Const, from Columbus Auto. Co. #1. (Read Infor. 
 #136, compare with B58 and read B59.) 
 
 As per contract, you are allowed to remit up to one-half of your proceeds 
 
90 PROGRESSIVE BUSINESS ACCOUNTING 
 
 in notes indorsed by you. You will send as a part of your remittance for 
 the proceeds of the consignment, your notes receivable Nos. 1, 2, 3, and 21, 
 which indorse to them in full, to be charged at face without reference to 
 interest. (Do not forget to endorse the notes in full and mark them off 
 the notes receivable book with an annotation similar to this: "Aug. 9, 1909. 
 Sent C. Auto. Co. on a/c") 
 
 After deducting the notes, your commission and the charges to the 
 consignment already made from the total credit of the consignment, pur- 
 chase a bank draft for the balance due, paying for the draft and 10 cts. 
 exchange by check. 
 
 Make a journal entry, charging the consignment and Expense, and cred- 
 iting three titles. 
 
 Post the entry, foot, and rule the consignment account. 
 
 Write in letter form an account sales of the consignment reporting the 
 remittance to balance. 
 
 In the letter, list the notes by number, name, and amount. Mail the 
 letter, notes, and draft to the consignor. 
 
 B83. Sell to Winnifred Bush, for cash $90, one R. E. Gasoline Engine 
 from Const. W. G. E. Co. #2. 
 
 B 84. You have learned that F. J. Mixdorf, who owes you a balance 
 on open account, has changed his residence to Platte, Charles Mix Co., S. D. 
 Make an annotation at head of his ledger account, showing the date and his 
 address. 
 
 Make a statement of his account, and inclose it in a letter to him urging 
 immediate payment. State in letter that if you do not hear from him at once 
 you will draw on him at sight for the amount. 
 
 B 85. The Henny Mfg. Co. have sent to your bank for collection your 
 note No. 2 to them which may be considered now due. 
 
 Pay the amount (face and 30 days' interest) by check; receive the can- 
 celled note. 
 
 Mark date of payment on notes payable book; paste cancelled note to 
 stub. 
 
 B 86. As you will soon need a large amount of cash, submit to your 
 banker the following notes receivable for discount : Nos. 4, 5, 6, and 7, Earl 
 Arthur; Nos. 15, 16, 17, and 18, H. & A. Dickman; No. 19, Harry Shaw; No. 
 20, E. Yearsley. 
 
 The banker will allow you credit for them as follows: 
 For Nos. 4, 5, 6, and 7, face less $8.33 discount. 
 For Nos. 15, 16, 17, and 18, face less $13.25. 
 For No. 19, face less the indorsement. 
 For No. 20, face, no discount. 
 
 Accept the offer and make a list of the notes. No. 19 should be listed 
 at face less indorsement. Foot the list. Deduct the discount, and show the 
 net proceeds of the notes. 
 
 Indorse in full each of the notes in favor of the bank. 
 
 Make annotation on notes receivable book opposite each note discounted, 
 in this form: "Aug. 10, 1909, discounted at bank." 
 
 Attach your list of notes to a deposit ticket, and deposit the proceeds. 
 Make the book entry. 
 
 B 87. Not hearing from F. J. Mixdorf, draw a sight draft on him for the 
 
PROGRESSIVE BUSINESS ACCOUNTING 91 
 
 amount due and leave it at the bank for collection. (See Infor. 4#^106-3d.) 
 A memo, in ledger account is to be made like the following: Aug. 10, 1909. 
 Drew through bank for bal., $212.92. 
 
 B 88. Receive account sales from Gregory Commission Co., of shipment 
 :ff:2, with draft for net proceeds. (Compare with B63.) 
 
 B 89. Sell to Richard Hall, on account, 3 R. E. Gasoline Engines @ $90, 
 from Const. ^Y. G. E. Co. #2. 
 
 B 90. Draw a sight draft on Vernal Arthur, at Millerstown, your state, 
 for the balance due, and leave the draft at the bank for collection. 
 
 B 91. Pay by check your Note Payable #3 due the bank. Consider 
 this the maturity date of the note. 
 
 B 92. Sell to Vivian Dix, for cash $90, the remaining R. E. Gasoline 
 Engine belonging to Const. W. G. E. Co. #2. 
 
 B93. Close Const. W. G. E. Co. #2 and remit the proceeds. (Refer 
 to B58.) Exchange on bank draft is 40 cts. 
 
 B 94. Paul Landy makes a second payment of $40 cash on his note #10. 
 (Compare with B44.) 
 
 B 95. The Ayers Horse Blanket Co. have sent your acceptance their 
 favor (Note Payable #1), to your bank for collection. Considering it now 
 due, pay it by check. 
 
 B 96. The bank has collected the sight drafts which you left for collec- 
 tion against F. J. Mixdorf and Vernal Arthur. They have placed the pro- 
 ceeds to your credit after deducting 45 cts. and 75 cts respectively from the 
 drafts for collection charges. Take your pass book to the bank and have 
 the teller enter (as deposits) the proceeds of the drafts collected. Make 
 entry and post. 
 
 B 97. AVrite a check in favor of yourself for one month's salary, $200. 
 Charge Expense. Cash the check, 
 
 B 98. Deposit all cash and leave your pass book at the bank to be 
 balanced. 
 
 B 99. Take a trial balance. 
 
 B 100. Make a statement of the business and close the ledger. The 
 inventories are given below. 
 
 Merchandise: 4 New Steinway "Wagons, truck 3x3%, @ $58; 5 New 
 Steinway Wagons, truck 3 in., @ $53; 2 Collinswood Mounted Stackers @ 
 $40; 2 Linn Grove Push-off Rakes @ $17.50; 6 Moline Plows N6 @ $13.20; 
 
 2 Moline Plows N7 @ $15.20; 2 Prairie Queen Breakers, 14 inch, @ $13.40; 
 1 Prairie Queen Breaker, 16-inch, @ $16; 2 Shaker Diggers @ $13; 3 Flex. 
 Pipe Bar Harrows 120th @ $14.60; 11 Moline Sulkies N116 (S^$47.80; 2 Mo- 
 line Gangs N128 @ $59.75; 3 Moline Cultivators A17 @ $15.50; 5 Moline 
 Cultivators RA32 @ $24.60; 3 Cedar Gate Co. #8 Gates, mesh bottom @ 
 $3.70; 3 Adams & Co. Plush Robes #603 @ $4.25; 6 Allen #4 Drills @ $12.90; 
 1 Allen #13 Dbl. Wheel Hoe (g $7; 4 sets Kipple #110 Harness @ $38; 
 
 3 sets Kipple #112 Harness, 1%-inch traces, @ $41; 2 Collars, #117 Kipple, 
 @ $2.40; 5 Hitch Straps, #461 Kipple, @ 20 cts; Goods in Inv. A. H. B. Co., 
 less sales, $484.08; 1 #6 Tubular Hand Separator @ $86.25. 
 
 Grain: Amount on hand, 430 bu. wheat, @ 84 cts. 
 Real Estate : The real property bought in B21 is valued at cost. 
 Expense: 5 months' rent prepaid, $400. Stationery on hand, $20. 
 Notes Receivable: 6 notes. 
 
92 
 
 PROGRESSIVE BUSINESS AOCOUNTIInG 
 
 Accounts Beceivable: One only. 
 
 Accounts Payable: Two only. 
 
 Enter the inventories and lists in pages 11 and 12 of inventory book. 
 
 Make a statement showing losses and gains, divided as agreed upon. 
 
 Close the ledger, carrying gains to partners as in statement. 
 
 Take a trial balance after closing. 
 
 Purchase a bank draft for your balance in the bank as shown by your 
 books, giving a check in payment. (The bank will charge no exchange.) 
 
 Leave your Notes Receivable at the bank for collection. Request that 
 when paid the proceeds be remitted to your firm by draft. 
 
 DIRECTIONS. You will now remove the books of this set and examine 
 each page carefully to see that all has been done in correct form. If satis- 
 factory, pin at back each of the three sets, wiite the usual heading at the top. 
 
 Make a neat package of your vouchers, and submit all for inspection. 
 
 EXERCISE XVI 
 
 INFORMATION # 140, It has been shown in #94 that the property 
 pertaining to any accounts may be listed in inventories. The totals of these 
 inventories are resources of the business, and when the accounts are closed, 
 are entered (red ink) in the credit side, and carried (black ink) below the 
 ruling to the debit side of the accounts to Avhich they pertain. There are 
 also liability inventories. These consist of items owed by the business, that 
 have not been entered in the books. Among liability inventories are found 
 Interest payable to others. Expense items due but not charged, as salaries 
 unpaid, taxes unpaid, etc. 
 
 When an account having a liability inventory is closed, the liability 
 inventory is entered in red ink in the debit side and carried below the ruling 
 to the credit side of the account. Some accounts have both resource and 
 liability inventories at the time of closing. Both are to be entered in the 
 same account. The form here given illustrates the closing of an account 
 having both kinds of inventories. 
 
 ^^^>^-Z!^--^:^g^.:^<^^<:a<^ 
 
 # 141. When making a statement of the business, add liability inven- 
 tories to the debit footings of the accounts to which they pertain. 
 
 # 142. A business may be in such a condition that a financial state- 
 ment will show greater total liabilities than total resources. When the 
 liabilities exceed the resources, the firm is insolvent. In a case of insolvency 
 it is impossible to pay all indebtedness out of the assets (resources) of the 
 firm, because the former exceeds the latter. 
 
 # 143. When insolvent, a firm may wind up its affairs by going into 
 
PROGRESSIVE BUSINESS ACCOUNTING 93 
 
 bankruptcy. The laws provide that a bankrupt may distribute all of his 
 assets among his creditors, pro rata, and thus extinguish their claims against 
 him. Bankruptcy may be entered into voluntarily by the insolvent person 
 or he may be forced into bankruptcy by one or more of his creditors. In 
 either ease the court appoints a receiver who takes possession of his property 
 and converts it into cash for the benefit of his creditors. 
 
 EXPLANATION. In this exercise, the student will make two state- 
 ments of the business from partnership books. There are included in both 
 statements resource and liability inventories. One of the statements will 
 show the business in a solvent condition although sustaining a net loss. The 
 other will exhibit an insolvent condition. 
 
 DIRECTIONS, Take a half sheet of journal paper. Head one side 
 "Statement of Brown, Smith & Jones;" head the reverse side "Statement 
 of Mason & Adamson." Complete the statement from the data. The ledger 
 exhibits accounts as follows : 
 
 John Brown, Partner Dr. $ Cr. $4,000.00 
 
 James Smith, Partner " 800.00 " 5,000.00 
 
 Edward Jones, Partner " 500.00 " 3,500.00 
 
 Cash " 329.60 
 
 Merchandise " 12,431.80 " 5,291.64 
 
 Furniture & Fixtures " 1.829.40 
 
 Expense " 3,291.80 
 
 Commission " " 584.92 
 
 Interest & Discount " 788.90 " 129.62 
 
 Notes Payable " " 5,691.40 
 
 Notes Receivable " 477.20 " 
 
 Accounts Payable " " 2,560.00 
 
 Accounts Receivable " 6,308.88 
 
 Inventories: Mdse. (resource) $7,281.39; Furn. & Fixt. (resource) 
 $1,525; Expense (resource) $125.90, (liability) $55.80; Int. & Disct. 
 (liability) $152.20. (Read Infor. #101.) 
 
 Losses and gains are to be divided equally among partners. Enter 
 expense inventories twice on statement — on resource and on liability sides, 
 as though pertaining to separate accounts. 
 
 From the data following make the Mason & Adamson statement: 
 
 Frank Mason, Partner Dr. $ Cr. $2,000.00 
 
 Richard Adamson, Partner " " 2,000.00 
 
 Cash " 5.29 " 
 
 Merchandise " 15,291.80 " 7,692.89 
 
 Furniture & Fixtures " 3,789.64 " 
 
 Expense " 2,219.87 " 
 
 Commission " " 469.00 
 
 Interest & Discount " 524.80 ' ' 159.60 
 
 Notes Payable " " 6,581.40 
 
 Notes Receivable " 1,329.47 
 
 Accounts Payable " " 5,158.00 
 
 Accounts Receivable " 900.02 " 
 
 Inventories: Mdse. (resource) $5,420.69; Furn. & Fixt. (resource) 
 $2,800; Expense (resource) $210; Int. & Disct. (liability) $219.40. The 
 total resources are to be deducted from total liabilities, showing as the result 
 net insolvency. As before, the partners share gains and losses equally. 
 
94 PROGRESSIVE BUSINESS ACCOUNTING 
 
 DIRECTIONS. When the two statements are complete, both in form 
 and results, head and submit the work. 
 
 QUESTIONS. 1. Define the term liability inventory. 
 
 2. How are liability inventories treated when closing a ledger account? 
 
 3. To what footings of an account are liability inventories added? 
 
 4. What is the condition of a business when the total liabilities exceed 
 the total resources? 
 
 5. Define the term assets. 
 
 6. What is bankruptcy? 
 
 7. How do voluntary and involuntary bankruptcy differ? 
 
 8. In the hands of what public official are the affairs of a bankrupt 
 placed? 
 
 9. By whom is the receiver appointed? 
 
 10. Does insolvency apply to a partnership as well as a sole propri- 
 etorship ? 
 
 EXERCISE XVII 
 
 EXPLANATION. The journal entries of this exercise are not a con- 
 nected record. They are transactions such as one would be likely to meet 
 with more or less frequently. The student should take time to make clear 
 memoranda as well as correct titles. This work is in the nature of an exam- 
 ination, hence spend the time necessary to do the work without personal 
 assistance. 
 
 Use a double sheet of journal paper, and date the entries beginning 
 March 1. 
 
 TRANSACTIONS. March 1. We have made settlement of John Adams' 
 account. The balance due us was $23.40, for which he delivered corn (Mdse.) 
 at 60 cts. per bu. 
 
 2. There is due George Hedges $75 for rent of store building for March. 
 Pass this to his credit on account. 
 
 3. Joshua Collins pays us cash in settlement of his note for $120 and 
 5 mo. interest at 6%. 
 
 4. Paid cash for freight on invoice of Mdse. received from Dale & Co., 
 Chicago, $58.20. 
 
 5. Charles Conrad, a customer, returns a sack of bran, which our clerk 
 delivered thinking it to be a sack of sugar, for which we give credit as origin- 
 ally charged $6.10. 
 
 6. Received of Henry Brunson 158 lb. live poultry at 9 cts., for which 
 sold him 1 brl flour for $8, and paid the difference in cash. 
 
 7. Paid by check to First National Bank our note for $400, and three 
 months' interest at 8%. 
 
 8. Received of Charles Adamson a new note in payment of his old note 
 to us for $368, and 9 mo. interest at 8%. 
 
 9. Walter Grossman, owing us $158.70 on account, settled by delivering 
 a horse (Live Stock) at $110, and paying cash for the remainder of the 
 amount. 
 
 10. Peter Myron, against whom we held a $100 note, delivered 7 cords of 
 wood (Expense account) @ $5.50, which was indorsed on the note. 
 
 11. Collinswood & Co. send a cash draft for $196 in payment of our bill 
 of 3d for $200, terms 2% 10 days. 
 
PROGRESSIVE BUSINESS ACCOUNTING 95 
 
 12. We send Austin Hardware Co. a bank draft for their bill $589.20 
 less 3%. Bank charges exchange 60 cts. 
 
 13. The bank reports that our draft for $13.90 on Porter & Son has been 
 paid and proceeds, after deduction of 25 cts. collection, has been placed to 
 our credit. 
 
 14. Our 30-day draft on Martinek & Mills, on account, for $392, has been 
 returned to us accepted. 
 
 15. Sundry cheeks and drafts included in our bank deposit have been 
 credited, less exchange 85 cts. 
 
 16. Drew a sight draft against our credit with Longman & Co. for 
 $359.16 and sent it to Fillings & Wood to apply on account. 
 
 17. The Illinois Steel Co. have drawn a draft at 90 days on us, on 
 account, for $1,396.43. We have accepted the draft. 
 
 18. Bought a typewriter for office use, paying cash $95. 
 
 19. Sold A. N. Palmateer Mdse. per bill for $75.80, receiving an 
 accepted sight draft on H. M. Rollins & Co. for $200.90. We paid cash for 
 the difference after deducting $1 discount on the draft. 
 
 20. Mersey & Allen have set fence posts around our farm charging $145, 
 for which we have given credit on book account. 
 
 21. Received an account sales from Gotch Commission Co. and check 
 for proceeds of our shipment No. 17 to them $49.28. 
 
 22. Closed consignment from J. S. Coffin No. 1. The entire credit on 
 sales made was $139.80. The charges prior to closing the account were 
 $3.29. Close the consignment account, allowing 5% commission on gross 
 sales and remitting cash for the proceeds. 
 
 23. Received an account sales from Heinz & Slosser of our shipment 
 No. 5. They placed the proceeds $168.90 to our credit. 
 
 24. Closed consignment from Ballington Creamery Co. No. 1. Their 
 credit ou sales was $269.50; Sundry charges to date, $15.12; our commission 
 3%, Placed proceeds to credit of consignor subject to sight draft. 
 
 25. Discounted at bank note of Henry Preston our favor for $149, re- 
 ceiving credit for the proceeds less $3 discount. 
 
 26. Paid our $1,000 loan at the bank, giving a check for the face of the 
 note and 98 days interest at 6%. 
 
 27. Drew on The Stock Yards Commission Co. for $2,000, on account, and 
 cashed the draft receiving face less a collection charge of $2.50. 
 
 28. Admitted Amos Young as a partner into the business giving him 
 credit for his invested resources consisting of Mdse. per invty, $1,650.12, Notes 
 Rec. per list $964.12, and Accounts Receivable per list, $2,169.49. 
 
 29. By mutual consent of partners, John Ferguson withdrew from the 
 business. We transferred to him in settlement of his interest in the business 
 amounting to $6,000, Notes Rec. per list, $1,800, Accts. Rec. per list, $2,400, 
 and cash for the remainder. 
 
 30. Our account against George Armstrong for $7.64 has been found to 
 be absolutely worthless. Charge the balance to Loss and Gain. 
 
 31. Peter Cooley, who is endeavoring to avoid payment of his debts, has 
 agreed to settle our balance of $58.16 against him by paying cash $3 and 
 giving his note endorsed by Edward Flynn and Elmer Million for $37, pro- 
 vided that he receive credit in full of account. Considering this proposition 
 the most favorable to be had, the settlement was thus made. Make entry. 
 
 DIRECTIONS. After making heading, submit your work. 
 
96 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 EXERCISE XVIII 
 
 INFORMATION # 144. Books having more tlian tlie ordinary two-col- 
 umn ruling are called special column books. Special columns are used in 
 journal, cash book, sales books, ledgers and other books. One purpose of the 
 bookkeeper in using special columns is to place certain entries of the same 
 kind in one column which can be footed and the total posted instead of post- 
 ing by items. The labor of posting, which occupies much time, can be very 
 much reduced. For example, if on the credit side of a cash book there 
 appear fifteen entries debiting Expense, a special "Expense" column can be 
 added to the other columns into which all Expense debits can be carried. At 
 posting time this column is footed, and the total posted to the debit of Expense. 
 Thus one posting takes the place of fifteen postings with the result that labor 
 and ledger space are reduced. The other principal reason for the use of 
 special columns is that where special ledgers are used, the items posted 
 to the special ledgers can be footed, and the total posted to the controlling 
 account. (See Infor. #147 and 148. This important feature of bookkeeping 
 is illustrated in Ex. XIX.) 
 
 #145. Where special columns are used, double sets of headlines are ruled 
 which are divided by the vertical columns into divisions to contain the head- 
 ings of the columns. A knowledge of when and how to use special columns 
 is always of advantage to a bookkeeper. Since only the standard rulings can 
 be purchased of general stationers, special books have to be made to order 
 from copy furnished by the accountant. 
 
 EXPLANATION. In this exercise, the student will prepare a special 
 column journal and write the headings. He will also rearrange a standard 
 ruling into special ruling. The uses of the special columns will be explained 
 in the following exercise. 
 
 DIRECTIONS. Take a sheet of writing paper and rule a three line head- 
 ing across the top. One writing space below, rule a two-line heading. Rule 
 vertical columns as spaced in the model. These vertical rulings will divide 
 the headings into parts. Be careful not to run the vertical lines that separate 
 given columns through the lower headline. 
 
 -«gv 
 
 c^Oj^Z^ dfa^^ L.^Ojt.^_^ 
 
 ^^ 'A 
 
 J 
 
 J. 
 
 i^e-s-Z^-''^ 
 
 ^^ 
 
 ^/-^ 
 
 /v 
 
 
 ^/^ 
 
 /V 
 
 <^£y'-'^:^L^^ 
 
 ^a^4U> ^^ ^ ._2;iit^_^iy 
 
 
 /^ 
 
 y'A 
 
 V^ 
 
 ;V U 
 
 'V 
 
PROGRESSIVE BUSINESS ACCOUNTING 97 
 
 On the reverse side of the special column journal make a three column 
 credit side of a cash book as shown in model. 
 
 NOTE. — The expressions "three-column cash book," "four-column jour- 
 nal," etc., refer to the number of money columns used. 
 
 Having completed the above, head the work journal at top, and submit 
 for examination. 
 
 QUESTIONS. 1. What are special columns? 
 
 2. Name several books that may have special columns. 
 
 3. What two principal reasons for the use of special columns in books 
 of original entry? 
 
 4. Describe the headlines used in special column books. 
 
 5. Why should a bookkeeper be able to rule special column books prop- 
 erly!! 
 
 EXERCISE XIX 
 
 INFORMATION # 146. Certain accounts of the same kind called group 
 accounts are conveniently placed under one title called the group title. The 
 purpose of the group title is to show under one heading the combined relation 
 to the business of certain similar accounts. The following are group accounts : 
 Notes Receivable, which shows the total of notes owing to the business 
 although each separate note may be a claim against a separate signer. 
 
 Notes Payable, which may include the firm's note indebtedness to several 
 holders. 
 
 Accounts Receivable, a group title in the general ledger, used to represent 
 the aggregate of all the accounts against others. 
 
 Accounts Payable, representing the aggregate of all the accounts owing 
 others. , 
 
 Shipments to (firm name), used as a general heading for all of the ship- 
 ments made to a specified firm. 
 
 Consignments from (firm name), used to represent all of the separate 
 consignments received from a certain firm. 
 
 C. 0. D.'s used to represent all of the sales made subject to payment on 
 delivery of the merchandise sold. 
 
 Suspense, used as a general title to represent all debits or credits that 
 cannot be entered under their right titles until further information is gained; 
 as, a receipt of cash through the mail without any writing to show the re- 
 mitter's name. 
 
 Doubtful Accounts, a title for accounts owing the firm that have ceased 
 to be perfectly good, and are transferred from the accounts receivable for 
 special attention. 
 
 Stock Account, representing the holdings of the different investors in a 
 joint stock company or corporation. 
 
 # 147. Group accounts are treated in two ways. In a smaller set of 
 books, the group title is placed at the top, and each special title of the group 
 is given one or more lines space below it. If only one line is used, the special 
 title is placed in the explanatory space. When thus placed they are fre- 
 quently numbered. (See Shipment and consignment accounts, page 73 ; C. O. D. 
 account, page 99, etc.) 
 
98 PROGRESSIVE BUSINESS ACCOUNTING 
 
 In a large set of books each group may be given a special ledger, or 
 register that takes the place of a ledger. The aggregate of the accounts in any 
 of these special ledgers is posted to the general ledger under the group title. 
 A group account in the general ledger which represents the aggregate of 
 accounts kept in a special ledger is called a controlling account, because the 
 total of balances in the special book must equal the balance of the group 
 account that controls it. 
 
 In many well kept sets of books, part of the group accounts are itemized 
 in the general ledger and part of them are kept in special ledgers. Some of 
 the books that are kept in separate covers, whose aggregate is represented by 
 a controlling account in the general ledger are the note ledger or notes 
 receivable and payable books, the sales ledger, the purchase ledger, the 
 shipment ledger, the consignment ledger, the C. 0. D. ledger, the ledger of 
 doubtful accounts, the stock ledger, the depositor's or individual ledger 
 (in a bank), etc. 
 
 # 148. Two-column books of original entry are used with one ledger 
 as in Sets A. and B. When a general and one or more special ledgers are 
 used, special columns must be added to the two columns in one or more of 
 the ordinary books of original entry. A special column contains the items 
 to be posted to a special ledger. The column is footed, and the total posted 
 to the controlling account in the general ledger. Thus the balance of the 
 controlling account equals the list of balances of the accounts in the special 
 ledger that it controls. This proof of accuracy in posting is one of the most 
 important safeguards in bookkeeping. 
 
 :#: 149. AVhen a general ledger and special ledgers are kept, the trial 
 balance is taken from the accounts in the general ledger. These accounts 
 should balance without reference to the special ledgers. The lists of accounts 
 in the special ledgers are compared with the controlling accounts in the 
 general ledger, to verify the posting of the special ledgers. 
 
 INFORMATION #150. When merchandise is sold on condition that 
 cash is to be paid when the delivery is made, the same is said to be a C. 0. D. 
 delivery. 
 
 When the delivery is made in the town where sold, a memo of the sale 
 is entered, not posted; and after the goods are delivered and cash collected, 
 the entry is made as a cash sale. 
 
 Express companies carry packages to all parts of the country, and if 
 instructed by the shipper, will withhold delivery until the purchaser pays 
 for the merchandise. The express company on payment returns the cash to 
 the shipper. 
 
 Railroad companies do not undertake to collect for the shipper in this 
 way. The same result is secured, by the shipper securing from the railroad 
 a bill of lading which must be presented at the point of destination by the 
 person who w^ould receive the goods. The shipper then draws a draft on his 
 customer, attaches the bill of lading to the draft and sends all for collection 
 through a bank. If the customer pays the draft, he receives the bill of lading 
 with it. The bill of lading presented at the freight office entitles him to the 
 shipment. 
 
 # 151. C. 0. D.'s by express or freight are subject to delays often run- 
 ning over weeks or even months. So it is necessary to keep a C. 0. D. 
 account with them in the sales ledger, so that the bookkeeper can urge pay- 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 99 
 
 ment in case of delay, or can arrange for a return of the merchandise if the 
 customer fails to make payment. 
 
 On the debit side of the C. O. D. account is placed the date, name of cus- 
 tomer, folio of salesbook and amount. When returns are received, the C. 0. D. 
 account is credited on the same line, opposite the debit entry. See model. 
 
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 EXPLANATION. In this exercise, three ledgers will be kept — a gen- 
 eral ledger, a purchase ledger, and a sales ledger. Special columns will be 
 added to the books of original entry as needed to accommodate these ledgers. 
 At the close of the month a trial balance will be taken. Lists of the two 
 special ledgers will be taken and compared with the two controlling accounts. 
 
 DIRECTIONS. Take three half sheets of ledger, and page each 1 and 2. 
 Head them General Ledger, Purchase Ledger, and Sales Ledger respectively. 
 Enter in the general ledger the following accounts, allowing each one-fifth 
 page : On page 1, Ezra Helmer, Propr., Merchandise, Expense, Furniture & 
 Fixtures, and Loss & Gain; on page 2, Notes Receivable, Notes Payable, 
 Accounts Receivable, and Accounts Payable. 
 
 When accounts are opened in the purchase and sales ledgers, allow 
 each account one-fifth page. 
 
 Take a sheet of journal and page it 1 to 4. Use page 1 for purchase 
 book, pages 2 and 3 for cash book, page 4 for sales book. In the cash book, 
 rule second headlines one space below the headlines found there, and write 
 in the debit side at head of the columns, "Date, Fol., Cr. Titles, Explanation, 
 Accts. Rec. Cr., General Cr." On the credit side rule one extra column as in 
 Ex. XVIIL, and at the top write "Date, Fol., Dr. Titles, Explanation, 
 Accts. Pay. Dr., Expense Dr., General Dr." 
 
 Rule and head a sheet of writing paper in four-column journal, as 
 directed in Ex. XVIIL This will be the journal. Take one-half sheet of 
 journal paper, page 1 for trial balances and page 2 statements. 
 
 TO THE STUDENT: More than one student who has completed a 
 bookkeeping course, upon taking some minor position in a large office, has 
 been discouraged in finding there books with ruled columns such as he never 
 saw before. Such persons should remember that no accountant ever saw all 
 of the rulings that are used in business houses. The different varieties of 
 ruling books to accommodate different conditions run into the thousands. 
 But it is possible for him to master any of these forms without hesitation 
 if he will learn the few simple principles that govern all special ruling. 
 The mastery of this exercise will do much toward making the subject of 
 special columns clear. Do not hurry through it. 
 
100 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 TRANSACTIONS. Oct. 1, 1909, Ezra Helmer opens a retail furniture 
 and household supply store. He invests Cash $3,364.04, Merchandise per 
 inventory $7,832.96, Accounts Receivable per list $2,214.56, and Accounts 
 Payable per list $6,683.48. 
 
 Make opening entry in the journal, using the general debit and credit 
 columns as in a two-column journal. Post the entries to the cash book 
 (general column) and to the ledger. 
 
 The list of Accounts Receivable and Accounts Payable follows. They 
 are balances due from customers on previous sale accounts, or due to firms 
 on previous purchase accounts. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 101 
 
 List of Accounts Receivable List of Accounts Payable 
 
 James Adams $ 597.40 Duhamel & Co $ 529.49 
 
 Oscar Benson 27.83 Earlham Mfg. Co 1,598.79 
 
 W. W. Davidson 140.80 The Hornellsville Co 15.71 
 
 Chas. Emery 95.88 Inman & Long 249.59 
 
 Isaac Garmore 492.62 Long & Hopper 3,589.64 
 
 C. T. Maine 521.88 Mass. Furn. Co 700.26 
 
 Owens & Co 44.16 
 
 Rollins & Son 293.99 Total $6,683.48 
 
 Total $2,214.56 
 
 Compare the total of the list of accounts receivable with the amount 
 charged to that account in the general ledger. If correct, open accounts 
 with each in the sales ledger and enter the balances to the debit of these 
 accounts. Do not proceed until it is clear to you that the sum of the balances 
 in the sales ledger equals the amount to the debit of Accounts Receivable 
 in the general ledger. 
 
 Likewise, compare the total of the list of accounts payable with the 
 balance of Accounts Payable account in the general ledger. If correct, open 
 accounts with each in the purchase ledger. Before proceeding, observe 
 that the sum of the balances in the purchase ledger equals the amount to 
 the credit of Accounts Payable in the general ledger. 
 
 Take a trial balance of the general ledger and cash book and enter it 
 at top of trial balance sheet. 
 
 Oct. 2. Paid for rent of store room to Nov. 1, $80. 
 
 Enter as shown in the model, carrying the amount to the Expense Dr. column. 
 It is not necessary to make any entry in the title column of the cash book, because 
 no Items will be posted from this column. The column will be footed and the total 
 posted to the debit of Expense later. Check mark the folio column to show that 
 this item is not to be posted. 
 
 Paid James Wiley for blank books for office use, $32.90 (Expense), 
 
 Paid Allen Printing Co. for stationery, $8.50. 
 
 Paid C. E. Jones, agent Columbian Fire Insurance Co., for insurance 
 on stock of goods as on policy received, $28.80. 
 
 Paid Nauman & Co.'s bill for furniture, $88.70. 
 
 As the Furniture & Fixtures account has no special column, it will be 
 necessary to enter the title in the title column and carry the amount to the 
 general column. After you have done so, post to the general ledger. 
 
 Paid W. B. Doble's bill for general drayage, $3.15 (Expense). 
 
 Paid Jones Scales Co. bill for furniture, $40.29. (Post). 
 
 Paid Henry Minturn on wages account, $5 (Expense). 
 
 Oct. 3. Paid Long & Hopper cash on account, $500. 
 
 This is one of the accounts payable found in the purchase ledger. Carry 
 the amount to the Accounts Payable column. Post to the purchase ledger all 
 items in the accounts payable column. 
 
 Paid Earlham Mfg. Co. cash in full of account. 
 
 Oct. 4. Paid Duhamel & Co. cash on account, $150, 
 
 Paid C. P. Colgrove, agent, for additional insurance in Boston Fire & 
 Marine Ins. Co., $14.40. 
 
 Oct. 5. Paid Nauman & Co. $18.60 for an office chair, per bill. 
 
102 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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 Paid Mass. Furn. Co. cash on account, $200. 
 
 Received cash from Charles Emery in full of account. 
 
 This is one of the accounts receivable and is found in the sales ledger. 
 The amount paid should therefore be entered in the accounts receivable Cr. 
 column of the cash book and then posted to Emery's credit. 
 
 Received cash of James Adams, to apply on account, $15. 
 
 Received cash of Isaac Garmore on account, $100. 
 
 Received of Oscar Benson cash on account, $10. 
 
 Sold W. "W. Davidson, on account, 1 china closet, quartered weathered 
 oak, for $21.90; I/2 doz. dining chairs, golden oak, for $18; 1 dining-room 
 table for $24.60; 2 ladies' rockers, $3.45 and $3.75; 1 wall set, $20.90. 
 
 Enter in the sales book and post to the sales ledger. 
 
 Sold Oscar Benson, on account, 6 dining chairs @ $4 ; 1 settee for $12.80 ; 
 1 Schram patent rocker for $21.25; 1 Princess dresser for $13.75; 1 ladies' 
 dressing table for $15.65. 
 
 Shipped Harry Belmont, Hudson, Iowa, by W. F. & Co. express, C. 0. D., 
 one office chair for $5.65. Post. 
 
 Review Infor. #150 and #151. Open C. 0. D. account on page 2 of 
 sales ledger. 
 
 Shipped Robert Adams, O'Neill, Neb., by U. S. and Am. Express, C. 0. D. : 
 1 ladies' rocker for $7.80; 1 library book case for $14.70: 1 music cabinet 
 $8.45. 
 
 Shipped Rollins & Son, on account, by C. & N. W. Ry. : 1 large arm rocker 
 for $6.90; 1 porch settee for $6.25; 1 chiffonier for $22.20; 1 jardiniere stand 
 for $1.60; 1 library table for $41.90. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 103 
 
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 Oct. 8. Sent Charles Colfax, via Am. X. (American Express), C. 0. D. : 
 1 office chair for $5.45; 1 sideboard, quartered golden oak, for $49.50. 
 
 Shipped Fred Thornton & Co., by C, B. & Q. Ry., C. 0. D. (sight draft 
 with bill of lading attached) : 1 Steele Davenport for $5 ; 1 portable wardrobe 
 for $14.10; 1 hall tree for $15; 1 morris chair, weathered oak, for $13.75. 
 
 Sold Charles Emery, on account, 1 typewriter chair for $7.50; 1 ladies' 
 writing desk for $15.95; 1 mahogany pedestal for $8. 
 
 Oct. 31. Sold Isaac Garmore, on account, 1 bedroom set for $48.50; 
 1 leather couch for $60. 
 
 The sales given represent the entire sales for the month. You may 
 foot the sales book, dating the footing as Oct. 31. All entries on the sales 
 book have been posted to the debit of certain accounts receivable in the sales 
 ledger, therefore the total is a debit to Accounts Receivable, the controlling 
 account in the general ledger. The total is also a credit to Merchandise. 
 Show the debit and credit by a journal entry on the sales book as shown 
 in the model, and post to the debit of Accounts Receivable and the credit of 
 Merchandise into the general ledger. Notice how the debit and credit titles 
 and post marks are placed when both titles appear on one line. 
 
 Oct. 7. Bought of The Hornellsville Co., on account, Mdse. per Inv. 
 #1, $238.70. 
 
 Enter in purchase book and post to the purchase ledger. 
 
 Oct. 15. Bought of Duhamel & Co., on account, Mdse. per Inv. :^2 
 $58.26. 
 
 Oct. 18. Bought of Inman & Long, on account, Mdse. per Inv. #3. 
 $764.91. 
 
104 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Oct. 31. Bought of Mass. Furniture Co., on account, Mdse. per Inv. 
 #4, $1,650.59. 
 
 The purchases given represent the entire purchases for the month. Foot 
 the purchase book and date the footing Oct. 31. All entries in the purchase 
 book have been posted to the credit of certain accounts payable in the pur- 
 chase ledger, therefore the total is a credit to Accounts Payable the con- 
 trolling account in the general ledger. The total is also a Merchandise debit. 
 Make a journal entry on the purchase book, debiting Mdse., and crediting 
 Accts. Pay., using the form given in the sales book, and post the two to the 
 general ledger. 
 
 Oct. 5. Received C. T. Maine's 30-day note for $300 to apply on account. 
 
 Enter in the journal, debiting Notes Receivable in the general column, 
 and crediting C. T. Maine in the Accounts Receivable column. Post. 
 
 Oct. 7. "We receive from W. W. Davidson a dining-room table which 
 was sold to him subject to approval, and which he returns. Pass to his 
 credit the price, $24.60. 
 
 We allow credit for one library chair $4, short in a sale to Oscar Benson. 
 
 Oct. 9. We send to The Hornellsville Co. our 60-day note for $254.41 
 in full of account. (Debit The H. Co. in Accts. Pay. column of journal.) 
 
 Oct. 15. Returned to Long & Hopper, merchandise not of grade ordered, 
 per bill rendered, $736.59. (Journal.) 
 
 The above are the entire journal entries of the month. Foot the two 
 special columns in pencil. The Accounts Payable column shows that items 
 amounting to $991 have been posted to the debit of ditferent accounts in 
 the purchase ledger, therefore the total is a debit to Accounts Payable, the 
 controlling account in the general ledger. Carry the total into general debit 
 column, as shown in model, and post. 
 
 Accounts Receivable shows that items amounting to $328.60 have been 
 posted to the credit of different accounts in the sales ledger, therefore the 
 total is a credit to Accounts Receivable, the controlling account in the 
 general ledger. Carry the total into the general credit column, as shown in 
 the model, and post. 
 
PROGRESSIVE BUSINESS ACCOUNTING 105 
 
 As a proof of correctness of entry, foot the general debit and credit 
 columns of journal as shown in the model. 
 
 CASH BOOK. Oct. 10. Received cash from C. T. Maine in part pay- 
 ment of his note, $100. (Enter in cash book, general column, because Notes 
 Receivable account is found in the general ledger. Post.) 
 
 Oct. 15. Paid The Hornellsville Co. $100 to apply on note due them. 
 (Enter in general column. Why?) 
 
 The U. S. Express returns cash $30.95 collected from Robert Adams in 
 payment of C. O. D. on him Oct. 5. (Enter in Accounts Receivable column 
 of cash book, as in model, and post to credit of C. 0. D. account on the same 
 line opposite the charge. Use X marks.) 
 
 Oct. 23. The bank credits $47.85 our draft on Fred Thornton for ship- 
 ment C. 0. D. Oct. 10. 
 
 Oct. 31. Received cash of Rollins & Son, on account, $200. 
 
 The above are the entire cash book entries of the month. Pencil foot 
 the three special columns of the cash book. On the debit side you will note 
 that $499.68 has been posted to the credit of different accounts in the sales 
 ledger, therefore the total is a credit to Accounts Receivable in the general 
 ledger. Carry to the general column and post. See model. Likewise, the 
 total of the Accounts Payable column of the credit side should be carried 
 to the general column and posted to the controlling account. 
 
 The Expense column does not represent any special ledger. Carry the 
 total to the general column, as in model, and post. 
 
 There remain the general debit and credit columns of the cash book. 
 The credit footing taken from the debit footing shows the balance on hand. 
 Enter the balance and rule cash; carry balance down. 
 
 THE GENERAL LEDGER. As all accounts are now posted, take a 
 trial balance of the general ledger, including cash balance. 
 
 SPECIAL LEDGERS. Take a list of the ledger balances of the sales 
 ledger, compare the total of this list with the balance of Accounts Receivable 
 in the trial balance. They should agree. If they do not, locate the discrep- 
 ancy. Take a list of the ledger balances of the purchase ledger, and compare 
 the total of this list with Accounts Payable in the general ledger. 
 
 Copy these lists below the trial balance of Oct. 31. 
 
 STATEMENT. Make a statement of the business. (Taken from general 
 ledger and inventories. The inventories are Merchandise $9,584.30; Expense, 
 $50; Furniture & Fixtures, $125.) Enter this statement on your statement 
 sheet. 
 
 Close the ledger in accordance with the statement. Open Loss & Gain 
 account at foot of page 1. 
 
 After closing the ledger, take a trial balance and record it below the 
 statement already taken. 
 
 DIRECTIONS. After the above work is completed, arrange the rulings 
 in the following order from the top downward : Journal, Purchase, Cash, 
 Sales, General Ledger, Purchase Ledger, Sales Ledger, Trial Balances and 
 Statement ; head, pin together and submit for examination. 
 
 QUESTIONS. 1. What are group accounts? 
 2. Name ten group titles. 
 
106 PROGRESSIVE BUSINESS ACCOUNTING 
 
 3. In what two ways are group titles treated? 
 
 4. What can you say of the ledger as used with two-column books of 
 original entry? 
 
 5. "When a general and special ledgers are used, what changes are made 
 in books of original entry? 
 
 6. What items does a special column contain? 
 
 7. What can you say of the controlling account? 
 
 8. What three ways of collecting on delivery are mentioned? 
 
 9. Describe the C. 0. D. account. 
 
 10. When special ledgers are kept, from what book or books is the trial 
 balance taken? 
 
 11. How is the posting of the special ledger proven? 
 
 12. How many ledgers were kept in Ex. XIX.? 
 
 13. Describe the journal used. 
 
 14. Describe the cash book used. 
 
 15. How are special columns carried to general columns at posting time? 
 
 EXERCISE XX 
 
 INFORMATION # 152. Many business concerns are organized in the 
 form of private corporations. A corporation is an organization of a number 
 of persons empowered by state authority to transact business as one person. 
 It is called a private corporation when it is organized for the purpose of 
 conducting business enterprises for gain to its members. The investment 
 (capital stock) is divided into shares of equal value. These shares may be 
 bought and sold. A person becomes a part owner of the business (stock 
 holder) by buying one or more of these shares. The number of shares held 
 by a person is the measure of one's interest in the company. A person may 
 become a stockholder and afterward dispose of his stock without legally 
 affecting the corporation. Very often one person is a stockholder in many 
 different corporations. 
 
 # 153. The interest of the stockholders in the business is shown in the 
 stock ledger. This is a special ledger, in which each stockholder has an 
 account showing to his credit the number of shares held by him and their 
 par value. A list of all of the balances in the stock ledger should equal the 
 balance of Capital Stock, the controlling account in the general ledger, if 
 all shares are issued. If some shares are not issued, this list should equal 
 the Capital Stock credit diminished by the shares still held by the company. 
 
 :j^ 154. The general books of a corporation are arranged with reference 
 to the business to be transacted as they would be in a sole proprietorship 
 or a partnership. However, some accounts in the general ledger are usual 
 to corporation bookkeeping. Among them are : 
 
 Capital Stock, which represents the entire authorized investment in the 
 business, and takes the place of proprietor's or partners' accounts. 
 
 Unsubscribed Stock, which represents any part of the capital stock 
 before it is taken by stockholders. 
 
 Treasury Stock, which represents stock of the company which has been 
 acquired from stockholders, and is held for sale. 
 
 Subscription, which represents the aggregate amount which stockholders 
 have contracted to pay for their stock, but which has not been collected by 
 the officers of the company. It is the controlling account of the installment 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 107 
 
 ledger, which contains in detail the accounts with the subscribers. 
 
 Dividends, an account to which that part of the net gain is carried that 
 is to be paid to stockholders as their dividend or divided profit. 
 
 Dividends is a group account, as under it may be credited dividend 
 No. 1, No. 2, etc. When the stockholders are paid, the account is debited. 
 
 Surplus, an account to which is posted that part of the net gain that is 
 to be kept in the business as additional capital. 
 
 Undivided Profits. To this account is posted the net gain as a credit. 
 It is charged with the part posted to Dividends, Surplus, or other accounts. 
 The remaining balance, if any, is open to any other disposition at any time. 
 
 # 155. Although the stock ledger and installment ledger are special 
 ledgers, there are commonly no special columns in the journal and cash book 
 for items posted to them, because as a rule the stock records are compara- 
 tively few and are mostly completed within a few pages at the beginning of 
 the business. Where entries for the stock or installment ledgers are made 
 in the general books, they are short extended, that is, written in the explan- 
 atory space for posting to the special ledger, while the corresponding amount 
 to be carried to the general ledger is extended to the money column. 
 
 # 156. When a person becomes a stock subscriber, the voucher for his 
 subscription is the subscription list which he has signed ; when he pays a part 
 of his subscription, an installment receipt is issued and the book record is 
 made from the stub of the installment receipt book; when the stock is paid 
 for in full, a stock certificate is issued and the record is made from the stub 
 of the stock certificate book. These forms will be taken up in Set C. 
 
 # 157. The business of a corporation is carried on by officers who are 
 elected by the stockholders to represent them. Commonly there are elected 
 a president, a secretary, and a treasurer. These or any other officers that 
 may be elected are responsible to the stockholders for their official acts. 
 
108 PROGRESSIVE BUSINESS ACCOUNTING 
 
 EXPLANATION. In this exercise, entries requiring the use of the stock 
 and installment ledgers will be made and the lists of these two special 
 ledgers will be checked with their controlling accounts. The purpose is to 
 show their use and relation. Later, closing entries will be made in Loss & 
 Gain, Undivided Profits, Dividends, and Surplus accounts. 
 
 DIRECTIONS. Take two half sheets of ledger. Use one for general 
 ledger, entering on page 1 the four accounts, Capital Stock, Unsubscribed 
 Stock, Treasury Stock, Subscription. Enter on page 2, Dividends, Surplus, 
 Undivided Profits, Loss & Gain. Head page 1 of the other sheet Stock 
 Ledger, and page 2 Installment Ledger. 
 
 Use a folded sheet of journal paper; page 1 for journal, pages 2 and 3 
 for cash book, page 4 for special ledger lists. 
 
 TRANSACTIONS. Mar. 1. The incorporators of the Wheaton Milling 
 Co., having complied with the legal requirements pertaining to the formation 
 of corporations^ are authorized to solicit subscriptions and transact other 
 business as a corporation with a capital stock of $100,000. 
 
 A stock subscription list has been opened. It contains the names of the 
 following persons, who agree to pay for the number of shares set opposite 
 their names. The payments are to be made as called by the board of 
 directors. 
 
 Stanton Cutler 300 shares, each $100 par value, $30,000 
 
 Harvev Wester 200 " " " '' " 20,000 
 
 M. E. Reddin 100 " " " " " 10,000 
 
 Marcella Kline 100 " " " " " 10,000 
 
 Wm. Reupke 50 " " " " " 5,000 
 
 C. E. Quintrell 50 " " " " " 5,000 
 
 The subscriptions amount to $80,000 of the $100,000 authorized capital 
 stock. 
 
 Make a journal entry debiting Subscription $80,000. (Subscription 
 represents claims against persons for stock.) Debit Unsubscribed Stock 
 $20,000. (This is the account receiving the remainder of the capital stock.) 
 Credit Capital Stock $100,000. (This is the giving account and represents 
 the entire liability of stockholders.) See model entry in journal. 
 
 Post the three general titles to the general ledger. Debit each subscriber 
 in the installment ledger, allowing five lines to each account. Indicate the 
 posting by a check mark as in model. Observe that the payment for the 
 stock assumed by the subscribers is to be collected from this ledger. If their 
 stock were paid in full at once, this ledger would not be needed. 
 
 In the Stock ledger, each stockholder has an account, in which he is 
 credited with the number and par value of the shares held. Posting is done 
 to the stock ledger from the subscription list and afterward from the stubs 
 of the stock certificate book. 
 
 Open an account with each subscriber and from the list given in the 
 text book carry the credit to the respective accounts, allowing four lines to 
 each. 
 
 The stock certificates are not issued until fully paid. The certificate 
 numbers are not to be entered in the ledger until certificates are issued. 
 The credit thus made is conditional upon payment of the account against the 
 subscriber in the installment ledger. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 109 
 
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 Mar. 2. The following persons have been added to the subscription list: 
 "Walter Sitts, 50 shares, $5,000 ; Velora Gingrich, 40 shares, $4,000. 
 
 Enter in journal, debiting Subscription, and crediting Unsubscribed 
 Stock. Open two accounts in the installment ledger, and post. 
 
 Make entries in stock ledger. 
 
 INFORMATION # 158. AVhen subscriptions are paid in installments 
 (part payments), all subscribers are called upon to pay a given per cent 
 of their subscription on a given date. Successive assessments are made as 
 tlie board of directors determine, until the entire 100% is paid in. When 
 several installments are called, they are referred to by number, as first 
 installment, second installment, etc. 
 
 TRANSACTIONS. Mar. 5. An assessment of 50% of the subscribed 
 stock is ordered to be paid on or before Mar. 10. 
 
 Mar. 8. Received cash for the first installment on subscription account 
 from Stanton Cutler, 50% of 300 shares, $15,000 ; Wm. Reupke, $2,500. 
 
 Enter the entire amount in the cash book to the credit of Subscription. 
 Short extend the credits to the installment ledger (see model). Post. 
 
 Mar. 10. Received cash in full of first installments of C. E. Quintrell, 
 Marcella Kline, Velora Gingrich, and M. E. Reddin. (Enter and post as 
 before.) 
 
 Mar. 11. Received cash in full of first installment of the remaining 
 subscribers. (Enter and post.) 
 
 Mar. 15. Received cash of Herbert Ross in full for five shares of the 
 unsubscribed stock, $500. Issued to him stock certificate No, 1, which certi- 
 fies that he is the owner of said shares. 
 
 Enter in cash book to the credit of Unsubscribed Stock in the general 
 ledger, and of Herbert Ross in the stock ledger. Post the certificate number 
 in the explanatory space of stock ledger. The number indicates that the 
 stock credit has been fully paid. 
 
 Sold R. A. Gardner eight shares of unsubscribed stock, receiving cash 
 at par, $800. Stock certificate No. 2 has been issued. 
 
110 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 April 1. A second installment of 25%, to be paid on or before April 10, 
 has been assessed against the subscribers. 
 
 April 8. M. E. Reddin, C. E. Quintrell, Walter Sitts, and Velora 
 Gingrich have paid their second installment in cash. Enter and post. 
 
 April 15. Stanton Cutler, Harvey Wester and Marcella Kline have paid 
 their second installments in cash, 
 
 April 30. M. E. Reddin and Wm. Reupke have paid the remainder of 
 their subscription in full. There have been issued to M. E. Reddin stock 
 certificate No. 3 for 100 shares, fully paid, and to Wm. Reupke stock cer- 
 tificate No. 4 for 50 shares, fully paid up. 
 
 After posting these credits, rule the accounts in the installment ledger 
 that balance. Transfer the certificate numbers to the stock ledger. 
 
 May 25. William Reupke offers his stock for sale. As he would prob- 
 ably sell it to a person who would be an undesirable stockholder, the 
 company buys back the stock, paying cash for it at par. It is to be held as 
 Treasury Stock until disposed of to some other person. Enter in cash book, 
 debiting Treasury Stock in the general ledger and Wm. Reupke 's account 
 in the stock ledger. Rule the latter account. 
 
 The student will see that a list of the credits in the stock ledger should equal 
 not the Capital Stock credit in the general ledger, but it should equal the Capital 
 Stock credit diminished by the debit balances of Unsubscribed Stock and Treasury 
 Stock. In other words, these three accounts combined give the controlling balance 
 of the stock ledger. The question may be asked, why not credit Capital Stock with 
 only the amounts actually subscribed or paid for and thus make its balance equal 
 to the credits of the stock ledger? The objection to crediting the entire amount Is 
 that the entire Capital Stock is a legal liability which cannot be off-set by any shares 
 in the hands of the company. For this reason the authorized capital should appear 
 in full as a liability in the general ledger. 
 
 June 5. Sold ten shares of the treasury stock to Herbert Ross for cash, 
 $1,000. Issued to him stock certificate No. 5 for the amount. (Credit 
 Treasury Stock and Herbert Ross Stock account.) 
 
 June 15. The company has taken M. E. Reddin 's entire stock holding, 
 paying cash at par. 
 
 INFORMATION # 159. The transfer of stock from one holder to 
 another is recorded in the certificate of transfer book and from that posted 
 to the debit of the seller's stock account and to the credit of the buyer's 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 111 
 
 ^5t^ 
 
 
 
 c3i-t->7^*i^ 
 
 / ^^ ^ 
 
 ^^Ta 
 
 stock account. Such entries have no effect upon any account in the general 
 ledger, and for that reason are not considered here. 
 
 June 30. The student will now make a list of the accounts in the stock 
 ledger and their credits. Record it on the fourth page of the journal ruled 
 paper. Does the total equal the Capital Stock account diminishecl by the 
 sum of the balances of Unsubscribed Stock and Treasury Stock? 
 
 The student will now record on the same page a list of balances from 
 the installment ledger. Does it equal the balance of Subscription account in 
 the general ledger? 
 
 If both lists prove, this portion of the exercise may be considered com- 
 plete. 
 
 EXPLANATION. The student will now take up a representative 
 closing of a corporation ledger. Suppose that the commercial accounts have 
 been active and that the results given below have been taken from ledger 
 accounts that have been closed in regular form. The Loss & Gain account 
 is to be completed and the net gain disposed of. 
 
 TRANSACTIONS. June 30. The commercial accounts show gains or 
 losses to be carried to Loss & Gain account as follows: Mdse., gain 
 $15,871.40; Expense, loss $2,581.60; Machinery & Tools, loss $1,621.49; Inter- 
 •>st & Discount, loss $379.46; Commission, gain $169.70. 
 
 Carry these to Loss & Gain account. 
 
 Close the Loss & Gain account into Undivided Profits. 
 
 The directors have decided to pay a cash dividend of 5% and to carry 
 $5,000 of the profits to surplus account, and to leave the remainder stand 
 in Undivided Profits account until some future action is taken in regard to it. 
 
 Post 5% of the total credits shown on the Stock ledger from Undivided 
 Profits to the credit of Dividends account, using the explanation Dividend 
 No. 1. 
 
 Post $5,000 from Undivided Profits to the credit of Surplus account. 
 
 Balance Undivided Profits, rule and carry the balance down under date 
 July 1. 
 
 Enter in cash book checks made out in favor of each stockholder in 
 payment of his dividend. Charge dividend No. 1 and itemize, using the name 
 of the person in whose favor the check is drawn. Post these checks to Divi- 
 dends account. 
 
112 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Dividend No. 1 should now be in balance ; rule it. 
 
 DIRECTIONS. Head each sheet as usual, pin them in this order: 
 Journal, cash book, lists, general ledger, stock ledger, installment ledger, 
 and submit for inspection. 
 
 QUESTIONS. 1. What is a corporation? 
 
 2. What is a private corporation? 
 
 3. What is the capital stock? 
 
 4. What are shares of stock? 
 
 5. How does a person become a stockholder? 
 
 6. May stock in a corporation be bought and sold? 
 
 7. What is the stock ledger? How used? 
 
 8. A list of the stock ledger accounts should equal what accounts in 
 the general ledger? 
 
 9. Are the business or operating books of a corporation necessarily dif- 
 ferent from those of any other similar concern? 
 
 10. Name seven general accounts usual to corporations, 
 
 11. Give the use of the following accounts : Capital Stock, Unsubscribed 
 Stock, Treasury Stock, Subscription, Dividends, Surplus, Undivided Profits. 
 
 12. Why are special columns not used in the journal and cash book for 
 the stock and installment ledgers? * 
 
 13. Explain the use of the subscription list, the installment receipt book, 
 the stock certificate book. 
 
 14. What persons transact the business of a corporation? 
 
 15. How are the officers chosen? 
 
 16. What is the purpose of this exercise? 
 
 17. Describe an account in the stock ledger. 
 
 18. Describe an account in the installment ledger. 
 
 19. What is meant by a stock assessment? 
 
 20. How is the transfer of stock from one holder to another posted? 
 
 21. Does such transfer have any effect on the general books? 
 
 22. Into what account is Loss & Gain closed? 
 
 23. Name two accounts into which Undivided Profits may be carried. 
 
 24. How is dividends account closed? 
 
 25. Name five corporations doing business in your community. 
 
PROGRESSIVE BUSINESS ACCOUNTING 113 
 
 SET C 
 
 BUSINESS PRACTICE 
 
 EXPLANATION. You are to open a mercantile business which will be 
 conducted as a corporation. It will be your work to take charge of the 
 secretary's records as well as the books of the company. You Avill be the 
 manager of the company and carry out all of its business transactions. The 
 books will be arranged with a general and special ledgers and with special 
 columns in the books of original entry similar to those in Ex. XIX. The 
 corporation accounts explained in Ex. XX. will be used in the general ledger 
 in addition to the operating accounts. Thus the books and rulings will illus- 
 trate the opening, operation, and closing records of a corporation. 
 
 DIRECTIONS. Page your ledger 1 to 14 as in previous sets. This 
 book will really consist of five ledgers, which are to be treated as though 
 in five separate covers. In the upper left corner of pages 1 to 6 write 
 "General Ledger;" pages 7 and 8, write "Stock Ledger;" pages 9 and 10, 
 "Installment Ledger;" pages 11 and 12, "Purchase Ledger;" pages 13 and 
 14, "Sales Ledger." 
 
 On page 1 of the general ledger enter the titles. Capital Stock 6 lines, 
 Unsubscribed Stock 15 lines, Treasury Stock the remainder of page; page 
 2, Subscription one-half page ; Accounts Receivable, Accounts Payable, Notes 
 Receivable, Notes Payable, Merchandise, Furniture & Fixtures, Expense, 
 each one-fourth page ; and other general accounts one-fourth page each as 
 opened. 
 
 Give all accounts in the special ledgers one-fifth page each. 
 
 Books of entry : Use one cover for purchase pages 1 to 7 ; Notes Receiv- 
 able and Payable, pages 8 and 9 ; Sales, pages 10 to 16. 
 
 Use the third cover for journal, cash book, trial balances, inventories, 
 statements, and secretary's minute book. 
 
 TRANSACTIONS. CI. Organize The (Student's Name) Mercantile 
 Coinpany, a corporation. Five persons will be the incorporators. The author- 
 ized Capital Stock of the corporation will be $25,000, to be paid in install- 
 ments as provided later. The purpose is to conduct a dry goods business. 
 You may now promote the company in the following manner : 
 First Step. Write a subscription agreement. This agreement is to be 
 signed by the persons who will take stock in the company. It is a contract 
 by which those signing can be compelled legally to pay for the amount of 
 stock subscribed after the steps of organization required by the state laws 
 are complied with. The form is given below: 
 
 SUBSCRIPTION AGREEMENT 
 
 We. the undersigned, having associated ourselves together for the purpose of 
 organizing a corporation for buying and selling merchandise and otherwise transacting 
 a general merchandising business under the laws of the state of Iowa, do declare as 
 follows: 
 
 1. The corporate name of this association shall be The Mercantile 
 
 Company. 
 
 2. The principal place of business of The Mercantile Company shall be 
 
114 PROGRESSIVE BUSINESS ACCOUNTING 
 
 3. The authorized capital stocli of the Mercantile Company shall be 
 
 Twenty-five Thousand Dollars ($25,000), which shall be divided into shares of One 
 Hundred Dollars ($100) each. 
 
 4. The names and residences of the shareholders of this corporation, with the 
 number and par value of shares to be held by each, are as follows: 
 
 Name Residence Number of Shares Par Value 
 
 John Manning Des Moines, Iowa One Hundred Shares $10,000 
 
 E. E. Clermont Waterloo, Iowa Fifty Shares 5,000 
 
 Burle Van Kleek Boston, Mass Ten Shares 1,000 
 
 Walter A. Gerrabrant . . Ottumwa, Iowa Twenty Shares 2,000 
 
 George Sherrill Oelwein, Iowa .Five Shares 500 
 
 When the above subscription agreement is i)roperly filled, enter your 
 name as subscriber for 100 shares and secure the signatures of the remaining 
 incorporators: E. E. Clermont, 50 shares; Burle Van Kleek, 10 shares; 
 "Walter A. Gerrabrant, 20 shares; George Sherrill, 5 shares. 
 
 Second Step. Call a meeting of the above five subscribers for the pur- 
 pose of organization and adoption of Articles of Incorporation. In this 
 meeting the business to be transacted is assumed to be completed as in the 
 minutes given below, which complete and copy in the minute book, using 
 the current date and the appropriate names. 
 
 MINUTES OF THE PROMOTERS OF THE MERCANTILE COMPANY 
 
 -, Oct. 2, 19- 
 
 At a meeting held on the above date by the promoters of The Mercantile 
 
 Company, there were present , E. E. Clermont, Burle Van Kleek, Walter 
 
 A. Gerrabrant, and George Sherrill. 
 
 On motion of Gerrabrant, seconded by Sherrill, E. E. Clermont was unanimously 
 elected Chairman, and| was elected secretary. 
 
 After discussion relative to the proposed articles of incorporation, the following 
 motion by Van Kleek, seconded by Sherrill, was unanimouslv carried: 
 
 "Moved, that the secretary be instructed to prepare articles of incorporation of 
 The Mercantile Company in conformity with the expressions of this meeting." 
 
 Meeting adjourned to meet Oct. 4th, 19 — . 
 
 , Secretary. 
 
 Third Step, Prepare articles of incorporation, making any changes or 
 additions necessary, in the following form : 
 
 ARTICLES OF INCORPORATION FOR THE MERCANTILE CO. 
 
 We, the undersigned, do by these presents associate ourselves together under 
 and by virtue of chapter one, title nine, of th<^ Code of Iowa, and the laws amendatory 
 thereto and do adopt the following articles of incorporation: 
 
 ARTICLE I. 
 
 The name of this corporation shall be The Mercantile Company, \nd. 
 
 its principal place of business shall be , . The general nature of its 
 
 business shall be the purchase and sale of merchandise and such other business as 
 shall be contributory thereto. 
 
 ARTICLE II. 
 
 The corporation shall commence business on the day of A D. 
 
 19 — , and shall continue twenty years, with right of renewal unless sooner dissolved 
 by a three-fourths vote of all stock subscribed at a stockholders' meeting. The 
 capital stock authorized shall be Twenty-five Thousand Dollars, and all stock subscribed 
 shall be payable at the call of the board of directors. 
 
 ARTICLE III. 
 
 The affairs of the corporation shall be conducted by a board of five directors, 
 who shall hold tjheir offices one year, and until their successors are elected and 
 qualified. 
 
 Said directors shall elect a president, and a secretary and treasurer, who shall 
 hold offices one year, and until their successors are elected and qualified. 
 
PROGRESSIVE BUSINESS ACCOUNTING 115 
 
 ARTICLE IV. 
 
 The election of the directors of this corporation shall be held at the office of 
 
 the secretary in , , on the first Tuesday of , 19 — , and annually 
 
 thereafter. At all elections and meetings of stockholders, each stockholder shall be 
 entitled to one vote for each share of stock held by him, which vote may be cast in 
 person or by proxy. Ten days' notice shall be given of all called or special meetings 
 of stockholders. 
 
 ARTICLE V. 
 
 The directors of this corporation until the first regular election shall be 
 
 , E. E. Clermont, Burle Van Kleek, Walter A. Gerrabrant, and George Sherrill, 
 
 who shall at their first meeting elect a president and a secretary and treasurer. 
 
 ARTICLE Vr. 
 The private property of the members of this corporation shall be exempt from 
 the debts of this corporation. 
 
 ARTICLE VII. 
 The indebtedness of this corporation shall not at any time exceed Sixteen Thou- 
 sand Dollars. 
 
 ARTICLE VIII. 
 No alteration or amendment to these articles of incorporation shall be made 
 unless the same be adopted by the majority stock present at a meeting of the stock- 
 holders called for that purpose. 
 
 Signatures : 
 
 State of ) 
 
 )ss. 
 
 County of ) 
 
 On this day of A. D. 19 — , before me personally appeared 
 
 , E. E. Clermont, Burle Van Kleek, Walter A. Gerrabrant, and George Sherrill, 
 
 to me known to be the persons named in and who executed the foregoing instrument, 
 and acknowledged that they executed the same as their voluntary act and deed. 
 
 [SEAL.] 
 
 Notary Public. 
 
 The second meeting of the promoters held transacts business 
 
 as per secretary's minutes below, which copy in minute book. 
 
 . , Oct. 4. 19— 
 
 At a second meeting of the promoters of The Mercantile Co., held at 
 
 the office of , there were present , E. E. Clermont, 
 
 Burle Van Kleek, Walter A. Gerrabrant. and George Sherrill. The chairman called 
 upon the secretary for a reading of the minutes of the previous meeting, which were 
 read and approved. 
 
 The secretary then read the articles of incorporation prepared by him as directed 
 in the previous meeting, a copy of which is here given in full. (Here copy the articles 
 of incorporation complete.) 
 
 Moved by , Clermont seconding, that these articles be adopted. After 
 
 discussion, the motion was unanimously carried and the articles were adopted as the 
 articles of incorporation of this association. (Secure the signature of each promoter 
 to the instrument and have same acknowledged by a notary public.) 
 
 On motion of Van Kleek, seconded by Gerrabrant. the secretary is instructed 
 to file the articles of incorporation for record with the county recorder, prepare a 
 notice of incorporation for publication in a local newspaper, as required by statute, 
 and take all other necessary steps for the completion of the incorporation. 
 
 Meeting adjourned on call of the president. 
 
 — , Secretary. 
 
 Fourth Step. Prepare a notice of incorporation for publication, as 
 directed in the following form: 
 
116 PROGRESSIVE BUSINESS ACCOUNTING 
 
 NOTICE OF INCORPORATION. 
 
 To Whom It May Concern: 
 
 Notice is hereby given that the undersigned have associated themselves together 
 as a corporation, under and by virtue of chapter one, title nine, of the Code of Iowa, 
 and the laws amendatory thereto, as a corporation, and have adopted articles »f 
 incorporation which provide as follows, to-wit: 
 
 1. The name of the corporation is "The Mercantile Company," and 
 
 its principal place of transacting business is , . 
 
 2. The general nature of the business to be transacted by said corporation is 
 the purchase and sale of merchandise, and such other business as may be contrib- 
 utory thereto. 
 
 3. The amount of the capital stock authorized by the articles of incorporation 
 is Twenty-five Thousand Dollars, which is to be paid in at call of the board of directors 
 without condition. 
 
 4. That the said corporation shall commence business on the day of 
 
 A. D. 19 — , and continue for twenty years with right of renewal. 
 
 5. The affairs of this corporation are to be conducted by five directors, who 
 
 are to be elected on the first Tuesday of annually, at which election each 
 
 stockholder shall be entitled to one vote for each share of stock owned, w*hich vote 
 
 may be cast in person or by proxy; and until such election, to be held in , 19 — , 
 
 the following named persons, , E. E. Clermont, Burle Van Kleek, Walter 
 
 A. Gerrabrant, and George Sherrill, shall be directors of said corporation; and the 
 directors at the first meeting in each year shall elect from their own number a 
 president, and a secretary and treasurer, who shall hold their office during the pleasure 
 of said board. 
 
 6. That the highest amount of indebtedness to which said corporation shall at 
 any time subject itself shall not exceed Sixteen Thousand Dollars. 
 
 7. That the private property of the members of such corporation shall be 
 exempt from ihe debts of said corporation. 
 
 Signatures of Incorporators: 
 
 Fifth Step. File the articles of incorporation with the county recorder, 
 paying a filing fee of $1.20. Order the publication of the articles of incor- 
 poration in a local paper and pay for same $4.50. After record by the 
 county recorder, send the articles of incorporation with a state recording 
 fee of $40, by draft (exchange 10 cents) to the secretary of state, with a 
 letter stating that the articles of incorporation are sent for record and that 
 the statutory fee is enclosed. 
 
 This cash paid from your private funds must be carefully entered in a 
 bill which you will present for payment as soon as the corporation has funds 
 to pay it. 
 
 Sixth Step. Receive from the secretary of state the Certificate of Incor- 
 poration. You are now entitled to commence business as a corporation. 
 A meeting of the board of directors may now be called for the purpose of 
 deciding the amount of the first installment on stock subscription. 
 
 Seventh Step. Enter in your minute book the record of a meeting of 
 the directors in which the following business is transacted: 
 
 1. The minutes of the previous meeting are read and approved. 
 
 2. George Sherrill is elected president, and Student, secretary and 
 treasurer. 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 117 
 
 3. The secretary and treasurer is instructed to take full charge of the 
 business of the corporation and conduct the same as ordinarily conducted, 
 for which service he is to receive a salary of $250 per month. 
 
 4. A call of 25 per cent of the capital stock is to be paid by the stock 
 subscribers. 
 
 C 2. Opening Entries : Enter in the journal, as directed in Ex. XX., 
 the opening stock accounts, debiting Subscription and Unsubscribed Stock 
 and crediting Capital Stock. Post to the general ledger. 
 
 Open accounts with each subscriber in the installment ledger, and post. 
 Index the accounts like the following: "Manning, J. Instal. a/c," etc. Open 
 accounts with each signer of the stock subscription agreement in the .stock 
 ledger and credit these accounts with the par value of their shares. . Index 
 such accounts like the following: "Manning, J. Stock a/c," etc. 
 
 C3. Collect cash of E. E. Clermont, Walter A. Gerrabrant, and George 
 Sherrill for their first installments of 25 per cent. 
 
 "Write for each installment receipts as per form below; secure signatures 
 on stub and deliver the receipts when the cash is paid; enter in cash book, 
 and post to general and installment ledgers. 
 
 INSTALLMENT CERTIFICATE 
 
 No.../..... 
 
 „ ^^?^^.^.^...I9^ 
 
 Inttallment No. ./. 
 
 Per Cent .-^.sfTI. 
 
 Hoot Shara.S:^^..... 
 
 Amount, i.' 
 Rtceived theyOlTathedCfrtificatt 
 
 Amount, %/-^^JIli2s. 
 
 INSTALLI^ENT CERTIFICATE .NO.^1 
 
 STALLME 
 
 ^.J~~<:? 
 
 -Shares 
 
 The Manning Mercantile Company 
 
 THIS CERTIFIES Thai 
 
 j^:^ 
 
 Chicago^ 
 
 19^ 
 
 has tohiicredil in the treasury of this Company the s\im of 
 
 )LLARS, 
 
 ^ 1 the same being theZ=<^^instal!ment pf -^^^ er cent o\ ^~^^ shares due ^-^^--<^'^^T^ 1 9^^ 
 
 Thij Ccctiiicate ii transferable only on the books of ihis Company, upon surrender of same by the holdcr^r his 
 lawful representative. 
 
 IN EVIDENCE it^LRLOF we have duly affised our signatures and the corporate seal 
 
 -Mercantile 
 
 C 4. Deposit the cash received to the credit of The 
 
 Co., and leave your signature of firm name by your name, Treasurer. 
 
 C 5. Present your personally receipted bill for cash expended in the 
 organization of the corporation. 
 
 Write a check, signing it "The Mercantile Company, by 
 
 Treas.," in favor of yourself personally which you are to receive as payment. 
 
 Mark the bill "Voucher #1" and place in vouchers paid file. 
 
 C 6. Enter by items in the purchase book a purchase from Burle Van 
 Kleek of the following stock of goods and post the amount to his credit in 
 the purchase ledger: 1 pc. Suiting, 331/2 yd. @ 75c; 3 pc. Swiss, 172 yd. @ 
 7c ; 3 pc. Swiss, I8614 yd. @ 7c ; 5 pc. Swiss, 2371/2 yd. @ 7c ; 5 pc. Swiss, 
 2673/4 yd. @ 7c; 30 pc. Brown Crash AA, 1,200 yd. @ Gi/oc; 25 pc. Brown 
 Crash AE, 1,000 yd. @ 7i^c ; 20 pc. Brown Crash BB, 800 yd. @ 8c ; 6 pc. 
 Cream Cord, 206i/s yd. @ 25c; 11 pc. Suiting, 361% yd. @ 271/2C; 5 pc. 
 Suiting, 2041/2 yd. @ I21/2C; 31 pc. Wash Goods, 1,0263/4 yd. @ S^/gC; 2 pc. 
 Jamestown Suitings, 48% yd. @ 85c ; 3 pc. Jamestown Suitings, 76 yd. @ 
 70c; 6 pc. Jamestown Suitings, 152 yd. @ 721/2C; 201/2 doz. Hose #503, per 
 doz., $2.10; 31/2 doz. Hose #505 per doz. $2.10; 7 doz. Hose #226 per doz. 
 
118 PROGRESSIVE BUSINESS ACCOUNTING 
 
 $1.50; 1/2 doz. Hose #857 per doz. $3.05; II/2 doz. Hose #859, per doz. $2.75; 
 314 doz. R. G. Corsets #671 per doz. $8.50; 1/3 doz. R. G. Corsets #290, 
 per doz. $24 ; 11/12 doz. R. G. Corsets #440, per doz. $12 ; 2-5/12 doz. R. G. 
 Corsets #661, per doz. $8.50; 1/3 doz. R. G. Corsets #906, per doz. $8.50; 
 3-5/12 doz. R. G. Corsets #663, per doz. $8.50; 3 Empire Skirts #515 @ 
 $4.50; 3 Emp. Skirts #521 @ $5.50; 3 Emp. Skirts #407 @ $4.50; 3 Emp. 
 Skirts #248 @ $6.50; 2 Emp. Skirts #501 @ $4; 1 Emp. Skirt #417 @ $9; 
 6 Emp. Skirts #523 @ $2.50; 328 doz. J. & P. Coats Thread, per doz. 55c; 
 15 bx. Crawford's Linen Floss, per box, 67c; 60 Sheets 72x90 "Pepp." @ 
 433^c; 120 Pillow Cases 45x36 "Star" @ 8c; 120 P. Cases 42x36 Star @ 
 73^0; 60 P. Cases 42x36 "Fearless" @ 834c; 24 P. Cases 42x36 "Clio" @ 
 1134c;.60 P. Cases 45x36 "Gold Medal" @ I51/2C; 25 doz. Napkins 18x18, 
 per doz. 34i/2C; 41 pc. Figured Vienna Silkaline, 2,1191/4 yd. @ 71/20; 7 pc. 
 Plain V. Silkaline, 34514 yd. @ 6c; 16 pc. French Muslin, 900 Vd. @ 834c; 
 1 pc. Elton Burlap, 291/2 yd. @ I21/2C; 2 pc. Cypress Plymouth Denim, 1213^ 
 yd. @ 91/^c; 3 pc. Hungarian Cloth, 123% yd. @ 15c; 4 pc. Figured Dimity, 
 21034 yd. @ I21/2C; 2 pc. Zephyr French Taffeta, 117 yd. @ I21/2C; 4 pc. 
 Dundee Burlap, 163 yd. @ 9c; 4 pc. Ragaline Crepe, IO9I/2 yd. @ 15c; 1/2 doz. 
 Drawers, per doz. $13.50 ; 3 doz. Gowns, per doz. $9 ; 1/3 doz. Gowns, per doz. 
 $21; 1/12 doz. Gowns, per doz. $54; 15 Butterick Patterns @ 5c; 12 Butterick 
 Patterns @ 71/2C. 
 
 When forwarding, do not carry the partial total into the second column. 
 
 NOTE. — The student will observe that after posting the above there will appear 
 three accounts in separate ledgers under the title Burle Van Kleek. Notice that these 
 accounts are kept for entirely separate purposes and should not be confused. 
 
 7. Burle Van Kleek is allowed to apply $250 of his credit in the 
 purchase ledger as a tirst payment on stock account. Issue to him an install- 
 ment receipt and make the journal entry. Post, debiting account in purchase 
 ledger and crediting account in installment ledger. Also credit subscription 
 account in general ledger. 
 
 8. Pay in your first installment in cash and take installment receipt. 
 
 C 9. Deposit $2,450. 
 
 INFORMATION #160. (Review #125.) A mortgage is the conveyance 
 of property for the purpose of securing the payment of money, or the per- 
 formance of some other obligation. 
 
 Personal property is conveyed by chattel mortgage ; real property is 
 conveyed by real estate mortgage. The person giving the mortgage is called 
 the mortgagor, and the one to whom it is given is called the mortgagee. 
 A real estate mortgage is executed, delivered and recorded in the same way 
 as a deed is. A mortgage contains two parts: (1) the conveyance of property 
 like a deed, (2) the stipulation that such conveyance shall be void if the 
 mortgagor pays a certain sum of money or does some other specified act. 
 
 INFORMATION #161. Real property is frequently bought for part 
 cash and part notes. "When so bought, the property should be conveyed 
 to the buyer by deed, and should then be reconveyed to the seller by mort- 
 gage. The mortgage is to be canceled when the notes are paid. If the 
 maker should fail to pay the notes, certain legal steps could be taken whereby 
 the property would be sold at public sale and the proceeds be used to pay 
 the mortgage indebtedness and any remainder passed to the mortgagor. 
 
 C 10. Buy of James P. Hess (unmarried) the following property which 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 119 
 
 will be used for your business purposes: Lot No. Eight (8) in Block No. 
 
 Thirty-one (31) of City. Make a consideration of $14,000, to be 
 
 paid as follows: Cash by check, $4,000; four notes of $2,500 each, payable 
 in one, two, three, and four years from date, drawing six per cent from date 
 interest payable annually, and the notes secured by mortgage on the property 
 purchased. 
 
 C 11. Fill the following papers : 
 
 The deed from James P. Hess to The Mercantile Company. Your 
 
 check and four notes payable at the bank to James P. Hess. Your mortgage 
 securing the notes, signed by president and yourself as secretary and treas- 
 urer. Have the deed and mortgage acknowledged before a notary public, 
 paying a fee of 50 cts. in currency. Have the deed and mortgage recorded, 
 paying a fee of $2 currency. Make journal entry of the transaction and 
 post. 
 
 012. Enter in the secretary's minute book a record of a meeting of 
 the board of directors at which four directors were present. They vote 
 to call upon subscribers for a second installment of 50 per cent of the 
 capital stock to be paid within ten days. 
 
 13. Write an installment receipt in favor of each subscriber except 
 the one having a credit in the purchase ledger, for 50 per cent of the sub- 
 scription, and collect cash. Enter and post. Deposit the cash received. 
 
 C 14. Charge the purchase ledger account of Burle Van Kleek a sufficient 
 amount to pay his subscription in full. His full payment entitles him to a 
 certificate of stock. Before issuing the certificate of stock, have him return 
 the installment receipt issued. Paste this to the stub. Issue certificate of 
 stock No. 1, using the form here given as a model. , Transfer the certificate 
 number to the stock ledger account. After posting, rule up his installment 
 account, as it is in balance. 
 
 Cirtificatt No. 
 
 / 
 
 i2^;2^^ 
 
 . Shares, 
 
 .^S-&.d2^££=ii^^=^=*^ 
 
 .^^^ 
 
 rq^ 
 
 Rtceivid CntifuauNo Z_ 
 
 for_ 
 
 is^^^^ay o f i^^^l^et^-^^-g-^ p^f^ 
 
 r 
 
 ■ (0 
 
 %% WWV% %*%%^'WV%%WV*%VW*%^%*% 
 
 The Manning Mercantile Company 
 
 Chb €ertlfl«^,Iliati 
 
 is the owner of 
 
 Capital Stock % ^^^^i^ ^ ^"^ . 
 
 Shares, of'the Capital Stock 
 
 fully paid, transferable only on the Books of the Corporation, by him or his attorney, upon sur- 
 render of this Certificate. 
 
 In Witness Whereof the officers of this Corporation have hereunto subscribed their 
 
 i( names and ca_^sed the corporate Seal to be hereto affixed at_ 
 \this- 
 
 ly nf ^:^<^Jgi>-<^^<i-^>^ g^^ 
 
 .,j '.^c^^-^^.^^g^^^^^^^<i:^^ 
 
 C 15. Pay Burle Van Kleek a check for the balance of his account in 
 the purchase ledger. Post and rule the account. 
 
 C 16. Buy of Calhoun, Robbins & Co., City, 20 pc. gingham, 5 pc. un- 
 bleached muslin. Use order blank, receive invoice, enter as Voucher #2. 
 
 C 17. Sell W. R. Johnson, City, the following goods on acct. 2/10 n/30. 
 Enter in sales book and bill, using the bill received in C16 as a model: 
 6 pc. Suiting, 34, 83, 331/2, 31, 30^4, 3214, at 35 cts. per yard; 5 pc. Swiss, 
 
120 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 45, 43, 52, 51, 461/2, at 9 cts. ; 3 Empire Skirts #521 at $6.50; 2 Empire Skirts 
 #501 at $5.50. 
 
 C 18. Sell H. A. Payne, City, as above, 10 doz. Hose #503 at $2.90 per 
 doz.; 11/2 doz. Hose #505 at $2.95; 1/2 doz. Hose #857 at $4.10; 3 Empire 
 Skirts #515 at $4.50; 6 Empire Skirts #523 at $3.25. 
 
 INFORMATION #163. (Review #130.) Firms that ship merchandise 
 to customers, before delivering the packages to the transportation company, 
 .should prepare triplicate shippers' receipts, on which is written the address 
 of consignor, the address of consignee and a description of the shipment. 
 The interstate commerce commission has prescribed a form to be used by all 
 common carriers, called a non-negotiable, straight bill of lading. Triplicate 
 copies are made in order that one signed by the agent of the company may 
 be retained by the shipper as a receipt, one may be sent by the shipper to 
 the consignee, and one may be retained by the freight agent to complete 
 his records. One original and two carbon copies are used for this purpose. 
 See form. 
 
 Railroad! Company y 
 STRAIGHT BILL OF LADING-ORIGINAL-NOT NEGOTIABLE. A,Irf.N«. 
 
 effect on ihe dmu ot Iss^ue^W^U Orlglwl llll ol Udiag. M ^^ yj ^yf 
 
 the property deaorlbei^betow, lo ac^iarent good order, exoept u doimI (oonteata aod oooditloo of contents ol package s^okoown), marked. ooDsigned and destined as In* 
 Otcated below, which aald company agraes to carry to Its usual place of delivery at said destination. If on Its road, otherwise to deliver to andiber carrier on the route 10 
 aald desttnatloa It Is mutually agreed, as 10 each carrier of all or any of a»ld property, over all br any i>ortton of said route to destination, and as to each party at any 
 lime Interested in a'l or any of said property, that every servioe to be performed hereunder, shall be subject to all the oondltioDS. wither printed or written, hcrela 
 ^IT10l«>it3Mai HEF"-- " • ' "*" ^ 
 
 ooDtalned (INCLUOIMO CONOITIOWS 
 The rate of freight from.. 
 
 by the shlppep^W^ accepted for himself and Ms usigns. 
 
 Is In Cents per 100 lbs. 
 
 Timwiil IFtrtCIlM If »<CI«H I IFKiiUCT I If 3ilCllM~ If WyUt e IF Ruir^g I If 4IIiCHm irtthClm lfttt>CUM[ if^«cl«l | IF (vmUI 
 
 ^ 
 
 
 Route- 
 
 State of 
 
 ...Car Initial 
 
 / 
 
 DESCRIPTION OF ARTICLES AND SPECIAL MARKS 
 
 WEIGHT CLUtO* CHSCK IfchargM are toJwprepild. writ* 
 
 (««W«H.e.r,«M«» »ATt COLUMN or .Ump her. To b. f r.p.Ul." 
 
 //^^ 
 
 Jf 
 
 Received »._,.._£_ _ 
 
 to apply In prepayment of the char- 
 BM oo the proper ty desorlbad hereon. 
 
 AirentorOaahlar. 
 
 rwt . 
 
 (The tltnature here aokoowiedget 
 only the amount prepaid.) 
 
 Charges Ady 
 
 .Agent 
 
 INFORMATION #164. When goods are offered to the carrier for ship- 
 ment, great care should be exercised in directing the cases properly. The 
 address of the shipper, the direction to the consignee, the route over which 
 shipment is to be made, whether freight is prepaid or to be collected at 
 destination, should all be plainly printed on the box. The form is given in 
 model. 
 
 C 19. Sell G. II. Brown & Son, Brownville, your state, ship via B. C. 
 Railway, terms 2/10 n/30 : 1 pc. Suiting 331/2, at 75 cts ; 15 pc. Brown Crash, 
 39, 381/4, 411/4, 421/4, 41, 401/2, 4II/4, 383/4, 391/2, 40, 40, 4II/4, 4II/4, 391/2, 401/2, 
 at 71/2 cts ; weight 440 lb. 
 
PROGRESSIVE BUSINESS ACCOUNTING 121 
 
 /?r^i/ Crooc/j /'r-o/'Tt 
 
 C/? /'c Cif c^o, /W. 
 
 aron/nvl /le,, 
 
 Direct the shipping case properly. Make out triplicate bills of lading. 
 Enter sale in sales book and fill out bill. Deliver the shipment to freight 
 agent and secure his receipt. Enclose bill and receipt in envelope properly 
 directed. Place your return address in upper left hand corner and place 
 letter in post office. Post the sales book entry to the sales ledger. 
 
 C 20. Sell H. "Wester, Jesup, your state, 1 pc. Figured Dimity, 52 yd. 
 at 141/2 cts. ; 2 pc. Dundee Burlap, 41 and 41 yd. at 11 cts. ; 2 pc. Ragaline 
 Crepe, 60 yd. at 18 cts; 5 pc. Plain Vienna Silkaline, 49, 51, 49^/2, 513^, 49^4, 
 at 8 cts. Weight 280 lb. Proceed as in C19. 
 
 INFORMATION #165. The student's attention is directed to the use 
 of contra columns in the cash book. A contra column contains items that 
 appear on the side of the cash book opposite to the side from which they 
 should be posted. Their purpose is to save labor by shortening entries. 
 For example, if we pay John Smith's bill of $100 less a discount of 2 per 
 cent, the amount of cash given is $98. Without the use of contra discount 
 columns in the cash book, a journal entry would be required debiting John 
 Smith $100; crediting Cash $98, and Mdse. Disct. $2. The cash entry would 
 then be posted to the cash book. (See Infor. #85.) The same result is 
 obtained if an entry is made on the credit side of the cash book, debiting 
 John Smith $100 in the proper column and entering the discount, $2.00, in 
 a separate column headed Mdse. Disct. This discount is really a credit and 
 like all other credits, would naturally be found on the debit side of Cash. 
 At the time of balancing the cash book, the total of such discounts is carried 
 to the debit general column of the cash book. The effect of adding it in the 
 opposite debit side is to reduce the cash total credit on such payments to 
 the amount actually paid. The total of Mdse. Disct. thus carried to the debit 
 side is posted, as are all other items in the general debit column, to the 
 credit side of the ledger. 
 
 Likewise a contra discount column on the debit side of the cash book 
 contains amounts of discount allowed others. The total of this column at 
 balancing is carried to the credit general column of cash book and is from 
 that posted with all other items in the credit general column to the ledger 
 debit. 
 
 The result of using contra discount columns is that entries like those 
 mentioned can be placed on one line of the cash book without the use of 
 
122 PROGRESSIVE BUSINESS ACCOUNTING 
 
 the journal, and that all the discounts of a given period can be posted in 
 one amount instead of one item at a time. 
 
 21. Pay Voucher :^2 by check after deduction of 2% discount. Have 
 bill receipted. Enter the full amount of the bill to the firm's debit in the 
 accounts payable column of the cash book and the discount in the Mdse. 
 Disct. column. Post the entire amount to their ledger debit and show in the 
 explanatory space the amount of discount received, thus, "D. 1.74." 
 
 C 22. Collect cash of H. A. Payne for the amount of his bill less 2%. 
 Make a like entry in the cash book debit side and post. Do not fail to give 
 receipt. 
 
 C 23. Send orders for goods to five firms, preparing each order as 
 follows : 
 
 1. Enter in the duplicate order blank. 
 
 2. "Write a letter stating that your company was recently incorporated 
 with $25,000 capital stock to engage in the dry goods business, and that 
 you desire to open an account with a debit balance not to exceed $2,000 
 at any one time. State that you have funds sufficient to discount bills and 
 you expect to do so. State that you enclose an initial order. Eequest an 
 immediate acknowledgment of the order, also prompt shipment and most 
 favorable terms. 
 
 Order of Valantine & Bentley, Boston, Mass. 
 50 pc. English Mohair. 
 50 " Jacquarde Madras. 
 50 " English Corded Prunella. 
 20 " Directoire. 
 20 " Sharkskin. 
 30 " Nainsook. 
 Order of P. K. Wilson & Son, Cincinnati, Ohio. 
 20 pc. French Serge Eaye. 
 30 " Percale. 
 3 '' Wool Taffeta. 
 2 " Table Linen. 
 Order of Broadhead Worsted Mills, Oswego, N. Y. 
 50 pc. Storm Serge. 
 20 " Broadcloth. 
 20 " Granite Cloth. 
 20 " Cashmere. 
 Order of F. A. Foster & Co., New York. 
 100 pc. Botany Twill. 
 100 " Toweling. 
 Order of Folwell Bros. & Co., Chicago. 
 100 pc. Crown Lining. 
 70 " Brown Sheeting. , 
 
 25 " Dimity. 
 
 C 24. Sell Berg & Bowers, Independence, , on acct., 60 days or 
 
 3% ten days: 5 pc. Figured Vienna Silkaline, 49, 51, 521/4, 50, 481/2 yd. @ 
 9 cts; 5 doz. Napkins 18x18, per doz. 48 cts; 1 doz. P. Cases 42x36 "Clio" 
 (5) $2 ; 1 pc. Elton Burlap, 291/2 yd. @ 16 cts. Per B. C. Railway. 290 lb. 
 
 25. Sell Unsubscribed Stock of the company to Leo A. Boyce, ten 
 shares, and C. Bolster, five shares, receiving cash at par. Issue to them stock 
 
PROGRESSIVE BUSINESS ACCOUNTING 123 
 
 certificates Nos. 2 and 3. Open accounts with them in the stock ledger, and 
 post to the stock ledger accounts from the stub of the stock certificate book. 
 Make entry in cash book and post to the general ledger. 
 
 C26. Burle Van Kleek has sold his ten shares of stock (Cert. #1) to 
 C. Bolster and desires that a transfer be made on the books of the company. 
 Secure Van Kleek 's certificate, indorse on the back his assignment in these 
 words: "For value received, I hereby assign and transfer unto C. Bolster 
 my right, title, and interest in the within ten shares of stock." Secure Van 
 Kleek 's signature to the assignment. Then fill out certificate No. 4 in favor 
 of C. Bolster. The stub must show from whom transferred. Hand Bolster 
 the new certificate. Paste the old certificate to its stub and write "Canceled" 
 across the face. No cash is received or given by the company. The record 
 of the transfer will be complete after you have posted to the stock ledger 
 from the stub of the stock certificate a debit to Van Kleek (rule his account) 
 and a credit to Bolster (give certificate number). 
 
 Enter in the minute book the record of a meeting of the directors 
 in which it is voted to call on the stockholders for payment of an installment 
 of the remaining 25 per cent due on stock subscription. 
 
 C 27. Collect cash of subscribers for all unpaid subscriptions. Take 
 up their installment certificates, cancel and paste to stubs. Issue certificates 
 of stock Nos. 5, 6, 7, and 8, to each in the order of their ledger accounts. 
 Post and rule the installment ledger accounts. From the stock certificate 
 book transfer the certificate numbers to the respective accounts in the stock 
 ledger. 
 
 C 28. Sell L. E. Scott, Manchester, terms 3/10 n/60, 15 pc. Suiting, 30, 
 37, 383^, 371/2, 3734, 363^, 361/2, 361/2 38, 36, 35, 36, 36I/2, 37, 36 yd. @ 14 cts. 
 Via B. C. Ry., 300 lb. 
 
 Sell Runner & Stone, La Porte, , terms 3/10 n/60, 20 sheets 
 
 72x90 @ 65 cts; 50 P. Cases 45x36 "Star" @ 12 cts; 7 doz. Hose #226 @ 
 $2.10 per dozen; 8 bx. Crawford's Linen Floss @ 83 cts. Via B. C. Ry., 
 195 lb. 
 
 Sell G. H. Brown & Son, Brown ville, , terms 3/10 n/60, 10 pc. 
 
 French Muslin, 491/2, 5014, 483^, 5II/2, 491/2, 483^, 5014, 5II/2, 491/4, 5034 yd. 
 @ 10 cts; 1 pc. Jamestown Suiting, 48% yd. @ 99 cts; 1 doz. R. G. Corsets 
 #671 @ $9.75 per doz.; 1/2 doz. R. G. Corsets #440 (g $15 per doz. Via 
 B. C. Ry., 480 lb. 
 
 Sell Berg & Bowers, Independence, , terms 3/10 n/60, 5 pc. 
 
 Suiting, 371/4, 38, 3714, 36, 38 yd. @ 14 cts; 15 sheets 72x90 @ 65 cts; 20 P. 
 Cases 45x36 "Star" @ 12 cts; 3 pc. Suiting, 58, 591/2, 541/2 yd. @ 10 cts; 
 3 pc. Cream Cord, 103 yd. @38 cts; 15 pc. Brown Crash, 391/4, 401^, 41, 4II/2, 
 40, 3834, 391/2, 421/4, 3734, 4314, 383/4, 4114, 43, 4II/2, 271/4 yd. @ 81/2 cts. 
 Via B. C. Ry., 595 lb. 
 
 Sell W. R. Johnson, City, terms 2/10 n/30, 2 pc. Suiting 4014 and 41 
 yd. @ 151/2 cts; 30 P. Cases 45x36 "Star" @ 12 cts; 10 sheets 72x90 @ 
 65 cts ; 20 doz. J. & P. Coats Thread @ 56 cts. per doz ; 7 bx. C. Linen Floss 
 @ 83 cts. Deliver. 
 
 C29. The Farrier-Miller Co. present a statement covering material and 
 labor to date. The amount is correct. Pay the statement by check. See 
 that it is properly receipted and give it voucher number. File. 
 
124 PROGRESSIVE BUSINESS ACCOUNTING 
 
 30. Pay Foskett & Co.'s bill. 
 
 C 31. A list of expense items is here given. Make out a check for 
 each. "Write on lower left corner of check the purpose for which given. 
 Charge in cash book by items: 
 
 Wm. Farrell, salary to date, $20; C. F. Tomlinson, salary to date, $12; 
 Perry Hargraves, salary to date, $8; W. W. Dole, salary to date, $18; City 
 Light & Power Co., bill to date, $7.30; Star Sign Painting Co., for services, 
 $18.60; W. K. Cole, P. M., for stamped envelopes, $42:90. 
 
 32. Ship Dollman & Co., Crawford Junction, per U. S. Express, 
 C. 0. D., the following bill : 5 pc. Swiss Suiting, 51, 531/2, 5214, 54, 57 yd. 
 (a) 10 cts; 15 sheets 72x90 @ 65 cts; 20 P. Cases 45x36 @ 12 cts; 3 pc. Cream 
 Cord, 33, 34, 36 yd. @ 38 cts; 5 pc. Suiting, 24, 24, 25%, 241/4, 26 yd. @ 
 151/2 cts. 
 
 DIREOTIONS. Read Infor. #150. Bill the goods, terms C. 0. D. 
 Address the package as you would for a freight shipment, routing it U. S. 
 Express. Place in upper right-hand corner "C. O. D. $97.21." Place the 
 bill in an express C. O. D. envelope (do not seal), attach the envelope to the 
 case, and deliver to the express agent, taking his receipt. 
 
 Open an account with C. O. D.'s in sales ledger (fifth place on page 12) 
 and post to debit of this account (see form, page 99). 
 
 33. Ship by freight C. O. D. to Denecke & Yeoman, Perry, : 
 
 3 pc. Swiss Suiting, 621^, 641/2, 59i/o yd., @ 10 cts; 12 P. Cases 42x36 
 (a) 18 cts ; 20 doz. Napkins 18x18 @ 48 cts. per doz. ; 6 pc. Brown Crash, 39, 39%, 
 41, 401/2, 41, 373^ yd. @ 914 cts; 3 pc. Jamestown Suitings, 25, 25, 26 yd. 
 @ 90 cts. Via B. C. Ry., 510 lb. 
 
 DIREOTIONS. Bill, terms C. O. D. Address the case to your firm, 
 write on case "Notify Denecke & Y6oman. " Deliver the case to freight 
 agent, taking an order bill of lading signed by agent. Write on bill of 
 lading "Notify Denecke & Yeoman," and sign; draw a sight draft for the 
 amount on Denecke & Yeoman, attach the bill of lading to the draft, leave 
 draft and attached bill of lading at the bank for collection, mail the bill 
 to Denecke & Yeoman. 
 
 Post to C. 0. D. account. 
 
 34. Ship Falstatf Dry Goods Co., Grundy Center, , C. 0. D. : 
 
 101/2 doz. Hose #503 @ $2.60; 1 doz. Hose #505 @ $2.67; II/2 doz. Hose 
 #859 @ $3.22; 214 doz. R. G. Corsets #671 @ $12.20; 1/3 doz. R. G. Corsets 
 #29 @ $27; 5/12 doz. R. G. Corsets #440 @ $13.80; 3 Empire Skirts #407 
 @ $6; 3 Empire Skirts #248 @ $7.25. Via B. C. Ry., 380 lb. 
 
 35. Ship Swanson Bros., Swanville, , by W. F. & Co. Express, 
 
 C.O.D., 19 pc. Brown Crash, 40, 391^, 38, 41, 38I/2, 391/2, 413^, 40, 41, 38, 
 411/2, 391/4, 37, 263^, 38, 3914, 371/2, 38i4, 401/2 yd. @ 93^4 cts. 
 
 36. Ship Eversole Mercantile Co., Lincoln, , by American 
 
 Express, C. 0. D. : 2-5/12 doz. R. G. Corsets #661 @ $10.50; 1/3 doz. R. G. 
 Corsets #906 @ $11.50. 
 
 37. Pay small items of expense $3.97 in currency. 
 
 38. Issue to G. B. Brown 10 shares of unsubscribed stock, receiving 
 cash at 110. Credit Unsubscribed Stock at par and open an account with 
 Premium on Stock (Ledger page 5). Credit this account with premium 
 received. 
 
PROGRESSIVE BUSINESS ACCOUNTING 125 
 
 C39. Receive cash, of W. R. Jolmson in payment of his first bill less 
 the stipulated discount. Allow him the major fraction of a cent discount. 
 
 C40. Receive a remittance from G. H. Brown & Son in payment of 
 their first bill. 
 
 C41. Receive a letter from H. Wester, Jesup, complaining that one 
 item billed to him was missing in the "shipment. On investigation, you find 
 his statement correct. Credit his account with the proper amount at the 
 price charged, and write him a letter stating that you have done so. 
 
 It will be seen that Mdse. should be debited and H. Wester credited 
 with this return charge. But there is an objection to posting such an item 
 to the debit of merchandise. Mdse. debits should show cost; Mdse. credits 
 should show sales. The above and similar allowances should be deducted 
 from sales rather than added to cost. Do not journalize, but make an entry 
 in the sales book (red ink) and post the entry to the credit of the customer. 
 Deduct the amount from the pencil footing of the sales book. The effect of 
 this deduction is to reduce the sales credit to the actual amount sold. 
 
 INFORMATION # 166. AVhen quick communication is desired, it is 
 often necessary to write a telegram instead of writing a letter. Telegraph 
 companies convey messages immediately by wire and charge for the service 
 a certain rate per word. It is therefore desirable to use the fewest words 
 possible in writing a telegram, yet the message should not be so brief as to 
 be obscure in meaning. If the purpose of the sender will be served by a 
 ''night message" (one sent at the convenience of the company after 6 p. m.) 
 a charge of one-half the regular rate is made. If the message is of sufficient 
 importance, it may be ordered "repeated," that is, sent back to verify the 
 exact wording. An additional charge is made for repeating the message. 
 Telegrams are written on blank forms furnished by the telegraph company. 
 See form. 
 
 *^'the wtestern union t eleg raph COMPAHnr 
 
 Z4,000 OFFICES IN AMERIC A. CABLE SE RVICE TO ALL THE WORLD. 
 
 ROBERT C. CLOWRY. President and General Manager. 
 
 Rucelvar'a No. 
 
 Time Filed 
 
 SEND the following message subject to the term^r^^.^^^^^ >J^-2t--t.u~MJ07Uz^ kT' \ O^/ /? 
 •n back hereof, which are hereby agreed to. ~i f- ^^ ^iC^.e^Z-C^ , ^<::^^-Z'-t^f-'^, ^yt^Zy ^^ | y/ ^ 
 
 To. 
 
 .^^C^^^x-^L-^^-T^-.^ ^-^- 
 
 £^^ 
 
 (^y.. 
 
 e^^g^^-^T- 
 
 ^^^ 
 
 -5^--^ ^iZ--* 
 
 -^^^^^^^.---^-^^^^ v^,^-^^^-^ 
 
 ^■-V^^g^^?Z->^>Z.-^^^>^:-^^-^<^^^g-^--<^ 
 
 w-READ THE NOTICE AND AGREEMENT ON BACK. .Ct 
 
 C 42. Receive, by mail, an order from G. H. Brown & Son. As you do 
 not have the goods in stock, order Folwell Bros. & Co., Chicago, by wire. 
 
126 PROGRESSIVE BUSINESS ACCOUNTING 
 
 to ship by express the goods to G. H. Brown & Son, Brownville, , 
 
 and send bill for same to you. Deliver the message to telegraph company 
 and pay the charges in currency 5.0 cts. 
 
 43. Send a telegram (night message) to F. A. Foster & Co., urging 
 immediate shipment of the goods ordered in C23. Use ten words or less. 
 Pay charges 30 cts. in currency. 
 
 44. Sell George Sherrill 20 shares of Unsubscribed Stock at 110 for 
 cash. 
 
 45. Transfer ten shares of your stock in the company to C. Bolster, 
 receiving cash at 110. Surrender your certificate No. 5, properly assigned. 
 Issue two certificates, one to Bolster for ten shares and one to yourself for 
 ninety shares. Deliver the one to Bolster and collect cash. Post to stock 
 ledger, debiting your stock account with Cert. #5 returned, and crediting 
 Bolster's account with No. 11 issued and your account with No. 12 issued. 
 
 Take the cash received to the bank and purchase a draft for $500, and 
 exchange 50 cts, and take a certificate of deposit for the remainder. (See 
 Infor. #167.) 
 
 Inclose the draft, properly indorsed (see Infor. #98, form 4) in your 
 personal letter to The American Red Cross, Washington, D. C, stating that 
 you send the amount as a personal donation to assist in the relief of the 
 sufferers from the latest great public calamity that you can remember. 
 
 Hold the certificate of deposit. 
 
 INFORMATION # 167. A person desiring to leave an amount of money 
 at the bank to be withdrawn at one time, may have a certificate of deposit 
 written in his favor instead of depositing on open account. C. D.'s are 
 written payable on demand or after a certain period, and are called demand 
 or time certificates. When the deposit is to be withdrawn, the certificate, 
 properly indorsed, is surrendered to the bank. 
 
 46. Sell the remainder of Unsubscribed Stock to your teacher, for 
 cash, at 110. 
 
 47. Deposit all cash on hand. 
 
 48. Receive bill from Folwell & Co. in answer to your telegram in 
 C42. Enter in purchase book V. #5. 
 
 Bill the goods shipped to G. H. Brown & Son by Folwell & Co. on your 
 account, to the former firm at $2.30 per yard, terms 3/10 n/60. 
 
 49. Deduct the discount allowed on V. #5. Buy a bank draft for 
 net amount, exchange 10 cts. (check for $39.30) ; enter on cash book the 
 payment as instructed in C21 ; carry the exchange to the expense column on 
 
 the same line; write on the voucher in red ink "Paid by draft 19 — , " 
 
 and file the paid voucher ; write a letter, enclose the draft, and mail to Folwell 
 Bros. & Co. 
 
 50. Balance the cash book. (1) Pencil foot columns. (2) Carry 
 Accounts Receivable, Accounts Payable, and Expense special columns to 
 general columns as in Ex. XIX. (3) Review Infor. #165. Carry the total 
 of Mdse. Disct. column found on the debit side of cash book to the credit 
 general column of cash book, thus, "Mdse. Disct. contra $5.18. (4) Carry 
 the Mdse. Disc, column found on the credit side of the cash book to the 
 general debit column, thua, "Mdse. Disct. contra $2.54. (5) Pencil foot the 
 general columns, find the cash balance and compare with the bank balance, 
 balance the cash book and carry the balance to page 6. 
 
PROGRESSIVE BUSINESS ACCOUNTING 127 
 
 On a sheet of journal paper take a trial balance. (Refer to closing of 
 journal Ex. XIX. before completion of posting.) 
 
 Below trial balance make a list of accounts in the stock ledger and 
 compare list with Capital Stock account. 
 
 Below enter a list of Installment Ledger accounts (if any) and compare 
 with Subscription. If all accounts are closed, rule the Subscription account. 
 
 Below make a list of purchase ledger accounts, if any, and compare with 
 Accounts Payable in general ledger. If all accounts are closed, rule the 
 latter account. 
 
 Below make a list of sales ledger accounts, and compare with balance of 
 Accounts Receivable. 
 
 Submit the trial balance and lists for approval, and if correct, copy 
 on page 8 of journal, cash and trial balances. 
 
 C 51. Receive invoice from P. K. Wilson & Son, in reply to order sent 
 them in C23. Assuming that the goods received are as billed in quantity and 
 quality, verify the extensions and footings of the bill as usual. If errors have 
 been made, show the right amount on bill in red ink, and enter the correct 
 amount in the purchase book. The sender of the bill should be notified in 
 case of error. Attach the corrected bill, when he sends one, to the bill already 
 entered. 
 
 52. Receive invoice from Folwell Bros. & Co., in reply to order sent 
 them in C23. Assuming that the invoice checks with goods delivered, enter. 
 
 C 53. The U. S. Express Co. deliver the C. O. D. envelope sent with ship- 
 ment in C32, containing cash for the amount of the collection. Enter and 
 post. 
 
 C 54. The American Express Co. return C. 0. D. envelope sent with ship- 
 ment in C36, containing cash collected. 
 
 C 55. Receive a letter from H. Wester, remitting draft in payment of 
 his account. Give it the necessary attention. 
 
 56. Receive a letter from G. H. Brown & Son, containing cash. 
 
 C 57. Pay by check the premium on a fire insurance policy on stock for 
 $2,000 at 11/4 cts. Receive and file the policy. Take receipt for the payment. 
 
 58. Buy 172^/^ shares of the capital stock of the Barrymore Dry Goods 
 Co. at 80. Pay by check and receive the stock certificate. Open a ledger 
 account with Barrymore D. G. Co. Stock. 
 
 C 59. You have engaged James Donner as traveling salesman at a salary 
 of $125 per month and expenses. Open an account with him in the general 
 ledger and write a memo of the terms, at the top of his ledger account. 
 Hand him a check for $50 advanced expense money and charge his account. 
 
 C 60. Buy of Calhoun, Robbins & Co., City, merchandise per bill. 
 
 C 61. Discount P. K. Wilson & Co. 's invoice and send a bank draft 
 (exchange $1) in payment. 
 
 62. Discount Folwell Bros. & Co.'s invoice and send a draft (exchange 
 70 cts.) in payment. 
 
 63. James P. Hess consents to the payment of your note running one 
 year with interest for thirty days at the rate named. He is not legally 
 obliged to accept less than the full year's interest, but for some business 
 reason will settle on the above terms. Give check for the amount and receive 
 the canceled note. 
 
 64. G. B. Brown sells back to the Company his 10 shares of stock at 
 par. Give check. Charge Treasury Stock. Balance Brown's stock account. 
 
 Observe that you have overdrawn your bank account. This should not 
 be done and will not be allowed by the bank. It is of no great consequence 
 in this instance, because you have cash on hand to cover the overdraft and 
 
128 PROGRESSIVE BUSINESS ACCOUNTING 
 
 should make a deposit at once, so that your balance will be sufficient to meet 
 the above check when it shall be presented. In the meantime, indicate the 
 amount of the overdraft on your check stub by subtracting your last balance 
 from the amount of the check and writing the difference in red ink. Deposit 
 all cash on hand and show on check stub your balance changed from "red" 
 to ''black." 
 
 C 65. Referring to the sales book, it is seen that L. E. Scott was charged 
 with a bill of suiting at 14 cts. per yd. The price should have been 94 cts. 
 per yd. Make in the sales book, as you would enter a new sale, the correct 
 entry referring to the previous incorrect entry, and fill out a corrected bill. 
 Make a red ink reverse entry in the sales book, crediting L. E. Scott with 
 the amount of the previously entered incorrect bill and deduct the amount 
 from sales footings as directed in C41. 
 
 Write a letter explaining the change and ask that the correct bill be 
 substituted for the incorrect one. 
 
 66. Also find that in the sale of C28 to Berg & Bowers, 186i/> yd. 
 suiting was billed at 14 cts. instead of 94 cts. Proceed as in C65. 
 
 C 67. Receive a letter from Runner & Stone, asking you to deduct the 
 discount of 3 per cent from their bill and draw at sight for the proceeds. 
 Credit them with the discount through the journal. Draw a sight draft for 
 the net amount and leave it at the bank for collection. Notify the drawees. 
 Make pencil memo of the draft drawn in credit side of ledger account. 
 
 C 68. Receive a letter from L. E. Scott enclosing his 60-day note without 
 interest to balance account. Credit through journal, enter in notes receivable 
 book; acknowledge. 
 
 C 69. The express C. 0. D. on Swanson Bros, in C35 is returned collected. 
 Enter and post. 
 
 C 70. The two C. 0. D. drafts left at the bank in C33 and C34 are paid 
 and credited. ' Have the bank bookkeeper enter the amounts in your pass 
 book. Observe that 30 cts. collection charges has been deducted from each 
 one. Enter collection charges in Mdse. Disct. column. Add the credits to 
 your bank balance on stub of check book. 
 
 C71. Pay Calhoun, Robbins & Co. a check of $300 on account. Deduct 
 in red ink from V. #6. No discount is allowed before settlement of entire 
 bill. Enter and post. 
 
 72. The merchandise ordered of F. A. Foster & Co., Broadhead 
 Worsted Mills, and Valentine & Bentley has arrived and has been checked 
 to their three invoices. It has been found that the invoice from Broadhead 
 Mills is short one piece 48yo yd. Cashmere. Deduct this from bill (red ink) 
 and notify the firm. 
 
 One bill is computed incorrectly. Make the correction in red ink, and 
 notify the firm. 
 
 Enter the three bills as corrected in the purchase book, giving them 
 voucher numbers in the order named above. 
 
 73. Make a list of your liabilities. Does the total exceed the amount 
 allowed by your articles of incorporation? If so, sell your Barryraore D. G. 
 Co. stock to E. E. Clermont at 82, receiving cash. Assign the stock certificate 
 as before instructed. 
 
 74. James Donner sends orders for immediate shipment to customers, 
 which you may enter and bill as follows: 
 
PROGRESSIVA] BUSINESS ACCOUNTING 129 
 
 Berg & Bowers, Manchester, , terms 3/10 n/60, via B. C. Ry., 
 
 620 lb.: 10 pc. Botany Twill, 52, 51, 51, 521/2, 50, 54, 5314, ^OVs, 49, 54 yd. 
 @ 60 cts; 4''pe. English Mohair, 36, 381/4, 37, 36I/2 yd. @ $1.30; 1 pc. Shark- 
 skin, 54 yd. @ $1.10. 
 
 Mowrey & Co., Independence, , terms 3/10 n/60, via B. C. Ry., 
 
 480 lb. : 5 pc. Jacquarde Madras, 52, 52i4, 53, 50%, 49 yd. @ 27 cts. ; 2 pc. 
 Directoire, 41, 433^ yd. @ $1.95 ; 3 pc. Granite Cloth, 36, 371/2, 35 yd. @ $1. 
 
 L. E. Scott. Manchester, , terms 3/10 n/60, via B. C. Ry., 490 lb. : 
 
 8 pc. Crown Lining, 54, 53, 521/2, 56, 55, 53, 493^, 4914 yd. @ 8 cts. ; 10 pc. 
 Brown Sheeting, 42, 43, 4II/2, 43, 44, 451/2, 42, 4314, 45, 44 yd. @ 9 cts. ; 1 pc. 
 Storm Serge, 423^ yd. @ 72 cts. ; 1 pc. Wool Taffeta, 60 yd. @ $1.40. 
 
 Crozier & Co., Manchester, , terms 3% off C. 0. D., via B. C. Ry. ; 
 
 sight draft, B/L attached; 210 lb.: 5 pc. Percale, 44, 451/2, 46, 4314, 47 yd. 
 @ 13 cts.; 2 pc. Table Linen, 56, 56 yd. @ $1. 
 
 G. H. Brown & Son, Brownville, , terms 3/10 n/60, via B. C. Ry., 
 
 715 lb.: 12 pc. Dimity, 50, 49V^, 483^, 5II/2, 48, 51, 54, 391/2, 541^, 541/2, 52, 
 48 yd. @ 11 cts. ; 4 pc. Nainsook, 30, 31, 3214, 343^ yd. @ 32 cts. ; 2 pc. English 
 Corded Prunella, 64, 63 yd. @ $1.90; 3 pc. Cashmere, 49, 51, 4834 yd. @ $1.10 
 
 C 75. Deposit all cash on hand. 
 
 Compare balance shown by pencil footings of the cash book with balance 
 shown on check stubs. 
 
 76. Take $15,000 insurance for one year in an approved insurance 
 company on the stock at $12.80 per thousand; also take $7,000 insurance in 
 another company for one year on the three-story, frame, gravel roof building, 
 situated on the lot described in the deed from J. P. Hess, paying $11.30 
 per thousand. (Charge Expense.) 
 
 C 77. The Byvank Transfer Co. renders a bill of in-freight and transfer 
 charges on merchandise received and delivered by them to date amounting 
 to $382.90. Pay by check. Use Explanation in ledger account "Freight and 
 Drayage," when you post to the debit of Mdse. account. 
 
 C78. Deduct 2% discount from the last bill from Calhoun, Robbins & 
 Co., and pay the balance due by check. 
 
 79. Deduct the discount allowed by Valentine & Bently; buy a draft 
 for the net amount; add to the check with which draft is purchased $6.50 
 exchange ; remit as usual. 
 
 80. The sight draft drawn on Runner & Stone in C67 has been paid 
 and the proceeds, after deduction of 15 cts. exchange, has been placed to 
 your credit by the bank. Have entry made in your pass book. 
 
 81. Receive a letter from the Broadhead Worsted Mills. Accept their 
 offer and send note as requested. 
 
 82. Ship back to F. A. Foster & Co. the entire quantity of Dotted 
 Swiss goods billed you recently. On reviewing the correspondence, it is 
 found that this was not ordered. Charge their account by making a reverse 
 entry in the purchase book (red ink) and deduct the amount from the pur- 
 chase footings. 
 
 83. Receive a letter from Berg & Bowers enclosing draft $830.54 in 
 payment of two bills. 
 
 84. James Donner sends orders which fill as follows : 
 
 H. Wester. Jesup — terms 10 days net, 5 pc. Botany Twill, 51, 53, 51, 
 
130 PROGRESSIVE BUSINESS ACCOUNTING 
 
 521/2, 531^ yd. @ 60c; 2 pc. English Mohair, 37, 361/4 yd. @ $1.30; 1 pc. 
 Granite Cloth, 371/2 yd. @ $1.00 ; 150 lb. Via I. C. Ry. 
 
 Eunner & Stone, La Porte, , terms 2/10 n/30, 12 pc. Crown Lining. 
 
 53, 521/2, 53, 511/2, 52, 491/2, 483^, 5II/2, 521/2, 53, 54, 53 yd. @ 8c ; 2 pc. Eng. 
 Corded Prunella, 631/2, 641/2 yd. @ $1.90. Via B. C. Ry. 200 lb. 
 
 Sell W. R. Johnson, City, Acct. 10 days: 6 pc. Dimity, 48%, 391/2, 46, 
 48, 4914, 54 yd. @ lie ; 10 pc. Jaquarde Madras, 51, 52, 5214, 51, 49y2, 491/2, 
 50, 51, 51%, 51 yd. @ 27c. 
 
 C 85. The sight draft on Crozier & Co. has been collected and credited 
 to your account at the bank at face less 30 cts. Have it entered in your 
 bank book. 
 
 86. Make a statement showing "W. R. Johnson's balance, without dis- 
 count; fill out 30-day, interest-bearing note for the balance, secure his signa- 
 ture and close the account. 
 
 G 87. Receive expense report from James Donner showing total travel- 
 ing expenses paid by him for the week to $28.39. Make journal entry 
 debiting Expense and crediting James Donner. (A separate account title 
 "Traveling Expense" is used where it is desired to keep this item separate 
 from General Expense.) 
 
 88. Send F. A. Foster & Co. a draft for $1,000 (Exchange $1), to 
 apply on account. 
 
 89. Receive a letter from H. Wester enclosing note in settlement of 
 account. Give him credit and acknowledge remittance. 
 
 90. James Donner informs you by telephone from Manchester that 
 owing to personal reasons he is unable to represent the house any longer. 
 He reports that his expense account since last report shows $7.84 expended, 
 for which he asks credit, together with one-half month's salary. Allow him 
 the credit asked and remit to him a bank draft for the balance due him. 
 (Exchange 10 cts.) 
 
 INFORMATION # 168. When property losses by fire occur, the agents 
 of the companies who carry the insurance of the property should be notified 
 immediately. The agents inspect the loss and report to their companies. 
 If losses are partial or small, the local agents are usually required to make 
 an agreement with the assured as to the amount of loss, and to award the 
 damages. If the loss is considerable, special insurance adjusters are sent 
 from the main offices. It is often difficult to determine the exact amount 
 of loss. There is no set simple rule for doing this. If the merchandise 
 account is kept as in this set, showing on the debit side the actual cost plus 
 the freight, and on the credit side the actual sales, the losses on merchandise 
 can be approximated closely enough in case of total loss for practical pur- 
 poses by an inspection of this account, with the accompanying vouchers. 
 
 When it is impossible to agree as to the value of a loss, insurance com- 
 panies frequently restore damaged buildings rather than pay to the assured 
 a cash loss. 
 
 When an agreement with reference to a loss is made, the assured is 
 required to sign the "proof of loss," which serves as a release from further 
 claims by him. 
 
 91. A fire which occurred in the store room some time ago, damaging 
 a small quantity of merchandise, has been adjusted with the agent of the 
 fire insurance company, the loss agreed upon being $52. Sign the agent's 
 
PROGRESSIVE BUSINESS ACCOUNTING 131 
 
 proof of loss form and receive cheek for the amount of the claim, which 
 credit to Merchandise account. 
 
 C 92. "Walter A. Garrabrant has sold his 20 shares of stock to Leo A. 
 Boyce. Make a correct transfer on the books. (Compare with C26.) 
 
 C 93. Examine your ledger to see that the indebtedness does not exceed 
 the limit mentioned in the articles of incorporation. 
 
 C 94. Deposit all cash on hand. 
 
 Pay the secretary and treasurer one month's salary by check. 
 
 C 95. Enter resource Inventories of Merchandise, Real Estate, Furniture 
 & Fixtures, and liability inventory of Interest and Discount on pages 11 and 
 12 Inventory book. 
 
 Merchandise as listed below : 
 
 20 pc. Brown Crash, 800 yd. @ 8c; 6 pc. Suiting, IGTi/s yd. @ 27c; 
 31 pc, "Wash Goods, 1,026% yd. @ 5%c; 6 pc. Jamestown Suitings, 152 yd. (a) 
 72y2C; lOVo doz. Hose #503 @ $2.10 per doz. ; 3-5/12 doz. R. G. Corsets 
 #663 @ $8.50 per doz.; 1 Emp. Skirt #417 @ $9; 308 doz. J. & P. Coats 
 Thread @ 55c per doz.; 120 P. Cases 42x36 @ l%c; 60 P. Cases 42x36 
 "Fearless" @ 834c; 12 P. Cases "Clio" @ n%c; 60 P. Cases 45x36 "Gold 
 Medal" (a) 15i/oc; 36 pc. Vienna Silkaline, l,868i/2y<l- (a) 7y2C; 7 pc. V. Silka- 
 line, 34514 yd. @ 6c ; 7 pc. French Muslin, 400 yd. @ 8%c; 2 pc. Cypress 
 Denim, 1213^ yd. @ 91/20; 3 pc. Hungarian Cloth, 1233^ yd. @ 15c; 3 pc. 
 Fig. Dimity, 1583^ yd. @ 121/00; 2 pc. Zephyr French Taffeta, 117 yd. @ 
 I2I/2C; 2 pc. Dundee Burlap, 81 yd. @ 9c; 2 pc. Ragaline Crepe, 491/2 yd. 
 @ 15c; 3 doz. Gowns @ $9 per doz.; 1/3 doz. Gowns @ $21 per doz.; 1/12 
 doz. Gowns @ $54 per doz. ; 5 pc. Unbleached Muslin, 168 yd. @ 6c ; 20 pc. 
 French Serge Raye, 721 yd. @ 80e ; 2 pc. "Wool Taffeta, 120 yd. @ $1.10; 
 25 pc. Percale, 1.132 yd. @ 9c ; 80 pc. Crown Lining. 4,330 yd. @ 6c; 60 pc. 
 Br. Sheeting, 3,582 yd. @ 7c; 13 pc. Dimity, 6631/2 yd. @ 8c; 85 pc. Botany 
 Twill, 4,4811/2 yd. (S) 45c; 100 pc. Toweling, 5,020 yd. @ 9c; 49 pc. Storm 
 Serge, 2,401 yd. @'55c; 20 pc. Broadcloth, 958 yd. @ $2.80; 16 pc. Granite 
 Cloth, 546 yd. @ 75c: 17 pc. Cashmere. 82414 yd. @ 90c; 44 pc. Eng. Mohair, 
 1,656 yd. (5) $1.05; 35 pc. Jacquarde Madras, 1,84834 yd. @ 18c; 46 pc. Eng. 
 Corded Prunella, 1,049 yd. @ $1.50; 18 pc. Directoire, 734 yd. (n) $1.60; 19 pc. 
 Sharkskin, 1,036 yd. @ 90c; 26 pc. Nainsook, 9633^ yd. @ 24c; 30 pc. Dundee 
 Twill, 1,429 yd. @ 32c; 12 pc. Jamestown Suitings, 528 yd. (a) $1.20; 10 pc. 
 Broadcloth, 383 yd. @ $2.10; 10 pc. French Muslin, 437 yd. @ 6c. 
 
 Real Estate, $14,500. 
 
 Furn. & Fixt. 10% below cost. 
 
 Interest & Discount, a liability inventory of 6% for 30 days on the three 
 notes payable to J. P. Hess. 
 
 C 96. Rule up Journal, purchase and sales books and post. 
 
 C 97. Balance the cash book and make a trial balance and ledger lists 
 as in C50 Record same on page 9. 
 
 98. Make a statement of the business and record on page 10. In this 
 statement include the capital stock with liabilities and the treasury stock 
 with resources. 
 
 Close the ledger into Loss & Gain. 
 
 C 99. At a meeting of the board of directors it is decided to declare 
 a dividend of five per cent on the 240 shares of stock held by stockholders. 
 
 Close Loss & Gain into Undivided Profits. 
 
132 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Close 5% of $24,000 into Dividend #1 account and the remainder of 
 the gain into Surplus. Issue checks to each stockholder for his five per cent 
 dividend, and post to Dividend account and rule. 
 
 Write on check "Five per cent Dividend #1 declared ..19..." 
 
 C 100. Balance the cash book and take a trial balance, making record 
 on page 10, 
 
 Submit your work. 
 
 QUESTIONS. 1. What is the secretary's minute book and how used? 
 
 2. What special ledgers are used in this set? 
 
 3. What special columns appear in the journal? 
 
 4. What special columns appear in the cash book? 
 
 5. Explain the use of contra discount columns in the cash book. 
 
 6. What is a real estate mortgage? 
 
 7. What is a bill of lading and how used? 
 
 8. How are shares of stock transferred on the books of the company? 
 
 9. How are goods billed C. 0. D. by freight? 
 
 10. How are goods billed C. O. D. by express? 
 
 11. Why should not returned merchandise be charged to the general 
 merchandise account? 
 
 12. What is a certificate of deposit and how used? 
 13. How is a bank overdraft shown on check stub? 
 
 14. How are fire losses adjusted by insurance companies? 
 
 15. How is an account with a traveling salesman kept? 
 
 16. What can you say of the entry for a liability inventory when closing 
 the books? 
 
 17. How is a corporation statement of business made, and how does it 
 differ from an ordinary statement? 
 
 18. What does surplus account represent? 
 
 19. Name some advantages of a corporation. 
 
 20. Name three usual officers of a corporation. 
 
 EXERCISE XXI 
 
 INFORMATION # 170. A method of bookkeeping in which accounts 
 with persons and cash only are kept is called single entry. This name is 
 used to indicate that in any transaction a corresponding debit is not sought 
 for every credit, but that the debit or credit that seems of most use to the 
 bookkeeper is entered, while the corresponding entry is disregarded. Any 
 accounts kept in double entry can be kept in single entry books, but as a 
 rule those who keep books by single entry give attention to the financial 
 accounts only. 
 
 INFORMATION # 171. In single entry a day book is used to record 
 personal debits and credits or other memoranda, and a cash book in which 
 to record cash receipts and payments. 
 
 Entries in either of these books so far as they affect personal accounts 
 are posted to such accounts in a personal account ledger. 
 
 INFORMATION #172. There are many devices used for simplifying 
 sales records from shops to retail customers; as, the duplicate sales sheets, 
 customers' individual pads, combined sales and ledger, etc. These devices 
 are useful, as they reduce the labor of billing and posting small sales, but 
 
PROGRESSIVE BUSINESS ACCOUNTING 
 
 133 
 
 they require no special study here as their form is constantly undergoing 
 change, and their usefulness is more or less evident without any special 
 reference in a study of accounting. 
 
 EXPLANATION. In this exercise the entries illustrating the use of 
 single entry books, the posting, and method of taking a financial statement 
 are given. 
 
 DIRECTIONS. Take one folded sheet of journal and one-half sheet 
 ledger paper. Use pages 1 and 2 of the journal paper for a day book, page 
 3 for a cash book and page 4 for statement. The ledger is to contain per- 
 sonal accounts only ; three payable on page one, five receivable on page two. 
 
 
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 TRANSACTIONS. Nov. 1, 1910. John Adams began a retail hardware 
 business with the following investment : Cash $580.20, Merchandise valued 
 at $4,629.50. Real Estate valued at $2,750. There are no liabilities. 
 
 Make a list of the resources as shown in the model day book. No account 
 is to be kept with merchandise or real estate. Simply transfer the cash to 
 the debit column of the single page cash book. Place a check mark before 
 the entry to show that no posting is required. 
 
 Paid cash for taxes on property occupied for business, $29.63. Enter as 
 in model and check mark to show no posting. 
 
 Nov. 2. Bought of Garver & Lane, merchandise per bill V. #2., $259.84, 
 on account. 
 
 Enter in day book as in model and post to personal ledger in the accounts 
 payable portion. 
 
 Nov. 3. Bought of Coan & Co., on account, merchandise per V. #3, 
 $164.30. Enter and post as before. 
 
 Paid sundry* expense items $3.29. Enter in cash book. Do not post. 
 
 Paid freight on Vouchers #2 and 3, $16.34. 
 
134 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Nov. 4. Sold to E. S. Conry, on account, 1 Kitchen Range, $34.60; 
 1 Boiler, $1.80 ; 5 pc. Pipe for $1.30. 
 
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 Enter in day book as in model and post to debit of customer as in model. 
 
 Sold W. B. Cooper, on account, 1 Hand Saw, $2.25; 1 Plane, $1.20; 1 
 Square, $1.50. 
 
 Sold for cash to sundry customers: Dish pan, 80 cts; 1 #10 shears, 
 60 cts; 2 hammers for $1.10; 1 axe 4# for $1.25. (Enter in cash book. Do 
 not post.) 
 
 Nov. 8. Paid Garver & Lane cash on account, $100. (Enter in cash 
 book, using the title Garver & Lane. As this is a personal account, post the 
 entry to the debit of G. & L. 's account.) 
 
 Nov. 9. Bought of Plibbard & Co., mdse. per V. #4, $729.50. 
 
 Sold Mrs. M. B. Williams, on account, 1 enameled roaster, $1.50; 1 soup 
 strainer, 25 cts ; 1 universal bread mixer, $2 ; 4 papers tacks, 20 cts ; 1 rolling 
 pin, 15 cts. 
 
 Nov. 9. Sent Hibbard & Co. a 30-day note #1, on account, for $500. 
 (Debit H. & C. in day book and post to ledger. The notes, if numerous 
 enough, could be entered in a notes payable book. Otherwise they would be 
 referred to from stub of note book.) 
 
 Nov. 10, The following cash sales were made: Meat grinder, $1.25; 
 awl, 40 cts ; steel carving knife, 50 cts ; cold chisel, 90 cts ; flour sifter, 50 cts ; 
 refrigerator, $16.80; set irons, $2. 
 
 Nov. 12. Received of E. S. Conry a note at 30 days in settlement of his 
 account, $37.70. (Credit Conry through the day book. An entry of notes 
 receivable is kept in auxiliary notes receivable book if there are a sufficient 
 number to require such a record.) 
 
 Nov. 15. Paid cash for sundry expense items, $16. Received of "VV. B. 
 Cooper, cash in full of account, $4.95. (Enter in cash book and post.) 
 
 Nov. 16. Sold Charles Gates, on account, 1 emery stone, $5; 100 ft. 
 soft mesh fencing, $3; #2 mortise lock for 70 cts. 
 
 Nov. 17. Sold M. B. Doren, on account, stepladder, $1.75; 1 gasoline 
 can, 65 cts; 1 ironing board, 98 cts; 1 bread board, 47 cts. 
 
 Sold E. S. Conry, on account, 1 register, $3; 40 ft. 8 in. pipe, $4; 1 pkg. 
 wire, 10 cts. 
 
 Paid Charles Emery, wages as clerk, $7. 
 
PROGRESSIVE BUSINESS ACCOUNTING 135 
 
 Nov. 18. Sold W, B. Cooper, on account, 1 pr. shears, 40 cts ; 1 dust pan, 
 25 cts ; 1 #9 file, 75 cts ; 1 dbl. tin pail, 60 cts ; 1 cake tin, 27 cts ; 1 stove 
 mat, $1.25. 
 
 Sold Mrs. M. B. Williams, on account, 1 hard coal burner, $40; 1 blue 
 flame oil stove, $21 ; 1 pail, 40 cts. 
 
 Received cash of Mrs. M. B. Williams, on account. $15. 
 
 Nov. 19. Sent Doan & Co. our note #2 in full of account. 
 
 Nov. 20. Sent Garver & Lane cash, on account, $100. 
 
 Nov. 21. Received from Doan & Co. invoice of goods billed on account, 
 V. #5, $349.80. 
 
 Nov. 30. Mrs. M. B. Williams gives her 60-day note for the balance of 
 her account. 
 
 The student will observe that the entries of debits and credits in the same 
 column of the day book, and of posted and unposted items in the same column 
 of cash book renders any proof of posting by comparison with column foot- 
 ings practically impossible. The bookkeeper, if he keeps books in this 
 manner, simply must be careful to post correctly. A failure to post may 
 never be discovered. 
 
 In closing the cash book, place the balance in the lesser side (red ink), 
 rule, foot, and carry the balance down (black ink). 
 
 A statement of the business may now be taken from the cash balance 
 and the following resources: Merchandise inventory, $6,062.93; Notes Re- 
 ceivable inventory, $88.20; Real Estate inventory, $2,750; and list of open 
 accounts receivable. The liabilities are Notes Payable inventory, $664.30. 
 and list of open accounts payable. 
 
 The diflFerence between total resources and liabilities will show net 
 worth. The net worth compared with net worth at starting will show loss 
 or gain for the period. 
 
 After completion, pin the exercise, dky book at top, ledger under, and 
 submit. 
 
 QUESTIONS. 1. What is single entry bookkeeping? 
 
 2. What kind of accounts are generally kept in single entry books? 
 
 3. Can any account kept in double entry books be kept by single entry 
 if desired? 
 
 4. What three books are essential in single entry? 
 
 5. How is the day book used? 
 
 6. Describe the cash book there illustrated. 
 
 7. What two divisions of ledger accounts were made? 
 
 8. What division of accounts found in double entry books was omitted? 
 
 9. How is the financial statement taken from single entry books? 
 10. How is gain or loss for a given period shown? 
 
 EXERCISE XXII. 
 
 INFORMATION # 173. The six-column journal, as commonly used, is 
 a book with four special columns and two general columns, so arranged that 
 the titles and explanations appear in the center space from left to right ; the 
 debit money columns are placed to the left, and the credit money columns 
 to the right of this space. A debit and a credit cash column are used, thus 
 doing away with the general cash book. This form of journal is practical, 
 
136 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 and in many places can be used to good advantage. The form illustrated 
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 credit columns. When a trial balance is to be taken, the special columns are 
 carried to the general column as shown, there balanced and posted to the 
 ledger. This form requires a general cash account in the ledger. 
 
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 # 174. The six-column and the four-column journals and the special 
 column cash books given in this text illustrate the uses to which special 
 columns may be placed. Bookkeepers employ special columns very largely 
 where work, particularly posting, can be reduced by their use. Journals con- 
 taining ten, twelve and even twenty columns are not unusual. Special journal 
 columns should be discontinued at the point where the entry of an amount 
 in a given column at a distance from its title would involve more care than 
 would the posting of the entry to the ledger from a book of ordinary columns. 
 
 EXPLANATION. In this exercise we have chosen the lumber business 
 to illustrate the essential entries, although it might be used as well with 
 many other lines. 
 
 DIRECTIONS. Take one-half sheet of six-column journal and one-half 
 sheet of ledger. Allow page one of ledger for general accounts and page 
 two for personal accounts. Accounts will need five lines each. 
 
 TRANSACTIONS. Dec. 1. Frank C. Bowers began a lumber business, 
 investing cash $5,290.60, and Mdse. per inventory, $14,296.80. Enter, and 
 
PROGRESSIVE BUSINESS ACCOUNTING 137 
 
 post one item. (Observe that in the model entry the Cash and Mdse. debits 
 are carried to their respective columns to be posted by totals when the 
 journal is balanced. The credit is carried to the general credit column, indi- 
 cating that it is to be posted as entered. 
 
 Dec. 2. Bought for cash, Mdse. per V. #1, $1,529.60. • (No posting is 
 required, as both debits and credits are in special columns.) 
 
 Bought of Brown & Son, on account, Mdse. per V. #2, $627.80. (Post 
 the credit from general column.) 
 
 Bought of Cadman & Co. Mdse. per V. #3, $1,742.61, giving note payable 
 :^1 in payment. 
 
 Dec. 3. Sold for cash Mdse. per sales book, amounting to $694.72. (No 
 posting required.) 
 
 Sold to T. Everson, Mdse. per sales book, on account, $1,620.70. (Post 
 one title.) 
 
 Sold to E. B. Jamison, receiving in payment his note at 60 days, Mdse. 
 per sales book, $549.59. 
 
 Dec. 4. Paid cash for stationery for office, $30.26. 
 
 Received cash of T. Everson, on account, $500. 
 
 Pencil foot the cash debit and credit columns. Is the balance there 
 shown $4,925.46? 
 
 Dec. 10 Sold for cash to J. Kellogg, Mdse. per sales book, $560.50. 
 
 Dec. 11. Sold to Archer & Archer, on account, Mdse. per sales book, 
 $40.64. 
 
 Dec. 12. Sent Brown & Son our 60-day note to apply on account, for $400. 
 
 Received from E. B. Jamison, cash indorsed on the note received from 
 him Dec. 3, $120. 
 
 Paid Cadman & Co. cash indorsed on the note given Dec. 1, $1,000. 
 
 Bought of Ely & Close, Mdse. per V. #4, on account, $2,168.30. 
 
 Dec. 15. The day's cash sales per sales book amount to $124.95. 
 
 Received cash of Archer & Archer in full of account. 
 
 Dec. 31. Paid Ely & Close cash on account, $1,000. 
 
 After entry of above transactions, close the month's work on the journal 
 by carrying the footings of the special columns into the general columns. 
 The footing of the general columns should then balance. Post the entries in 
 the general columns and refer back to the other entries in the general col- 
 umns to see that all are posted. A cash account is needed in the ledger. 
 
 Take a trial balance of ledger. 
 
 Submit the work. 
 
 QUESTIONS. 1. Describe the six-column journal. 
 
 2. What advantages has this book? 
 
 3. Is a general cash book required with a six-column journal? 
 
 4. Why are the cash totals posted to the ledger? 
 
 5. What can you say with reference to special column journals con- 
 taining many columns? 
 
 EXERCISE XXIII 
 
 INFORMATION #175. In the management of a business concern em- 
 ploying many persons, the work can be taken care of best by dividing it 
 into departments. Each department is in charge of a manager whose entire 
 
138 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
 attention is given to a particular phase of the business. The bookkeeping 
 records of the departments are kept as separate units, but the totals are 
 reported each day to a general bookkeeper who, from these reports, makes 
 ap the general accounts of the business. The department plan of conducting 
 any business enables the persons working to specialize on one given part 
 of the whole work and thus accomplish greater results than could be secured 
 if each person's energies were expended in many different ways. 
 
 EXPLANATION. In this exercise, the department system of bookkeep- 
 ing will be illustrated by the entries of two days' work in a bank. The 
 rulings required are to be prepared by the student from writing paper. The 
 student should use care as to width of rulings and general make-up. 
 
 INFORMATION # 176. (Review Infor. #81, #82, #144, and #145.) 
 A bank may be divided into four departments: (1) Department of Individual 
 Deposits, where the daily deposits of customers are credited and their daily 
 checks are charged; (2) Department of Loans and Discounts, where entries 
 are made of the notes on which customers have borrowed money, and of the 
 payment of such notes; (3) Exchange Department, where a record is made 
 of the drafts drawn by the local bank on other banks and of drafts sent by 
 the local bank to other banks for collection or credit; (4) General Books, 
 where a record is kept of the totals passed from the other departments by 
 tickets daily. Of course, other departments are needed in banks whose busi- 
 ness is more extensive and varied than here considered. The forms given, 
 however, are representative. 
 
 # 177. The entries for the individual deposits are placed daily in a 
 ledger especially ruled for this purpose. Several different rulings are in 
 use. A common one is here given. In this ledger the depositor's name is 
 placed at the left. To the right of the name, divisions are made, each division 
 to contain one day's work. The day's work shows on each depositor's line 
 in one column the total checks charged, in another the credits given, and in 
 a third the balance of the account. The totals of all checks or debits and 
 of all deposits for the day are found by footing the respective columns. 
 At the close of the day, these footings are passed by ticket to the general 
 bookkeeper, who enters the amounts to the debit and credit of Individual 
 Deposits account in the general books. See model. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 139 
 
 # 178. Money is loaned by tlie bank to persons who give the bank 
 their notes to secure payment. The advance of money by the bank is called 
 a Loan when the face of an interest-bearing note is paid to the borrower to 
 be repaid with accrued interest later. It is called a Bill Discounted when 
 future due paper is taken by the bank at a deduction from the amount, 
 and the proceeds or difference between face and discount is paid to the cus- 
 tomer. The entries of the loans and discounts for the day are made in the 
 loan and discount register, as shown in the model. The totals are handed to 
 the general bookkeeper by tickets debiting Loans, and Bills Discounted, and 
 crediting Discount. See form. 
 
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 the drawing bank has open accounts, are drawn and sold to customers who 
 wish to make remittances. Entry of these drafts is made in the draft regis- 
 ter, which contains, besides a column for the totals drawn, a column for the 
 total exchange charged for them. Tickets are given the general bookkeeper 
 crediting the drawee bank and Exchange accounts. (See model.) 
 
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 In this department drafts and other cash items payable by out-of-town 
 banks are entered in a remittance register. After entry, they are indorsed 
 and mailed to a correspondent bank which is to pay or send them for col- 
 lection to other banks. This correspondent bank gives credit for these drafts, 
 thus maintaining a credit balance against which the above mentioned drafts 
 are drawn. The day's drafts issued are totaled on remittance register, and 
 the total credited to the bank on which drawn. The total exchange is cred- 
 ited to Exchange account. The total of the remittance register is charged to 
 the account of the bank to whom sent. 
 
140 
 
 PROGRESSIVE BUSINESS ACCOUNTING 
 
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 dj: 180. The tickets from the departments are entered in the general 
 journal to the debit or credit of the accounts mentioned. This is conveni- 
 ently done in a journal with the titles in the center and the debit and credit 
 amounts in columns to the left and right. The usual titles are 
 
 Bills Discounted — The account with discounted notes, drafts, etc., pur- 
 chased by the bank. 
 
 Cash — Practically all transactions of a bank are for cash, hence cash 
 is the complementary title of every debit or credit ticket entry. 
 
 Other Banks — The banks on whom drafts are drawn and to whom cash 
 items are sent. 
 
 Expense — As in any other business. 
 
 Furniture and Fixtures — As in any other business. 
 
 Loans — The account with customers' interest-bearing notes representing 
 cash paid for loans. 
 
 Capital Stock — As in any other business. 
 
 Certificates of Deposit — The account with deposited money for which 
 certificates of deposit have been given. 
 
 Collection and Exchange — To which is credited the charges for collecting 
 paper and the exchange for drafts sold. 
 
 Interest and Discount — The cash paid for the use of money on loans 
 or discounts. 
 
 Individual Deposits — The total of accounts with checking depositors. 
 
 The above are the principal general ledger titles in a bank, although 
 other titles are used with more or less frequency. 
 
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PROGRESSIVE BUSINESS ACCOUNTING 
 
 141 
 
 The general journal is posted to the general ledger daily. The general 
 ledger may be ruled in one of several different ways, as the four-column 
 balance ledger, the three-column balance ledger, the ordinary two-column 
 ledger, etc. In this exercise the two-column ledger is to be used. 
 
 A daily balance of the ledger is taken in the daily balance book. This 
 is so arranged that the accounts showing resources and those showing liabil- 
 ities are grouped separately. The total resources thus equal the total lia- 
 bilities. See the model form which shows the resource and liability accounts 
 ordinarily found in a bank general ledger and general balance book. 
 
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 TRANSACTIONS JUNE 1. (Individual Deposits Department.) Rule 
 an individual ledger on penmanship paper for two days as in the model, 
 and enter the customers' names as there given, also enter in the amount for- 
 warded column the balances that appear to the credit of the respective depos- 
 itors at the close of the previous date, May 30. Foot the column. Do not 
 enter any amounts in the debit or credit columns until instructed to do so. 
 
 The following deposits were received today: J. B. Alcorn, $290.60; 
 Board & Casey, $1,260.49; Peter Craig, $100. Enter these in the credit 
 column opposite the depositors' names as shown in the form. 
 
 The following checks were paid to be charged : J. B. Alcorn, $49, $52.60. 
 $1.39: E. S. Bennett, $5, $5, $37.40; Peter Craig, $56.70, $79.42; Peter Zimmen 
 $40, $57.90, $500, $72.51, $400.20. Total the checks to each person and enter 
 the totals in the debits column, indicating the number of checks in each charge 
 
142 PROGRESSIVE BUSINESS ACCOUNTING 
 
 by a small circled figure as in model. (In a bank these checks would be 
 added in a separate column, on a scratch book, or by an adding machine, and 
 the lists of the checks kept.) 
 
 Foot the Debits and Credits columns. The totals there given are to be 
 placed on tickets for entry in the general journal, debiting and crediting 
 Individual Deposits respectively with the amounts therein. 
 
 To complete the individual ledger add the credits of each depositor to 
 his previous balance and subtract his debits, carrying the balance found 
 to the balance column of June 1. Any balances having no debit or credit 
 on June 1, should be carried forward to the balances column without change. 
 
 When all balances are carried out, add to the total of previous day's 
 balances the total day's credits, from the sum subtract the total day's debits; 
 the result should equal the total of the day's balances. 
 
 (Loan and Discount Department.) Rule a Loan & Discount Register 
 as in model. The following loans and discounts have beem made for cus- 
 tomers: J. S. Barns, note our favor payable on demand, drawing interest, 
 for $1,000, for which he was allowed face. (Enter in loan column as shown.) 
 
 Glidden Donner, note 60 days our favor, without interest, discounted 
 $5 Enter as shown. 
 
 Dennis Murphy, note 3 months, favor Cole & Camp, amount $406, for 
 which we paid amount less $3.79 discount. 
 
 Casey Mfg. Co., note to us, interest bearing, due 2 months, for $600, 
 for which we allowed face. 
 
 Having entered as shown in model, make three tickets, debiting Loans, 
 Bills Discounted, and crediting Int. & Discount with the totals there sliown. 
 
 (Exchange Department.) After ruling draft and remittance registers 
 as shown, enter the sale of four drafts on the First National Bank, New York, 
 as follows: No. 1, sold to R. Courbet, payable to same person, for $16.40, 
 exchange 10 cts; No. 2, sold to Ray Minkler, favor John Wannamaker, for 
 $129.60, exchange 20 cts; No. 3, Anna Crum, in favor of J. Merrill & Co.. 
 for $5.10, exchange 10 cts ; No. 4, Perry Mfg. Co., to their order, for $671.40, 
 exchange 70 cts. 
 
 Total the day's entries and make two tickets, one crediting First National 
 Bank, New York, with the total of drafts drawn, the other crediting Collec- 
 tion & Exchange with the exchange paid for the drafts. 
 
 There were received during the day in deposits or for cash paid three 
 bank drafts, payable in or about New York City, which we have indorsed 
 and sent to the First National Bank of New York, for credit: No. 1491, 
 dated May 28, by Farmers Bank, Vinton, on Seabord Nat'l Bank, New York, 
 indorsed by J. B. Alcorn, for $290.30; No. 1957, dated May 26, by First Nat'l 
 Bank, Sioux City, on First Nat'l Bank, New York, indorsed by P. Craig, for 
 $100; No. 2910, dated June 1, by Bank of Vinton, on First Nat'l Bank, 
 Albany, N. Y., indorsed by J. B. Coe, for $500. 
 
 Total the drafts sent and make a ticket debiting First Nat'l Bank, New 
 York, with the amount. 
 
 (The General Books.) Rule a general journal as shown in model; use 
 a half sheet of ledger paper for the ledger, and rule a page of general daily 
 balancs as in model. Enter the account titles shown in the model on a sheet 
 of ledger paper (4 lines to account) and transfer to this ledger the balances 
 
PROGRESSIVE BUSINESS ACCOUNTING 143 
 
 of May 31, resource balances on the debit side and liability balances on the 
 credit side. Notice that accounts are in alphabetical order for convenience 
 in locating them. After entry, transfer these balances to the daily balance 
 book and foot. 
 
 Enter the eight tickets from the departments to the debit or credit of 
 the respective accounts as shown in model. Observe that all credit amounts 
 to titles other than cash represent cash received or cash debits, and all debit 
 amounts represent cash paid or cash credits. Write the title cash below the 
 other titles, and to its debit place the total of all other credits and to it3 
 credit place the total of all other debits. 
 
 Rule and foot debit and credit columns to show that they are equal. 
 
 When the journal is completed all entries, including cash, are to be 
 posted to the ledger, debits to the debit of the accounts and credits on the 
 credit side, as in any ledger. Indicate that posting is done by check marks. 
 
 AVhen the posting is completed, find the balance of each account and 
 transfer it to the book of general balances as shown in model. The com- 
 pletion of this trial balance closes the day's work. 
 
 June 2. (Individual Deposits Department.) The following deposits 
 were made : J. B. Alcorn, $530.70 ; E. S. Bennett, $210 ; D. R. Collings, $150 ; 
 Peter Craig, $2,570.91. 
 
 The following checks were paid: J. B. Alcorn, $15.90, $42.60, $7.29, 
 $400.40; Board & Casey, $50.42. $73.51, $526.80, $73.42, $984.30; Peter Craig, 
 $2,000, $7.31 ; Peter Zimmer, $5. 
 
 Dispose of as instructed in June 1. 
 
 (Loan and Discount Department.) The following loans and discounts 
 have been made for customers, to which we give numbers 6 to 11 on register: 
 Darrow & Co., our favor, dated June 2, one month, amount $600, discount $3 ; 
 D. B. Archer, our favor, dated June 2, demand, $800 and interest (loan) ; 
 Henry Tibbits, favor Peter Craig (indorser), dated May 15, four months, 
 amount $204. discount $3.57; Louis B. Jones, favor Peter Craig, dated INIay 
 18, four months, amount $102, discount $1.75; A. A. Gracy, our favor, dated 
 June 2, sixty days, for $150 and interest (loan) ; John Marsh, our favor, 
 dated June 2, thirty days, amount $350, discount $1.75. 
 
 Dispose of as instructed in June 1. 
 
 (Exchange Department.) Sold drafts on First Nat'l Bank, New York, 
 as follows: To Colgrove & Son. their order, for $62.90, exchange 10 cts; 
 to Martin & Lane, their favor. $148.37, and exchange. 20 cts; to Mrs. E. B. 
 Dunn, favor Scott & Co.. for $5.22, exchange 10 cts; to Porter Bros., favor 
 Henry Faber, for $467.39, exchange 50 cts; to Cone Jewelry Co., their favor, 
 for $16.28, exchange 10 cts; to Fisher Awning Co., their favor, for $291.66, 
 exchange 30 cts. 
 
 Received today for remittance to First Nat'l Bank, New York, the fol- 
 lowing drafts: No. 421, dated June 1, F. & M. Bank, Humboldt, on Broad 
 Street Bank, Boston, indorsed by J. B. Alcorn, for $66.90; No. 6123, dated 
 June 1, Bank of Ardmore, on Seaboard Nat'l Bank, New York, indorsed by 
 J. B. Alcorn, for $142.80; No. 1994, dated May 28, Mead & Beach, Minne- 
 apolis, on City Nat'l Bank, New York, indorsed by P. Craig, for $567.89; 
 No. 643, May 17, Cushman & Co., Chicago, on First Nat'l Bank, New York, 
 indorsed by D. R. Collings, for $150; No. 1948, May 19, Parkersburg Bank, 
 
144 PROGRESSIVE BUSINESS ACCOUNTING 
 
 Parkersburg, on American Bank, Boston, indorsed by P. Craig, for $420.70 ; 
 No. 42971, June 1, Grain Exchange Bank, Milwaukee, on D. M. & Co., Phila- 
 delphia, indorsed by W. S. Coe, for $47.54; No. 10730, June 2, Old Savings 
 Bank, Waterloo, on Kountz Bros., New York, indorsed by D. James & Co., 
 for $100. 
 
 Dispose of as instructed in June 1. 
 
 (General Books.) You should have eight tickets from the three de- 
 partments Enter as before, and finish the day's journal by entering cash 
 debits and credits and balancing journal: post to ledger and take daily 
 balance. 
 
 DIRECTIONS. Pin papers together, in this order: Individual Depos- 
 itors' Ledger, Loan and Discount Register, Draft and Remittance Registers, 
 General Journal, Daily Balances, and General Ledger, 
 
 Submit your work. 
 
 QUESTIONS. 1. AVhy is it desirable to divide a large business con- 
 cern into departments? 
 
 2. How are the general results of department books carried to the 
 general books? 
 
 3. What line of business is studied in this exercise? 
 
 4. Name the three departments -in banking mentioned. 
 
 5. Describe the individual depositors' ledger. 
 
 6. Describe the loan and discount register. 
 
 7. Describe the draft and remittance registers. 
 
 8. How are the totals carried from these registers to the general books? 
 
 9. How is the day's work completed after entry in general journal? 
 10. Is the department system of bookkeeping adaptable to other lines 
 
 of business than banking? 
 
 EXERCISE XXIV 
 
 INFORMATION # 181. Any legitimate business is an organized effort 
 to gain by supplying to people something of value for which they will pay. 
 As the purpose is to secure the greatest possible gain, two varieties of ac- 
 counts should be kept with the greatest possible intelligence^— those showing 
 the sources of the gains and those showing the sources of the losses. These 
 accounts must be divided and sub-divided so that at the end of a given period, 
 one may tell by inspection where an investment of any value brought suflfi- 
 eient returns, and where insufficient, or where losses occiirred that could be 
 avoided. For this reason the commercial accounts give to the accountant 
 the greatest opportunity to exhibit ability. 
 
 ^182. The financial accounts of a business, such as the proprietor's 
 account, cash, accounts and notes receivable, accounts and notes payable, 
 are less complex in their nature than the commercial account;?. A good deal 
 of skill is required to keep them properly; for example, th(! books should 
 show at a glance when, where, and how all collections should be made or 
 all debts should be paid, should show interest of im^estors and the amount 
 and kind of resources and liabilities. Yet it is not necessary to give them 
 the close analysis that the commercial accounts require. 
 
 :#: 183. In outlining a set of books, first prepare a list of such commer- 
 cial accounts as will show at the end of the year which parts of the business 
 
PROGRESSIVE BUSINESS ACCOUNTINQ 145 
 
 should be expanded in the coming year, and which parts should be curtailed, 
 in order to make the greatest profit. Give to these accounts as much space 
 as they will require in the ledger. Decide whether it would be better to keep 
 a general and special ledgers or to keep all accounts in one ledger. If it is 
 decided to have general and special ledgers separate, arrange the general 
 ledger so that it may be used a number of years. The general ledger would 
 preferably be a bound book, while the personal ledgers may be loose leaf 
 books. 
 
 After the ledger scheme is decided, select such books of original entry 
 as will most completely and easily record and arrange the facts of the busi- 
 ness for posting. In a business of much diversity, many different special 
 record books may be required. Some of the special record books of a bank 
 were illustrated in Ex. XXIII. Equally as many special records are found 
 in manufacturing, transportation, etc. 
 
 EXPLANATION. In this exercise, the student is required to outline 
 ledgers and books of original entry for several lines of business. Attention 
 must be given to the probable amount as well as the kind of business to be 
 recorded. The work is to be prepared on writing paper as shown in the 
 outline given. 
 
 REQUIREMENT I. 
 
 Outline a set of books for a general farm of 160 acres, occupied by the 
 owner. He will raise and sell or use corn, oats, potatoes and other produce, 
 raise and feed hogs, horses and other live stock for sale, will keep milch 
 cows and poultry for profit. May extend his farming business in other lines 
 if found profitable to do so. Cash transactions will not be numerous. 
 
 OUTLINE I. 
 ACCOUNTS. Use one double entry ledger, divided into three parts: 
 (1) general accounts, (2) accounts payable, (3) accounts receivable. Keep 
 a separate ledger account with each production. The details of one account 
 are given below: 
 
 Dr. CORN ACCOUNT. Cr. 
 
 Receiving Side. Giving Side. 
 
 Charged with rental or ground Credited with the value of corn 
 
 used for raising corn, the labor of produced, whether used on place or 
 
 caring for ground, the cost of ma- sold. 
 
 chinery used exclusively for corn .^ t^ i , i a 'i.-! n 
 
 raising, seed, use of labor, teams, ^ Credited at close of year with al 
 
 -, , , . . • • ^ items charged to corn account at 
 
 and general machinery in raising ^ 
 
 corn, cost of corn cribs, expense of ^^^ ^^ ^®* 
 
 handling. 
 
 The difference between debit and credit totals shows gain or loss. 
 
 Keep similar accounts with Oats, Potatoes, Hogs, Horses, Milch Cows, 
 Poultry, etc. 
 
 Keep, in addition to these, the usual ledger accounts with Proprietor, 
 Living Expense, Cash, Real Estate and similar accounts, accounts payable, 
 and accounts receivable. 
 
 ORIGINAL ENTRIES. Use a two-column day-book journal for original 
 entries. The entries may be grouped monthly from a mgmo book as in Ex. 
 
146 PROGRESSIVE BUSINESS ACCOUNTING 
 
 IX., if desired. Ordinarily a special cash book is not necessary, as the pay- 
 ments and receipts of cash are not active. 
 
 REQUIREMENT II. 
 
 Outline a set of books for a jobbing grocery business, in which there are 
 many notes received, and in which invoices or bills of goods, both payable 
 and receivable, are constantly discounted for cash payment. The books 
 should be arranged for about $100,000 business per year. Illustrate the use 
 of one representative account as in Outline I. Three ledgers are to be used. 
 Give books of original entry and explain. 
 
 REQUIREMENT III. 
 
 Outline a set of books for a dealer in agricultural implements, in which 
 consignments are received, sales are made often for notes, grain is bought 
 and shipped. The business may run from $25,000 to $200,000 a year. 
 
 QUESTIONS. 1. What two varieties of accounts are said to require 
 of the bookkeeper the greatest intelligence? 
 
 2. Can new commercial titles be entered in the ledger if their presence 
 would better explain the sources of losses or gains? 
 
 3. Do the financial accounts show as great a variety of treatment as 
 the commercial accounts? 
 
 4. When outlining a set of books, how are the titles of commercial 
 accounts chosen? 
 
 5. Plow can one determine what books of original entry to use in a 
 given business? 
 
 EXERCISE XXV 
 
 TO THE STUDENT. A mastery of the accounting principles of the pre- 
 ceding sets and exercises (bookkeeping), combined with good business writing 
 (penmanship), and ease with accuracy in the use of figures (arithmetic) 
 should enable a person to adapt himself readily to the requirements of the 
 majority of bookkeeping positions. 
 
 One's first office position is usually that of assistant, or he may be 
 given the management of a certain division of the entire work of an office." 
 If he is an assistant, he should endeavor to conform his bookkeeping methods 
 to those of his principal. He should study to increase his efficiency by using 
 all of his knowledge of accounts to aid, not to antagonize the office methods 
 as he finds them. He should not try to revolutionize the bookkeeping of an 
 established office, even though he may be satisfied that his methods would 
 produce better results with less labor. But he should study the facts and 
 requirements of the business in which he is engaged. He should be ready to 
 improve his part of the work when opportunity presents. Business condi- 
 tions are such that a person who will do well the work of a minor position 
 may expect to find his responsibilities increasing in number and importance 
 until he has attained to his full salary earning capacity. 
 
 But the position of assistant should be passed as soon as possible. Mind 
 work is more valuable and better paid than mere hand work. The person 
 who has the ability to keep books well undoubtedly has the ability to do 
 many other needed things well. It is the opportunities to be useful in a 
 
PROGRESSIVE BUSINESS ACCOUNTING 147 
 
 wider way that should be sought by any young person beginning his business 
 career in an office. 
 
 To begin with, the amount of salary at the very beginning of one's 
 work is not so important as is the character of the house for which one 
 works and the kind of men one works undeer. Ordinarily the larger and 
 wealthier business houses are conducted by the men of the broadest minds, 
 who are willing to see those in their employ advance as rapidly as possible 
 in the ability to earn money. But this is not always the case. The person 
 offering his services as a bookkeeper should consider these facts, and not 
 offer his services blindly to any one whose general business methods do 
 not appeal to him. As soon as the applicant has secured a position that is 
 satisfactory, he should consider himself a part of the business and should 
 endeavor to make his work as valuable as possible. 
 
 A person assuming the position of bookkeeper should see that the books 
 have been left in condition by the person whom he follows. He should 
 check the last trial balance with the books, and if errors are found, report 
 them. He should see that the business vouchers are properly filed. If he has 
 charge of cash, this should be carefully counted, and compared with the cash 
 book. When leaving a bookkeeping position, care should be taken to leave 
 the books properly balanced and the vouchers properly filed. 
 
 Time is the valuable thing in an office. It is the bookkeeper's business 
 to give any information contained in his books, and give it quickly. The 
 books should bo perfectly indexed, always posted to the date, always in their 
 places. A bookkeeper cannot expect to advance if he requires his employer 
 to spend idle time waiting for the bookkeeper to find something that has 
 been misplaced or to post some account to date when the account should be 
 found already posted to date. 
 
 Attention to all matters that make one ready when an emergency arises 
 is really time saved. Customers' statements of account should be prepared 
 on the evening of the last day of the month, not a few days after the first 
 of the month. Bills of goods shipped should be sent when the goods are 
 shipped, not a day or several days afterward. Cash on hand to be deposited 
 in the bank should not be forgotten and kept until the following day. The 
 bank balance should be always plainly before one, not a few checks behind 
 hand. A good bookkeeper never has his mind encumbered with things that 
 he has postponed and is trying to remember to do. Always record them. 
 
 Time may also be saved if the bookkeeper will begin on his first day 
 to systematically learn the common things about the business, such as the 
 telephone numbers of the persons or firms who are frequently called, the 
 names of the frequent customers or business callers, the names and addresses 
 of all persons who do work of any kind about the place. Not only that, 
 but he should study to make their relations with the place as satisfactory as 
 possible. 
 
 One thing that is appreciated highly in a bookkeeper by business men 
 is absolute reliability. Any matter intrusted should be carried out absolutely, 
 regardless of whether anyone sees it done or not. It is of great value to 
 any young person to be known as one who never forgets and never fails 
 to do all matters entrusted. In order to be perfectly reliable in such matters, 
 a pocket memorandum book and pencil should be always ready. In this 
 
148 PROGRESSIVE BUSINESS ACCOUNTING 
 
 book, among other things, should be placed the names of new acquaintances 
 whose names should be recalled, appointments of various kinds, things to 
 be done, etc. 
 
 The bookkeeper should study the business in which he is engaged, 
 whether it be retail business, wholesale, manufacturing, local, mail order, 
 or what not. He should familiarize himself with the advertising methods. 
 He should thoroughly know the collection methods. 
 
 After he has learned the buying, selling, and collection methods of 
 the business, he should take a lively interest in the commercial accounts 
 so that he can exhibit from his books the sources of gains and losses accu- 
 rately. If he can do this, he can give valuable suggestion to his employer 
 and his employer will seek his advice. A person no less important in busi- 
 ness affairs than Andrew Carnegie has frequently said that his ventures are 
 never made without the advice of his accountants. 
 
 The person of sound mind and body, temperate in habits, cheerful in 
 disposition, and good in morals, who will work persistently along the lines 
 indicated, should occupy an important place in the house where his energies 
 are directed, or should eventually become the master of a business of his 
 own. But he should remember that it is as an accountant that he is expected 
 to be highly efficient. It will well repay him to always have at hand the 
 latest accounting magazines and to continue the study of accounting in its 
 more specialized forms. The demand for the highest quality of work along 
 these lines never can be fully supplied. 
 
 QUESTIONS. 1. What three branches of study are mentioned as 
 necessary to the bookkeeper? 
 
 2. How should an office assistant act with reference to the methods 
 already in use? 
 
 3. Should he venture to improve methods before carefully studying the 
 conditions. 
 
 4. Is it profitable to attempt to keep books before learning the nature 
 of the business? 
 
 5. Why should all detail work be kept up to the date ? 
 
 6. . Name some general ways in which a bookkeeper may become valu- 
 able to an office. 
 
 7. What is said of reliability? 
 
 8. How can one be sure that he has attended to all matters to be remem- 
 bered? 
 
 9. Which class of accounts should a bookkeeper first become familiar 
 with? 
 
 10. What should be learned before attempting to systematize the com- 
 mercial accounts? 
 
 LEGAL FORMS. The forms following illustrate the manner of pre- 
 paring deeds, mortgages and other papers. These should be written with 
 great care and carefully ruled. 
 
 As they are generally to be recorded by the county recorder, they are 
 not complete until acknowledged before a notary public or other official em- 
 powered to take acknowledgments. The form of acknowledgment accom- 
 panies the deed on page 150. The acknowledgment should accompany the 
 other forms, but as the space for it is usually found on the reverse side of 
 the instrument, the illustration is omitted except in the deed form. 
 
Warranty Deed 
 
 (Form No :>0) 
 
 >IiTT PARITOTT i 90NS CO., WATERLOO, IOWA 
 
 KNOW ALL MEN^ BY THESE PRESENTS 
 That:. 
 
 -r j^;:/^rr:?^^ 
 
 ■of- 
 
 ■• m consideration of the sum of 
 -DOLLARS. 
 
 . ...... ot 
 
 County and State 
 
 O^ yZ-^^^t;'- '..^ !^^ 
 
 do hereby SELL AND CONVEY unto the saxd 
 the following described premises situated vnrrr^ 
 
 -r ^^:^^:jfrf::?r:'>:3r::<^^^ 
 
 TO EAVE AND TO HOLD the premises above described, with the appurtenances, unto the said 
 
 :. : a nd \ V.T: ' ,! ^rr:<r-^ /.. 
 
 heirs and assigns forever, and- 
 
 that:. 
 
 
 rdo hereby covenant xuith the said.r 
 
 ■rhwfully seized of said premises; that they are free from encumbrance 
 
 ..^^^■!^<=^?4-:<;Zr<C4^ 
 
 that )^^. ha ^^t^rr^r^t iood right and lawful authority to sell and convey the same.-rrr'^^^ 
 
 do hereby co^'enant to WARRANT AND DEFEND the title to said real estate cmd appurtenances 
 .thereto belonging, against the lawful claims of all persons whomsoever; « n« l : 
 
 — h e nby itUm j unh :....ull > lyhl 
 
 of d ^u io t ', c i ^ ai i t ^tjht under ( he H « m « tmd L n u - s of the SMa «f Iowa, 
 
 in and to doccmbod p p om i oeo. 
 
 Signed this~^^<rr-<L^a-^=^y of 
 
 A. D. 19/ /2.. 
 
 STATE OF WW A^^S^^Ii^:^^^-'-^^ ss: 
 
 On thisr^^^r^^ii^day of i:!^dC:ti€.<^^rri>c,<t-<^. .4. D. 19/../2...., before me personally 
 
 appeared 
 
 ....^:?!><^l^L^^-~^...r:^^<Q:^^^ 
 
 to me known to be the person nathed. in. and ivho executed the foregoing 
 
 instrument, and acknowledged that. rr::?*^?:^^:^ executed the same 
 
 ts...:rr^r%::<k:<^.. voluntary act and deed. 
 
 Notan/ J'ublic in and for said County. 
 
UOSTGAGE 
 
 Matt. PiUHOiT i sons Co., 'wateiiloo, iowa. 
 
 KKOW ALL ME. 
 That 
 
 BY THESE PRESENTS: 
 
 !?:5'!'^.....^!;i^L^'r:5!^?r^......<S^^ 
 
 ol^rrif^'!^r<?h^>:7>r7<i.^^ State ofrrrrr-:^.! 
 
 —in consideration- of the sum of 
 DOLLARS, 
 
 in hand paid by.. 
 
 ofrr~^^ir:f!>:r:iS^rr:r C/. Cmtnty, State o/....te^i^^^*^rrr:7:r^,rm!^rr<rr«^:r:rflfo hereby sell and convey un(o the 
 
 said.T ^ 
 
 the following described premises, situated M»yi'*^2-<^«*-'*r^?^ri?'rr?^^ Iowa, to-wit: 
 
 thatr^^^A^ J^'^^r^awjully seized of said premises; that 
 
 -right tinder the home.'<lead laws of the State of Iowa, in and In the above 
 di-Kcribed premises. 
 
 PROVIDED ALWAYS, and these presents are upon the express conditum, that if the said 
 
 T.J,. r'A^i4dT<fi:riieiTS, execxUors or 
 
 administrators shall pay or cause to be paid to the said 
 
 : ^;^:g::S^^gtr^, cxccutors, administrators or assigns, the sum of 
 
 <^«^2^?l2-,^-<--^?C«r-<^^ on thi-^^^-^-^'^-^ay of ^^^f^rr-^'^r^.. 10// 
 
 <^^^^'^r<^.r^?^i£<e>'rt^^ Dollars, on the^^^-^-^^^^y of J^*^^yt-eJ...... 19/.^ 
 
 <i^^^^<l^r.r:?^C2J«.rr*%<Cr*«.-^^ Dollavs, OH thir^^^-^rfiit-^rday of ^^,^^^<<?n,!<X.. 19/^ 
 
 (^^'^^■e<-,.::ii3^,.a.r-<<.^iC^^ Dollars, on ther^^'^i^^ilfrday of .^;,^««<?:*^. 19./.^ 
 
 ..Dollars, on the 
 
 day of'. 
 
 -w 
 
 mlh mi crest on all of said money, from this date, at the rate o/'T-r^r'^rr?s<^rr™per centvm per annum, 
 
 rpromissory notes of said 
 of even date herevrith. 
 
 lints paid, payable annually, according to the tenor of 
 
 then these presents to be void, othenvise in full force and effect. 
 
 And it Is stipulated In said note and In this rnortgaee that should an.T of aald Interest not be paid irtien due l> almll bear 
 
 Interest at the rate o».-^-fr^-^-1^T)er cent per nnntim from the time the same hecomes due. and that this mortease Bhall also 
 stand as security for the Mme : and It Is stipulated that a failure to pay anv of said Interest or principal within thirt.v days 
 sfter It becomes due. shall cause the whole of said sum to become due. and this mortKaee may be foreclosed thereupon iium»Mjlately 
 for the whole of said money and Interest. And It Is also stipulated that should any taxes on the above descrtiied land not lie 
 paid when due, the mortjfaeee or bis assigns shnll have the rlpbt to pay the same, and this mortcage shall stand security for 
 the money so advanced and Interest thereon at the rate of eight per cent per annum, payable annually. 
 
 It Is furyier agreed that mortgagor shall keep buildings and property covered by this mortgage Insured, for At least 
 
 -rT'^^^^f^^ T-r*r~?r*r:~;^CT its actual cash value In good, reliable Insurance compnnlea appmred by mortgagee, with clause 
 ntlnched. "Loss, If any, payable to mortgagees, as their Interest may appear." and shall pay all premiums In counectlon there- 
 with. In default of same, said mortgagee shall have the right t" Insure lald hulldlnga and property and pay the premium's therefor 
 and this mortgage shall stand as security for the moneys so advanced for premiums and all enpensea In conn«ctlop tberewltli, 
 and all money so advanced shall draw Interest at the rate -of eight per cent per annum. 
 
 In event of the foreclosure of this mortgage. It Is agreed that a reasonable attorney's fee shall !« I>y the Court also 
 taxed and Included by the Court In the decree of foreclosure of this mortgage, and the mortgage shall also stand as w^-'urlly 
 for the same, and the same shall be Included In the special execution, snd be made with the other money and coata on tt» 
 Hherier's sale of said land. ^_ 
 
 Signed thiy^^<r'i^day of ..rrrr^^^^:f^:2:^:r^. .< A . D., l9/.<>. 
 
 Jp''^^'':?:?-frrt?r:?f!*»?^^ 
 
 they are free from incumbrance; /fca/...>«ri25^rr^^..T7— ^ — .ha<^t<rr£^ good right and lawful authority to sell 
 
 and convey the same and the said m/ j(rZ<riK.riirr^......^^rr:^t:::7^lisC^r. 
 
 — — — - — rrrrr. hereby relinquishes all—^rri^<i&<iL :r.. rujhl to doner, and all 
 
 ' ..... ■;igC:4g,r<fcr- .^ 
 
CHATTEL MORTGAGE. No. >-.twm 
 
 (Form No. (2) 
 
 UATT PABBOTT * 60X8, KiTlBtOO, lOWi. 
 
 Know all Men by these Presents: 
 
 That 
 
 
 ~-;;?^'-*2^-'ir-^^ 
 
 of the Coxuity^'of^^^<^iiZ.-<i''^^'^^''-^^ State of Iowa, party of the first part in consid ration, 
 
 of the sum ot''='^^^^^<^'-^ ^-'^'^^ . DOLLARS 
 
 to him III. hand paid by ^---r^'*^^^^-^'*r7fCri^^ second 
 
 part, has bargained and sold, and by these presents does convey, transfer and set over unto said 
 fiarty of the second part, his heirs, successors and assigns, the following ^oods and chattels to-wit: 
 
 <i2i:--^*<i<in*^'*>^^!.=^*^<t.^^ 
 
 TA" idioee dr^crihed chatltU arc noiu iii the possestiion of the said parly of 11^ first part at mid upon 
 
 A- 
 
 llic fiilluwiiig described premtscs. to-irit: 
 
 ,n saur(^^^^^Z--<f^^^^<A^-^Z--*^^^^ County, Iowa. 
 
 TO HAVE AND TO IKil.D Ihc sauie forever. And the said first party hereb" covenants and 
 r<;i)rcscnls thut said clialtcis are oniied by him, (hat same are free from any incumbrance xvhaievcr and 
 (Jidl he ii:ill_ vairant and defend the same against (ill jiersons tilicmsoever. 
 
 Vroii condition.. HOWEVER, that if the said FIHST PARTY shall pay (o (he party of (he second 
 
 liiiri. or assigns, /risw-^S^*'-^ ' ' certain promissory notes, dated- 
 
 ...y^„ 19/.^-, and described as follows, to-wit: 
 
 One for.(^^^-1^-'^-<>'---r^^^^ Dollars, payable .A!^Z:tZ^ p^ 19/j(P. 
 
 One for (^^^'fit.^-^Ltif<^%-<^^^ payable J^T^^^^^rll^. .^^^ lOZ O 
 
 One for. - ._ .„ .^^^^^^^Z^ZBollars, payable. ..^^H^K... 
 
 One f&r.. ..^^^t^^Z... JDoUars, payable.- ..^^^^^^^Zl... — JP 
 
 One /or^ss?^^^^. - -. Dollars, payable^^^^"^ _ _19 
 
 mth interest at (he rale ofs^^^c^n't^rper cent per annum, according to the tenor (hereof, then, these 
 presents to he void, othern-inc in fail force. 
 
 And the said party of the first part does hereby covenant and agree uith the second party that in case of default 
 made in payment of the above mentioned promissory notes, or any of them, or in case of any attempt to dispose of or 
 remove from the said county wherein the same arc now kept, the aforesaid goods and chattels, or any part thereof, or 
 whenever the said second party shaU deem himself insecure, then, in either of said events, the whole amount of said 
 indebtedness shall become due and fayable at once and this mortgage may thereupon be immediately foreclosed there- 
 for, and in that case it shall be lawful for said second party, or assigns, by himself or agent, to take immediate posses- 
 sion of said goods and chattels, wherever found, the production of these presents being sufficient authority therefor, 
 and to sell the same at public auction, or private sale (at the option of the second party), or so much thereof as stuill 
 be required to pay the amount of said mortgage indebtedness, with all reasonable costs and expenses, pertaining to 
 the discovery, taking, keeping, advertising and selling of such property, and a reasonable attorney's fee for all ser- 
 vices rendered in connection therewith. If second parly elects to sell said property at private sale it shall be lawful 
 for him, to do so xvithout notice, and at the best prices by him attainable. If he elects to tell the same at public 
 
 auction, then said sale shall take place at...<</r.ji:X<^C.^i(>-:Z.,r£^^tfrt?. :...in,the County 0} __ _ 
 
 and State of Iowa, after giving at least' ten days' notice thereof by posting up written notices in three public places in 
 said County; and said first party hereby authorizes the person conducting the said public sale to adjourn the same, if 
 deemed in his opinion necessary, from tiyne to time until said property is sold. And in case Of sale by either of the 
 above methods, the person so making and conducting the same is liereby authorized by first party to give a bill of sale 
 to the purchasers of said property, which shall be conclusive as to the regularity of all proceedings connected herewith, 
 and shall convey absolutely all the right and title of said first party in and to the property so sold. If from any cause 
 the amount realized from such sale shall fail to satisfy said debt, with interest, costs and charges, the first party agrees 
 to pay the deficiency, and any money remaining after paying said sums shall be paid, on demand, to the first party. 
 
 iln(i..TrT^=====. Trrrrrr^r^rr^"^ ...wife of the said first party, in consideration of 
 
 and being fully advised in the premises, does hereby expressly concur in the making, execution and delivery hereof, 
 for the uses and purposes expressed and does hereby waive and release all her rights in and to said mortgaged prop- 
 erty, arising and existing under and by virtue of the Exemption Laws of the State of Iowa. 
 
 Dated thi9<^:^^-^''-z=ti4ay :/ '^ ..::^....d....-^. "^... r . . .1. 
 
 D. 19/..£>... 
 
AGREEMENT OF CO-PARTNERSHIP. 
 
 Tpis Agreement Witnesseth, That 
 
 of ■ have this day agreed to associate themselves together as 
 
 a co-partnership, for the purpose of engaging in the business of buying and selling for profit. 
 
 atT r<?^<:?rr^UCr-t?^:?7r . '^ ....>.. ■. inrrT rrf^r-^i'^r:?:^^?^ . (. ■ ■Countyrr7-. br<^r?<gg"r?^ r ■ 
 
 r ./^/Zr:?^f<>?ri7:t^'t<-9rut^ . . . JC. C^-r^r-:?:7^r?r?<-^^<y. 
 
 under the firm name and style of 
 
 the term of|aid co-partnership to continue. . . .'.' .'$^?rrr^rr^^Tr^< ^^^ vear r^^. from and after the 
 
 Tday of: 
 
 r/. i (^tP. unless sooner dissolved. 
 
 The ijnvestment contributed by the aforesaid partners is to be as' herein set forth, to-wit : 
 
 •''^"^ xV^-'g2..---;^'2--->z..-^-^?-?,.,< ^. ... ■ ' . . contribntes .-r.^?rr*?:ri^ri?C<rvrr<rr??rr1=rr^^ir 
 
 ■--TTTTTTOntributes.-. <^:gi;r^^r(^C <:< ^S^^^ 
 
 ^^^i-c^ tg^--gZ-^Z^> 
 
 
 l^^:^^>fi^r^h??r^. ' -^^-:^/ r :^^''f^o-yTy ^^. Vr^ 
 
 The profits or losses of said partnership business'^are to be shared in the following proportions: 
 
 I win 
 
 With respect to the time and services given, and the compensation to Se received it is agreed thatr 
 
 It is ako agreed that aside from the profits and compensations heretofore mentioned, neither partner is to withdraw 
 from the business any money or other property, except with the written consent of the partners. 
 
 It is especially agreed that neither of the parties to this contract shall sign or endorse any bank note, draft or com- 
 mercial paper, oor stgn any official or other bond, nor do any other act to create a financial liability or obligation, without 
 the written conSENT 6f his co-partner. 
 
 At the expiration or sooner determination of said co-partnership, the business and property of said firm may be closed 
 out by sale ; and after all debts and liabilities are paid and discharged, the amount remaining shall be divided between the 
 partners in the ratio of their respeetive interests; or, if the parties so agree, the co-partnership may be continued for such 
 further time, and upon such .terms as the members thereof may be able to agree upon. 
 
 Witness our hands 
 
 thi*=r^^2^::^;^r-?day of; ^<^ir??rfr^^^^!^rr^!^ -rTTr l 
 
 »/<?- 
 
LE.ASE 
 
 This 
 
 fTitt Made between 
 
 "^:. 
 
 of the County 
 
 o {7<^^^!^^i:>:^fi>rtr^<^^ State oirrr^^^^^:^:^^^^^ 
 
 t){ the first part, and 
 
 of the second part witnesseth : That the said party of the first part has this day leased unto the party of the second part 
 the following„d^cribed premises, to-wit: 
 
 And it is further agreed that if any rent shall be due and unpaid, demand therefor being waived, or if default be made in 
 any of the covenants herein contained, it shall then be lawful for said party of the first part to re-enter the said premises 
 and remove all persons and property therefrom, or hi may recover possession thereof by action for the forcible detention 
 of said property. 
 
 And the said party of the second part agrees to hire said premises, and^o pay the party of^he first part there- 
 for the?r ^r!<-rr?r?rr?'rTrrfr^7-r?yrc< v ' . f. rent of 
 
 to be paid as follows, to-wit: 
 
 except when said premises are untenable b» reason of fire from any other cause than the carelessness of the party of 
 
 the second part, or of persons of . . . ; . ^^?7-r<<<^ .\. family or in ^^?^<<-r^<^ / . employ or by 
 
 superior force or inevitable necessity. 
 
 And the said party of the second part covenants that.j< 
 
 enants tha 
 
 .will use said premises as a: 
 
 and for no other purpose whatever; and that. 2j(^V^<_... especially will -not use said premises nor permit the same to be 
 
 used for any unlawful business or purpose whatever; thatrrr r??^-?^. will not assign this lease nor let or 
 
 underlet - said premises without the written consent of the^ lessor, under the penalty of the forfeiture of alt 
 
 • . '/^^ri<i-:f^ 1 ights under the kase: and that:'7r r/r?T-^ ^ . . . w ill use due care and diligence in guarding 
 
 said property from damage; that /rf^,^<\ will keep the same in such repair as the same now is, or 
 
 may at any time be placed in by the lessor, damages by superior force, inevitable necessity, or^fire from any other cause 
 
 than that from carelessness of the lessee, or persons of . . . . .'A<r-r<t-f^f <. familv or in-rr rr^r?<^^. v - . emplov excepted, 
 
 and that a^ the expiration of this lease, or upon a breach by said lessee of any of the covenants herein con- 
 
 tainedr r.-fvVt^ . • w ill, without further notice of any kind, quit and surrender the possession of said premises in as 
 
 good condition as reasonable use, natural wear and decay thereof will permit, damages by fire as aforesaid, supwior 
 force or inevitable necessity, only excepted. 
 
 IN WITNESS WHEREOF, the said parties have hereunto subscribed their 
 
 day of: 
 
 :A. D.. lo /.^?. 
 
BILL OF SALE 
 
 (Form No. 115) 
 
 UATI. PABBOTT A SONS CO.. WATEBL'X), lOWi. 
 
 KNOV^- ALL MEN BY THESE PRESENT, 
 
 That 
 
 ■..in, the County o^ 
 
 and S^ale of 
 
 '^-'^^^i.^Lr^e^rr:-^. 
 
 ^-^^5^^:25-^:^^- 
 
 ->.oj the first part, in considerallon of the sum of 
 D OLLARS. 
 
 in hand paid by..— - 
 
 '^^^^-^^■-C<.^^^ 
 
 •County and Slate 
 
 of-T^ ^^::^--£-€^'-t<-^ :U^ J^^^ 
 
 of the second part, the receipt ivhereof is hereby achiowlcdged, have bargained and sold, and by these 
 jucsenls do grant and convey unto the said party of the second part, ~::- :/i<<rr ^ ^.. heirs and assigns, 
 
 ..(^^....-=:^^L::<£,l£:ri!^^ „ .-. 
 
 'y'^'%-'^'ii<rfA::rl!irr>rt,^:(^ 
 
 - '(i^*^;^4--^'r^<''^-:<^^^ ..■r:pi^^^<g>4X;<f<>;^;i;^;t^^ 
 
 l,frS^::e:Z-:^!^^::::^r5fC:!?^^ 
 
 --^<^'-<L-i^rrifC.<r?X^...^'^^ 
 
 
 -2lrah-ik^ ..... .ar:^?ri^ ...:.^: 
 
 -z:.do hereby covenant ivith the said party of the second partr-<^<<ri-;^^... executors 
 ■and assi.gns, to icarrant and defend the sale of said property hereby made to the said party of the second 
 
 ;;aH, — -^^-^CruC- ^ executors atnd assigns, and against all and every person whomsoever. 
 
 Arid-.Trr. 
 
 IN WITNESS WHEREOF... 
 day o/^— -^^^^^j^<^-:<. ^ / 1 9/a,. 
 
 I?f PRESENCE OF 
 
 ..have hereunto geL .rrrr?^>^t^. hand.Trr..ihis /.^^■^Zr^^^^H^. 
 
INDEX 
 
 Page 
 
 Acceptance f^6 
 
 Accounts 8 54 
 
 Account sales ^'-i 
 
 Acknowledgement 149 
 
 Articles of incorporation 114 
 
 Balances of account 15 
 
 Bank account 60 
 
 Bank bookkeeping 137 to 144 
 
 Bankruptcy 92 
 
 Bill of lading 83-120 
 
 Bill of sale 154 
 
 Capital stock 106 
 
 Cash account 8 
 
 Cash books 31-32-33-41-102-103 
 
 Cash books (single entry) 134 
 
 Cash check 41 
 
 Cash items 66 
 
 Cash sales and purchases 49-50 
 
 Cash value of account 20 
 
 Certificates of deposit 126 
 
 Checks 40-41 
 
 Closing the ledger 20-24-57 
 
 C. O. D.'s ■ 98 
 
 Collection items 66 
 
 Columns of journal and ledger . . 7-15 
 
 Commercial accounts 26 
 
 Commission 85 
 
 Compound entries 28-29 
 
 Consignments 73-84-85 
 
 Contra columns 121 
 
 Controlling account 98 
 
 Co-partnership agreement 152 
 
 Corporations *106 
 
 Day book (Single entrj') 133 
 
 Debit and credit rule 8 
 
 Deed 149 
 
 Departments 137 
 
 Deposit tickets 39 
 
 Discount 66 
 
 Dividends 107 
 
 Double entry 10 
 
 Draft register 139 
 
 Drafts 65 
 
 Errors — how located 88-89 
 
 Exchange ^^ 
 
 Expense account 20 
 
 Expense bills 80 
 
 Financial accounts ^6 
 
 Folio columns 15 
 
 Forwarding 45 
 
 Furniture and Fixtures 20 
 
 Page 
 
 Gains 20 
 
 General balances — bank 141 
 
 General journal — bank 140 
 
 Group titles 97 
 
 Headlines 6 
 
 Index 37-38 
 
 Individual depositors' ledger .... 138 
 
 Indorsements 60-65-66 
 
 Insolvency 92 
 
 Installment certificate 117 
 
 Installment ledger 107 
 
 Interest 27 
 
 Inventory 20-55-56 
 
 Journals 14-15-27-48-63-100 
 
 Labor 27 
 
 Lease 153 
 
 Ledger 8-14-31-85 
 
 Ledger closed 22-23 
 
 Ledger divisions 31 
 
 Ledger index 37-38 
 
 Liability inventory 92 
 
 Lists 57 
 
 Live stock 16 
 
 Loan and discount register .... 139 
 
 Loans 86 
 
 Loss and Gain 21 
 
 Mercantile transactions 31 
 
 Merchandise account 13 
 
 Merchandise discount 47 
 
 Minute book 114 
 
 Money columns 6 
 
 Mortgage — chattel 151 
 
 Mortgage — real estate 150 
 
 Negotiable paper 66 
 
 Net gain or loss 21 
 
 Net proceeds 83 
 
 Net worth 20 
 
 Note, promissory 52-54 
 
 Note sales and purchases 51 
 
 Notes receivable and payable . . . .25-26-76 
 
 Notice of incorporation 116 
 
 Opening entries 32-68-69 
 
 Orders '. 65 
 
 Order sheet 42-43 
 
 Outlining books 144 
 
 Parties to commercial paper .... 40 
 
 Partnership 69-70-71-72 
 
 Partnership agreement 153 
 
 Part payments 82 
 
 Pencil footings 18 
 
 Posting 10-15 
 
 Profit, how shown 8 
 
Page 
 
 Property, purchase or sale 25 
 
 Proprietor's net worth 68 
 
 Purchase book 31-34-43 
 
 Real estate account 13 
 
 Receipt 47 
 
 Red ink entries 24 
 
 Remittance register 139 
 
 Rule for debit and credit 8 
 
 Ruling directions 6 
 
 Sales book 31-35-64-104 
 
 Sales for notes 51 
 
 Shipments 73-83 
 
 Shipping address 121 
 
 Short extensions 107 
 
 Sight drafts 66-87 
 
 Single entry 132 
 
 Six-column journal 135-136 
 
 Special column books 96-136 
 
 Page 
 
 Statement to customer 54 
 
 Statement of the business 58-59 
 
 Stock certificate 119 
 
 Stock ledger 106-107 
 
 Subscription 106 
 
 Surplus 107 
 
 Teams account 20 
 
 Telegrams 125 
 
 Time drafts 66 
 
 Titles 8 
 
 Transfer of real property 79 
 
 Transfer of stock 110 
 
 Treasury stock 106 
 
 Trial balance 19 
 
 Undivided profits 107 
 
 Unsubscribed stock 106 
 
 Vouchers 41 
 
 Warranty deeds 149 
 
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 UNIVbKbllYUI-LA 
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 CA 94720 
 
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 U.C.BERKELEY LIBRARIES 
 
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 UNIVERSITY OF CAUFORNIA LIBRARY