rrnT i Tir i r rrr ii nr nr i r i Tir.Tiri i n- i r r nrir nnr t r ~ r i ~fr ti: ririf i riTr7rT i r i riTL i T i Tirpf,-f , f i'i i i T ii T | ^xruCa »#>T. BOOKKEEPING f INTRODUCTORY AND f INTERMEDIATE COURSES GEORGE W.MINER GINN AND COMPANY .. Digitized by the Internet Archive in 2007 with funding from IVIicrosoft Corporation http://www.archive.org/details/bookkeepingintroOOminerich MOOKE AND MINER SERIES BOOKKEEPING INTRODUCTORY AND INTERMEDIATE COURSES BY GEORGE W. MINER GINN AND COMPANY BOSTON • NEW YORK • CHICAGO • LONDON aJi*^.-..-^..^-..' . . ... . xxix LIST OF EXERCISES PAGES Model Script Set 2-5 Exercise 1. Business Transactions Explained 7 Exercises 2-5. Elementary Journalizing 8-10 Exercise 6. Terms Explained 11 Exercise 7. Classifying Debits and Credits 11-12 Exercise 8. Suggestions for Ruling 13 Exercise 9. Set A (Model Set). General Merchandise 13-14 Exercise 10. Analysis of the Model Journal 15 Exercise 11. Summary of Principles 15-16 Exercise 12. Copying the Model Journal 16 Exercise 13. Directions for Posting 16-17 Exercise 14. Analysis of the Model Ledger 18 Exercise 15. Trial Balance of the Model Ledger 18 Exercise 16. Posting the Model Journal ; Rechecking 19 Exercises 17-20. Journalizing 20-21 Exercise 21. Set B. Furniture 21-22 Exercise 22. Set C. Grain and Seed 22-24 Exercises 23-24. Classification of Accounts 24-26 Exercise 26. Terms Defined and Explained 27 Exercise 26. Trial Balances for Statements 28 Exercise 27. Making Statements 29 Exercise 28. Rulings for closing the Ledger 30 Exercises 29-32. Closing the Ledger 30-36 Exercise 33. Set D. Hardware 37-38 Exercise 34. Correction of Errors 38-39 Exercise 35. A Written Review 45-49 Exercise 36. A Written Review 54-58 Exercise 37. Set E (Model Set). Flour and Grain 58-61 Exercise 38. Set E. Coal and Wood 61-62 Model Script Set 63-67 Exercise 39. Transactions with a Bank 74 Exercise 40. Business Forms 74-78 Exercise 41. The Trial Balance 79 Exercise 42. A Written Review ... 89 Exercise 43. A Written Review 95-96 Exercise 44. Interest and Discount 96-97 Exercise 45. Interest and Discount Entries 97 t LIST OF EXERCISES PAOBS Exercise 46. Compound Entries 98 Exercise 47. A Written Review . 106 Exercise 48. A Written Review ^ 112 Exercise 49. Set G. Grain 112-114 Exercise 50. Consignments 114-116 Exercise 51. Writing Drafts 120-122 Exercise 52. Bank Drafts, Oral Work 125 Exercise 53. A Written Review of Sight Drafts 127 Exercise 54. For Written Work, Drafts 133 Exercise 55. For Oral Work, Drafts 134 Exercise 56. A Written Review, Drafts 135 Exercise 57. Opening Double-Entry Books 136 Exercise 58. A Written Review 179 Exercise 59. A Written Review 197 Exercise 60. A Written Review 230 Exercise 61. A Written Review 246 Exercise 62. Set H. Carpets 246 t BOOKKEEPII^G PART I. INTRODUCTORY WORK INTRODUCTION 1. It is of first importance that the student should begin his work in accounts at some point where knowledge of his own is readily associated with that systematic arrangement of the record of business transactions termed Bookkeeping. The unknown must come into definite contact with the known if the mind of the learner is to be led step by step to larger understanding. Students who know nothing of accounts are often very familiar with the buying of household articles, and understand that they get one value by giving some other value in return. The starting point in this text treats of the giving and the receiving of values, and this feature is developed by a series of graded exercises. 2. The ability to apply a principle is always of positive value ; for this reason, in the body of the text, terms are described and applied rather than defined. However, for the accommodation of those instruc- tors who wish formal definitions, an appendix is given in which terms are defined. 3. A script model set is given, worked out in all details, using the journal and the ledger, and the results and the condition of the business are fully shown. Later, when the cashbook, the purchase book, and the sales book are introduced, another script set is given for the student's direction. 4. The oral exercises include a large number of entries which cover an extensive variety of transactions. They afford material for study, for class discussion, and for instruction in the principles of bookkeeping. 5. At the close of each set, reviews are given which provide differ- ent kinds of work. In these reviews, the text gives the student no aid, but he has an opportunity to test independently the knowledge he has gained. Some of these review* exercises have sufficient data for a com- plete set. 6. The first exercise in the student's work is found on page 7. 1 2..' :;: .•;; ; •: PAGE DEBITS AND CREI BOOKKEEPING Model Journal /. EXPUNATfONS /f- DEBIT AMOUNT CREDIT AMOUNT / "^.^-ZZ^-d-'A^ > 4^ US^^^:--?':?-Z-27^^-2- '9- 1 — 1 h"' = 1= J/a^ 3 / (fS^ — J^^i-^n^ '^ / Z/^ - cT / Z4^a — C / Z4^^ — ^ / A7A ^^ f / ^.H •- '- 1 j2z^?4i'^ ^-f' // 24^^ ^^Z^^-Z^^^ .//>/• «^!9Z^ /^4^ 3J^4^Ci2;Z-^^^^-^2^^^<^^t^-^ ^t^ ^ .j:^ S^^^'i^'rZ^ y^^^^^uy. BOOKKEEPmG Model for recording Inventories dT-y-T'zy /- fe^^<^-^^-<;^^t^^ L^<^>i:.^^,y&V-^^-7£^ //4A s^ J// so // 1? 2-S 6c> /3J- THE SCRIPT FORMS AND MODELS In connection with the student's preHminary work he is directed to write some of the script forms given on preceding pages. These forms represent the highest excellence in penmanship and may serve as models in writing for the student. The plan, statement, and arrangement o*f these models may be a guide to the student in all his work throughout the book. The method of placing matter on the page and the complete- ness of explanations are parts of high-grade bookkeeping. While writing these models the student is learning how to place busi- ness transactions on the written page in the most approved manner. Busi- ness records are not only valuable when made, but may be of especial importance years hence ; therefore it is necessary that the statements be clear not only to the writer but to any person who may have occasion to examine them at any future time. If books are introduced into court as evidence, the explanatory part of the records is often the most impor- tant. It is the experience of attorneys that very few books of record that are brought into court have any value as evidence, because of the incompleteness of the explanatory matter. If explanations are not made clearly, a correct entry is of little value as conclusive evidence. Erasures are not to be tolerated, as they not only spoil the neatness of the page, but often make entries look suspicious. FUNDAMENTAL PRINCIPLES EXERCISE 1 For Oral Work A Business Transaction is an exchange of values ; that is, the giving of one value in return for another. A bought of B 20 T. coal at $5 per ton, and paid the money for it. Name the two values in this transaction. Which value did A receive ? Which value did he give ? A sold to C 2 T. coal at $6 per ton, and received the money for it. Name the two values in this transaction. Which value did A receive ? Which value did he give ? Each of the above transactions is an exchange of vahies. In the first, A receives value, 20 T. coal, and gices value, $100 in money. In the second, A receives value, |12 in money, and gives value, 2 T. coal. A merchant sold a pair of shoes for $4 ; the value received by him was $'4, and the value given was a pair of shoes. A man sold a horse, for $100 ; the value received by him was ^100, and the value given was the horse. A doctor occupied a suite of rooms which belonged to another man, for the use of which he paid the owner at the end of one month |50 ; the value received by the doctor was the use of the rooms, and the value given was $dO. A grocer sold John Bell a barrel of flour for |6, which was to be paid for in 10 da., a sale on credit or on account ; the value received by the grocer was the expressed or iynplied promise of the customer to pay the bill in 10 da., and the value given was the barrel of flour. A manufacturer paid B $2 for shoveling snow off his sidewalks; the value received by the manufacturer was the services of B, and the value given was $3. C borrowed $100 of D, and at the end of 6 mo. paid $3 for the use of the money to date ; the value received by C was the use of $100 for 6 mo., and the value given was $3. Henry Brown bought a suit of clothes of his tailor for which he paid $40 ; the value received by Brown was the suit of clothes, and the value given was $40. These represent business transactions, for they show that for every value received a value M^as given. 7 8 BOOKKEEPING EXERCISE 2 EoR Oral Work These items represent the transactions of a merchant, Edward M. Brown, for several days. Name the value received and the value parted with in each transaction. Feb. i. Bought of A. R. Dean for cash, 500 bu. wheat at |1. 2. Sold Fred S. Lay for cash, 100 bu. wheat at |1.15. ' S. Bought of John Barr for cash, 50 bu. beans at |3. 4. Sold Bell Bros, for cash, 30 bu. beans at $3.50. 5. Bought of H. A. Leary for cash, a set of office books for |15. This item is called Expense because the supplies were bought to be consumed, not to be sold, — an expenditure to carry on the business. 6. Bought of Thos. M. Day for cash, 200 bu. millet at |1. 6. Sold S. A. Allen for cash, 100 bu. millet at $1.30. 8. Paid John Race, a carpenter, cash for repair work, $6. 9. Bought a delivery wagon of A. R. Meek for cash, $55. 10. Bought a horse of James Crow for cash, $75. 11. Sold J. H. Morse for cash, 200 bu. wheat at $1.15. 12. Bought of Arthur Way 60 bu. beans at $-3, and agreed to pay for them in 10 da. In this transaction the value received is the 60 bu. beans, and the value parted with is the stated or implied promise to pay for them in 10 da. 13. Sold Isaac Mason 40 bu. beans at $3.50, and he agreed to pay for them in 15 da. 15, Gave John Weeks, a clerk, cash, $10. EXERCISE 3 EoR Written Work Take a sheet of paper and draw a line through the middle of the page from the top to the bottom. On the left side of this line write the teclinical name of the value received, and on the right side of the line write the teclmical name of the value parted with, for each transaction in Exercise 2. The technical term applied to goods bought to be sold is Merchandise ; to any expenditure to carry on the business. Expense; to all forms of money, and business papers which pass as money. Cash. Cash includes gold, silver, paper money, checks, bank drafts, money ordeis, etc. FUNDAMENTAL PRINCIPLES 9 Expense may include rent, fuel, lighting, clerk hire, postage, stationery, adver- tising, and the like. When there is an expenditure to carry on the business, such as the payment of money for rent, the value received is entered under the name Expense. Items of Feb. 1, 2, 8, and 12 will appear as follows, in the order named: Mdse. Cash Expense Mdse. 1500 Cash 115 Mdse. 6 Cash 180 Arthur Way EXERCISE 4 1500 115 6 180 For Written Work This exercise is to be worked out in the same form as the preceding one ; that is, the names and the amounts of the values received and parted with are to be placed respectively on the left and right sides of a perpendicular line. As a review, the exercise may be used first orally. These items represent the transactions of a merchant, Richard S. Rowe, for several days. March 1. Bought of J. N. Osborn for cash, 60 yd. velvet carpet at $1. 2, Sold Allan Dale for cash, 25 yd. velvet carpet at |1.20. S. Paid Henry A. Milton cash, for rent of the store for 1 mo., $28. A receipt similar to the one illustrated herewith would be received by Rowe from Milton. Tieceived of /^^^r^y^r^-^r/{^ ^^^j f, ^ ^ V^^y ^ ^. W=i $ zr^^ -.-^^^^y ^yk.:^ C^r77^ 4, Bought of Wm. Jackson for cash, 100 yd. Brussels carpet at $1.25. d. Sold John Welton for cash, 40 yd. Brussels carpet at |1.50. 6. Bought of John Lane, on account, 20 Smyrna rugs at $3.75. On the right side of the line write John Lane, because the promise was given to him. In this transaction, on account means that the goods bought are to be paid for at some future time. 10 BOOKKEEPING March 6. Sold Jolin Drew, on account, 10 Smyrna rugs at |4.75. On the left side of the line write John Drew, because the promise was received from him, 8, Sold Ira Hicks for cash, 5 Sm3rrna rugs at $5. 9. Bought of D. K. Pearson for cash, 100 yd. ingrain carpet at 70(f. 10. Paid John Lane cash, to apply on account, |50. On the left side of the line write John Lane, because the promise given was redeemed. In this transaction, to apply on account means that only a part of what was owed was paid. 11. Sold A. L. Derby for cash, 50 yd. ingrain carpet at 85(f. 12. Received of John Drew cash, to apply on account, $25. On the right side of the line write John Drew, because he redeemed his promise. IS. Bought of Harry Lucas for cash, office books and stationery, $12. IS. Bought of A. F. Service for cash, 200 yd. matting at 45(/!. 15. Sold Harvey Grilman for cash, 100 yd. matting at 60^. 16. Bought of Harvey Pease for cash, 3 T. coal for office use at |6. 17. Sold John L. Smith for cash, 50 yd. matting at 58(^. 18. Sold Albert Owen, on account, 40 yd. matting at 63^. 19. Bought of Amos Gibson, on account, 100 yd. velvet carpet at |1. 20. Sold Lester Ford for cash, 25 yd. velvet carpet at |1.40. 22. Paid Amos Gibson cash, to apply on account, |75. 2S. Received of Albert Owen cash, in full of account, $25.20. In full of account means that all that was owed on a given account was paid. EXERCISE 5 For Written Work s In this exercise use the same form as in Exercises 2 and 4. As a review, the exercise may be used first orally. These items represent the transactions of a merchant, James A. Murphy, for several days. April 1. Bought of Ball & Son for cash, 200 bbl. flour at $5. 2. Sold Henry Allen for cash, 100 bbl. flour at $6.50. S. Paid John Weeks cash, for rent of the store for 1 mo., $50. 4. Bought of Hunt & Co., at 10 da., 500 bu. wheat at 95^. At 10 da. means on account, to he paid in 10 da. 5. Sold Powell & Co., at 10 da., 300 bu. wheat at |1.10. 6. Sold Lane & Son for cash, 50 bbl. flour at |6.50. FUNDAMENTAL PRINCIPLES 11 April 6. Bought of Harper & Co. for cash, 5 T. coal for office use at $6. 8. Sold Lee & Sampson for cash, 100 bu. wheat at |1.08. 9. Bought of Field & Co. for cash, 1 office safe for }65. Transactions for April 9 and 10 may be treated as Expense items. 10. Bought of Derby Desk Co. for cash, 1 office desk for $35. 11. Bought of Wright Bros, for cash, 600 bu. corn at 50(^. 12. Sold Elder & Co. for cash, 50 bu. wheat at $1.05. 13. Paid Hunt & Co. cash, for the amount of the bill of April 4. 15. Received of Powell & Co. cash, for the amount of the bill of April 5. 16, Paid John Atlin, a clerk, cash, |10. EXERCISE 6 TERMS EXPLAINED All items at the left of the perpendicular line, in the preceding exer- cises, are debits^ and all items at the right are credits ; hence Debits represent values received^ and Credits values parted with. A systematic classification of debits and credits in business trans- actions is called Journalizing. A person who owes a debt is called a Debtor; a person to whom a debt is owed, a Creditor. A Debit is an amount due the business, or the amount of a thing or a service received ; a Credit is an amount owed by the business, or the amount of a thing or a service given. By universal custom, the left-hand side of an account is the Debit side, and the right-hand side the Credit side. As an oral exercise, go over all the transactions in Exercises 2, 4, and 5, and classify the values received and parted with as debits and credits. EXERCISE 7 For Written Work These items represent the transactions of a merchant, Wm. L. Martin, for several days. Classify the values as debits and credits. May 1. Bought of Brown Bros., on account, 1000 bu. wheat at $1, 2. Bought of Taylor & Co., at 10 da., 1000 bu. corn at 45(^. 3. Sold Henry Smith, at 15 da., 200 bu. wheat at |1.20. 12 BOOKKEEPIKG The technical term for my written promise to pay money to another is, on my books, Bills Payable ; for his written promise to pay me, BilU Receivable. Some instructors prefer to use the terms Notes Payable and Notes Receivable. There is no objection to the use of these terms. The following Promissory Note would be classified as Bills Payable by Henry W. Sherman, and as Bills Receivable by Morgan, Taylor & Co. ^••""" " ' ^^^^Ct';>^^s^ tf^^^?^^^^:<^ -iz-after dateL£promise to pay to the order of y^^^^^^^'-z^^^..^^ l^/^;?^.^^^^^^^ P^^^^-^p-^- ^^^^^^^^^r^K^^..-^.^,^^^.^^ ■ - . - T>ollars ni J^ :: i<^ . ,y^^ ,.^ ^ ^ -^y A ^^ - Value received * May 4, Gave Brown Bros, a note at 5 da., for $500. Who received value in this transaction ? What is the name of the value parted with? 6, Received of Henry Smith his note at 5 da., for $240. What value was received in this transaction ? To whom was value given ? 6, Sold James W. Hills for cash, 400 bu. corn at 55(f. 6. Paid H. S. Crane cash, for rent of the store for 1 mo., $50. 8. Bought of James B. Williams, on account, 1000 bu. oats at 40(f. 9. Paid Brown Bros, cash, for a note due to-day, |500. The name of the value given in the transaction of May 4 is here the name of the value redeemed. 10. Received of Henry Smith cash, for his note due to-day, $240. The name of the value received in the transaction of May 5 is here the name of the value parted with. 11. Sold Wm. Jones, on account, 500 bu. oats at 50(f. 12. Bought of Lacey & Son for cash, 2 T. coal, to be used for heating the store, at $5. 13. Received of Wm. Jones cash, to apply on account, $100. IS. Paid James B. Williams cash, to apply on account, $250. 15. Paid Mary A. Brown, a clerk, cash, $20. FUISTDAMEKTAL PRINCIPLES 13 EXERCISE 8 SUGGESTIONS FOR RULING Good mechanical work is essential in bookkeeping. If good results are to be secured, the pen, the ruler, and the blotter must be used in the right way. Use red ink for all ruling ; always have a blotter at hand ; use a medium pen, not too fine; dip the pen in the ink lightly; avoid getting ink on the ruler. Use ordinary writing paper, ruled; sit facing the desk squarely; place the paper directly in front of you. Place the beveled edge of the ruler just below the first ruled line on the page ; keep the point of the pen away from the ruler. Draw a line across the page, keeping the pen on the ruled line, as follows : Do not lift the pen until the line is finished. Continue this ruling until you have ruled a red line on every blue line of the page. Now rule lines between the ruled lines of the page just finished. Use a second sheet of paper for ruling double lines. Draw a single red line on the blue line ; without moving the ruler draw a second red line just underneath the first. You now have parallel lines across the page. Parallel lines : - In ruling parallel lines the position of the ruler is not changed, but the hand is pressed slightly forward. Repeat the parallel ruling until both sides of the sheet have been ruled, then rule parallel lines between the lines already ruled. This exercise in ruling should be repeated from day to day until good results are secured. EXERCISE 9 SET A (MODEL SET). GENERAL MERCHANDISE On pages 2 to 5 is a model set, in script, complete in every detail. This set was written from the following memoranda of transactions. Study each transaction in connection with the entry for it in the model journal, both the debit and the credit, also the explanatory portion. Note the name given to each column in the journal. The paragraph in script at the beginning of the journal is the memorandum, setting forth the conditions under which business was begun. The figures in the middle of the script journal page are the dates. 14 BOOKKEEPING When a man begins business he usually makes an investment, so that he may be able to carry on his business. In these practice sets cash investments will be used. In this set the proprietor, James Wilson, makes a cash investment of 12000. Memoranda of Transactions Jan. 1. James Wilson began business, investing cash, |2000. 2. Paid James A. Bird cash, for rent of the store for 1 mo., 5. Bought of M. C. Brown for cash : 190 bbl. Flour at |5 4, Sold H. King for cash : 45 bbl. Flour at $6 6. Bought of L. C. Horton for cash : 24 bbl. Flour at |5 120 bbl. Salt at $1 6. Sold D. Simons on account : 30 bbl. Flour at $6 40 bbl. Salt at |1.60 8. Sold A. Mead for cash : 20 bbl. Flour at |5.50 10 bbl. Salt at $1.50 9. Bought of O. Lane on account : 60 bbl. Flour at |5.24 61 bbl. Salt at $1 10. Received of D. Simons cash, to apply on account, |144. 11. Paid O. Lane cash, to apply on account, $175.40. Inventory, January 31, 1 Merchandise : 9— 179 bbl. Flour at |5 131 bbl. Salt at $1 $895 131 $1026 Note. The inventory is recorded immediately after the memoranda of transactions, just for convenience. The use of the inventoiy will be discussed in Exercise 23. The fundamentals of bookkeeping are recognized by all bookkeepers, but the forms of record vary. One of the simplest forms of recording business transactions is to write the dates, the debit and the credit titles, a complete history of the transactions, and the money values of the same in a book called the Journal, including the daybook record or explana- tions, and to collect and classify these entries in a book of accounts called the Ledger. This method is set forth in the introductory work. FUNDAMENTAL PRINCIPLES 15 EXERCISE 10 ANALYSIS OF THE MODEL JOURNAL The following is an analysis of each entry in the model journal. Similar analyses should be used in connection with all journalizing. Entry 1. Cash is debited because value was received by the business under the title James Wilson is credited for the amount he invested in the business. Entry 2. Expense is debited because value was received by the business under the title Expense. Cash is credited because value was parted with by the business under the title Cash. Entry 3. Merchandise is debited because value was received by the business under the title Merchandise. For the credit, refer to the second part of Entry 2. Entry 4. For the debit, refer to the first part of Entry 1. Merchandise is credited because value was parted with by the business under the title Merchandise. Entry 5. For the debit, refer to the first part of Entry 3. For the credit, refer to the second part of Entry 2. Entry 6. D. Simons is debited because he became indebted to the business. For the credit, refer to the second part of Entry 4. Entry 7. Refer to Entry 4. Entry 8. For the debit, refer to the first part of Entry 3. O. Lane is credited because the business became indebted to him. Entry 9. For the debit, refer to the first part of Entry 1. D. Simons is credited because he got out of debt to the business. Entry 10. O. Lane is debited because the business got out of his debt. For the credit, refer to the second part of Entry 2. EXERCISE 11 SUMMARY OF PRINCIPLES In the study of the preceding exercises it has been seen that we DEBIT AND CREDIT 1. That which is bought 2. That which is sold 3. That which costs value 4. That which produces value 5. All moneys received 6. All moneys paid out 7. Persons who owe the busi- 8. Persons whom the busi- ness ness owes 9. Other persons' notes re- 10. Other persons' notes when ceived paid by them 11. Our notes received (paid) 12. Our notes given (issued) 16 BOOKKEEPING The foregoing principles may be summarized as One General Principle for Journalizing, as follows : Debit, under their appropriate names, all values that are received hy the business, (See Debit, Appendix B.) Credit, under their appropriate names, all values that are given by the business, (See Credit, Appendix B.) These principles are not to be memorized, but should be referred to frequently until their meaning and application are well understood. By the skillful application of this principle the debits and the credits of every business transaction may be determined. EXERCISE 12 !FoR Written Work Make an exact copy of the model journal, page 2, on a half sheet of loose journal paper. If journal paper is not available, riile a sheet of ordinary writing paper for a journal. This copy must be exact in every detail. In making this copy omit the figure 1 in the page column of the model journal. In the money columns at the right, when writing an even number of dollars, put a dash in the cents column. This shows that an omission has not occurred. Keep this copy for a subsequent exercise. EXERCISE 13 DIRECTIONS FOR POSTING An Account" is a collection of debits and credits under one heading. An account may contain but one debit or one credit. A number of accounts may be seen in the model ledger, page 3. The Ledger is a book containing the accounts of the business. Posting is a process of transferring debit and credit items to their re- spective accounts in the ledger. At present, all posting is from the journal. The posting of the model journal is on page 3. This page is the model ledger. Each different name that appears in the model journal requires an account or a heading of the same name in the ledger ; therefore there are FUNDAMENTAL PRINCIPLES 17 six accounts in the model ledger. The Proprie-tor's account is usually the first in the ledger. To Open an Account, write in the ledger, as a heading, the name to which items are to be posted. Note that in the model journal the debits and the credits of merchandise are dis- tributed over the entire page. Then note that in the model ledger the debits and the credits of merchandise appear under the heading of Merchandise in one section of the page, entirely apart from other items on the page. Posting brings about this classification of debits and credits under appropriate headings. The left and the right side of the ledger have the same ruling; the left is the debit side, and the right is the credit side. Now examine the posting from the model journal to the model ledger. By referring to the script set, the student has an opportunity to study posting in just the form in which it will appear in his own work. In the model journal, in each entry, the name that is debited appears first, and the credit appears second. The Jirst money column records the amount of the debit, and the second money column records the amount of the credit. All items in the first money column will be posted to the left (debit) side of the ledger ; all items in the second money column will be posted to the right (credit) side of the ledger. Now trace the posting of each debit item in the model journal to the model ledger. The first item in the journal is Cash. Turn to the Cash account in the ledger, debit side, and note the amount, the page of the journal from which the item was posted, and the date. Above the date the year is written. The page of the ledger is placed at the left of Cash in the journal. The placing of these page numbers in both ledger and journal checks the posting ; that is, shows that the posting has been completed. The next debit item is Expense. Turn to the Expense account in the ledger and trace the amount, the page, and the date. Note that the ledger page is placed at the left of Expense in the journal. In this manner trace the posting of each debit item in the journal. The first credit item in the journal is James Wilson. Turn to his account in the ledger, credit side, and note the amount, the page, and the date. Above the date the year is written. The page of the ledger is placed at the left of James Wilson's name in the journal. The next credit item is Cash. Turn to the Cash account in the ledger, credit side, and note the amount, the page, and the date. Remember to place the page of the ledger at the left of Cash in the journal. In this manner trace the posting of each credit item in the journal. Review until all is clearly understood. 18 BOOKKEEPING EXERCISE 14 ANALYSIS OF THE MODEL LEDGER The posting of the model journal has been completed. The following is a full explanation of each account in the model ledger. Each account having more than one item has been footed. (The minute figures in the accounts show this footing.) These footings should always be written in pencil. (See model ledger, page 3.) James Wilson's account : The credit shows that he invested $2000 in the business. The debit shows that he has withdrawn nothing from the business. Cash account : The debit shows that the business has received $2539. The credit shows that the business has paid out $1415.40. Expense account : The debit shows that value was received, — the use of the store, which cost $50. Merchandise account : - The debit shows that the business has bought merchandise to the amount of $1565.40. The credit shows that the business has sold merchandise to the amount of $639. D. Simons's account : The debit shows that he became indebted to the business to the amount of $244- The credit shows that he paid $144 on his indebtedness. O. Lane's account : The credit shows that the business became indebted to him to the amount of $375.40. The debit shows that the business has paid $175.40 on such indebtedness. Similar analyses of ledger accounts should be made frequently. The ledger is the book of accounts in business and is referred to very frequently for information that is wanted immediately ; therefore one should be able to understand an ordinary account almost at a glance. For this reason, strong emphasis has been placed on the analysis of ledger accounts in the very earliest stages of the student's work in bookkeeping. EXERCISE 15 TRIAL BALANCE OF THE MODEL LEDGER The script trial balance, page 4, is a trial balance of the model ledger. The trial balance is simply a list of the names and the totals of each open ledger account and shows that the debits and the credits are equal. Study this trial balance carefully, and then take a trial balance of the model ledger and compare it with the script trial balance. FUNDAMENTAL PRINCIPLES 19 EXERCISE 16 For Written Work Each student has made a copy of the model journal on a sheet of journal paper. Post this exercise, using a half sheet of loose ledger paper. Allow ten lines for each account. Write the accounts in the same order as in the model ledger. Post the model journal a second time. In posting, write the name of the month and the year at the head of each account only once, and do not use ditto marks. Post all the debit items first, and then all the credit items. After the journal items have been transferred to the ledger, the post- ing may be recheched. This checking is usually done to locate an error. Determine whether the first debit item in the journal has been posted correctly to the ledger. If it has, place a small check ( \/ ) in pencil at the left of the first money column in the journal, and at the left of the folio column in the ledger. Use a pencil for checking, and make very small check marks. These marks should not be erased. The following script illustrations will show how this checking should be done. U^^^^^U^ C, /f- f 3 / ^ Z^^l^^2/~d^^-t^^^€^'^ r » f 3/ j^/(^ /^ 9^/6 i^ .-fr/^ / rs^ 3/ (Oyc^^^^2.^^^^,^ JO/ /J ^^/ ^ J- >^Cli.'^:^^l^-6^^'^^2^^;E>^^i^^ /^(?0 /^JJ 7J 2J3 7S ^/■<^2 ^7 ^Hz ^7 *foJ 7/ / Ot^ a ^/JJ 0/ f^f 23 J//0 /^^ 66 /o^ a i? yr 3/7J 7^ 1 ^/JJ 0/ ^/J3 ^/ * To be written in red ink. SET I. RETAIL FUEL AND FEED BUSINESS The Object of this set is to illustrate in a practical manner one of the ^implest forms of bookkeeping. In the preceding illustrative work the student has recorded all transactions and entries on loose sheets of journal paper and ledger paper, but now he is given a set of bound books, in which all records will be made. I I The Books used are the journal, the ledger, and the statement book. No business forms are handled, but different forms are illustrated, and entries are made directly from them. Directions and Suggestions. In working out this set the student should observe the following : 1. For the introductory memorandum, refer to the model journal on page 2. Follow this model carefully. 2. In this beginning work it is well for the student to journalize the transactions first on a loose sheet of journal paper ; after correction, this work may be copied into the bound journal. The posting should be directly to the ledger. 3. A. M. Benton is represented as the proprietor. 4. Use the same explanatory forms as in the model journal. 5. The books should be paged consecutively, 1, 2, 3, etc. 6. Take pains in all writing ; make neat, small figures. Price List for January Article Cost Selling Price (irate Coal $6.10 $7.25 Stove Coal $6.25 $7.50 Nut Coal $6.20 $7.50 Hay $10.50 $14.50 Memoranda of Transactions for January Jan. 1. A. M. Benton, Buffalo, N.Y., began the Retail Fuel and Feed business, investing cash, $2750. 2, Paid Edward N. Shaw cash, for rent of the store for 1 mo., January, $30. 3, Bought office supplies as per bill on the following page : 41 42 BOOKKEEPING /^^^ .A^f7^jcy/ / ^y^ Jf : ^^:^^ v^ rXi^^f^yf^^ ^^ /^^...'t^^-rir^ 3 ~ -y. J^ 2.^ ^"^^^^^y^^^^^p^^^fi^. S::/^2^^^^:^y i^^r^ ^ .^ Debit Expense for the above bill. A detailed statement of goods bought or sold is called either a hill or an invoice. A detailed statement of goods bought to be used or consumed, or a statement of services rendered, is usually called a hill. Thus, a physician's statement of services rendered, and the charges for the same, is called a bill; a statement of a quantity of silk bought or sold by a merchant is called either a hill or an invoice. Jan. 4. Bought of Allen & Parker for cash : 50 T. Grate Coal 40 T. Stove Coal 5. Sold John S. Adams for cash : 10 T. Grate Coal 6. Sold A. M. Paterson on account: 15 T. Stove Coal 8. Sold John S. King for cash : 5 T. Grate Coal 9. Sold Charles M. Gray on account : 10 T. Stove Coal 35 T. Nut Coal 20 T. Hay 5 T. Hay 10 T. Nut Coal 5 T. Hay 10 T. Hay SET I. EETAIL FUEL AND FEED 43 Jan, 11. Bought of Henry A. Stevens on account: 15 T. Stove Coal 15 T. Hay 12, Received cash as shown by the following check : traders Rational ^ank \ "Pay to the order of ^^ /W^ ^^ ^^W;^^ , ^ / Z^^ M ^^y> ?..^ Jl^r^.^?^^^?^.-^---^^^^^^ ''//ffa — 'Dollars j 'C^^?Z}^ ..^L^fb-^^ ^ A Check is an order on a bank by a depositor for the payment of money. 13, Received the following note to apply on account : • : -^^.,-7^ ^ ^i>:/<':7^^^ — • - nfier date^2Lpromke to pay to the order o f ^, /Y/. ~ AX^.^^ . :^ ^ ^i7^^ — ( /~?^^y A ^.^^^ ^^ -^ (<6/ '.' ^ ^ "^ / aff ■ - -- TioUars 'Value received ^o. /r ? "Due Vz. 3 7^^^C^^^^^ %? J^-^^^ 15. Gave Henry A. Stevens a note at 10 da. to apply on account, $150 16. Bought of Johnson & Main for cash; 5 T. Nut Coal 17. The Proprietor withdrew cash for personal use, $50. 18. Gave the Monroe Typewriter Exchange cash for the following : 1 Typewriter, $50 1 Office Desk, $25 Debit Expense for this bill. 19. Received of A. M. Paterson his check for the balance of the in- voice sold him on Jan. 6, $62.50. W. Received of Charles M. Gray cash, to apply on account, $75. ^. Sold James W. Traver on account: 20 T. Grate Coal 12 T. Nut Coal 44 BOOKKEEPING Jan, 22, Bought of Lane & Son merchandise, as shown by the fol- lowing invoice : 2-^ //Z-^!L ^ . ^^;>^ ^- 'S^rf Vo ^ ^Cl^.^7^ ^^ P^^^^^Z^y- L^ kjerms (j^yar^^.^f7^^^^^ "Dr 2^ ^^^^ r- 2-y ^ UL /T-^^^ry!^^^ J^ AjL ^ 7/ 23, Received of Charles M. Gray cash for his note which is due to-day, $110. 24, Received of James W. Traver his check, to apply on account, ♦100. 25, Gave Henry A. Stevens cash for a note which fell due to-day, $150. 26, Sold A. M. Paterson on account : 5 T. Hay 5 T. Grate Coal 27, Gave Henry A. Stevens cash, to apply on account, |50. 29, Gave Lane (& Son a note at 10 da., to apply on account, $135. SI, Paid Student cash, for services to date, $20. Pass the journal sheet to the instructor for correction and criticism; then copy carefully into the bound journal. Below the last journal entry copy the following, using the form given on page 6. Inventories, January 31, 19 Merchandise : 20 T. Grate Coal $6.10 30 T. Stove Coal 6.25 18 T. Nut Coal 6.20 30 T. Hay 10.50 $122. 187.50 111.60 315. $736.10 SET I. RETAIL FUEL AND FEED 45 The student should verify the merchandise inventory. Expense : Typewriter $50 Office Desk ^ 25 Office Supplies _5 |80 Posting. Open accounts in the ledger, three on each page, in the following order : Proprietor, Cash, Expense, Merchandise. After posting, foot the accounts having more than one item, in pencil, making very small figures. Recheck the posting. Take a trial balance of the ledger, omitting all accounts that balance ; record it in Blank No. 1, on the page indicated by the index. Make a Loss and Gain Statement. Make a Resource and Liability Statement. Make a proof or verification of statement. Record the statements and proof in Blank No. 1, on the page indicated by the index. Closing the Ledger. Open a Loss and Gain account; close the Mer- chandise and Uxpense accounts into the Loss and Gain account; close the Loss and Gain account into the Proprietor s account. Balance the Cash account ; take a trial balance. Present all books to the instructor for approvaL EXERCISE 35 A Written Review The following review exercises are suggested. a. Journalizing. Journalize orally or in writing each of the following transactions, and state the reason for each debit and each credit named. 1. You began business with the following investment: cash, $1500; merchandise, |1200. When several resource items represent the proprietor's investment, each item is debited, under its appropriate name, and the proprietor is credited for the total of the resources. The following is the correct entry for No. 1 : Cash $1500 Mdse. 1200 Student $2700 Note the explanation of this entry on page 46. 46 BOOKKEEPING This is a compound entry ; it may consist of any one of the following : Several debits and one credit. One debit and several credits. Several debits and several credits. 2. Chas. E. Snyder began business with the following investment : cash, $1000; John A. Wilder's note, $950; merchandise, |1325. 3. Wm. A. Russell began business with the following resources: cash, $560 ; merchandise, $1975 ; H. H. Redding's note, $450 ; coal for use in store, on hand, $35. The following is the correct entry for No. 3 : Cash $560 Mdse. 1975 Bills Rec. 450 Expense 35 Wm. A. Russell $3020 4. W. A. Lincoln began business with the following resources : cash, $1750; account against Freeman & Co., $350; merchandise, $1275; John G. Reed's note, $500. 5. You began business with the following resources : cash, $1000 ; Geo. O. Overman's note, $400 ; merchandise, $1500 ; account against Prince & Lane, $250. 6. Gave Geo. S. Ware your note at 60 da., to apply on account, $325. 7. Gave H. M. Marshall your note at 30 da., with interest, to apply on account, $450. No entry is made for the interest until the note is paid. 8. Received of R. D. Record his note at 10 da., to apply on account, $176. 9. Received of Lyman & Son their note at 30 da., with interest, to apply on account, $275. 10. Received of Thomas & Co. cash for their note and interest; face of the note, $320 ; interest, $16. The above is journalized as follows : Cash $336 Bills Rec. • $320 Interest 16 Interest is debited when it costs something ; it is credited when it produces something. When the statement is made that we pay interest, we really mean that we pay cash for the interest. EEVIEW EXERCISES 47 11. Paid your note and interest in cash, in favor of W. D. Longman ; face of the note, |275 ; interest, $12. The above is journahzed as follows : Bills Pay. $275 Interest 12 Cash $287 12. Received of W. L. Clark cash, for his note due to-day, $187.50. 13. Received of Frank Likly cash for his note and interest; face of the note, $245 ; interest, $11. 14. Paid your note and interest in favor of James A. Boyce, in cash ; face of the note, $160 ; interest, $7.50. 15. Paid your note in favor of Geo. K. Johnson, in cash, $300. 16. Received a check of H. A. Preston for his note, $452.50. 17. Paid your note in favor of H. D. Bryan, in cash, $275. 18. Received a check from A. S. Kemp for his note and interest; face of the note, $150 ; interest, $6.25. 19. Paid your note and interest in favor of A. R. Sharp, in cash; face of the note, $200 ; interest, $9.50. 20. Gave Robbins & Co. your note at 60 da., with interest, to apply on account, $500. b. Statements. Make the two statements and the verification from the following trial balances. Observe these directions : The bills receivable are a resource. The bills payable are a liability. Interest, as an open ledger account, is always a loss or a gain item ; if the balance is a dehity the account shows a loss ; if the balance is a credit, the account shows a gain. Date each statement Feb. 28, 19 — . No. 1 Student, Prop. $5096. Cash $2443. Merchandise 952.50 200.50 Expense 100. Interest 12.25 8.50 James & Co. 397.50 Bills Receivable 500.20 Henry S. Willis 1011. John K. Searle 61.40 A. L. Gracey 101.35 Bills Payable 172. W. W. Hays 100.50 $5578.35 $5578.35 Inventories : Merchandise $794.50 Expense 76.50 48 BOOKKEEPING No. 2 Geo. M. Lee, Prop. H. K. Paine, Prop. Cash Merchandise $1061.30 2096.75 $1200. 1200. 1723.50 Expense Wm. H. Lowney J. I. Percy Arden & Co. 110.50 125.30 206.30 215.15 Jas. P. Hunter 116.25 Bills Payable Interest 15.85 125. 16.40 Bills Eeceivable 550. $4381.15 S4381.15 ntovies . Merchandise $578.45 Expense 67.20 c. Closing the Ledger. On a loose sheet of ledger paper copy the following accounts; allow ten lines for each account. Student, Proprietor 19— Jan. 10 125 19- Jan. 2.550 Merchandise 19— — 19— - — Jan. 5 1 516 20 Jan. 10 2 412 75 12 2 78 40 17 3 310 25 24 3 285 70 Expense Jan. 3 22 35 25 50 REVIEW EXERCISES 49 Inventories : Merchandise Expense Open a Loss and Gain account ; close the ledger. 1275.20 22.50 II James K. Turxer, Proprietor 19- Feb. 4 19— Feb. 26.50 Merchandise 19- — 19- Feb. 11 2 289 50 Feb. 13 2 609 20 18 3 546 70 19 3 335 23 4 715 45 25 4 255 60 - 27 5 100 Expense 19- Feb. 1 10 26 1 50 2 35 4 21 50 Interest 19— Feb. 12 12 10 19— Feb. 19 Inventories : Merchandise Expense $725.25 72.50 The model for closing the Interest account is on page 54. Open a Loss and Gain account ; close the ledger. 50 BOOKKEEPING REVIEW QUESTIONS 1. What is a business transaction ? 2. In how many ways does a business transac- tion affect the business ? 3. Define merchandise. 4. B, a dry-goods merchant, bought 3 T. coal for heating his store. Should this purchase be recorded under merchandise ? Why ? What is the name of the purchase to the merchant who sold it ? 5. Define cash. 6. Define expense. 7. Who is a debtor? a creditor? 8. Define debit; credit. 9. What is an account? 10. Name the two sides of an account. 11. What are personal ac- counts ? 12. Define a negotiable promissory note. 13. What is meant by journaliz- ing ? 14. Define bookkeeping. 15. What is the object of bookkeeping ? 16. Name the two methods of bookkeeping. 17. What is the purpose of the journal ? 18. What is posting ? 19. What is the purpose of the ledger ? 20. What is a trial balance ? From what is it taken ? 21. What facts are set forth in the trial balance ? 22. What is an inventory, and how is it found ? 23. When is merchandise debited ? when cred- ited ? 24. When is expense debited ? 25. When are personal accounts debited ? when credited? 26. When are bills receivable debited? when credited? 27. When are bills payable debited? when credited? 28. What is a gain? a loss? 29. What are resources or assets? liabilities? 30. Define net gain; net loss. 31. Define capital; insolvency. 32. Name the two general classes of accounts. 33. Name the class to which each of the following accounts belong: cash; merchandise; personal accounts ; expense ; interest ; discount ; bills receivable ; bills payable. 34. On which side of the ledger are losses found? gains? resources? liabilities? 35. What is the object of making business and financial statements ? 36. What is meant by closing an account ? 37. When are resource and liability accounts closed in business ? loss and gain accounts ? 38. Explain the process of closing a loss and gain account. 39. The accounts showing loss and gain are closed into what account ? 40. The loss and gain account is closed into what account? 41. How is the proprietor's account closed when there is a net gain ? when there is a net loss ? 42. Which side of the cash account must always be the larger when there is any difference ? of the bills receivable account? of the bills payable account? 43. What is an entry? 44. What is the difference between interest and discount ? 45. When is interest or discount debited? when credited? 46. When does a personal account show a resource? a liability ? SET II. WHOLESALE CARPET BUSINESS This set is separate from Set I, but the character of the work is similar. The books used are the same as in Set I. Directions and Suggestions. Observe the following directions : 1. First journalize on a loose sheet of journal paper. 2. James R. Denison is represented as the proprietor. Selling Price List for February Axminster $2.50 Brussels $1.35 Ingrain 75^ Linoleum 60^ Oilcloth 30^ Wilton $2.65 Memoranda of Transactions for February Feb. 1. James R. Denison, Boston, Mass., began the Wholesale Carpet business with the following resources: cash, $500; merchandise, $2595.50; fixtures, $200 ; coal, for heating the store, |15 ; the note on page 52, The following is the opening journal entry for this set : /,/f- i&^?7^-^-<^ /fr^roi >J^CiZ>^u^4.~c<^ Z(P(P<. l^e>TZ^/s^ Z / ^ s3 a c^ J 6/ (? vjT^ 2. Paid Lee & Crane cash for the following expense items : stationery, $4.50 ; office books, $3.50. S. Paid George R. Daniels cash, for rent of the store for 1 mo., Feb- ruary, $75. 4. Bought of W. B. Mason & Co., Philadelphia, on account, invoice •of carpets amounting to $572.50. 5. Bought of A. R. Prescott & Co., New York, on account, invoice of carpets amounting to $612.95. 51 52 BOOKKEEPING — v-^^^T'-l^.r^p/.^^^^Ld — — ^after datek:iLpTomise to pay to the order nf ' (/t^^^>7-7^^^ ^/(^^ z:^.^ *Value received Feb, 6. Sold W. F. Pratt, Spriiigfield, on account : 200 yd. Brussels 150 yd. Ingrain 100 yd. Axminster 6. Sold Jas. R. Holcomb, City, for cash : 100 yd. Oilcloth 40 yd. Axminster 9. Sold John W. King, City, on account : 40 yd. Oilcloth 16 yd. Linoleum 60 yd. Brussels 9, Sold M. F. Newbury, Providence, on account : 100 yd. Wilton 120 yd. Axminster 10. Remitted A. R. Prescott & Co. a note at 10 da., with interest at 6%, in full for the invoice of Feb. 5. 11. Received of Ernest B. Jackson cash for his note and interest due to-day; face of note, $300; interest, 50(f ; total, $300.50. 12. Received of W. F. Pratt his note at 10 da., with interest at 6%, $250, and the balance of the invoice of Feb. 6 in cash. IS. Sold Geo. S. Rollins, City, for cash: 100 yd. Brussels 100 yd. Linoleum 15. Bought of A. R. Prescott & Co., New York, on account, invoice of carpets amounting to $172.50. 16. Sold W. F. Pratt, Springfield, on account : 40 yd. Ingrain ^b yd. Brussels 100 yd. Axminster 16. The Proprietor appropriated for his own use : 1 Rug 14' X 18', $40 1 Rug 16' x 20', $85 20. The First National Bank presented for payment the note in favor of A. R. Prescott & Co., due to-day. Paid the note and interest in cash; face of the note, $612.95; interest, $1.02; total, $613.97. SET 11. WHOLESALE CARPET 53 Feb. 20. Sold John A. Newton, City, for cash : 70 yd. Wilton 22. Received of W. F. Pratt cash for his note and interest due to-day ; face of the note, $250 ; interest, ^.^ ; total, 1 250.4 2. 22. Bought of C. W. Allen & Co., City, for cash, an invoice of carpets amounting to $410.50. 23. Received the following check, to apply on account : traders Rational ^ank "Pay to the order of i^-7 7 ^^7-?-? ^.^ <^ i^' V(^ ^ ^i9^^~^ -^-^^^4^^^^ A^^^ ^i^^ ^ " . //r ? ^ , ~ — ■ T>ollars Under what name is this check entered ? As checks are used so commonly in business, a careful study of this form is commended. 25. Sold John W. King, City, the following (received cash, $65 ; balance on account): 50 yd. Ingrain 40 yd. Axminster Make the following entry for this sale : Debit King and credit M(he. for the whole bill ; then debit Cash and credit King for the money received. Date each entry Feb. 25. 26. Received of John W. King his note at 30 da., with interest at 6%, for the amount of the invoice of Feb. 9. 26, Remitted W. B. Mason & Co. a note at 30 da., with interest at 6%, in full for the invoice of Feb. 4. 27. Sold Lewis & Parsons, City, for cash : 200 yd. Ingrain 50 yd. Linoleum 100 yd. Oilcloth 27. Paid Student for services to date, $40 ; paid A. M. Olcott for services to date, $30. Pass the journal sheet to the instructor for approval ; then copy uito the regular journal, beguming on the page indicated by the index for Set II, in Blank No. 1. 54 BOOKKEEPING Below the last journal entry copy the followmg Inventories, February 28, 19- Merchandise : Per schedule prepared by Deiiison Expense : Fixtures on hand 12214.92 |195. Posting. Open accounts in your ledger, three on each page, in the same order as in Set I, beginning on the first full blank page. Foot the accounts in pencil ; recheck tlie posting. Take a trial balance, omitting all accounts that balance ; after approval, record it in Blank No. 1, on the page indicated by the index. Make the usual statements, and the verification ; after approval, record them in Blank No. 1, on the page indicated by the index. Closing the Ledger. Open o, Loss and Gain account; close the follow- ing accounts into it : Merchandise, Uxpense, Interest. The model for closing the Interest account is given on this page. Close the Loss and Gain account into the Proprietor s account. Close the Cash account by balance. Take a trial balance. Present all books to the instructor for approval. Model for closing Interest 7 A -7J^ r^^i^ti^ y^^^t:z..C'^n^ Z^a ZS 2/ EXERCISE 36 A Written Review The following review exercises are suggested : a. Statements. Make the two statements and the verification from the following trial balances. Date each statement March 31, 19 — , KEVIEW EXERCISES 55 No. 1 Student, Prop. $100. $2450. Expense 120. Cash 1876.25 1214.50 Merchandise 3354.75 1827.40 Chas. J. Hardy 365. Interest 8.35 13.75 Frederic & Co. 286.50 Martin & Son 235.20 Geo. L. Grace 67.40 Bills Payable 325. Bills Receivable 125. 16184.55 $6184.55 Inventories : Merchandise $1926.50 Expense 77.50 No. 2 George S. Mitchell, Prop. $100. $3400. Expense 155. Merchandise 3875.50 2300.60 Cash 2364.35 John F. Henry 308.20 Maurice & Co. 215.50 James F. Hawkins 127.75 Wm. H. Reeder 87.90 Interest 15.65 11. Bills Payable 611.45 H. H. Wyatt 320. $6946.45 $6946.45 Inventories : Merchandise $1729.55 Expense 102.50 h. Closing the Ledger. On a looser sheet of ledger paper copy the following accounts ; allow ten lines for each account. Student, Proprietor 19— Mar. 11 150 19— Mar. 2650 56 BOOKKEEPING Merchandise 19- 19- Mar. 3 1 352 55 Mar. 8 1 560 25 12 2 250 50 15 2 337 50 19 3 425 23 4 211 20 27 5 516 Expense 19— Mar. 2 11 30 2 3 5 42 35 18 Interest 19— 19- Mar. 13 5 5 60 Mar. 18 6 7 80 20 6 8 20 23 6 4 10 Inventories : Merchandise Expense Open a Loss and Gain account ; close the ledger. II James S. Cone, Proprietor $625.75 45. 19— Apr. 75 19— Apr. 3250 Merchandise 19- 19— Apr. 3 1 1256 20 Apr. 8 1 986 40 10 2 835 70 12 3 632 70 16 2 255 75 19 3 587 50 25 4 490 50 REVIEW EXERCISES Expense 57 19- — — Apr. 4 10 29 1 3 4 75 15 10 50 25 40 Interest 19- — 19— — Apr. 11 5 11 75 Apr. 17 4 9 90 14 6 5 25 24 5 15 25 22 7 3 40 Inventories : Merchandise $1070.80 Expense 62.50 Open a Loss and Grain account ; close the ledger. c. Journalizing. Journalize orally or in writing each of the following transactions and state the reason for each debit and each credit named. 1. You began business by investing cash, |1250; merchandise, |800; real estate, |1750. Real Estate includes all land, and whatever legally belongs to the land. 2. James R. Durham began business with the following resources: merchandise, $975; cash, $850; account against George H. Sand, $250; Jas. L. Perrin's note, $550 ; real estate, $750. 3. Thos. Hardy gave you his note at 60 da., with interest, to apply on account, $400. 4. You gave A. H. Wheeler your note at 30 da., with interest, to apply on account, $300. 5. Bought merchandise of Lane & Gross amounting to $650. Gave them cash for one half the invoice ; balance on account. 6. Sold James R. Mann merchandise amounting to $750. Received his check for one half the invoice ; balance on account. 6. Paid your note in favor of Harry F. Meekins, in cash, $350. 8. Received a check from Thomas Harlan for his note due to-day, $100. 9. You gave Larned & Co. cash for your note and interest due to-day; face of the note, $235; interest, $10.50. 10. Received a check from J. A. Markham for his note and interest due to-day ; face of the note, $425 ; interest, $21. 58 BOOKKEEPING 11. You withdrew from the business for personal use cash, |100. 12. Borrowed of T. K. Jones cash, |150, and gave him your note at 30 da. 13. Loaned A. H. Decker cash, |200, and received his note at 60 da. LABOR-SAYING DEVICES: DIFFERENT BOOKS USED It has been seen that all the transactions of a business may be recorded in a book called the journal. In business it is more convenient, simple, and effective to classify transactions as they occur ; this is accomplished by using the following books : The Cashbook contains a record of all receipts and all disbursements of cash. It is the cash account of the business, and when it is used no account with cash need be kept in the ledger. The left-hand page con- tams a record of all the cash debits (receipts), together with the names of the accounts to be credited^ and a brief explanatory statement. The right-hand page contains a record of all the cash credits (payments), to- gether with the names of the accounts to be debited, and a brief explana- tory statement. The difference between the two sides of the cashbook should show the amount, balance^ of cash on hand. The Sales Book contains a record of all sales on account, and usually of all cash sales, except small retail sales for which no bills are rendered. The records consist of the names and the addresses of the purchasers, the terms, the items, the prices, and the amounts of the goods sold. At regular intervals the book is footed and closed. The Purchase Book contains, usually, an abstract of all bills of merchan- dise bought. At regular intervals the book is footed and closed. When the cashbook^ the sales book, and the purchase book are used, only such transactions as do not affect these books are entered in the journal. As a preliminary drill it will be found helpful to journalize on the blackboard each cash transaction and beside it make the cashbook entry. The same plan may be followed for both purchases and sales. EXERCISE 37 SET E (MODEL SET). FLOUR AND GRAIN On pages 63 to 67 is a complete model set, in script, in which the journal, the cashbook, the sales book, the purchase book, and the ledger have been used. This set was written from the following memoranda of transactions, but different prices were used in some instances. CLASSIFICATIOX OF TRANSACTIONS 59 Directions and Suggestions. Write the set from the memoranda of transactions following; be guided by frequent reference to the model script set. 1. Use a double sheet of journal paper, four pages, and a sheet of ledger paper, two pages. 2. On the upper half of page 1 of the journal sheet write the journal^ and on the lower half the purchase hook ; on pages 2 and 3, the cash- book ; on page 4, the sales hook. On the portion of pages 2 and 3, below the cashbook, write the trial balance, the statements and the verification. 3. This set is not to be recorded in the bound books. 4. The entries will be the same as in the script model, but the amounts will differ in some transactions. 5. A. B. Coates is represented as the proprietor. Memoranda of Transactions March 1. A. B. Coates, Chicago, 111., began the Grain and Produce business, investing cash, |1500. Make a memorandum in the journal; enter the cash received by the business in the ca.shhook. 1. Paid G. H. Irving cash for rent of the store for 1 mo., $65. 1. Paid E. M. Snow cash for stationery, $6. 2. Bought of F. E. Rogers & Co., Peoria, on account, 30 da. : 500 bbl. Flour at $4 3. Bought of L. O. White & Co., City, for cash: 750 bu. Wheat at 61(^ Enter in the purchase hook, placing a check mark ( V ) in the folio (page) column against the name of the firm ; enter the cash paid on the right side of the cashbook and place a check mark in the folio column against the name of the firm. Neither entry need be posted. If the ledger is designed to show just how much business is done with each firm of whom we buy or to whom we sell, then the items should not be checked, but post- ings should be made from both the purchase book and the cashbook. When the check mark is used, as above, it means do not post. Until otherwise instructed, all purchases for cash will be entered in the purchase book and the cashbook, and checked ; all sales for cash will be entered in the sales book and the cashbook, and checked ; neither will be posted to the ledger. 5. Sold D. E. French, Joliet, on account, 20 da. : 300 bbl. Flour at $4.75 150 bu. Wheat at 89^ 60 BOOKKEEPING March 9. Bought of F. E. Rogers & Co., Peoria, on account, 30 da.: 1000 bu. Oats at 39(^ 10, Sold P. Q. Reed, City, on account, 20 da. : 200 bu. Wheat at 89(^ 11, Sold J. K. Loveless, City, for cash less 2% : 100 bbl. Flour at $4.85 200 bu. Oats at 50(^ Enter in the sales book and check ; then enter in the cashbook and check. Unless otherwise instructed, all cash purchases and all cash sales will be entered as already described. 15, Sold D. E. French, Joliet, on account, 20 da. : 500 bu. Oats at 55(f 200 bu. Wheat at S^ 20, Sold C. A. Wesp, City, for cash less 2% : 100 bbl. Flour at $4.95 300 bu. Oats at 53(f 28, Bought of M. N. Olson, City, on account, 3 da. : 1500bu. Wheat at 63^ 25, Received of D. E. French his check in full for the invoice oi March 5, $1558.50. A check is regarded as cash ; record the amount on the left side of the cashbook 26, Gave M. N. Olson cash in full for the invoice of March 23. 27, Remitted F. E. Rogers & Co., a note at 10 da., with interest in full for the invoice of March 2. 50, Received cash of P. Q. Reed in full for the invoice of March 10. 51, Paid the bookkeeper, H. C. Ray, his monthly salary in cash, $40. Balance the cashbook ; follow the model script form. Make the closing entry in the purchase book. Make the closing entry in the sales book. Post all the books to the ledger; allow ten lines for each account, as follows : 1. Post the journal in the usual way, writing J in the explanation column of the ledger to indicate the book from which it was posted. 2. Post the cashbook. The amounts on the debit (left) side should be posted to the credit of the ledger accounts named. The amounts on the credit (right) side should be posted to the debit of the ledger accounts named. Write C in the explanation column of the ledger. Write the page of the ledger in the folio column of the cashbook. Checked items must not be posted. CLASSIFICATION OF TRANSACTIONS 61 3. Post the sales book. Debit each personal account that is not al- ready checked, and credit merchandise for the total sales, the footing. Write aS' for sales book in the explanation column of the ledger. Write the ledger page in the folio column of the sales book. 4. Post the purchase book. Credit each personal account that is not already checked, and debit merchandise for the total purchases, the foot- ing. Write P for purchase book in the explanation column of the ledger. Write the ledger page in the folio column of the purchase book. Recheck the posting ; foot the ledger accounts. Take a trial balance. Remember that the balance of the cash in the cashbook must be carried tq the trial balance, on the debit side. Have the trial balance approved. Pass all work to the instructor. Note. If an additional exercise is required, use Exercise 22, Set C. EXERCISE 38 SET F. COAL AND WOOD Directions and Suggestions. This set is designed to give further drill in the use of the cashbook, the sales book, the purchase book, the journal, and the ledger. 1. Use loose sheets of journal paper and ledger paper. 2. This set is not to be recorded in the bound books. 3. Follow the directions given in the model script set. 4. Student is represented as the proprietor. Memoranda of Transactions April 1. Begin a Coal and Wood business, investing cash, |1750. 2. Rent a coal and wood depot of C. M. Estes, 17 Warren Street; give him a check for one month's rent, $75. 3. Buy of M. L. Travers for cash : 2 Work Horses, |130 each 1 Delivery Wagon, $100 1 set Double Harness, |35 1 Osgood Scales, |200 Debit Expense for the above items. 4. Buy of C. F. Osborn & Co., City, on account, 10 da. : 100 T. Egg Coal at $6 100 T. Grate Coal at $6.10 62 BOOKKEEPING April 6. Buy of Stevens & Co., Pittsburgh, on account, 10 da.: 100 T. Stove Coal at $6.25 100 T. Nut Coal at $6.20 100 T. West Virginia Coke at $5 8. Buy of C. L. Smith, City, for cash : 10 cd. Maple Wood at f 3.50 10 cd. Pine Wood at $4.50 10 cd. Body Hickory Wood at $5.50 9. Sell George H. Marshall, Homeville, on account : 50 T. Stove Coal at $7.50 50 T. Grate Coal at $7.25 11. Sell Gaylord & Son, City Point, on account : 50 T. West Virginia Coke at $6 50 T. Nut Coal at $7.50 12, Sell G. A. Collier, City, for cash less 2%: 50 T. Stove Coal at $7.50 10 cd. Maple Wood at $4.50 10 cd. Body Hickory Wood at $6.50 15. Pay C. F. Osbom & Co. cash, to apply on account, $500. 16. Receive of Gaylord & Son cash, to apply on account, $250. 17. Give Stevens & Co. a note at 30 da. with interest, to apply on account, $1000. 18. Withdraw cash for personal use, $100. 20. Receive of Gaylord & Son their check to balance account, $425. 25. Receive of George H. Marshall cash, to apply on account, $350. 27. Sell G. A. Collier, City, for cash less 2%: 10 cd. Pine Wood at $5.50 50 T. Grate Coal at $7.25 29. Pay Mary L. Pierce, the bookkeeper, her monthly salary in cash, $30 ; pay James Torrey, the teamster, his monthly salary, $30 ; E. L. Higgins for care of the horses, $16.50. Debit Expense for the above items. 30. Make an additional investment in cash, $750. Inventories, April 30, 19 — Merchandise : 50 T. Nut Coal at $6.50 100 T. Egg Coal at $6 50 T. West Virginia Coke at $4.75 Expense : Horses, Wagons, and Harness at 1% below cost, $391.05 Osgood Scales at 1% below cost, $198 MODEL SCRIPT SET Set E. Journal 63 /^iPO ^7 2-iP c? o 2-Cfff ff Set E. Purchase Book 3 f 2.3 / ^/ / / / 3 o ^eiCizy. j-^ jy^z ,r^ 3/ 3 7I^Z ^^. 64 BOOKKEEPING Set E ^^ // 30 ^z-^/^ I / ^^^^3 r ^^^3 Zj£L 2-f ^ ^ zr Set E ^^^^^^ /^ Cy?^y iPi.'C^^e^-ZyC^'^fz.^ ZiPa '^7 // / / (P i? ^^-7^-t>'. t:^^^^^-^^ "1^-^^!^ ,/7 /33 sS-fy Z^S j-o /cTJ-^ cT^ / 74^ '7 ^yJ Z^ ACAAa JzJZJlA. tA. MODEL SCRIPT SET Cashbook 65. % / 3 3/ J/ a%Ac.tiy,^ ^:U.»»:^ < -^ <^, /^-^-re^^^ A'H^^ X^^o %AA lA ^ ^ Z /J-^PO Z(P O £) Jf ^ ^^2^^^''7^l„ff-? ^^ . (^^^■^f^^X -^ /^ 7/ ^ 7^ ^±^ -Cil INTKODUCTIO:^ TO BUSINESS PRACTICE 71 N I 1 ^ / Q t- t£ ^ ^ 72 BOOKKEEPING The deposits may be recorded on the reverse, or left, stub, an illustra- tion of which is givqn on page 70. The deposits may be carried forward on the reverse stub, and then the balance shown by the check book may be readily found by finding the difference between the total deposits and the total checks. Page 71 is an illustration of a common form of check book. It shows the transac- tions of a depositor, Charles H. Jones, with The Union Bank for two consecutive days. Notice the manner of filling out the check, the important items of the check re- produced on the stub, the total after the second check has been written, and the amount of the two checks carried /orz^arrf. Great care should he taken in the writing of each check. There should be no erasures of any kind in the check book. The first figure in the amount of a check should be written close to the dollar sign ; an amount in figures should be written as follows : $15—. The first word in writing the amount should begin at the head of the line, and cents should be ex- pressed as a fraction of a dollar, as 25/100 ; any other space on this line should be filled in with a waved or broken line. It should be borne in mind that there are manifold ways of keeping a check book. The method outlined herewith is a simple one and well serves the need of the student in his work in business practice. The Left, or Reverse, Stub may be used for recording any memoranda that the depositor deems important. Deposits should be entered in the pass book by the teller of the bank at the time the deposit is made. If at any time a deposit is made with- out the pass book, a duplicate deposit ticket should be obtained by the depositor. Different banks use different methods for keeping records in a pass book. All deposits may be entered in it; at the end of the month the checks are totaled on an adding machine, the amount carried to the pass book, and the balance shown. However, it is more common, at least in large banks, to record deposits in a pass book, and at the end of each month all deposits and all checks, itemized or in total, are entered on a slip or on an envelope, and the balance shown as a monthly statement. This statement, together with all canceled checks, is given to the depositor and constitutes a statement of his dealings with the bank for a given month. In this text, in business practice, all deposits will be entered in the pass book at the time they are made. In the package of business forms, an envelope is provided for each month on which a monthly statement of the bank account should be made. Upon this envelope the student's name should be written, and a§ pbecks are drawn they may be filed in it. INTRODUCTION TO BUSINESS PRACTICE 73 We UNION BANK STATEMENT OP ACCOUNT DATE CHECKS DATE DEPOSITS ^^J ^ Zot) Balance / yj -_ //L^y>^. ' ^ 10^f9 , /7 / / / 7 ,r^ /C Zoo ^ /a ^/ .^.^0 X.S 7-Z r 7^ ■ Z3 11 ZS / ^ Z^ //^ U Za i/a ^0 / 2 /r(? 3/ 3 / ?-^^ - TOTALS: DEPOSITS Zy.fo Z.f CHECKS (^r3 i/0 TOTAL C^3 1^0 BALANCE l^(p 6 ^ tJ At the end of a month a statement of the student's bank account should be made on the outside of this envelope, recording simply all deposits and all checks, as shown in the above illustration, and the balance. 74 BOOKKEEPING The deposits in the pass book may be totaled and the checks, in total, subtracted therefrom, thus showing the balance in the pass book. Place all the checks in the envelope. This constitutes a complete monthly statement of the student's bank account. EXERCISE 39 TRANSACTIONS WITH A BANK Make the following blank forms : rule lengthwise two sheets of paper about 6x8 inches ; rule two checks, two stubs, and the reverse stub on each sheet. This represents a page of a check book and the reverse stub. Follow the models given on page 71. Under date of March 1, enter on the reverse stub of the sheet just ruled a deposit of $1500. Under date of March 9, write a check for |250, in favor of Henry S. Lee, No. 1. Fill out the stub first and then write the check. Under date of March 13, enter a deposit of |150. Under date of March 16, write a check for $137.50, in favor of Wm. G. Howe, No. 2. Remember to fill out the stub first. Forward the total deposits to the reverse stub, and the total checks to the regular stub, on sheet number two. Under date of March 19, write a check for $100, in favor of E. T. Perry. Under date of March 23, enter a deposit of $75. Under date of March 30, write a check for $28.40, in favor of Amos H. Wells. What balance now remains in the bank ? This exercise may be continued at the discretion of the instructor. EXERCISE 40 BUSINESS FORMS Boston, Mass., .)^.^?^x a, /9.r:z l^eceioed o f ^^^^^^^-^^^^<^1^. '^XJ^^^.r-c^- $ 2^/^"-^ ^-^^^^^^/-^^^^^^^^^.^^.^-^^ INTRODUCTION TO BUSINESS PRACTICE 75 The Receipt. Study the model receipt, page 74, in every detail. Write the following receipts on slips of paper properly ruled ; S. T. Wade owes you $56.75, and pays the whole amount. The receipt bears these words: in fall of account. R. O. Warner owes you 1120.50, and pays you $75. The receipt bears these words : to apply on account. You owe John Wheeler |102.50, and pay it all. You owe J. H. Leaman $62.50, and pay him $35. Near the bottom of page 19 is an open ledger account with J. A. Lyons. Write the receipt that he should give you, assuming that you pay the account in full. The Invoice. This model shows how an invoice should be made out when goods are bought or sold. The terms are on account^ 60 da., there- fore it is not receipted. -<■ /9- — ^^^^:^^J.yJ^ ^^^^ ^Ci Co..^:^^^i^^/>r?^^i^h^ :;^0^,.<^-^C-' ©r. ^erms r^^ ,;?^^^ p .-/c^^^-^l^.^ .y^ -6^^^^^^.^^ vr.^^ / .rr r^^ / ^ -^?^2^-,5zuy -^^ y^^-^^Jj^TC-^^ ^^^ / r / ? T . -r ^^^^..A^^^ y^ ^^ r -X^^ ^^^£^^^^^^,/^-^ / r.9 >?>? ^^/9 1 ^r (^ (^^^. ^ ^^, ^Y'"^ ^ ^-^^ ^' ^ In this invoice who is the buyer ? the seller ? What is meant by terms 60 da. ? Note that the dollar sign is not used in writing either the prices or the exten- sions on an invoice. 76 BOOKKEEPING This model invoice is receipted because the terms are cash. o^^^ 2^^^-^^ ^0 Q-^^^^^^^^^L^^K^^/^'-^^t^^,.^^ 7)i .JL — g^y^^ (ry.-^r^l^'r^-^^^ .^ .AT 7^ ^^ -V^ 2^r^.£ ^-^-^^^ M2. 7^ s-^ ^JL ry^^y^ .f^ ^ Z^ ( j"-^^ ',^t>rz<^?^^ /J-.' .Jul / .? / ^^ ^^^^^^ / Z^-;/ pfl Z^^ 7^ ^.^■■C>!:^-^:^z-r^^^i^^^^ ^r^^Ct^^^.--?-'../^7:^^.^-p'%^:^-'i^^<^ <^ Study these model invoices in every detail, then rule two sheets of paper according to the model, and write the following invoices. Do your best work, — good writing and neat, legible figures. Turn to Set I, page 42, and write the invoices under the dates of Jan. 4 and 9. Turn to Set II, page 52, and write the invoices under the dates of Feb. 6 and 9. Filing Invoices. For convenience in handling, invoices may be folded lengthwise with the printed matter outward. The manner of folding the invoice (noted above) is not imperative. The invoice may be folded lengthwise, the printed matter within ; on the left end write the name of the seller, the amount in figures, and the date. For the student's work in business practice the first method is recommended. After the invoices are folded a rubber band may be placed around them, and then they are in a convenient form for handling. The filing should be in the order of the dates. These suggestions are simply for the students in the classroom. INTRODUCTION TO BUSINESS PRACTICE 77 The Promissory Note. Study all the details of the following model note : — <^^/^C^>^^^^^ ^?^;g^y^:.^^ —- - — - after datcLj. promise to pay to the order nf yA^t7-7--7^^^<^^ c^<^^.^^>^^^^ Z^-^^^g^- ^~^^.A-i^^/^J^^-^A^^.<^.^^:^^.^f:^ .T>oll ars K^^^^-:^.-^^^^^^ at. Value received Z^ -^r^C^.^fP-^^-rpr^ 7^-^;C^!^^,^^^^. ~- ^-^^/.yr -T'^^Y^^^^^^^^ jM^^^^^.^^ Who is the maker of this note ? the payee ? Does it draw interest ? When is the maturity of the note ? Who holds this note hefore maturity ? After it is paid who will hold it? Why is this called ^, promissory note? Write the following notes on slips of paper. Use the current date. 1. Gave Henry A. Morton your note, at 60 da., with interest, payable at the First National Bank, |250. 2. Received of Henry S. Mercer his note, at 30 da., payable at The Union Bank, |128.50. 3. Gave Wilson & Brown your note, at 2 mo., payable at your office, $175.20. 4. Received of A. D. Rose & Son their note, at 1 mo., with interest, payable at their office, |200. The Purchase Book. The following model represents a purchase book, — a book in which all purchases may be recorded. Model Purchase Book INV. NO. DATE NAMES AND ADDRESSES TERMS AMOUNT F / i^^a^^^. ' / - 30 ^/t^i^ U2 /V ■ 2 ^^^e^z. ■z^ 2 A /<^ .^Z^^Z--^ SO - J £:i 6^0 so> y ^^^.^.^^Si^' /7^J J^ 78 BOOKKEEPING Various books are designed for recording purchases, but the illustra- tion given on page 77 shows the general plan of any book that may be used for this purpose. In the more advanced portion of this work an invoice hook will be introduced. The posting of this book is explained on page 61. Daily Cash Proof. In the following sets the student will use repre- sentative money in carrying out his business transactions. At the close of each day's business cash should be proved. DAILY CASH PROOF Name / J' ^ ^. Cash received per cashbook, total ^jT ^ Q; ^ ^ Cash paid per cashbook, total Balance per cashbook Cash on hand per cash drawer Cash in bank per check book Total ^^ How to prove oiisfas 1. The left side of the cashbook shows all cash received. 2. The right side of the cashbook shows all cash paid out. 3. The difference shows the amount of cash the busmess has on hand. 4. The money in the cash drawer added to the amount in the bank should equal the difference shown by the cashbook. 5. If no bank account is kept, the cash in the drawer should equal the difference shown by the cashbook. 6. If all money is in the bank, the true bank balance should equal the balance shown by the cashbook. It is suggested that the above form of proof be used. INTRODUCTION TO BUSINESS PRACTICE 79 EXERCISE 41 THE TRIAL BALANCE Thus far all trial balances have been made by taking the footings of the debit and the credit items of each account, omitting all accounts that balanced. It is a common practice for bookkeepers to take a trial balance by using the balance of each account. This form of trial balance is illus- trated herewith. Refer to the model trial balance, page 4 ; compare it with the following trial balance : Trial Balance, January 31 , 19- - James Wilson 2000 Cash 1123 60 Expense 50 Mdse. 926 40 D. Simons 100 0. Lane 200 2200 2200 To find Errors in the Trial Balance. If the debit and the credit items are not equal, that is, do not balance, observe the following suggestions in tracing the error : 1. Go over all additions, both in the trial balance and in the ledger. 2. Find the exact amount of the error ; if ten or some power of ten, the error is usually in addition. 3. If the amount of the error is exactly the same as some amount in the journal, the trouble is likely to be with that amount. 4. Divide the amount of the error in the trial balance by 2, and look for an amount corresponding to this result. If a debit item has been posted to the credit, it will cause an error equal to twice the amount of the item thus posted. 5. If the amount of the error is divisible by 9, the error is probably the result of the transposition of figures. 6. If necessary, recheck the posting to determine if that work was done correctly. (This manner of rechecking is described on page 19.) Rechecking involves a great deal of extra work ; it should be undertaken only as a last expedient. A trial balance that balances is not absolute proof that the ledger is correct. If a credit of Merchandise was posted to the credit of Cash, it would not affect the trial balance. SET III. GRAIN AND SEED BUSINESS WORK FOR MARCH The Object of this set is to give systematic drill in elementary business practice. Student is represented as the proprietor. Business forms are used, and all transactions in cash admit the handling of currency. An account is kept with the bank, deposits are made and checks are drawn. This set covers a period of two months, March and April, the books being closed at the end of each month. The Books used in this set are the journal, the cashbook, the sales book, the purchase book, the statement book, and the ledger. All business forms handled are either Incoming Papers or Outgoing Papers. Incoming papers are those received from others ; outgoing papers are those given to others. Incoming papers will be received and recorded by the student as in business, and he will issue and record all outgoing papers as in business. Different selling price lists may be used if desired. Twenty-five selling price lists are provided for this set. When the in- structor gives the student the necessary blank forms he should assign him a price list. Any one of the selling price lists may he used in connection with the buying price list Selling Price Lists ARTICLE 1 2 3 4 6 6 7 8 9 10 11 Clover Seed . . 3.70 3.65 3.80 3.75 4.00 3.88 3.68 3.73 3.79 3.71 3.78 Dwarf Beans . . 4.20 4.30 4.15 4.25 4.15 4.38 4.33 4.38 4.44 4.21 4.43 Field Corn . . .48 .50 .48 M .46 M .53 .58 .64 .49 .63 Garden Corn . . 1.90 1.95 1.90 1.80 1.80 2.08 1.98 2.03 2.09 1.91 2.08 Millet, Common . .98 1.05 .95 .98 .90 1.16 1.08 1.13 1.19 .99 1.18 Oats .34 .37 .33 .38 .40 .52 .40 .45 .51 .35 .50 Spring Rye . . 1.10 1.16 1.06 1.15 1.05 1.28 1.19 1.24 1.30 1.11 1.29 Timothy Seed . 2.40 2.50 2.40 2.50 2.65 2.58 2.53 2.58 2.64 2.41 2.63 Wheat . . . . .90 .96 .90 1.00 1.00 1.08 .99 1.04 1.10 .91 1.09 After a price list has been assigned, copy it for ready reference. Ask the instructor for Business Forms^ No. i, and then proceed to write Set III. Directions and Suggestions. This set may be written in any of the following ways: 1. Simply record the transactions as in the preceding sets. 80 SET III. GRAIN AND SEED 81 2. In addition to recording the transactions, all business forms may be used. 3. In addition to recording the transactions, using the forms, etc., all the business called for may be done, such business to be transacted according to the directions of the instructor. The memoranda and all directions are given, so that complete business practice may be used if desired. 4. Prove the cash at the close of each day. (See model, page 78.) 5. If the tablet of Incoming Business Forms is not used, make out the forms on page 82 and file them in the envelope for Incoming Papers, before beginning Set III, and use them instead of the tablet. Unless otherwise instructed, keep the cashbook on a loose sheet of journal paper and copy at the close of the month. All other work may be recorded directly in the required books. Incoming Business Forms for March These incoming forms are included in the text for the following reasons : 1. All material in any given set is included in the text proper. 2. The student is able to make a study of the work of the set before attempting to write it ; this is especially important. 3. By having all matter included in the text, extended and varied reviews are made possible. for March and April 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3.80 3.80 3.84 3.76 3.89 3.69 3.74 3.81 3.72 3.82 3.81 3.83 3.85 3.77 4.30 4.45 4.34 4.26 4.39 4.34 4.39 4.46 4.22 4.47 4.31 4.48 4.35 4.27 .58 .65 .62 .54 .67 .54 .59 .66 .60 .67 .59 .68 .63 .55 2.00 2.10 2.04 1.96 2.09 1.99 2.04 2.11 1.92 2.12 2.01 2.13 2.05 1.97 1.08 1.20 1.12 1.04 1.17 1.09 1.14 1.21 1.00 1.22 1.09 1.23 1.13 1.05 .44 .52 .48 .40 .53 .41 .46 .53 .36 .54 .45 .55 .49 .41 1.20 1.31 1.24 1.16 1.29 1.20 1.25 1^ 1.12 1.33 1.21 1.34 1.25 1.17 2.50 2.65 2.54 2.46 2.59 2.54 2.59 2.66 2.42 2.67 2.51 2.68 2.55 2.47 1.00 1.11 1.04 .96 1.09 1.00 1.05 1.12 .92 1.13 1.01 1.14 1.05 .97 A tablet, separate from the text, containing all the incoming business forms, is available for use with this set when business practice is used. All incoming checks are drawn on Traders National Bank. If business practice is not used, the tablet of incoming forms and the package of blank business forms will not be needed. 82 BOOKKEEPING In Set III all merchandise is to be bought at the following prices, per bushel : Clover Seed $3.50 Dwarf Beans $4 Field Corn 44^ Garden Corn $1.75 Millet, Common 90<^ Oats 30^ Spring Rye Timothy Seed $2.25 AVheat 80(^ Form 1. Invoice of E. C. Ferry, City, March 2. Terms : cash. 50 bu. Clover Seed 100 bu. Field Corn 100 bu. Oats Form 2. Invoice of S. D. Welch, City, March 5. Terms : on account. 20 bu. Dwarf Beans 40 bu. Garden Corn 100 bu. Millet 100 bu. Wheat Form 3. Receipt of Amos Graves, March 7, in your favor, for rent of the store for March, $35. Form 4. Bill of David Ross for office books and stationery, March 8. Office Books, $8.50 Stationery, $4 Form 5. Invoice of Henry Bruce, City, March 10. Terms: on account. 100 bu. Spring Rye 50 bu. Timothy Seed Form 6. Bill of I. N. Moss, City, for 2 T. coal at |5.20, March 11. Terms: cash. Form 7. Bill of A. C. Webb, City, for office safe, |75, March 12. Terms: cash. Form 8. Invoice of Haynes & Co., City, March 14. Terms : on account. 30 bu. Dwarf Beans 100 bu. Spring Rye 200 bu. Field Corn 200 bu. Wheat 100 bu. Millet Form 9. Check of Boyd & Co., City, for |200, in your favor, March 23. Form 10. Invoice of S. D. Welch, City, March 24. Terms: on account. 10 bu. Dwarf Beans 100 bu. Millet 100 bu. Field Corn 100 bu. Oats 20 bu. Garden Corn Form 11. Invoice of Henry Bruce, City, March 25. Terms: on account. 100 bu. Spring Rye 200 bu. Wheat Form 12. Note of Jesse Watson, City, for $180, in your favor, at 30 da., with interest, March 29. Form 13. Check of John Wells, City, for |100, in your favor, March 29. Form 14. Check of Oscar Wilson, City, for $242, in your favor, March 31. SET III. GRAIN AND SEED 83 Memoranda of Transactions for March March 1. Begin the Grain and Seed business, investing cash, $2400. Place the above memorandiiiii in the journal, hut make no journal entry. Make the proper entry in the cashbook. Receive the currency from the instructor and put it in the Business Cash envelope. 1. You have entered into an agreement with Amos Graves for the rental of his store, at 120 Main Street, at $35 per month. No entry is required. A memorandum of this agreement may be made and filed with the incoming papers. 2. Buy of E. C. Ferry, City, for cash, merchandise as per invoice, Form 1. Remove this invoice from the tablet of Incoming Papers. Note the extensions and the addition. In business, the goods received are compared w^ith the invoice, and if found to be cor- rect, check marks are placed at the left, as shown in the following script illustration ; then the extensions and the addition are verified and checked as sliown at the right. Verify the extensions and the addition. Make the proper entries in the cashbook and the purchase book. These items should be checked in each. The check mark means do not post. In the j)urchase book write the name, the address, the terms, and the amount on one line. Pay for the invoice. Fold the invoice once lengthwise, face outward, and place it in the Paid Bills envelope. •Co ^^^.^.^^, r- T>r, ^erms ~ ^^ , ^y _£S -r^^y . ■fy^-^^- ■^^L. /7<^'- — -^ iyTTf.^. ^.-iri..'<>^y Zd^^ "7 ^ — ( ^^f T :B4 BOOKKEEPING March 3, Sell John Williams, City, for cash, at the prices given herewith : 20 bu. Clover Seed at $3.70 50 bu. Field Corn at ^^ 40 bu. Oats at 34(^ Make out an invoice and receipt it. If correct in every detail, record it in the sales book and the cashbook, and check in each. Do not put any check marks on any bill of goods that, you sell. Receive the cash and place it in the Business Cash envelope. Pass the bill to the office, or dispose of it according to directions received. Take great pains in counting all cash. 4. Deposit in The Union Bank cash, $2000. Read pages 68 and 70 for instructions. Make out a deposit ticket. Record the amount in the check book, on the reverse stub. Place the currency and the deposit ticket in the pass book, and hand it to the bank. 5, Buy of S. D. Welch, City, on account, merchandise as per invoice, )Form2. Remove the invoice from the tablet. Check the extensions and the footing. I Record it in the purchase book. Fold and place it in the Unpaid Bills envelope. Do not receipt this invoice. Why ? 6. Sell John Wells, City, on account : 5 bu. Dwarf Beans 20 bu. Garden Corn 50 bu. Millet Write the invoice, but do not receipt it. Why ? Use the selling prices of the list assigned to you. Record in the sales book. Refer to the model, page 64. Dispose of the invoice according to directions received. 7. Pay Amos Graves cash, for rent of the store for March, |35, Form 3. Remove this receipt. Make the entry in the cashbook. Pay the money. Place the receipt in the Paid Bills envelope. 8, Pay David Ross cash, for office books and stationery, $12.50, Form 4. Examine and check the bill. If correct, pay it. Make the entry in the cashbook. Fold the bill and file it in the Paid Bills envelope. 9, Give S. D. Welch your check, to apply on account, $200. Fill out the stub in the check book. No. 1. (See model check book, page 71.) Write the check and detach it. Make the entry in the cashbook. A receipt need not be taken when an amount is paid by check, as the canceled check will be returned as a receipt. However, a receipt may be taken if desired. In the package of business forms there is an envelope for keeping a record of your dealings with the bank for one month. SET III. GRAIN AKB SEED 85^ If the checks are passed to an office, this envelope should be left at the office. The form and the use of this envelope are illustrated and explained on page 73. Place the student's name on the envelope. As checks are received, they may be filed therein. If the checks are kept by the student at his desk, he may keep the envelope and do this work himself. March 10. Buy of Henry Bruce, City, on account, merchandise as per invoice, Form 5. * Remove this invoice from the tablet. Examine and check as previously instructed. Enter in the purchase book. Fold and file the invoice. 11. Pay the bill of I. N. Moss in cash for 2 T. coal at $5.20, Form 6. Remove the bill from the tablet. Examine and check it. If correct, pay it. 12. Pay the bill of A. C. Webb by check, for office safe, $75, Form 7. Remove the bill from the tablet. Total the two checks and carry the amount forward to the top of the next regular stub. 13. Receive of John Wells cash, to apply on account, $100. Write a receipt in favor of John Wells and receive the currency. Make the cash- book entry. Place the money in the Business Cash envelope. 14. Buy of Haynes & Co., City, on account, merchandise as per invoice, Form 8. Examine and check the invoice, and then proceed as usual. Id. Sell Boyd & Co., City, on account : 100 bu. Field Corn 50 bu. Spring Rye 100 bu. Millet 10 bu. Dwarf Beans Write the invoice and record it in the sales book. 16i Deposit currency, $200. Make out the deposit ticket. Record it in the check book, on the reverse stub. The total of the deposits may now be carried forward to the top of the next reverse stubl Place the currency and the ticket in the pass book and hand it to the bank. 17. Pay Henry Bruce by check, to apply on account, $112.50. Write the check and make the entry in the cashbook. How do you dispose of the check? 18. Sell Howard Young, City, on account, at the prices given herewith : 20 bu. Clover Seed at $3.65 10 bu. Timothy Seed at $2.50 Write the invoice and record it. 19. Sell Jesse Watson, City, on account, at the price given herewith : 200 bu. Wheat at 90(^ 86 BOOKKEEPING March 20. Withdraw cash, for personal use, $50. Take $50 in currency from the Business Cash envelope and place it in the envelope for Personal Cash. Make the entry on the right side of the cashbook. Under what name will you enter it ? 2S, Receive of Boyd & Co. their check, on account, $200, Form 9. Remove the check and enter it in the cashbook. Place the check in the Business Cash envelope. ^S. Pay Haynes & Co. by check, to apply on account, $500. Write the check and make the entry. 24. Buy of S. D. Welch, City, on account, merchandise as per invoice. Form 10. Examine and check it. 25. Buy of Henry Bruce, City, on account, merchandise as per invoice. Form 11. 26. Sell John Wells, City, on account : 50 bu. Spring Rye 150 bu. Wheat 27. Give S. D. Welch your note at 8 da., to apply on account, $100. Write the note, payable at my office. The note which you write will be similar to the script form given herewith. The signature will be your name. .. ■^— — Co^^^i^-^^^.^.,^^^^^^ ajler dalt^:X-prom\se. to pay to iht order n f — J>^. ^/~ ^K?. ( />>^ j"^ A^^.y^ ^^ ^^ V/a^ ■ ■ T>ollars at ^^7^^^^ ^^ r r;^^ ^^r ^y '—-•' ^- = 7 -rv 'Oalue received ^o.-JL 'Due "V^ x- 7Y-r.^^^j ( r XvJ e ^ --^^^-^-^^^^ Make the entry in the journal. Dispose of the note according to directions received. 28. Sell Boyd & Co., City, on account: 100 bu. Wheat 10 bu. Clover Seed 5 bu. Dwarf Beans 10 bu. Garden Corn Write the invoice. What record is made ? 29. Receive of Jesse Watson his note at 30 da., in full of account. Form 12. Remove the note from the tablet. Make the journal entry. Place the note in the Unpaid Bills envelope. SET III. GRAIN AND SEED 87 March 29. Receive of John Wells his check, on account, |100, Form 13. Remove the check and enter it in the cashbook. Place the check in the Business Cash envelope. 31. Sell Oscar Wilson, City, for cash, at the prices given herewith, receiving in payment his check, Form 14. 50 bu. Field Corn at ^^ 100 bu. Oats at 34*^ 10 bu. Garden Corn at $1.90 150 bu. Spring Rye at $1.10 • Write the invoice and receipt it. Record it in the sales book and the cashbook, and check the item in each. Remove the check and place it in the Business Cash envelope. 31. Deposit the three checks and all the currency on hand. Take the currency and the checks from the Business Cash envelope ; count the currency and make out the deposit ticket. Indorse each check, as shown in the following illustration : 9a^ /9— /ATo. /.5^ \. "Bank ^ n^rk 11 nr^ t \v ^.OhJ/^^ The full indorsement, shown in the accompanying illustration, is the one most commonly used in business, and some banks and the clearing houses insist that this form must be used. The Uank indorsement is simply the writing of one's name on the back of the paper. ^See page 90.) 88 . BOOKKEEPING Place the currency and the checks in the pass book and hand it to the bank. Examine the pass book to see that all is entered correctly. March 31, Give Henry T. Dale, your clerk, a check for his salary, $30. Write the check and record it. At this point the monthly bank statement should be made. If the deposits and the checks have been passed to an office, these instructions should be followed by the one in charge of that work; if not, the student may make the statement himself. Proceed as follows : Enter all deposits and all checks on the outside of the bank envelope, in which the checks have been filed from day to day. Refer to page 73 for illustrations. Total both the deposits and the checks and find the balance. Place the checks in the envelope. Total the deposits in the pass book, subtract the total checks therefrom, enter the balance, rule and foot. Bring the balance down under April 1. Before closing the books, hand them to the instructor for inspection and approval. Record the following in the journal, in the usual form, at the cost price. Inventories, March 31, 19 — Merchandise : 40 bu. Dwarf Beans 60 bu. Oats 200 bu. Field Corn 60 bu. Spring Rye 20 bu. Garden Corn 40 bu. Timothy Seed 150 bu. Millet 50 bu. Wheat Expense : Office Safe $75. Office Books 8. Office Supplies 2.75 Coal 6.40 $92.15 ■ Closing the Work for March Close each of the following: the cashbook, the sales book, arid the purchase book. Refer to pages 63 to 65. Post the books to the ledger, three accounts to the page, as follows : 1. Post the journal, writing J'm the explanatory column of the ledger. 2. Post the cashbook, writing C in the explanatory column of the ledger. 3. Post the sales book, writing S in the explanatory column of the ledger. EEVIEW EXERCISES 89 4. Post the purchase book, writing P in the explanatory column of the ledger. Foot the ledger accounts. Take a trial balance, using only the balance of each account. (See page 79.) Do not forget the balance of cash from the cashbook. Have the trial balance approved ; record it in Blank No. 1, on the page indicated by the index. Make the two statements and the verification ; after approval, record them in Blank No. 1, on the page indicated by the index. Close the ledger. Take a second trial balance. Submit all work to the instructor for approval. When the monthly statement of your bank account has been com- pleted, compare each check with the stub in the check book ; if they agree, put a large check mark on the stub. This shows that the check issued has been returned canceled. Does the balance of your monthly bank statement agree with the balance shown in your check book ? Place the canceled checks in the Paid Bills envelope. EXERCISE 42 A Written Revietw The following review exercises are suggested : a. Journalize orally or in writing each transaction in March. h. Use trial balances 1 and 2, page 28. Make the two statements, using $25 for the expense inventory in each statement. c. Use Exercise 31, I and II, pages 33 and 34 for closing the ledger. INDORSEMENTS An Indorsement is the writing of one's name on the back of commercial paper with the intent to transfer the title or to assume legal responsi- bility for its payment. Sometimes a payment of interest, or a partial payment of the face, is recorded on the back of an instrument. Tlie Object of indorsement is to effect a transfer of the title, or to make the indorser conditionally liable for payment, or both. Indorsements are made by using a rubber stamp or by writing. The indorsements most commonly used are the special or full, the hlank, the qualified^ and the restrictive. 90 BOOKKEEPING Special /a^.^-?^kr1^^t^i^L6^^t'--l-z^ Blank Qualified or A special indorsement names the indorsee ; the instrument could not agam be negotiated without the indorsee's indorse- ment. A blank indorsement names no indorsee. Any holder may, how- ever, convert this into a special indorsement by writing ''Pay to Qiu name) or order" above the blank indorsement. A qualified indorsement simply passes the title without rendering the indorser liable. In form, this indorsement may be either in blank or special. A restrictive indorsement con- stitutes the indorsee an agent, of the indorser, usually for the col- lection of the paper. This form of indorsement is not com- mended by banks and clearing houses. Note the indorsement on page 87. All commercial paper offered for deposit at a bank must be in- dorsed, and the special indorse- ment is most commonly used. This form is a protection to the lawful holder because the payee is named, and payment will be made only on his order, by in- dorsement. If a check or a note bearing a special indorsement is lost or stolen, it is valueless to such a holder. When one has a check cashed at the bank, the blank indorsement may be used, as the check will be canceled as soon as cashed. As the qualified indorsement relieves the indorser of responsibility for payment, commercial paper bearing this indorsement should be accepted with great caution. ^'''/^^yy^^C^ri:^'?^^^^^^ Restrictive SET III. GRAIN AND SEED BUSINESS WORK FOR APRIL The memoranda following are a continuation of the memoranda foi March. No new principles are introduced, and the familiar business forms are used. As such full and explicit instructions were given in March, much explanatory matter will be omitted in April. If anything is not understood, refer to a similar transaction in the preceding month. Directions and Suggestions. The following general directions should be observed: 1. Use the same price list, the same books, etc., as in March. 2. Begin a new page in the journal. In the sales book leave a space of three lines, then write the first sale in April under the last sale in March. 3. The balance brought down from the March cashbook, under April 1, is to be reckoned with the cash receipts in April. Use a new envelope for the bank account. Record the balance at the head of the deposit column. Incoming Business Forms for April Form 15. Invoice of Henry Bruce, City, April 6. Terms: on account. 50 bu. Clover Seed 300 bu. Oats 50 bu. Garden Corn 100 bu. Millet Form 16. Invoice of S. D. Welch, City, April 9. Terms : on account 200 bu. Field Corn 100 bu. Spring Rye 200 bu. Wheat Form 17. Invoice of C. V. Cronin, City, April 11. Terms : cash. 50 bu. Timothy Seed Form 18. Note of Boyd & Co., City, for |100, in your favor, at 10 da., April 14. Form 19. Check of Howard Young, City, for |145, in your favor, April 15. Form 20. Check of Boyd & Co., City, for $165, in your favor, April 23. Form 21. Check of Boyd & Co., City, for |100, in your favor, April 24. Form 22. Invoice of Smith & Bowers, City, April 25. Terms : cash. 20 bu. Dwarf Beans 200 bu. Field Corn 50 bu. Garden Corn 91 92 BOOKKEEPING Form 23. Check of Jesse Watson, City, for $175, in your favor, April 27. Form 24. Check of Jesse Watson, City, for $180.90, in your favor, April 28. Form 25. Check of Howard Young, City, for $90, in your favor, April 29. Memoranda of Transactions for April April 1, Give Amos Graves your check for the rent of the store for April, $35. 1. Give Henry Bruce your check in full of account. Turn to Henry Bruce's account in the ledger and find tlie balance of his account; write the check for this amount. 5. Receive of Howard Young cash, in full of account, $98. Turn to Howard Young's account in the ledger and verify the balance. Write the receipt and get the money. Enter it in the cashbook. 4, The note in favor of S. D. Welch falls due to-day ; pay it by check. Write the check. Pass it in and receive the canceled note. The note will be can- celed by writing across the face, Paid April 4, 19 — . Make the entry in the cashbook. What account is debited in the cashbook? Place the canceled note in the Paid Bills envelope. 6. Buy of Henry Bruce, City, on account, merchandise as per invoice. Form 15. Remove the invoice from the tablet and proceed as usual. 7. Sell Howard Young, City, on account, at the prices given herewith: 100 bu. Field Corn at 480 50 bu. Millet at 980 20 bu. Timothy Seed at $2.40 9, Give S. D. Welch your check, to apply on account, $200. 9. Buy of S. D. Welch, City, on account, merchandise as per invoice. Form 16. 10. Sell Boyd & Co., City, on account : 30 bu. Garden Corn 20 bu. Clover Seed 100 bu. Oats 11. Buy of C. V. Cronin, City, for cash, merchandise as per invoice, Form 17. Check the invoice ; if it is correct, write a check in payment. 12. Sell P. H. Morse, City : 20 bu. Timothy Seed 100 bu. Field Corn 100 bu. Wheat SET III. GRAIN AND SEED 93 Receive cash, $125; balance on account. Write the bill. Terms : cash, $125 ; balance on account. Enter the entire bill in the sales book, and the cash received in the cashbook as a receipt on account. Neither entry should be checked. Why? Record the amount of the cash on the bill and receive the money. April 13. Receive of Boyd & Co. their note at 10 da., to apply on account, $100, Form 18. Place the note in the Unpaid Bills envelope. 13. Give Henry Bruce your note at 30 da., to apply on account, $200, payable at his office. 15. Sell Jesse Watson, City, on account : 20 bu. Dwarf Beans 50 bu. Spring Rye 50 bu. Millet 10 bu. Timothy Seed 15. Receive of Howard Young his check for invoice of April 7, $145, Form 19. 17. Deposit the check and all currency on hand except $25. 18. Give S. D. Welch your check in full for the invoice of April 9, $348. Verify the amount by referring to the purchase book. 19. Sell Howard Young, City, on account, at the price given herewith : 100 bu. Wheat at 90^ 20. Sell F. G. Morgan, City, for cash, at the prices named herewith : 10 bu. Clover Seed at $3.70 10 bu. Timothy Seed at $2.40 Write a receipted bill and enter it in the sales book and the cashbook ; check the item in each. Pass in the bill and receive the currency. 'Bl. Sell Boyd & Co., City, on account : 30 bu. Timothy Seed 20 bu. Garden Corn 50 bu. Millet ' 40 bu. Spring Rye 22. Sell Jolin Wells, City, on account : 200 bu. Oats 50 bu. Millet 100 bu. Field Corn 23. Receive of Boyd & Co., their check, to apply on account, $165, Form 20. 24. Receive of Boyd & Co. their check in payment of their note due to-day, $100, Form 21. Enter the amount of the check in the cashbook. Under what name ? Cancel the note and pass it in. 94 BOOKKEEPING April 24. Deposit the two checks and all currency on hand. Indorse the checks. 25. Buy of Smith & Bowers, City, for cash, merchandise as per in- voice, Form 22. Examine and check the invoice; if correct, pay it by check. Enter in the purchase book and the cashbook, checking the item in each. 26. Sell Johnson & Pease, City, for cash, at the prices named herewith: 10 bu. Dwarf Beans at $4.20 100 bu. Eield Corn at 48(^ 25 bu. Garden Corn at |1.90 After entering the invoice in the required books, receipt it, pass it in, and receive the currency. 27. Receive of Jesse Watson his check, to apply on account, |175, Form 23. 28. Prepay your note in favor of Henry Bruce by check. Face of the note, |200; discount, 50(^ ; amount of the check, |199.50. This note has 15 da. to run, and the interest on |200 for 1.5 da. is 50^. Write the check. Enter it in the cashbook as follows : on the right side debit Bills Payable for $200 ; on the left side credit Interest for 50^. Hand in the check and receive the note. Across the face of the note write, Paid April 28, 19 — . Place the canceled note in the Paid Bills envelope. Interest and discount are practically synonymous terms, interest is paid, usually, at the maturity of a loan, and discount is allowed before such maturity. For this reason all discount items will be entered as Interest. Study this transaction until it is understood. The discount and the prepayment of notes are common business transactions. 28. Receive of Jesse Watson his check for note and interest due to-day, Form 24. Face of the note, $180 ; interest, 90(^. What two entries are made in the cashbook ? Cancel the note and pass it in. 29. Receive of Howard Young his check for the invoice of April 19, Form 25. 30. Give Henry T. Dale, your clerk, a check for his salary, $30. 30. Deposit the checks and all currency on hand. Indorse the checks. 30. Withdraw by check the balance on deposit in The Union Bank. This withdrawal is made as a matter of convenience in closing the set. The amount of the check is for the balance in the bank. Make the check payable to Self and pass it in. No entry is required. Proceed with your bank account as you did at the close of March. Before closing the books hand them to the instructor for inspection and approval SET III. GRAIK AND SEED 95 Record the following in the journal, in the usual form, at the cost price : Inventories, April 30, 19 — IVIercliandise : 30 bu. Dwarf Beans 50 bu. Millet 20 bu. Clo\an' Seed 60 bu. Oats 200 bu. Field Corn 60 bu. Spring Rye 45 bu. Garden Corn 50 bu. Wheat Expense : Oiiice Safe $75. Office Books 7.50 f 82.50 Closing the Work for April After looking over the closing of each book in March, close the cash- book, the sales book, and the purchase book. The careful bookkeeper checks his work at every step. Check all additions before writing the results in ink. A simple way to check addition is to add the columns in reverse order. If the results agree, the work may be assumed to be correct. Post the books to the ledger. Post to the same accounts as in March. If any new accounts are to be added, allow one third of a page for each. Foot the ledger accounts. Take a trial balance ; after approval, record it in Blank No. 1, on the page indicated by the index. Make the two statements and the verification ; after approval, record them in Blank No. 1, on the page indicated by the index. Close the ledger. Take a second trial balance. Submit all work to the instructor for approval. When your monthly bank statement has been completed, compare each check with the stub in the check book. If they agree, check the stub. Place all canceled checks in the Paid Bills envelope. EXERCISE 43 A Written Review The following review exercises are suggested : 1. Journalize orally or in writing each transaction in April. 2. Use trial balances 3 and 4, page 28. Make the two statements, and the verification for each ; use $30 for the expense inventory in each statement. 96 BOOKKEEPING 3. Write from memory on blank paper, cut to the proper size, the following business forms : a. A Receipted Bill Jan. 17, C. H. Palmer, Trenton, N.J., bought of Student for cash, less 3%: 25 doz. table knives at |7.50, 15 doz. nail hammers at $9, 25 doz. safety locks at $4.50. 5. A Promissory Note, Jan. 20, Student gave James B. Stevens a 60-da. interest-bearing promissory note payable at First National Bank. Face of the note, $125. e. A Receipt Jan. 22, Frank H. Jackson paid Student |1 27.85 in full for invoice of Jan. 12. d. A Check, Jan. 25, Student gave William E. Hitchcock a check on Commonwealth Trust Company for $200. EXERCISE 44 INTEREST AND DISCOUNT The rate of interest allowed by law is called the Legal Rate. Persons may agree to pay less than this rate, but not more, unless a higher rate by special agreement is permitted by statute. If an agreement for the payment of interest specifies no rate, the highest legal rate in the state where the contract is signed will be understood. In the Commercial World 12 mo. of 30 da. each — 360 da. — are reckoned as 1 yr. In bank discount the exact number of days is used. Throughout the business practice employed in this text the rate will be 6%, based on the commercial year of 360 da. This method is not exact, but it is the most common because the most con- venient. It has been legalized by statute in some states and is generally used in all the states. A great variety of methods is employed to compute interest and dis- count, but it is suggested that the student use the day method, as follows : Point off to the left three decimal places in the principal, multiply by the number of days, and then divide by 6. Cancel when possible. Example. What is the interest on $146.50 for 50 da. at 6%? Solution. .1465 x 50 = 7.325. 7.325 -^ 6 = 1.22, or $1.22, the required interest. When a man borrows money at a bank, he not infrequently pays the interest in advance ; when he sells a note to a bank, he allows discount to the bank, and such allowance is called Bank Discount. INTEEEST AND DISCOUNT 97 The maturity of negotiable paper is determined as follows : When the time is expressed in months, calendar months are used to fix the date of maturity ; but when the time is expressed in days, the exact number of days is used. To illustrate : A note dated Jan. 28, 29, 30, or 31, at 1 mo., will mature on Feb. 28 (leap years excepted) ; but a note with any of the dates just noted at 30 da. will mature on Feb. 27, 28, March 1, or 2, respectively. The Term of Discount is the time from the date of discount to the maturity of the note. Banks differ as to method in finding the term^ but m this text the exact number of days will he used uniformly. EXERCISE 45 INTEREST AND DISCOUNT ENTRIES This exercise is not a set, but a series of illustrations. It may be used first as an oral exercise. Use a sheet of journal paper for the cashbook, and enter the following transac- tions ; balance and rule the cashbook. May 1. Student begins business and invests cash, $1600. 2. Give Henry A. Dunton a check for your note, which falls due to-day, $172.50. 4. Receive a check from Henry A. Gray for his note, which is due to-day, $235.20. 6. Pay your note and interest, due to-day, in favor of H. H. James, in cash. Face of the note, $325 ; interest, $11.50. 8. Receive of Hale & Son their check for their note and interest, due to-day. Face of the note, $220.35; interest, $7.75. 9. Discount at The Union Bank W. K. Marsh's note. Face of the note, $300 ; discount allowed for 45 da. What entry is made on the left side of the cashbook ? on the right side ? 12. Prepay your note in favor of Geo. R. Gushing. Face of the note, $400 ; discount allowed for 30 da. 20. Receive a check from Johnson & Co. for their note, due to-day. Face of the note, $256.25. 24. Prepay your note in favor of E. R. Sterling. Face of the note, $222.40 ; discount allowed for 60 da. 26. Discount at First National Bank T. T. Hunger's note. Face of the note, $257.80 ; discount allowed for 60 da. 30. Make an additional investment in the business in cash, $500. 98 BOOKKEEPING EXERCISE 46 COMPOUND ENTRIES The Compound Entry is explained on page 46. Refer to that explana- tion before proceeding with this exercise. A Simple Entry consists of one debit and one credit. Several of the preceding interest and discount entries are here used as illustrations of compound entries ; they will serve for reference in subsequent work. Journalize Exercise 45. The making of these entries in both the cashbook and the journal will make the debits and the credits clearer in each transaction. May 6. Bills Pay. $325. Interest 11.50 Cash 1336.50 May 9. Cash |297.75 Interest 2.25 Bills Rec. $300. May 8. Cash $228.10 Bills Eec. $220.35 Interest 7.75 May 12. Bills Pay. $400. Cash $398. Interest 2. Selling Price Lists ARTICLE AND QUANTITY 1 2 3 ^ 5 6 7 8 9 10 11 Carpenter's Chis- els, ^-in., doz. . 4.75 5.00 5.00 5.00 5.10 4.96 5.01 5.06 5.11 5.16 4.76 Coal Hods, doz. . 9.00 10.00 9.00 9.00 9.30 9.21 9.26 9.31 9.36 9.41 9.01 Copying Presses, each .... 8.00 7.50 8.00 8.25 8.20 8.21 8.26 8.31 8.36 8.41 8.01 Door Knobs, doz. LOO* 1.20 1.10 1.10 1.05 1.21 1.26 L31 1.36 1.41 1.01 Grindstones, each 5.00 6.00 5.00 5.25 5.20 5.21 5.26 5.31 5.36 5.41 5.01 Hammers, doz. . 8.00 9.00 8.00 8.20 8.60 8.21 8.26 8.31 8.36 8.41 8.01 Handsaws, doz. . 2L00 22.50 21.50 22.00 22.75 21.21 21.26 21. .31 21..36 21.41 21.01 Ice-cream Freez- ers, each . . 3.25 3.20 3.30 3.10 3.30 3.46 3.51 3.56 3.61 3.66 3.26 Knives and Forks, set .... l.GO 1.50 1.75 1.70 1.65 1.81 1.86 1.91 1.96 2.01 1.61 Lanterns, doz. . 7.50 8.00 7.80 8.00 7.75 7.71 7.76 7.81 7.86 7.91 7.51 Mortise Locks, doz 6.00 6.80 6.25 6.20 6.35 6.21 6.26 6.31 6.36 6.41 6.01 Nails, 8d, wire, keg 4.00 4.25 4.25 4.20 4.20 4.21 4.26 4.31 4..36 4.41 4.01 Planes, #4, doz. . 30.00 32.00 30.00 29.00 31.00 30.21 30.26 30.31 30.36 30.41 .30.01 Ilailroad Picks, 9-1 b., doz. . . 13.00 12.00 15.00 12.50 14.25 13.21 13.26 13.31 13.36 13.41 13.01 Steelyards, doz. . 16.00 17.50 18.00 16.25 15.80 16.21 16.26 16.31 16.36 16.41 16.01 Steel Axes, doz. . 12.00 12.50 13.00 12.25 12.50 12.21 12.26 12.31 12.36 12.41 12.01 Try-squares, 6- in., doz 6.00 7.00 6.30 6.50 6.20 6.21 6.26 6.31 6.36 6.41 6.01 SET lY. GENERAL HARDWARE BUSINESS WORK FOR MAY The Object of this set is to continue the work of Set III and to give more extended business practice. A partnership is introduced. Directions and Suggestions. Observe these general directions : 1. The same bound books are used as in Set III. 2. Student and James A. Hart are represented as proprietors. 3. The firm name is to be Student & Hart. 4. Student will keep the books and manage the business. 5. Begin a new page in the cashbook, the journal, the check book, and the sales book. 6. Unless otherwise stated, all payments are to be made hy cheek. Use a new envelope for the bank account. Different sellmg price lists may be used if the instructor so desires. The following table provides twenty-five such lists : for May and June 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4.80 4.84 4.88 4.92 4.97 5.02 5.07 5.12 5.17 4.77 4.81 4.85 4.89 4.93 9.05 9.09 9.13 9.17 9.22 9.27 9.32 9.37 9.42 9.02 9.06 9.10 9.14 9.18 8.05 8.09 8.13 8.17 8.22 8.27 8.32 8.37 8.42 8.02 8.06 8.10 8.14 8.18 1.05 1.09 1.13 1.17 1.22 1.27 1.32 1.37 1.42 1.02 1.06 1.10 1.14 1.18 5.05 5.09 5.13 5.17 5.22 5.27 5.32 5.37 5.42 5.02 5.06 5.10 5.14 5.18 8.05 8.09 8.13 8.17 8.22 8.27 8.32 8.37 8.42 8.02 8.06 8.10 8.14 8.18 21.05 21.09 21.13 21.17 21.22 21.27 21.32 21.37 21.42 21.02 21.06 21.10 21.14 21.18 3.30 3.34 3.38 3.42 3.47 3.52 3.57 3.62 3.67 3.27 3.31 3.35 3.39 3.43 1.65 1.69 1.73 1.77 1.82 1.87 1.92 1.97 2.02 1.62 1.66 1.70 1.74 1.78 7.55 7.59 7.63 7.67 7.72 7.77 7.82 7.87 7.92 7.52 7.56 7.60 7.64 7.68 6.05 6.09 6.13 6.17 6.22 6.27 6.32 6.37 6.42 6.02 6.06 6.10 6.14 6.18 4.05 4.09 4.13 4.17 4.22 4.27 4.32 4.37 4.42 4.02 4.06 4.10 4.14 4.18 30.05 30.09 30.13 30.17 30.22 30.27 30.32 30.37 30.42 30.02 30.06 30.10 30.14 30.18 13.05 13.09 13.13 13.17 13.22 13.27 13.32 13.37 13.42 13.02 13.06 13.10 13.14 13.18 16.05 16.09 16.13 16.17 16.22 16.27 16.32 16.37 16.42 16.02 16.06 16.10 16.14 16.18 12.05 12.09 12.13 12.17 12.22 12.27 12.32 12.37 12.42 12.02 12.06 12.10 12.14 12.18 6.05 6.09 6.13 6.17 6.22 6.27 6.32 6.37 6.42 6.02 6.06 6.10 6.14 6.18 99 100 BOOKKEEPING Incoming Business Forms for May Note. Please read the instructions given under the Incoming Business Forms for March and apply them to the work of Set IV. Form 1. Invoice of Turner & Moss, City, May 2. Terms : cash. 10 doz. Carpenter's Chisels 20 sets Knives and Forks 6 Copying Presses 4 doz. Mortise Locks 10 Grindstones 1 doz. Planes, #4 3 doz. Handsaws Form 2. Bill of H. L. Mills, City, May 4. Terms : cash. Set Office Books, $12 Stationery, |3 Form 3. Invoice of Wilder & Chase, City, May 7. Terms : 1/2 in 3 da., balance in 10 da. 8 doz. Coal Hods 5 doz. Lanterns 12 doz. Door Knobs 10 kegs Nails 15 doz. Hammers 2 doz. Planes, #4 10 Ice-cream Freezers 5 doz. Carpenter's Chisels Form 4. Invoice of Dunn & Sanford, City, May 9. Terms : 10 da. 10 doz. Railroad Picks 12 doz. Steel Axes 6 doz. Steelyards 20 doz. Try-squares Form 5. Check of Strong & Hunter, City, for |117.75, in your favor, May 11. Form 6. Invoice of Turner & Moss, City, May 14. Terms : on account. 12 doz. Carpenter's Chisels 6 doz. Hammers 10 doz. Coal Hods 6 Ice-cream Freezers 15 Copying Presses 6 doz. Handsaws 20 doz. Door Knobs 10 Grindstones 10 sets Knives and Forks Form 7. Invoice of Wilder & Chase, City, May 16. Terms : on account. 10 doz. Lanterns 10 kegs Nails 6 doz. Mortise Locks 6 doz. Planes, #4 Form 8. Invoice of Dunn & Sanford, City, May 20. Terms : 1/30. 10 doz. Railroad Picks 6 doz. Steel Axes 6 doz. Steelyards 10 doz. Try-squares The terms given mean that 1% will be taken off the face of the invoice if it is paid within 30 da. SET IV. GEKERAL HARDWJlKE •. r-iQi' Fonn 9. Check of Strong & Hunter, City, for $150, in your favor. May 23. Form 10. Check of John H. Sand, City, for $200, in your favor. May 30. In Set IV all merchandise is to be bought at the following prices : ARTICLE AND QUANTITY COST Carpenter's Chisels, J-in. Coal Hods, , doz $3.75 7.50 Copying Presses, Door Knobs, each doz 6.00 75 Grindstones, Hammers, Handsaws, each doz 3.75 6.00 18.00 Ice-cream Freezers, Knives and Forks, each set 2.50 1.25 Lanterns, Mortise Locks, doz 6.00 4.50 Nails, 8d, wire. Planes, #4, Railroad Picks, 9-lb., keg doz 3.00 24.00 10.00 Steelyards, Steel Axes, (( 12.00 « 9.00 Try-squares, 6-in., « 4.50 Memoranda of Transactions for May Mai/ 1. Student and James A. Hart begin a General Hardware busi- ness, investing cash, $3000. Each partner invests $1500. Place the above memorandum in the journal, hut make no journal entry. Receive the currency from the instructor. Make the following entry in the cashbook : 1. Deposit all currency in The Union Bank, under the firm name. In the pass book, above the student's name, write the firm name. Student & Hart. 102 V '— • \' BOOKKEEPING May 1. You have entered into an agreement with Wm. H. Kellogg for the rental of his store, at 266 Broad Street, at $50 per month. No entry is required. A memorandum of this agreement may be made and filed with the incoming papers. Engage Henry Lakey as a clerk at $35 per month. 2. Buy of Turner & Moss, City, for cash, merchandise as per invoice, Form 1. Examine and check the invoice. Write a check in payment. Enter in the pur- chase book and the cashbook, and check in each. This check will be No. 1. Now that you are engaged in a partnership business, checks are to be signed with the Jirm name. 3. Give Wm. H. Kellogg a check for rent of the store for May. 4. Buy of H. L. Mills, City, for cash, books and stationery, as per bill, Form 2. Remember, all cash payments are made by check unless otherwise noted. 5. W. D. Mendon, City, places an order for the following goods. Fill the order at the prices given herewith. Terms : cash. 4 doz. Carpenter's Chisels at |4.75 1 doz. Handsaws at |21 3 Copying Presses at |8 5 sets Knives and Forks at |1.60 4 Grindstones at |5 2 doz. Mortise Locks at $6 Record the invoice in the sales book and the cashbook, and check in each. Begin a new page in the sales book. Receipt the invoice and receive the currency. 6. Hall & Son, City, place an order for the following goods. Fill the order. Terms : on account. 3 doz. Carpenter's Chisels 6 sets Knives and Forks 1 doz. Planes, #4 2 Copying Presses 7. Buy of Wilder & Chase, City, merchandise as per invoice. Form 3. Terms: 1/2 in 3 da. ; balance in 10 da. 7. Deposit currency, $100. 8. Strong & Hunter, City, place an order for the following goods. Fill the order at the prices given herewith. Terms : on account. 4 doz. Coal Hods at |9 5 doz. Hammers at |8 3 kegs Nails at $4 3 Ice-cream Freezers at $3.25 5 doz. Door Knobs at $1 2 doz. Lanterns at $7.50 9. Buy of Dunn & Sanford, City, at 10 da., merchandise as pel invoice. Form 4. SET IV. GENERAL HARDWARE 103 May 9. Withdraw by check $15, to be used for sundry office expenses. Write this check to the order of Cash. No entry is required because no cash has been paid out. Place the currency in the Business Cash envelope. This is called a cash check. 10. Remit Wilder & Chase a check for one half the invoice of May 7. If there is a half cent in the division, call it one cent ; always reckon the odd cent on the first transaction. 10. Pay S. H. Lyman, in currency, |5 for cleaning the store and basement. 11. Receive of Strong & Hunter their check for invoice of May 8, Form 5. Examine the check; if correct, enter the amount in the cashbook. Place the check in the Busi7iess Cash envelope. 1^. Give each partner a check for $50, for his personal use. Write your check as follows : Pay to the order of Student. Make your partner's check payable to his own name. Sign each check with the firm name, as usual. Enter in the cashbook as payments, under each partner's name as a withdrawal. Place the currency in the Personal Cash envelope. 13. L. P. Austin, City, places an order for the following goods. Fill the order. Terms : on account. 5 doz. Railroad Picks 5 doz. Try-squares 2 doz^ Steelyards 5 doz. Hammers 6 doz. Steel Axes 3 Ice-cream Freezers 14. Buy of Turner & Moss, City, on account, merchandise as per invoice. Form 6. 15. Deposit the check on hand. 15. Wilson & Barton, City, place an order for the following goods. Fill the order. Terms : 10 da. 10 doz. Door Knobs 3 Ice-cream Freezers 3 doz. Hammers 6 sets Knives and Forks 2 doz. Handsaws 4 doz. Carpenter's Chisels 16. Buy of Wilder & Chase, City, on account, merchandise as per invoice, Form 7. 17. Remit Wilder & Chase a check for the balance of the invoice of May 7. Note the amount paid on this invoice on May 10. 104 BOOKKEEPING May 18. John Howe, City, places an order for the following goods. Fill the order at the prices given herewith. Terms: cash. 4 doz. Lanterns at $7.50 5 kegs Nails at |4 3 doz. Mortise Locks at $6 3 doz. Planes, #4, at $30 Record in the sales book and the cashbook, and check in each. 19. Strong & Hunter, City, place an order for the following goods. Fill the order. Terms : on account. 6 doz. Carpenter's Chisels 8 doz. Door Knobs 4 doz. Coal Hods 4 Grindstones 5 Copying Presses 3 doz. Hammers 3 doz. Handsaws 5 sets Knives and Forks 20. Buy of Dunn & Sanford, City, merchandise as per invoice. Form 8. Terms : 1/30. 21. Receive of L. P. Austin cash, on the invoice sold to him on May 13, $100. Write the receipt and receive the currency. 22. John H. Sand, City, places an order for the following goods. Fill the order. Terms : on account. 6 doz. Railroad Picks 5 kegs Nails 5 doz. Steelyards 5 Ice-cream Freezers 10 doz. Try-squares 4 doz. Lanterns 3 Grindstones 6 doz. Carpenter's Chisels 23. Receive of Strong & Hunter their check for $150, to apply on the invoice of May 19, Form 9. 24. Deposit the check on hand, and currency, $200. Remember, you must indorse all checks that you deposit. 24. Remit Dunn & Sanford a check for the amount of the invoice bought of them on May 9. 25. Receive of Wilson & Barton cash, for the amount of the invoice sold them on May 15. Remember the receipt. 26. Give Wilder & Chase your note, at 15 da., with interest, for the invoice of May 16. Write the note and make the journal entry. The invoice should be receipted as follows : Paid by note at 15 da.. Wilder & Chase. SET IV. GENERAL HAKDWAKE 105 May 27. P. D. Anson, City, places an order for the following goods. Fill the order. Terms: 10 da. 3 doz. Coal Hods 5 Grindstones 5 Copying Presses ^ 2 doz. Hammers 4 doz. Door Knobs 1 doz. Handsaws 27. Give Turner & Moss a check for one half of the invoice bought of them on May 14. 28. Receive of Hall & Son cash, to apply on the invoice sold them on May 6, |50. 29. L. P. Austin, City, places an order for the following goods. Fill the order at the prices given herewith. Terms: 3/10, 1^/30. 4 sets Knives and Forks at $1.60 3 doz. Mortise Locks at $6 3 doz. Lanterns at $7.50 4 kegs Nails at $4 29. Wilson & Barton, City, place an order for the following goods. Fill the order. Terms : on account. 2 doz. Planes, #4 2 doz. Steelyards 4 doz. Railroad Picks 4 doz. Steel Axes 30. Receive of John H. Sand his check to apply on account, $200, Form 10. 31. Deposit the check and all currency on hand. 31. Give Henry Lakey, your clerk, a check for his salary, $35. Make the monthly bank statement. Before closing the different books, hand them to the instructor for inspection and approval. Record the following in the journal, in the usual form, at the cost price : Inventories, May 31, 19 — Merchandise : 4 doz. Carpenter's Chisels 2 doz. Lanterns 7 doz. Coal Hods 2 doz. Mortise Locks 6 Copying Presses 3 kegs Nails 5 doz. Door Knobs 3 doz. Planes, #4 4 Grindstones 6 doz. Railroad Picks 3 doz. Hammers 3 doz. Steelyards 2 doz. Handsaws 8 doz. Steel Axes 2 Ice-cream Freezers 15 doz. Try -squares 4 sets Knives and Forks Expense : Office Books and Stationery $12 106 bookkeepi:n^g Closing the Work for May Look over the closing of each book in April, and then close the books. Post to the ledger, beginning on a new page ; allow one third of a page for each account. There are two proprietors in this set ; their accounts should be on the first page of the ledger. Foot the ledger accounts. Take a trial balance ; after approval, record it in Blank No. 1, on the page indicated by the index. Make the usual statements, and the verification ; after approval, record them in Blank No. 1, on the page indicated by the index. Close the ledger as follows : 1. Close the Merchandise and Expense accounts to the Loss and Gain account. 2. As there are two proprietors in this set, divide the gain equally between them, and close the Loss and Gain account as shown in the following model: <^^ttJ P'^'&^L^t^'ny J/ - C^^Hc^^^tJ-ZU^^^z^ ^ ^.a^Pz^^^^J^^ y^z^ect^^ y^^yZ^ /^7Z^ Take a second trial balance. Submit all work to the instructor for approval. After receiving your monthly bank statement, check the stubs of your check book. EXERCISE 47 A AVritten Review The following review exercises are suggested : a. Journalize orally or in writing each transaction in May. h. On loose sheets of paper write Set I, page 41, as follows : Enter all cash items in the cashbook ; journalize all other items ; post to the ledger, three accounts to the page; take a trial balance; make the usual statements ; close the ledger ; take a second trial balance. SET IV. GENERAL HARDWARE BUSINESS WORK FOR JUNE The following memoranda are a continuation of the memoranda for May, representing a partnership business. Directions and Suggestions. The following general directions should be observed: 1. Use the same price list and the same books as in May. 2. Begin a new page in the journal. In the sales book leave a space of three lines, then write the first sale in June under the last salfe in May. 3. The balance brought down from the May cashbook, under June 1, is to be reckoned with the cash receipts in June. Use a new envelope for the bank account. Record the balance at the head of the deposit column. Incoming Business Forms for June Form 11. Invoice of Wilder & Chase, City, June 3. Terms: 2/10, n/^O. 6 doz. Carpenter's Chisels 5 doz. Hammers 10 doz. Door Knobs 6 doz. Handsaws 6 Grindstones Fonn 12. Invoice of Dunn & Sanford, City, June 5. Terms : on account. 6 Ice-cream Freezers 10 doz. Mortise Locks 12 sets Knives and Forks 20 kegs Nails 10 doz. Lanterns 6 doz. Planes, #4 Form 13. Check of Arnold & Davis, City, for $100, in your favor, June 5. Form 14. Note of P. D. Anson, City, for $100, in your favor, at 10 da., with interest, June 6. Form 15. Bill of H. L. Mills, City, June 9. Terms : cash. Office Stationery, $6.75 Form 16. Invoice of Turner & Moss, City, June 12. Terms: 1/2 cash; balance in 30 da. 10 doz. Carpenter's Chisels 6 Grindstones 5 doz. Coal Hods 6 doz. Hammers 6 Copying Presses 5 doz. Handsaws 6 doz. Door Knobs Form 17. Check of L. P. Austin, City, for $71.50, in your favor, June 14. 107 108 BOOKKEEPING Form 18. Invoice of Wilder & Chase, City, June 15. Terms: 1/2 cash; balance in 30 da. 6 Ice-(?ream Freezers 12 doz. Mortise Locks 10 sets Knives and Forks 20 kegs Nails 6 doz. Lanterns 5 doz. Planes, #4 Form 19. Invoice of Turner & Moss, City, June 21. Terms : 1/2 cash ; balance in 10 da. 12 doz. Railroad Picks 6 doz. Steel Axes 8 doz. Steelyards . 10 doz. Try-squares Form 20. Check of P. D. Anson, City, for |100, in your favor, June 25. Memoranda of Transactions for June June 1, Give Wm. H. Kellogg a check for rent of the store for June, 150. 2, Receive of Hall & Son cash for the balance of the invoice of May 6. 2, Give Turner & Moss your note at 15 da. for the balance of the invoice of May 14. S, Buy of Wilder & Chase, City, merchandise as per invoice, Form 11. Terms : 2/10, n/30. 4. Hall & Son, City, place an order for the following goods. Fill the order. Terms : 30 da. 4 doz. Coal Hods 3 doz. Carpenter's Chisels 2 Copying Presses 3 doz. Hammers 3 doz. Handsaws 5 doz. Try-squares 5, Buy of Dunn & Sanford, City, on account, merchandise as per invoice. Form 12. 5. Arnold & Davis, City, place an order for the following goods. Fill the order at the prices given herewith. Terms : cash, $100 ; balance in 15 da. 3 Ice-cream Freezers at $3.25 5 doz. Lanterns at $7.50 3 doz. Try-squares at $6 6 doz. Mortise Locks at $6 8 sets Knives and Forks at $1.60 2 doz. Planes, #4, at $30 Enter in the sales book. Receive their check for $100, Form 13, and enter it in the cashbook. Do not check in either book. Why ? Under what name is the check entered ? 6. Receive of L. P. Austin cash for the balance of the invoice of May 13. SET IV. GENERAL HARDWARE 109 June 6. Receive of P. D. Anson his note at 10 da., with interest, Form 14. Do not make any entry for the interest. 6. Receive of Strong & Hunter cash for the balance of the invoice of May 19. 6. Deposit the check on hand, and currency, |200. 8. Receive of L. P. Austin cash for the invoice of May 29, less 3%. The allowance of 3% on this invoice for early payment is called Merchandise Dis- count. Such allowances are common in business. Enter in the cashbook in this set, as follows : Receipts L. P. Austin, Inv. 5/29 t62.90 Payments Mdse. Disc, Inv. 5/29, less 3 % |1.89 It is very convenient to write dates in fractional form. 5/29 means the .5th month and 29th day, — May 29. 8. Give Dunn & Sanford a check for the invoice of May 20, less 1%. 9, Pay the bill of H. L. Mills by check for office stationery. Form 15. 10. Give Wilder & Chase a check for your note, in their favor, due to-day, with interest. 11. Strong & Hunter, City, place an order for the following goods. Fill the order. Terms : 15 da. 5 doz. Door Knobs 2 doz. Handsaws 3 Grindstones 6 kegs Nails 2 doz. Hammers 4 doz. Try-squares 12. Buy of Turner & Moss, City, merchandise as per invoice. Form 16. Terms : 1/2 cash ; balance in 30 da. Enter the entire amount in the purchase book. Remember the check. IS. Give Wilder & Chase a check for the amount of the invoice of June 3, less 2%. 13. Give each partner a check for $50, for personal use. Sign each check with the firm name. 14. L. P. Austin, City, places an order for the following goods. Fill the order at the prices given herewith. Terms : 1/2 cash ; balance in 30 da. 4 doz. Carpenter's Chisels at $4.75 2 Grindstones at $5 3 Copying Presses at $8 3 doz. Hammers at $8 3 doz. Door Knobs at $1 3 doz. Handsaws at $21 Enter the invoice in the sales book. Receive a check for one half the amount, Form 17. 110 BOOKKEEPING June 15. Buy of Wilder & Chase, City, merchandise as per invoice. Form 18. Terms : 1/2 cash ; balance in 30 da. 16. Receive of P. D. Anson cash for his note and interest due to-day. Compute the interest on the note and receive the currency. Remember, there are two entries in the cashbook. What titles will be used? 16. Deposit the check on hand, and currency, |200. 17. Give Turner & Moss a check for your note, in their favor, due to-day. 19. V. M. Furnham, City, places an order for the following goods. Fill the order at the prices given herewith. Terms : cash. 6 kegs Nails at $4 2 doz. Railroad Picks at |13 W. Receive of Arnold & Davis cash for the balance of the invoice of June 5. 21. Buy of Turner & Moss, City, merchandise as per invoice, Form 19. Terms; 1/2 cash; balance in 10 da. 22. Wilson & Barton, City, place an order for the following goods. Fill the order. Terms : cash, |75 ; balance in 10 da. 5 doz. Carpenter's Chisels 5 Grindstones 3 doz. Coal Hods 3 doz. Hammers 4 doz. Door Knobs * 2 doz. Handsaws 22. Deposit currency, $175. 23. Give Dunn & Sanford your note at 30 da., to apply on account, 1200. 24. John H. Sand, City, places an order for the following goods. Fill the order. Terms: cash, $150; balance in 30 da. 6 Ice-cream Freezers ' 6 doz. Mortise Locks 8 sets Knives and Forks 10 kegs Nails 5 doz. Lanterns 3 doz. Planes, #4 25. P. D. Anson, City, places an order for the following goods. Fill the order. Terms : cash, $100 ; balance in 10 da. 5 doz. Railroad Picks 4 doz. Steel Axes 5 doz. Steelyards 3 doz. Try-squares Receive his check for $100, Form 20. 26. Receive of Strong & Hunter cash, for the invoice of June 11. 26. Deposit the check on hand, and currency, $250. 27. Strong & Hunter, City, place an order for the following goods. Fill the order. Terms : 10 da. 3 doz. Railroad Picks 4 doz. Try-squares 10 kegs Nails 2 doz. Steel Axes SET IV. GENERAL HARDWARE 111 June 28. Henry Zaner, City, places an order for the following goods. Fill the order at the price given herewith. Terms : cash. 6 kegs Nails at $4 29. Prepay your note in favor of Dunn & Sanford, issued on June 23, by giving them a check for the net proceeds. A correspondiug transaction is fully explained under April 28. 29. Hall & Son, City, place an order for the following goods. Fill the order. Terms : on account. 2 Copying Presses 3 Ice-cream Freezers 3 Grindstones 2 doz. Handsaws 30. Give Henry Lakey, your clerk, a check for his salary, |35. SO. Deposit all currency on hand. 30. Withdraw, by check, the balance on deposit in The Union Bank. AVrite the check payable to the order of Cash. The reasons for this withdrawal were given at the close of April. No entry is required. Make the monthly bank statement. Hand all books to the instructor for inspection and approval. Record the following in the journal, in the usual form, at the cost price: Inventories, June 30, 19 — Merchandise : 8 doz. Carpenter's Chisels 8 doz. Lanterns 5 doz. Coal Hods 12 doz. Mortise Locks 5 Copying Presses 5 kegs Nails 9 doz. Door Knobs 9 doz. Planes, #4 3 Grindstones - 7 doz. Railroad Picks 3 doz. Hammers 6 doz. Steelyards 1 doz. Handsaws 8 doz. Steel Axes 2 Ice-cream Freezers 6 doz. Try-squares 10 Sets Knives and Forks Expense : Office Books and Stationery $12.50 Closing the Work for June Close the different books. May and June constitute one set of books; therefore the work for June will be posted to the same accounts as that for May. Foot the ledger accounts. Take a trial balance; after approval, record it in Blank No. 1, on the page indicated by the index. 112 BOOKKEEPING Make the usual statements, and the verification ; after approval, record them in Blank No. 1, on the page indicated by the index. Open a new Loss and Gain account ; close the ledger. Refer to the Loss and Gain account in May for a suggestion as to the proper division of the gain between the partners. Take a second trial balance. Submit all work to the instructor for approval. After receiving your monthly bank statement, check the stubs of your check book. EXERCISE 48 A Written Review The following review exercises are suggested : 1. Journalize orally or in writing each transaction in June. 2. On loose sheets of paper write Set II, page 51, as follows : Use the cashbook, the journal, the purchase book, the sales book, and the ledger. Complete the set in every detail and pass it to the instructor. 3. The following written test in business forms : Write from memory on blank paper, cut to the proper size, the following business forms; make the entry for each party. a. A Promissory Note, May 27, Student gives Henry S. Miller a 30-day promissory note, bearing interest at 6%, payable at Second National bank. Face of the note, $237.50. 5. A Promissory Note, June 16, Student receives of Adam H. Free- man a 60-day promissory note, without interest, payable at Union National Bank. Face of the note, $348.20. c, A Check, On May 15, Student receives of Howard & Co. a check drawn on the City National Bank for $88.40. EXERCISE 49 SET G. GRAIN This set is given as an optional review set, or it may be used for additional work by those students who finish the regular sets in advance of the class. The books used are the journal, the cashbook, the sales book, the pur- chase book, and the ledger. Loose sheets of journal paper and ledger paper should be used for recording the transactions. Allow one third of a page for each account in the ledger. A REVIEW SET • 113 Memoranda of Transactions June 1. Student and Wm. G. Allston begin the Grain and Seed busi- ness, investing cash, |2000. Each partner invests $1000. 2, Pay Edward S. Green by check, for rent of the store for 1 mo., $50. S. Buy of Wm. S. Duncan by check : 500 bu. Wheat at 90(^ 600 bu. Corn at 43^ 4. Sell Harvey & Co. for cash : 200 bu. Wheat at $1.10 150 bu. Corn at 50^ 5. Buy of E. S. Harlan on account : 1000 bu. Oats at 320 6. Pay T. J. Coleman by check, for a set of office books, stationery, and supplies, $22.50. 6. Sell Graves & Co. on account: 250 bu. Corn at 51(^ . 400 bu. Oats at 38^ 8. Pay E. S. Harlan by check, on account, $200. 9. Buy of Richard F. Goodman on account : 500 bu. Corn at 440 10, Sell Henry P. Button on account : 150 bu. Wheat at $1.12 100 bu. Corn at 500 200 bu. Oats at 390 11. Buy of S. M. Collins by check : 400 bu. Wheat at 920 12, Pay Reading & Co. by check, for an office safe, $75. 13. Student withdraws cash, for personal use, $50. 13. Wm. G. Allston withdraws cash, for personal use, $50. 15. Give E. S. Harlan your note, with interest, at 10 da., $120. 16. Receive of Graves & Co. their check, on invoice of June 6, for $175. 17. Give Richard S. Goodman your check for the invoice of June 9. 18. Receive of Henry P. Button his check for the invoice of June 10. 19. Sell Kelsey & Co. on account : 200 bu. Wheat at $1.15 100 bu. Corn at 500 200 bu. Oats at 37^0 20. Receive of Graves & Co. their check for the balance of the invoice of June 6. 114 BOOKKEEPING June 22. Sell Graves & Co. on account, 2%, 10 da. : 200 bu. Wheat at |1.10 200 bu. Corn at 50(^ 100 bu. Oats at 38<^ 23. Buy of Geo. M. Barber on account : 500 bu. Oats at 33^ 24. Sell Henry P. Button on account: 50 bu. Wheat at |1.12 200 bu. Oats at 39(^ 25. Pay E. S. Harlan by check for your note and interest due to-day. 26. Receive of Graves & Co. their check for the invoice of June 22, less 2%. 27. Pay Geo. M. Barber by check, on account, |100. 27' Buy of E. S. Harlan on account : 300 bu. Wheat at 91^ 29. Receive of Henry P. Button his check, on account, $75. 30. Receive of Kelsey & Co. their note, with interest, at 30 da., |250. 30. Pay Fred A. Walker, your clerk, by check, one month's salary, 130. Inventories, June 30, 19 — Merchandise : 400 bu. Wheat at 900 300 bu. Corn at 430 400 bu. Oats at 320 Expense : Office Books and Stationery, $20 Office Safe at Cost EXERCISE 50 CONSIGNMENTS A fruit grower in Oregon may send a quantity of apples to a merchant in New York, who will act as agent in selling the apples. This agent is called a Commission Merchant. The quantity of apples received is called the Consignment ; the one who sent the apples, the Consignor; the commission merchant who received them, the Consignee ; the itemized statement sent by the consignee to the consignor, the Account of Sales. CONSIGNMENTS 115 After the apples are sold, the merchant deducts a certain per cent of the sales as his Commission, pays all the other charges, and remits the balance. The following transactions afford illustrations of the application of debit and credit to this kind of business. Journalize each transaction. Memoranda July 1. Henry Brown, a commission merchant of New York, received a consignment of pineapples from the Day Porto Rican Fruit Company, Manati, Porto Rico, by the steamer Coamo^ to be sold, on their account and risk, as follows : 100 crates 36's 100 crates 30's 100 crates 24's 100 crates 18's No debit and no credit entry for this, simply a memorandum. 36's, 24's, etc., set forth the number of pineapples in each crate, and indicate the size of the fruit. 2. The freight charges, $0,482 per crate, were paid by check to the New York & Porto Rican Steamship Company. Charge the Day Porto Rican Fruit Company for the amount of this check. 3. Upon examination it was found that some of the fruit was damaged, and the entire shipment was repacked at a charge of 2^ per crate. The following were the losses : 3 crates 36's 2 crates 30's 2 crates 24's 1 crate 18's Charge the Company and credit Labor. The charge is for the total number of crates. 4. Sold H. B. Smith on account : 50 crates 36's at |2.90 50 crates 24's at $3.25 5. Sold J. B. Conley for cash, less 2% : 47 crates 36's at $2.90 50 crates 30's at |3.10 Charge the net amount. 6. Sold C. H. White on account: 48 crates 30's at $3.15 50 crates 18's at $3.60 7. Sold P. C. Wilson for cash: 48 crates 24's at $3.20 49 crates 18's at $3.50 116 BOOKKEEPING July 8, The company is charged for the following items : Labor, $4; cartage, 2^ per crate; commission, 10% on the sales. Credit the accounts named. 9. A check is remitted for the net amount due the Day Porto Rican Fruit Company. Make the necessary entry for this remittance. COMMERCIAL DRAFTS Note. A brief study of the commercial sight draft and the bank draft is introduced at this stage of the student's work for the convenience and accommodation of those instructors who desire to take up the study of drafts, in a brief way, in connection with the introductory work of the text. Study the following illustration, giving particular attention to the relation that the different parties bear to each other. Chas. H. Hardy, Hartford, Conn., owes Geo. H. Allen, Chicago, 111., |500. Amos R. Graham, Chicago, 111., owes Chas. W. Hardy the same amount. What may Chas. H. Hardy do to serve his own convenience, and at the same time save Amos R. Graham the trouble of sending the money from Chicago to Hartford ? Chas. H. Hardy writes an order directing Amos R. Graham to pay Geo. H. Allen $500. Allen presents the order to Graham, and he pays it in cash. Does this accomplish the same result as if Graham had sent the money to Hardy, and Hardy had sent it to Allen ? Whom should Chas. H. Hardy debit? Whom should he credit? Whom should Geo. H. Allen credit ? What should he debit ? Whom should Amos R. Graham debit ? What should he credit ? . A Commercial Draft is a written order in which one person directs another to pay a specified sum of money to the order of himself, or to the order of a third person. The primary ohject of commercial drafts is to effect the settlement of debts without the risk or the inconvenience of transmitting money. There may be either three parties or two parties to a draft. The Original Parties to a three-party draft are : The Drawer, the one who draws the draft ; The Drawee, the one on whom the draft is drawn. The Payee, the one to whom the order is made payable. Many commercial drafts are drawn as a means of collecting debts, and a large number of them are dishonored. Unless there is a special reason, such as dealing with a delinquent debtor, a draft should not be drawn without a previous arrange- ment or an understanding between the persons. Without such notice, a draft ordi- narily has no more significance than the sending of a monthly statement of account. COMMERCIAL DRAFTS 117 Sight Paper is paper payable on presentation. The following is the usual form of a sight draft. Sight Draft *Pai/ to the order of >?y '^-^Cc^i^-^^ ^Z:^rY^.^f??C ^^ .r ^ y /'" Dollars Value received and charge to account of ^^.^g^^^^^^ V%^. ^ u.^?^.^^ Study this sight draft in connection with the following diagram : C. W. Gray, payee Springfield F. C. Gorham, drawee, Springfield owes Mason & Young, drawers Boston The persons to a three-party commercial draft usually bear the follow- ing relation to each other : The Drawee generally owes the drawer ; The Drawer generally owes the payee ; The Payee and the drawee bear no relation to each other. The drawee and the payee usually live in the same place. While not bound to do so, the drawer usually notifies the drawee before or at the time of drawing the draft. It is customary to send it to the payee, and he presents it to the drawee. 118 BOOKKEEPING The Drawer's Entry. Mason & Young mail the following draft to C. W. Gray, and make this journal entry : ^^^'tue . ::^J^^..d^f^<^^. ^^,W^t>7 ? r£^< l ^^ Wilbert, Closs & Co. will indorse the draft and leave it with the Springfield National Bank for collection. As they have no account with a Paterson bank, they will again indorse the draft and forward it to the Chemical National Bank of New York City, with whom they have a regular account. The following indorsements will appear on the back of the draft. The blank indorsement, simply the name, is but little used in business. Banks insist on the use of the full indorsement. A number of indorsements that are common in business are illustrated and explained on page 90. The Chemical National Bank will collect the money from McMickle through a bank in Paterson, and then notify the Springfield National Bank that the draft has been collected and the amount credited. The Springfield National Bank notifies Wilbert, Closs & Co. that the pro- ceeds have been credited. 120 BOOKKEEPING The following are the entries for this draft : The Drawer*s Entry. Wilbert, Closs & Co. make this entry on the left side of their cashbook : Wilbert, Closs & Co.'s Cashbook SO Should the bank make a charge for collecting this draft, the amount of such a charge would appear on the right side of the above cashbook. The Drawee^s Entry. When Edgar McMickle pays the draft, he will debit Wilbert, Closs & Co. on the right side of his cashbook, as follows : M McMickle' s Cashbook lu so From the preceding discussion the following principles are deduced regardmg the entries for commercial sight drafts : Drawer's Entry when a three-party sight draft is drawn : Payee Drawee Drawer's Entry when he draws a sight draft in his own favof, and it is collected: ^ , t^ Cash Drawee Payee's Entry when he receives a sight draft and collects it, on account : Cash Dtawer Drawee's Entry when he pays a sight draft : Drawer Cash EXERCISE 51 WRITING DRAFTS Write each of the following drafts, at sight, and make the entry for each party. Use the current date. The following script model shows an orderly arrangement of the work. It is suggested that the students rule ordinary sheets of writing paper to corre- spond to the model on page 121, and use them when writing the drafts outlined on page 122. COMMEECIAL DRAFTS. SCRIPT MODEL 121 Model Draft and Entries ^^- //. /f - Zc>/: 3iP ^ ^C?(? — /^'■T^^d.^Jdy (^..^^t-^^^^ i7-?^^-^^^^-Kii^^^2^^/ 6^'^.^.~Vy^ ^.^->7.^r:7^<^^ $//^^^^ To Chemical Rational ^ank I /Wy^ /W c^^V-f-^T^^-^^^..-^^^^ l]\CeW York ) ^^ Ca^Afer 124 BOOKKEEPING A bank draft is usually drawn payable to the order of the purchaser, who indorses it to the person or the firm to whom it is to be sent, as shown herewith. In this way the name of the sender appears on the draft and he is identified as such, and the draft, when canceled, is filed and serves as a receipt. The one who purchases a bank draft may require the name of the one to whom it is to be sent to appear as the payee. In opening letters that contain drafts, if the name of the sender does not appear on the draft, care must be taken to keep the draft and the letter together. If his name is on the draft, it may be identified without the letter. The Entries. The sending of this draft constitutes a cash payment by C. C. Canan to Jordan, Marsh & Co., and he makes the following entry on the right side of his cashbook : /C ^ (A^T'r^eZ'^. 4^(?^ <^j2>i>A^cz.y'^z,^..^^ t;^'?'Z^ ^^i.J^V't^^ M I BANK DRAFTS 125 Upon the receipt of the draft Jordan, Marsh & Co. will make this cashbook entry on the left side : 7 <;Z.-'7^z^-e^^<>-z^ .:./j^^'^^<^^'^J^<^^ ^(?0 When Jordan, Marsh & Co. make their deposit for the day they will include the draft received from Canan, such drafls being treated as checks. EXERCISE 52 EoR Oral Work ^ 1. Receive from Henry Belmont a bank draft to apply on account, $750. Give your entry ; give his entry. No exchange charged. 2. Receive from Green & Co. a bank draft to apply on account, $328.40. Give your entry ; give their entry. No exchange charged. 3. Buy of your local bank by check, Henry C. Lucas, Cashier, a draft on the Chemical National Bank, of New York, No. 6846, payable to your order, for $250. Send it to Louis I. Brace in payment of your note due to-day. Give your entry; give his entry. In whose favor should this draft be drawn ? Indicate the proper indorsement. No exchange charged. 4. Buy of the First National Bank, of your city, Thomas E. Gross, Cashier, a draft on the Second National Bank, of New York, No. 2378, payable to your order, for $32.50. Indorse it and send it to the Jones Manufacturing Company for a set of office books, to be used in your office. Give your entry; give their entry. No exchange charged. As a review, write the check and the draft called for in No. 3, and the draft called for in No. 4. SUGGESTIONS FOR BUSINESS CORRESPONDENCE When ordering goods it is a common practice in business to keep a duplicate of the order, and as these orders are generally made by letter, a copy of the letter is a convenient and exact record for the office file. When a bill of the goods is received, if any question arises regarding the original letter, this duplicate is available for reference. As business correspondence is closely allied to business practice, and is commonly taught in connection with it, the script letter on page 126 is given as a suggestion to the student and to the instructor. 126 BOOKKEEPING It is not unusual for the instructor in correspondence to select some of the orders of purchase and sale in the bookkeeping text, and ask the student to write the required letters for these orders. This plan correlates the work in correspondence very closely with the work in bookkeeping, and affords an unusual variety of material for practice in the writing of this kind of letters. Model Letter ordering Goods «■ ^h^i^^Jci^J^^M^ -c::§^<^<^Z^^^^'i^?>z-.^-^^zX- -6^^:^^^<^l^^,<^^*C^^^^-ii«^.<^ £:::?^a-n.'C^i^-V^'i(^^^ -J^^^^-^-^^C^ ^(p.-/-/^ "y/^A^ut^^ -v^c^^^^^z^^i^ zo -'^:^£-C^:Zy>'Z.'€^^^tZyt^ C^-k::^^ z^ KjC-c^-'T^^^-^S^^i^ezy^^L-u^'C^ /(p ,, ■y^ra^^^^c!^^4^x^i.-€^-z:^^^^ ^ ^jK^^€-^-2;^-^^^-^C/.s?^'^^j 'gyl^.. }H^J^ C^-Q^UyY, r^^Z^^^^ /?7^^>i^ y^^Ay 2-n^ /Q - >?z^^ ^ay to the order of '^TK JDollars This draft is the same as the draft drawn payable after date except as to the manner of acceptance. In an order payable after sight it is necessary to date the acceptance in order to fix the date of maturity. The difference between p, draft payable after date and one payable after sight is that the former begins to mature on the date of the draft, the latter on the date on which the draft is accepted. The date of acceptance must be given in a draft pay- able after sight, while it may or may not be given in a draft payable after date. COMMERCIAL DRAFTS 131 Another Use of Time Drafts. The ordinary time draft is sometimes used in connection with sales of merchandise. For instance, Quincy, Bradley & Co. sell L. B. Wade & Co. merchandise amounting to $1305 on the following terms : 30-day draft for $500, balance in 60 da. A draft similar to the following is mailed with the bill : ■ — - - - ■ <. /^^^^^ /^/^Kf^^ /:7^J^^^^ /^.^icfy!^^ 'Pay to the order of 00f^^erby^ WA^^ ^o Qray, Salisbury & Co., T>r. (^^Z Jf 'Crenton. tKJ., .jU^,^C-i/ / A. \9=^ / Sought ofC W. Allen & Co. ^ '^^fs^^C7, ^ Buffalo, 5^.Y. £ f' M^^^.^'-r^^ W>f^^. '^,y>y2.2. 79- ' ^.y-^^ y '.^^.^ :^?y Sought of 'Uhe ^ills FurnUure Co. ftK^ ^i^<2 £/ ^ .^ T^,^^ ^i t-t^^^ .^g^ ?W- .- .^ry^^^ . /^^ '^^ r^gy ^/ ^ ^ /- (^^^^ ■^i^ ^,^^.^/-rp-z7^,.^,:^L<^ ^/^ ^:^^,^rirC>'^^J- .^. ^-^-gz..Si>^^J^t4^ ^^^^■x ..zl^.^. -^ Ar^ /^^^ 3c>(^ 1^ •/^^7 .i::^ ^/r^"/ S^ 3f^^Ja Invoice Book. This book illustrates another form for recording the amounts of all merchandise bought by the business, and takes the place of the purchase book with which the student is already familiar. It is generally made up of original bills. In regular work these bills are received and audited and then pasted into the invoice book. The net amount of each bill is carried to the money columns, which are ruled on the right of each page. In entering items in the invoice book observe the following: 1. Do not allow the edges of the bills to extend into the money col- umn. Invoices coming from different houses will not be of uniform size, and when necessary the edges of some of these bills should be trimmed. 2. Use but little mucilage. Paste the upper and the lower corner of the first bill on each page, but paste only the lower corners of all the other bills, and let them lap over each other as shown in the model invoice book. 3. Place the amount of each bill in the money column directly oppo- site the name of the firm of whom the goods have been purchased. How to post the Invoice Book. This book is posted in practically the same way as the purchase book. In posting observe the following : 1. Be sure to forward the total of the money column from page to page. 144 BOOKKEEPING 2. At the end of the month, or at such other periods as may seem advisable, post the aggregate of the money column to the debit side of the Merchandise account. 3. Post the amount of each bill directly from the invoice book to the credit of the firm of whom the merchandise was purchased. Cashbook. The cashbook used in this set differs slightly from that used in the preceding sets. A special column is provided on each side for merchandise discounts. A careful study of the following illustration will enable the student to use this book intelligently. Note. The Mdse. Disc, column is given a place in the cashbook as a matter of con- venience. It shows the deduction on the invoice, and the posting to the credit of the customer's account requires that the net cash received should be added to the Mdse. Disc, to ascertain the amount of the bill settled. The Mdse. Disc, is not used in proving cash. Cash Receipts, July, 19 — MDSE. DISC. DR. GENERAL TOTALS J. H. Sampson J. E. Bender C. W. Gray Bills Rec. Interest C.O.D. Accounts J. O. Brown & Co. Mdse. Disc. Dr. Investment Inv. 7/7, less 3% Inv. 7/5 Moran's note On above C. B. Moore Inv. 6/12, less 1% Total for month 36 12 48 16 60 6000 1169 1240 560 5 50 1247 76 10272 10272 19 19 SET V. JOBBIKG FURNITURE 145 The Incoming Business Forms. The list of incoming business forms for July is given on pages 151 to 154. If the set is written without using the tablet of printed incoming forms, it will be necessary for the student to prepare them before he begins to write the set. After these forms are written, they should be placed in the envelope marked Incoming Business Forms, and withdrawn as they are needed when writing the set. Whatever plan the instructor may adopt, either using business prac- tice or writing the set as a study of the theory of bookkeeping only, this material is immediately at hand for reference, for class drills and dis- cussion, for reviews during the progress of the set or when the set is finished. This plan of the text does away with the necessity of using a pad of vouchers which are wholly independent of the text. Cash Payments, July, 19 — MDSE. DISC. CR. GENERAL Expense Expense Expense J. O. Moran Cobb, Bates & Co. C. W. Allen & Co. Expense Expense Bills Pay. J. K. Levy & Co. Stoddard & Co. Bills Pay. Interest Expense Mdse. Mdse. Disc. Cr. Balance Rent Office safe Insurance Sight draft paid Inv. 7/6, less 2% Inv. 7/6, less 2% Telegram Stationery, etc. Accept, favor King Draft favor Brq,wn & Co. Inv. 7/10, less 2% Note favor Ellis Mfg. Co. On above note Salaries to date Freight and cartage Total for month In safe, 67.09; hank, 3600 24 65 40 150 250 120 200 1176 862 1 4 900 1100 1176 500 5 120 50 40 50 6605 8667 10272 10 09 19 146 BOOKKEEPING Selling Price Lists for July and August ARTICLE AND DESCRIPTION No. 3ir6 Antique Card Table . 2546 Antique Library Rocker 693 Antique Wardrobe . . Blue Chenille Curtain . 16 B Brass Easel .... 635 Brass Bedstead . . . 15 Cane-seat Dining Chair 59 A Cheval Glass .... 71a Child's Crib .... 10 China Closet .... 20 Corner Chair .... 245 Cedar Chest .... 16 A Complete Dining-room Set 572 Drawing-room Suite 170 English Clothes Pole . 5932 Empire Toilet Table . 3016 Fancy Rocker . . . 36 B Gentleman's Chiffonier 6387 Hall Settle .... 16 K Leather-seat Dining Chair 169 c Library Table . . . 91 Lace Curtain .... 16 Lady's Dressing Cabinet 835 Music Cabinet . . 50 Mahogany Parlor Table 626 Mahogany Office Chair 396 Mahogany Hall Stand . 89 Mahogany Chamber Set 1008 Oak Sideboard . . 2229 Oak Dining Table . 73 Oak Writing Desk . 68 Oak Bookcase . . . 76 A Oak Chamber Set . 687 Ornamental Table . 20 D Parlor Cabinet . . 821 Parlor Lamp . . . 176 c Piano Chair . . . 57 Reclining Couch . . 17 a Roman Chair . . . 73 Sofa Bed .... 5926 Secretary Book Cabinet 65 Turkish Rocker . . 27 c Woven-wire Mattress 16 W^ool Mattress . . 495 White Iron Bedstead ^19.75 12.00 25.75 5.00 15.00 22.50 2.25 21.25 15.75 25.00 26.00 11.00 110.00 100.00 5.50 50.00 10.00 10.00 23.25 9.50 25.00 6.00 40.00 5.00 21.25 16.50 65.00 80.00 195.00 12.25 10.00 9.75 14.25 5.25 37.00 16.00 17.00 28.00 18.75 38.00 92.00 24.75 3.25 4.00 5.00 $13.50 29.25 27.50 5.00 15.00 24.00 1.85 21.99 9.50 24.50 26.00 19.00 98.00 152.25 4.10 39.75 10.00 9.00 19.25 9.00 23.75 6.00 23.50 9.00 20.00 17.25 65.00 75.00 145.00 12.00 14.75 9.75 14.25 12.00 43.50 10.00 9.00 21.00 18.75 15.50 137.50 22.00 3.00 3.00 4.00 $15.00 11.75 29.50 5.00 11.75 21.50 1.75 22.00 16.79 39.00 26.00 9.50 90.50 175.00 3.60 33.75 10.00 17.25 21.00 7.50 21.50 6.00 35.00 10.00 19.25 19.00 65.00 112.50 135.00 10.00 18.59 9.75 14.25 10.00 50.00 9.50 6.00 21.50 18.75 19.75 139.50 25.00 2.50 3.00 5.00 $17.50 22.00 28.75 5.00 13.00 23.00 2.22 20.50 15.65 19.90 26.00 9.65 110.00 125.00 3.15 39.75 8.50 22.50 22.00 9.50 15.00 6.00 39.50 6.00 15.00 13.50 65.00 60.00 120.00 15.00 15.00 9.75 14.25 9.50 65.00 7.50 9.50 17.50 18.75 20.00 75.00 15.00 4.00 2.75 5.50 5 124.00 13.50 22.90 5.00 12.00 21.69 2.69 19.75 18.50 14.50 26.00 6.25 95.00 92.50 3.15 27.00 9.75 15.90 17.75 8.00 39.00 6.00 38.50 3.00 12.50 11.75 65.00 149.50 117.50 12.75 11.50 . 9.75 14.25 4.50 35.00 11.50 13.00 14.50 18.75 21.00 65.00 18.00 5.00 2.90 6.50 SET V. JOBBING FURNITURE 147 Selling Price Lists for July and August 6 7 8 9 10 11 12 13 $19.00 $16.50 $20.50 $23.20 $24.00 $15.00 $18.50 $19.50 12.25 17.00 22.00 13.25 12.00 19.25 26.00 27.25 24.50 26.75 28.00 29.00 27.50 29.50 24.00 30.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 13.50 12.25 14.00 14.50 17.00 11.00 12.75 14.75 22.00 23.50 22.50 20.00 21.50 21.75 22.25 23.25 2.10 2.45 1.90 2.45 2.50 1.80 2.20 2.00 21.00 21.25 22.00 22.50 19.00 20.50 21.50 19.50 15.00 12.70 14.50 13.75 10.40 12.70 18.00 18.50 24.00 26.50 17.75 19.50 14.00 12.80 32.50 24.50 26.00 26.00 26.00 26.00 26.00 26.00 26.00 26.00 11.50 9:75 10.00 9.50 7.75 16.00 15.50 12.50 105.00 97.50 112.50 95.00 100.00 90.00 94.50 110.00 97.50 100.00 115.00 102.50 92.50 120.00 135.00 137.50 4.00 5.20 3.65 3.00 4.25 5.00 5.25 3.50 32.50 50.00 40.00 42.50 35.00 27.50 27.00 36.50 8.00 10.00 8.50 9.00 9.50 8.25 9.25 10.25 15.00 12.50 13.50 17.50 16.00 11.50 12.50 22.00 17.50 23.25 21.00 17.75 22.50 19.75 18.50 17.00 9.00 7.20 8.50 7.50 8.40 9.50 8.00 7.00 23.50 25.00 27.50 29.00 31.00 32.50 22.50 19.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 35.00 25.00 27.00 33.50 38.00 25.00 34.00 39.20 5.50 6.00 5.00 7.00 6.50 9.00 10.00 8.75 20.00 21.25 19.50 13.00 15.50 17.50 19.25 15.00 15.00 12.60 16.40 14.50 18.50 17.00 15.00 11.50 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 95.00 140.00 87.50 90.00 100.00 75.00 110.00 105.50 150.00 125.00 145.00 120.00 135.00 137.50 120.00 160.00 12.00 16.00 10.50 13.25 11.00 13.20 11.00 13.20 13.00 17.50 11.00 14.00 10.50 12.40 18.00 17.00 9.75 9.75 9.75 9.75 9.75 9.75 ■ 9.75 9.75 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 6.50 7.00 5.00 4.50 8.00 7.50 9.00 10.00 40.00 37.50 50.00 52.50 60.00 62.00 65.00 63.50 8.00 7.50 12.50 15.00 13.50 12.00 10.50 14.00 10.00 12.00 14.50 9.50 8.50 13.00 11.00 9.50 20.00 27.00 18.00 14.50 16.20 15.90 21.50 25.00 18.75 18.75 18.75 18.75 18.75 18.75 18.75 18.75 22.00 35.00 21.20 24.60 30.50 22.70 16.25 28.00 100.00 96.00 125.00 132.50 91.50 124.00 110.00 112..50 21.00 16.25 14.75 24.20 18.75 19.40 22.50 23.00 3.50 4.00 3.75 4.50 5.00 5.50 2.50 3.25 3.00 4.00 2.90 3.25 2.70 3.20 4.00 3.00 5.00 4.00 6.00 4.50 5.25 6.25 4.25 6.20 148 BOOKKEEPING Selling Price Lists for July and August ARTICLE AND DESCRIPTION ^0 3116 u 2546 i( 693 a 16 b li 635 (I 15 {( 59 a li 71a (I 10 li 20 It 245 11 16 a a 572 a 170 a 5932 a 3016 It 36 b it 6387 it 16 k It 169 c li 91 it 16 it 835 it 50 it 626 it 396 it 89 tt 1008 it 2229 it 73 ii 68 It 76 a tt 687 tt 20 D it 821 it 176 c it 57 tt 17 a it 73 It 5926 tt 65 tt 27 c it 16 it 495 Antique Card Table . . . Antique Library Rocker . Antique Wardrobe . . . Blue Chenille Curtain . . Brass Easel Brass Bedstead . . . . Cane-seat Dining Chair Cheval Glass Child's Crib China Closet Corner Chair Cedar Chest Complete Dining-room Set Drawing-room Suite . . . English Clothes Pole . . Empire Toilet Table . . Fancy Rocker Gentleman's Chiffonier . . Hall Settle Leather-seat Dining Chair Library Table Lace Curtain Lady's Dressing Cabinet . Music Cabinet Mahogany Parlor Table . Mahogany Office Chair. . Mahogany Hall Stand . . Mahogany Chamber Set . Oak Sideboard . . . . Oak Dining Table . . . Oak Writing Desk . . . Oak Bookcase Oak Chamber Set . . . Ornamental Table . . . Parlor Cabinet . . . . Parlor Lamp ...... Piano Chair Reclining Couch . . . . Roman Chair Sofa Bed Secretary Book Cabinet Turkish Rocker .... Woven-wire Mattress . . Wool Mattress .... White Iron Bedstead . . 14 121.60 14.50 25.00 5.00 12.50 21.00 1.75 23.00 16.75 27.50 26.00 14.25 88.50 96.50 3.60 34.00 10.00 20.00* 17.50 8.75 25.00 6.00 32.00 4.50 21.00 12.00 65.00 112.50 150.00 14.00 15.50 9.75 14.25 9.50 45.00 16.00 7.00 27.50 18.75 16.00 75.00 20.00 4.20 2.90 5.50 15 $13.50 18.00 26.00 5.00 16.00 20.50 1.95 23.50 16.40 30.00 26.00 10.75 94.25 99.50 4.20 28.50 9.75 21.50 20.00 9.50 35.00 6.00 30.00 7.00 18.00 15.50 65.00 125.00 130.00 12.50 16.50 9.75 14.25 8.50 47.50 10.00 10.00 20.50 18.75 19.75 65.00 23.75 2.50 3.00 4.70 16 17 $16.50 26.00 25.00 5.00 13.00 24.00 2.00 21.50 15.75 25.00 26.00 11.20 106.00 152.25 4.30 40.00 8.00 16.40 17.50 9.50 25.50 6.00 34.00 5.50 20.00 12.50 65.00 85.00 125.00 12.50 13.75 9.75 14.25 10.00 50.00 8.25 9.50 21.40 18.75 22.50 80.00 22.00 2.75 2.90 4.90 $20.00 17.50 27.50 5.00 15.00 21.50 2.90 24.25 17.25 33.60 26.00 15.00 91.50 125.00 5.40 37.50 9.50 21.20 19.00 7.70 23.00 6.00 31.50 7.00 17.50 14.50 65.00 142.00 147.50 14.90 17.50 9.75 14.25 7.50 43.50 10.50 13.00 27.90 18.75 31.50 90.00 16.60 3.45 4.00 4.40 SET V. JOBBING FURNITUEE 149 Selling Price Lists for July and August 18 19 20 21 22 23 24 25 $15.20 $22.00 $21.50 $24.00 $23.50 $18.00 $19.50 $22.50 22.00 16.00 24.00 19.00 28.20 21.60 26.40 30.00 26.00 24.00 29.00 28.00 22.50 27.50 22.90 25.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 15.40 11.50 14.20 16.25 13.25 12.00 13.40 14.50 20.00 23.00 21.00 21.40 23.50 21.75 22.25 20.50 1.80 2.30 1.90 2.40 2.30 1.70 1.95 2.25 23.00 20.00 19.00 19.50 23.50 19.75 22.00 22.50 15.40 10.70 12.40 13.75 16.20 9.90 11.75 12.90 37.50 17.50 18.50 26.70 24.90 23.20 15.00 17.20 26.00 26.00 26.00 26.00 26.00 26.00 26.00 26.00 7.50 6.75 8.90 14.20 18.00 12.60 13.75 14.50 96.40 100.00 89.50 92.00 98.00 97.50 109.20 107.00 100.00 160.00 142.50 94.50 102.50 99.50 110.00 120.00 3.90 3.75 4.60 4.40 5.50 4.20 3.10 3.35 27.50 35.00 29.50 33.50 28.00 35.50 45.00 50.00 10.00 9.75 8.50 9.25 10.50 8.25 10.25 9.00 22.00 23.00 15.40 13.90 12.50 9.90 10.50 11.80 21.00 22.50 23.25 20.00 19.75 17.75 20.50 23.00 6.45 9.20 8.80 7.60 9.30 9.50 8.50 9.00 27.00 22.50 30.00 31.50 28.00 21.00 17.50 35.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 24.50 23.90 26.20 32.00 39.00 37.50 39.00 40.00 9.50 8.00 5.00 10.00 8.50 6..50 4.50 7.50 16.00 19.25 15.50 18.50 21.25 17.00 16.25 20.50 16.00 17.20 11.70 19.20 18.60 17.50 13.30 14.75 65.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 130.00 117.50 94.40 97.50 124.00 101.75 109.00 114.20 122.50 165.00 175.00 127.50 162.50 180.00 187.50 190.00 16.20 12.75 10.80 11.40 13.65 14.75 11.50 10.50 14.65 11.50 10.80 13.75 15.60 18.50 17.90 15.60 9.75 9.75 9.75 9.75 9.75 9.75 9.75 9.75 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 9.50 8.25 7.75 9.20 11.00 10.50 7.20 6.50 32.50 28.20 31.50 43.50 52.00 57.50 60.00 35.50 9.75 12.25 11.50 13.20 8.75 7.50 11.20 14.25 14.20 15.00 12.50 9.60 7.80 10.50 15.25 16.00 24.20 21.00 25.20 14.90 13.80 17.60 20.50 26.75 18.75 18.75 18.75 18.75 18.75 18.75 18.75 18.75 23.90 17.70 16.90 26.25 27.50 19.40 20.00 22.50 88.40 97.50 101.00 74.20 81.80 135.00 127.50 92.20 15.50 24.80 16.75 23.90 22.60 23.20 18.80 17.90 4.15 3.65 4.40 5.25 4.80 3.90 3.35 4.15 3.80 2.95 3.90 3.25 3.15 3.65 3.00 4.00 6.60 4.25 5.35 6.40 6.60 5.25 5.10 4.75 150 BOOKKEEPING Buying Prices for July and August ARTICLE AND DESCRIPTION No .3116 it 2546 (( 693 i( 16 b (( 635 it 15 i( 59 a u 71a (( 10 ii 20 u 245 u 16 a u 572 « 170 « 5932 « 3016 « 36 b « 6387 li 16 k u 169 c u 91 (I 16 ii 835 ii 50 a 626 a 396 a 89 a 1008 ii 2229 a 73 li 68 a 76 a a 687 a 20 D a 821 a 176 c a 57 ii 17 a a 73 ii 5926 a 65 ii 27 c a 16 a 495 Antique Card Table . . . Antique Library Rocker . Antique Wardrobe . Blue Chenille Curtain . . Brass Easel Brass Bedstead .... Cane-seat Dining Chair Cheval Glass Child's Crib China Closet Corner Chair Cedar Chest Complete Dining-room Set Drawing-room Suite. . . English Clothes Pole . . Empire Toilet Table . . Fancy Rocker Gentleman's Chiffonier Hall Settle Leather-seat Dining Chair Library Table Lace Curtain Lady's Dressing Cabinet . Music Cabinet .... Mahogany Parlor Table . Mahogany Office Chair Mahogany Hall Stand . . Mahogany Chamber Set . Oak Sideboard .... Oak Dining Table . . . Oak Writing Desk , . . Oak Bookcase Oak Chamber Set . . . Ornamental Table . . . Parlor Cabinet . . . . Parlor Lamp Piano Chair Reclining Couch . . . . Roman Chair Sofa Bed Secretary Book Cabinet . Turkish Rocker . . . . Woven-wire Mattress . . Wool Mattress . . . . White Iron Bedstead . . $14.50 9.00 21.75 4.00 12.50 15.75 1.50 15.25 11.50 17.25 20.00 8.50 78.00 75.00 3.50 39.00 7.50 7.50 16.50 6.50 20.00 4.50 30.00 4.00 15.25 12.50 43.00 60.00 150.00 9.75 7.50 7.50 11.00 4.00 25.00 13.00 12.50 21.00 15.00 30.00 65.00 18.00 1.75 2.25 3.75 SET V. JOBBING FUBKITUKE 151 Incoming Business Forms for July A tablet, separate from the text, containing all the incoming business forms, is available for writing this set when business practice is used. A list of the forms is given herewith, so that the text affords all mate- rial for writing the set if business practice is omitted. These forms also afford an opportunity for the study of the set as a whole before writing it, thus meeting a requisite for adequate drill work, whether business forms are used or not. If the set is written without using the business practice, blank invoice forms may be used for the invoice book, in recording the merchandise bought; these blanks may be secured of the publishers. Twenty-five selling price lists are available for this set, and each one may be used in connection with the business forms, whether business practice is used or not. Let the instructor assign to each student a price list, and if business practice is used, he should be given the necessary blank forms. In all the following invoices the student is represented as the purchaser. Form 1. Note of J. B. Maxwell, dated City, June 15, drawn in your favor, payable at The Union Bank 30 da. after date, with interest at 6%, 1500. Form 2. J. B. Topham's draft in his own favor, on W. D. Rimbach, City, transferred to you by full indorsement. Draft is for $450 and is dated City, June 3, payable at The Union Bank 30 da. after date. Form 3. Bill of Thorp, Martin & Thorp, 798 Franklin St., City, dated July 1. Terms: cash, less 2%. Items as follows: 4 M Letterheads at $2 1 Ledger, $6 2 M Envelopes at |1.50 1 Journal, $3 1 M Billheads, |2 1 Cashbook, |3.50 2 gro. Steel Pens at 750 1 Sales Book, |3 1 qt. Writing Fluid, 75(^ 1 Bill Book, $1.50 1 doz. Pencils, 30(^ 1 Invoice Book, f 1 Deduct the discount on the bill and receipt it. Form 4. Invoice of Cobb, Bates & Co., 62 Portland St., City, dated July 3. Terms: 3/10, net 30 da. Items as follows: 9 #5932 Empire Toilet Tables 10 #76 a Oak Chamber Sets 12 #36 B Gentleman's Chiffoniers 5 #1008 Oak Sideboards 5 #16 Lady's Dressing Cabinets 6 #693 Antique Wardrobes 152 BOOKKEEPING Fonn 5. Invoice of Derby Mfg. Co., 17 Portland St., City, dated July 3. Terms: draft at 10 da. for the amount of the bill, less 2%. Items as follows: 4 #20 D Parlor Cabinets 10 #3116 Antique Card Tables 4 #169 c Library Tables 5 #89 Mahogany Chamber Sets 10 #16 A Complete Dining-room Sets Deduct the discount on the bill, as a draft will be attached when it comes into your possession. Form 6. Draft of Derby Mfg. Co., dated City, July 3, payable at 10 days' sight, on you, in favor of themselves, for the net amount of the above bill. Form 7. J. O. Moran's sight draft, dated City, July 5, on you, in his own favor, |200. Form 8. Check of J. E. Bender, dated Troy, July 8, on Traders National Bank, in your favor, |1169.09. Form 9. Invoice of W. H. Stearns & Co., Chicago, 111., dated July 9. Terms : 30-da. draft for one half of the bill ; balance in 60 da. Items as follows : 100 #15 C. Dining Chairs 20 #626 M. Office Chairs 100 #16 K L. Dining Chairs 20 #3016 Fancy Kockers 10 #2229 0. Dining Tables 5 #2546 Ant. Lib. Rockers Form 10. W. H. Stearns & Co.'s draft, dated Chicago, 111., July 9, payable 30 da. after date, on you, m favor of themselves, for one half the amount of the above invoice. Form 11. Your draft at 30 da. from July 5 on Samuel W. Bradley, Bed- ford, in favor of yourseK, accepted, for |840.25. Acceptance is dated July 5. Form 12. Samuel W. Bradley's draft, dated Bedford, July 12, at 30 da. from date, on J. E. Farley, City, in favor of himseK, for $179. Transferred to you by full indorsement. Form 13. A bank draft drawn by Traders National Bank, Springfield, on Chemical National Bank, New York, July 10 ; drawn pay- able to G. H. Ingalls & Co., A. B. Turner, Cashier, for $1085.19. Transferred to you by full indorsement. Form 14. Invoice of C. W. Allen & Co., Trenton, N.J., dated July 9. Terms : 2/30, net 60 da. Items as follows : 24 #27 c Woven-wire Mattresses 10 #71 a Child's Cribs 24 #16 Wool Mattresses 24 #495 White Iron Bedsteads 50 #635 Brass Bedsteads SET V. JOBBING FUENITUEE 163 Form 15. Invoice of William Leavens & Co., 32 Canal St., New York City, dated July 11. Terms: sight draft in 10 da. for the amount of the bill, less 2 % . Items as follows : 12 #73 Oak Writing Desks 3 #5926 Sec. Book Cabinets 15 #68 Oak Bookcases 6 #396 Mahogany Hall Stands Deduct the discount. Form 16. Stoddard & Co.'s draft, dated City, July 14, on you, in favor of themselves, at 15 da. from date, for $400. Form 17. E. F. Green & Co.'s draft, dated Bangor, July 14, on H. B. Claflin & Co., City, in your favor, at 30 da. from date, for $400. Form 18. Invoice of Randall Mfg. Co., 126 East 123d St., New York City, dated July 8. Terms : 3/10, 1/30, net 60 da. Items as follows : 10 #57 Reclining Couches 50 #^5 Turkish Eockers 5 #73 Sofa Beds Form 19. Invoice of S. T. Udell & Co., Chicago, 111., dated July 16. Terms: sight draft in 20 da. Items as follows: 19 #50 M. Parlor Tables 11 #10 China Closets Form 20. William Leavens & Co.'s sight draft, dated New York City, July 20, on you, in favor of themselves, for the net amount of Form 15. Form 21. C.O.D. envelope. Get $50 of the instructor and place it in the envelope. Data as follows: Cash inclosed, $50. Goods were shipped by you to Chas. B. Lyman, Springfield, July 17. Note. An envelope containing the required amount of cash will be found in the back part of the tablet of Incoming Business Forms. If business practice is used and the incoming business forms are not used, get the cash of the instructor. Form 22. Check of David E. Teeter, dated City, July 23, on Traders National Bank, in your favor, for $1291.95. Form 23. M. N. Overman's draft on Rogers, Peet & Co., Buffalo, in favor of himself, dated Albany, July 13, payable at 30 days' sight, for $469.39. Accepted July 15. Transferred to you by full indorsement. Form 24. New York draft, dated City, July 24, drawn by The Union Bank on Chemical National Bank, in your favor, Chas, H. Palmer, Cashier, for $319.72. 154 BOOKKEEPING Form 25. Invoice of C. W. Allen & Co., Trenton, N.J., dated July 23. Terms : 2/30, net 60 da. Items as follows : 17 #5.72 B Drawing-room Suites 5 #59 a Cheval Glasses Form 26. Stoddard & Co.'s sight draft, dated City, July 27, on you, in favor of themselves, for |150. Form 27. Bill of the Metropolitan Carting Co., dated City, July 28. Items as follows: July 3, Cartage, $12.25 10, Cartage, 9.50; Freight, $126.50 13, Cartage, 7.50; Freight, 54.20 26, Cartage, 3.75 Receipt the bill as follows : Metropolitan Carting Co. Form 28. Receipted bill of the Consolidated Gas and Electric Light Co., City, dated July 29. Terms: cash, less 5%. Items as follows: Meter at current date, 8200 cu. ft. Meter at last settlement, 2000 cu. ft. Gas consumed, 6200 cu. ft., at $1.20 per 1000 Deduct the discount before receipting the bill. In receipting, sign the name of the gas company, per your initials. Memoranda of Transactions for July July 1 You begin a Jobbing Furniture business at 269 Causeway St., with the following resources and liabilities : Resources J. B. Maxwell's note, dated June 15, in your favor, payable at The Union Bank 30 da. after date, with interest at 6%, |500 ; interest accrued on the above note to date, $1.33. Discount on bills payable, |4. Accepted draft, dated June 3, payable at The Union Bank 30 da. after date, |450. This draft is drawn by J. B. Topham, in his own favor, on W. D. Rimbach and transferred to you by full indorsement. The stock of furniture of the late Allen & Bailey Furniture Co., as per schedule on file, $7150. Cash on hand, $6200. Store and lot, 269 Causeway St., as per warranty deed on file, $7000. SET V. JOBBING FUENITUEE 155 Office fixtures, etc., as per schedule on file, $450. Two horses, harness, delivery wagon, etc., valued at |450. The following persons owe you : J. E. Bender, Troy, |1350 ; Samuel W. Bradley, Bedford, $750; E. F. Green & Co., Bangor, $400. lAabilities Your note at 1 mo. from June 25, in favor of Allen & Bailey Furni- ture Co., payable at The Union Bank, for $2500, with interest at 6%; interest accrued, |2.50. Discount on bills receivable, 15(^. C. O. Boswell's draft at 30 days' sight, dated New York City, June 20, on you, in his own favor, for flOOO. You accepted it June 25, payable at The Union Bank. You owe the following persons on account : J. O. Moran, City, $2100 ; Paine Manufacturing Co., Bedford, $350; Stoddard & Co., City, $4750. Note. The ledger title for the store and lot is Real Estate; for the schedule of office supplies, Office Fixtures ; for horses, harness, and delivery wagon. Horse & Wagon. The Interest account and the Discount account will be united in one account under the title Interest. Make the opening journal entry ; enter the cash item in the cashbook also. Record the notes in the bill book. Write the note and the draft given in the liabilities., and hand them in. Did you remember to check the cash item in the opening journal entry in both the cashbook and the journal ? How are they checked ? In opening a set of books it is always necessary to find the present value of the notes on hand and outstanding, in order to determine the actual net investment. The item of $4 under interest on the list of resources is for 24 days' discount on the acceptance in favor of C. O. Boswell. The draft is not interest-bearing, so it will not be worth its face value until maturity. Computing the discount for 24 da., it is found that a cash payment of $4 less than the face will cancel the acceptance July 1. Since Bills Payable must be credited for the face of the draft, the discount is treated as an available resource. In like manner it is found that W. D. Rimbach's acceptance is worth 15^ less than its face value on July 1. Bills Receivable must be debited for the face of the accept- ance, and Interest credited for 15^ to offset the overcharge of resources. Take J. B. Maxwell's note. Form 1, and W. D. Rimbach's acceptance. Form 2, and place them in the Unpaid Bills envelope. The warranty deed, the schedule of property on hand, etc., are assumed to be on file, and you will make no reference to them at this time. 156 BOOKKEEPING Apply to the instructor for the cash investment. Deposit in The Union Bank all the cash on hand except f 100. The bank account will be kept in the same manner as in the introductory work. An envelope for filing the checks drawn, and for making the monthly bank state- ment, will be found in the package of business forms. The left stub of the check book may be used for recording any important memoranda. Pay by check the bill of Thorp, Martin & Thorp, for books, station- ery, etc., Form 3. Place the bill in the Paid Bills envelope. Secure from the Manhattan Fire Insurance Co. a policy of insurance for 112,000 on the store, the goods, and the fixtures at 1J% premium. Pay the premium by check in favor of Chas. M. Shaw, general agent for your place. Charge Expense. The policy, it is assumed, was received and filed yesterday. Note. A policy of insurance is simply an insurance company's contract with the insured. Such a contract covers usually the following : Premium paid by the insured. Term of insurance. Amount of insurance. Description of the property insured. Extent of the company's liability, etc. This agreement is signed usually by the president and the secretary of the company as well as by the local agent of whom you obtained it. Engage Harry K. Sutton at |60 and Harvey L. Grant at $50 per month as salesmen ; Michael Donovan at |30 per month as delivery man ; Daniel L. Coon and Geo. W. Ainsley at $48 and $40 per month, respectively, as upholsterers and finishers. A memorandum of the above may be made by the student and filed with the incoming papers. THINGS TO OBSERVE IN WRITING LETTERS ORDERING GOODS 1. Arrange the items one on a line. 2. Give shipping directions in out-of-town orders. 3. In case of a first order : a. Give satisfactory references. h. State how you intend to pay. 4. When you name prices, state at what point you expect the goods f.o.b. 5. Always be definite with regard to the quality and the quantity of the articles ordered. 6. If it is a special order, state the purpose for which the goods are intended. 7. State, if necessary, when the goods must reach you. SET V. JOBBING FURNITURE 157 Model Letter for ordering Goods Hartford, Conn., July 1, 19 — Mr. Harold M. Bates 136 Main Street Detroit, Michigan Dear Sir : Please ship the following goods, subject to your best cash discount : 10 #5926 Secretary Book Cabinets 15 #396 Mahogany Hall Stands 20 #73 Oak Writing Desks 10 #57 Reclining Couches 50 #65 Turkish Rockers 25 #68 Oak Bookcases 5 #73 Sofa Beds I am permitted to refer you to the First National Bank, of this city, as to my business standing. Yours truly Write letters, ordering the following goods : 1. Of Cobb, Bates & Co., 62 Portland St., City, the goods outlined in Form 4. Give references and ask for their best cash discount. Note. In this set no entry will be made at the time of ordering goods. Almost all of the orders are sent to out-of-town firms, and sufficient time is allowed to elapse for the student to receive the invoice and the goods before making any entry. 2. Of William Leavens & Co., 32 Canal St., New York City, the goods outlined in Form 15. Offer to honor their sight draft in 10 da. for the amount of the bill less the regular discount for payments within 10 da. As you are a stranger to this firm, give New York City references. 3. Of C. W. Allen & Co., 46 Merrimac St., Trenton, N.J., the goods outlined in Form 14. You have had dealings with this firm before and expect their regular terms. 4. Of Derby Manufacturing Co., 17 Portland St., City, the goods outlined in Form 5. Ask them to allow you their usual discount, and to draw on you for the amount of the bill at 10 da. from date. 158 BOOKKEEPING 5. Of W. H. Stearns & Co., Chicago, 111., the goods outlined in Form 9. Tell them that you will honor their 30-da. draft for one half the bill, and will pay the balance in 60 da. Cancel your indebtedness to Paine Manufacturing Co., Bedford, by a sight draft on Samuel W. Bradley of the same place. Write a letter of remittance and send it with the above draft to Paine Manu- facturing Co. Also write a letter to Samuel W. Bradley, notifying him of the draft you have drawn on him at sight. Make the journal entry. The following suggests what the letters should contain. I Boston, Mass., May 25, 19 — 0. M. Behrns & Co. Syracuse, N. Y. Gentlemen : Inclosed find a sight draft on K. P. Shedd of your city, drawn in your favor, for Three Hundred Fifty (350) Dollars, in full settlement of account to date. Very truly yours E. R. Gaylord & Co. per m* II Boston, Mass., May 25, 19 — Mr. K. P. Shedd Syracuse, N. Y. Dear Sir : We have this day drawn upon you at sight, in favor of 0. M. Behrns & Co., of your city, for Three Hundred Fifty (350) Dollars. Very truly yours E. R. Gaylord & Co. per m. July 2 David E. Teeter, 360 Main St., City, orders the following goods. The order is filled at the prices given herewith : 10 #5932 E. Toilet Tables at |50 3 #89 M. Chamber Sets at $80 1 #16 A C. Dining-room Set at $110 2 #1008 0. Sideboards at |195 1 #396 Mahogany Hall Stand at $65 Terms: 3/5, 1/30, net 60 da. SET V. JOBBING FURNITURE 159 Note. T6e space allowed for recording the terms of sale on a bill is generally limited, and bookkeepers find it necessary to use symbols and abbreviations to indicate them. The following list explains the meanings of the abbreviations for terms used in this work. Net 30 da. means that the bill is to be paid in thirty days without discount. 1/30 means that 1% discount will be allowed if the bill is paid within thirty days. 3/10, net 30 da., means that 3% discount will be allowed if the bill is paid within ten days, or the amount of the bill will be due in thirty days without discount. Benj. P. Freeman & Co., 924 East St., City, order the following goods : 12 #170 Eng. Clothes Poles 12 #495 W. Iron Bedsteads 5 #245 Cedar Chests 25 #821 Parlor Lamps Fill the order. Terms: sight draft in 10 da., less 3%. Make out the bill, have it approved by the instructor, and then copy it into the sales book. Deduct the discount on the bill and in the sales book also. Draw a sight draft in favor of yourself, dating it 10 da. ahead. Write To he given to the hank July 12 on a slip of paper, pin the slip to the draft, and place both in the Business Cash envelope. Make no entry for the draft until July 12. Note. Some business men prefer to wait until the 10 da. have expired before drawing the draft. It is considered better, however, to draw the draft at the time of billing the goods, since the matter may be overlooked if it is deferred 10 da. Walker, Brown & Co., Albany, order: 5 #20 D Parlor Cabinets 10 #835 Music Cabinets 24 #176 c Piano Chairs 15 #821 Parlor Lamps Fill the order. Terms : draft at 30 da. from date. The goods called for in the above order will be sent by freight, and it will be necessary for you to prepare a hill of lading and the duplicates, the shipping order, and the memorandum. Study carefully the following illustration and the explanation. This is a new feature of your work ; be sure you understand it thoroughly. In the box of business forms there is a pad of bill of lading blanks, and full instructions for using this form. Use the pad marked Straight Bill of Lading. BILLS OF LADING As a means of serving the convenience of both the shippers and the railway companies, the Interstate Commerce Commission approved a uniform bill of lading, for general use, June 27, 1908. This approval applies to two forms of the bill of lading as follows : the straight bill of lading and the order bill of lading. 160 BOOKKEEPING Model Bill of Lading iUbm BttI ff Uiflng-Stiadart] form of StralgM BHI of Lading tfpmti bjr the Intentate Comtnerce CommlnlM by Onkr No. 797 of June 27, 1908 THE COMMERCIAL TRANSPORTATION CO. STRAIGHT BILL OF LADINQ-ORIQINAL-NOT NEGOTIABLE Shipper's No>. Agent's No. - BECEWED, subject to the claesiflcations and t^fEs in effect on the date of issae of this Original BUI of Lading, cA. J9-, from- ^ y^pJ-^-jA W^-r:7.-i^^ ^^ -the property described below, in apparent good order, except as noted (contents and condition of contents of packages unknown), marked, consigned and destined as Indicated below, which said Company agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- ested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigna The Bate of Freight fro . is in Cents per 100 lbs. tn IF SpKitI IFSpKi.1 IF-.TuMsItt IFItt CIM. IFZdClM. IF Rul* 25 IF 3d Clui IF Rul« 26 IF Rul* 28 IF 4th Clan IF 5th CUM IF 6tk CI>H P« Consigned to- Destination__ Route 7hy:^ ^^^ ^y y^ r>- . (MaU address— Mot for purposes of DeUvery) .^tate Of ??. T/. -County oL _Car InitiaL -Car No^ ypo DESCRIPTION OF ARTICLES AND SPECIAL MARKS * '>f7-7^^^..^^^1n ' ^^ ^^ Weight Subject to Correction) / r? o o CLASS OR RATE CHECK COLUMN If charges are to be prepaid, write ir stamp here. " To be prepaid. " / 00 ^ ':^r?^J^^^ ^^ JQ2 ^ Received % apply in prepayment of the / f JlCL Agent or Cashier fnie 0IU7 Ui stgnature here sekmovledges Charges AdTmnced ; % Pte Per ^ Lgent (This Bill of Lading is to be signed b; the shipper and i Model Memorandum (Heading) Far ate h connectiM wMi Uw StaiuUnl form of Straight Bill of Ladljig tpproved b; the Interttate Commerce Commission by Order No. 787 of Ibm 27, 1908 THE COMMERCIAL TRANSPORTATION CO. is an acknowledgment that a Bill of Lading baa been Isaned and Is not the Original Bill of THIS MEMORANDUM Lading, not a copy or dupUcate, covering the property named herein, and is intended solely for filing or record. Shipper's No.. Agent's No. - RECEIVED, subject to the dassiflcations and tarifis In effect on the date of the receipt by the carrier of the property described Original Bill of " " 19 =r. the property described below, in apparent good order, except as noted (contents and condition of contents of packages unknown), marked, consigned and destined as indicated below, which said Company agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- ested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigns. The Eate of Freight frran. ^/^ ia in pAnhi n«r 100 Ih. IF Sptcial IF SpKul IF TimMli t IFlit a««i IF 2d Clu> IF Rul«2S IF 3d CUM IF Rul* 26 IF Rul. 28 IF 4th CISH IF StO ClaM IF 6tk Glut P« --. -- - ,• SET V. JOBBING FUEKITURE 161 Model Shipping Order (Heading) For BM In csnnectloa with the Standard forni ol Straight Bill of Lading approved by the Interstate Commerce Commission b} Order No. 787 of Jim 27. I9W THE COMMERCIAL TRANSPORTATION CO. ruiceuiDDiwnnDncD »'«»*''« '•8l'>'y ^"'^ In, la ink, in Indelible pencU. or In carbon, and Shipper's No, THIS SHIPPING ORDER retained by the agent. . ^^^.^ ^^ RECEIVE, subject to the classiflcatious an 1 tariSs In effect on the date of issue of this Shipping Order, -the property described below, in apparent good order, except as noted (contents and condition of contents of packages unknown), marked, consigned and destined as indicated below, which said Company agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- ested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and bis assigns. The Rate of Freight from. is in f;Anf.s r.PT inn Ih ! IF SiMciil IF S(>«i.l IF Timmll IF !•< Cits. IF 2d Ciui IF Rul«3S IF Jd Glut IF Rul* 36 IF Rult 28 IF 4th Glut IFSthGlui iF6tl>Clau P- . Note. Bills of lading were lacking in uniformity until a final decision of the Inter- state Commerce Commission regarding them was secured. Previous to this they were so varied in size and form as to occasion much confusion and a consequent loss of time. To obviate these difficulties, business men appealed to the Interstate Commerce Com- mission to issue an order that would require a uniform bill of lading for all shipments. This request resulted in many conferences between the shippers, the transportation companies, and the Commission, with the result shown in the form of the bill of lading illustrated herewith. The straight bill of lading is drawn up in a set of three papers, du- plicates being made by using carbons, as follows: the straight bill of lading, original ; the memorandum, an acknowledgment that a bill of lading has been issued ; the shipping order. TM% form is not negotiable, and must be printed on white paper. The shipping order is signed by the shipper only, while the others are signed by both the shipper and the agent of the railway company. The shipping order is left with the agent; the bill of lading is sent to the purchaser of the goods; the memorandum is retained by the seller. The goods may be delivered to the purchaser without his surrender of the bill of lading. The order bill of lading is also drawn up in a set of three papers, but in this form the bill of lading must be printed on yellow paper and the duplicates on blue paper. The order bill of lading is negotiable by indorsement, and is extensively used in the shipping of freight that is not to be delivered until it is paid for. When the order bill of lading is used, the shipment is termed a Shipper's Order, and is recorded as a O.O.D. account. When an order bill of lading is used, it is customary to draw a sight draft, attach it to the bill of lading, and make the collection through a bank. The name of the bank is written after Consigned to Order of, and the name of the consignee after Notify. The consignee cannot get the 162 BOOKKEEPlKa bill of lading until he pays the draft, and he cannot get the goods until he surrenders the bill of lading. For this reason^ the shipper's order is a C.O.D. transaction. The bill of lading must be used in connection with all out-of-town shipments, the straight bill of lading for general orders, and the order bill of lading for all orders that are not to be delivered until the goods are paid for. Observe this distinction carefully. Prepare the straight bill of lading and the duplicates ; sign the ship- ping order and the duplicates, and then have the instructor or the freight agent sign the bill of lading and the memorandum. Place the bill of lading with the invoice, inclose both in an envelope addressed to Walker, Brown & Co., and hand it in. The shipping order should be left with the freight agent, and the memorandum placed on file by the shipper. Draw a draft, in favor of yourself, payable 30 da. from the date of the invoice. Indorse the draft properly and leave it with your bank for collection. It should be borne in mind that Walker, Brown & Co. have agreed to accept the draft, and it will be honored in due course. Make no entry in the check book. Some banks make a memorandum entry in the pass book for paper left for collection, but do not extend the amount into the money column. The straight bill of lading will always be used, unless you are otherwise instructed at the time of the transaction. Make an entry in the journal in the same way as if the accepted draft were in your possession. Make the proper record in the bill book. Refer to the model bill book, page 140. Leave W. D. Rimbach's acceptance at the bank for collection. Indorse it properly and make the necessary record in the Date Sent to Collect column of the bill book. July 3 J. E. Bender, Troy, has agreed to honor your sight draft, in favor of Stoddard & Co., for |300. Write the draft and the letters and hand them in. Make the proper entry in the journal. The Metropolitan Carting Co. has just delivered to you the goods ordered of Cobb, Bates & Co. on July 1. Look up the invoice. Form 4. Enter it in the invoice book. (See illustration, page 142.) SET V. JOBBING FURNITURE 163 THINGS TO BE OBSERVED WHEN ENTERING PURCHASES IN THE INVOICE BOOK 1. In actual business never enter a bill in the invoice book until the goods have been received. Sometimes it may happen that more than one bill is sent for the same goods, or perhaps a bill is sent and the goods are not delivered. 2. When the goods have been received, the invoice for the same should be checked. 3. If everything called for in the invoice has been received, then the bill should be compared with the order to find out whether or not you have received the goods you ordered. 4. If the items on the bill agree with the order, next observe if the prices and the terms are what you bargained for. 5. Examine the extensions of the invoice carefully and, if everything is found to be correct, paste the bill into the invoice book. 6. If the checking shows any irregularities on the bill or in the goods received, do not paste the invoice into the invoice book, but hold it, and immediately notify the persons of whom you are purchasing the goods. The goods ordered of Derby Manufacturing Co. have been dehvered. Look up the invoice. Form 5, and the draft sent with it, Form 6. Enter the invoice in the invoice book. Accept the draft, payable at The Union Bank, and make the journal entry. Record it in the bill book. Place the draft in an envelope, address it, and hand it in. The deduction of 2% from the face value of this invoice is a trade discount, and really amounts to a reduction from the list price. Only the net amount is extended to the money column on the invoice, as this is the selling price of the goods, and this amount is to be posted to the ledger. This discount appears only on the invoice, as no ledger account is kept with the trade discount. W. D. Rimbach's acceptance has been collected. Go to the bank and have the amount placed to your credit in the pass book. Make the following record on the left stub of your check book : / cZ-i^C^-^i^- ay9-z-€i-£y l/J-c? Credit Bills Receivable on the left side of the cashbook. Mark the note Paid in the bill book. July 5 Pay by check J. O. Moran's sight draft on you, in favor of himself, for $200, Form 7. Write the check and make the cashbook entry. Hand in all outgoing papers. 164 BOOKKEEPING Samuel W. Bradley, 126 James St., Bedford, orders the following goods. The order is filled at the prices given herewith. 5 #3116 A. Card Tables at $19.75 3 #1008 0. Sideboards at |195 6 #687 O. Tables at $5.25 5 #169 c Library Tables at $25 Terms : draft at 30 da., in favor of yourself, for the amount of the bill. Write the draft and have it approved. Inclose the invoice, the bill of lading, and the draft in an addressed envelope, and hand it in. Make no entry for the draft until it has been returned, accepted. Telegraph Randall Manufacturing Co., 126 East 126th St., New York, ordering : 50 #65 Turkish Rockers 10 #57 Reclining Couches 5 #73 Sofa Beds Do not use more than twenty words for the message. Write the telegram and hand it to the instructor for approval. Pay 75^ charges in currency. Debit Expense in the cashbook. The following suggests the general wording and the form of a telegram: THE UNION TELEGRAPH CO. INCORPORATED 15,000 Offices in America Cable Service to all the World "W. H. ARMISTEAD, President and General Manager Receiver's No. Time Filed Check O t IN U the following message subject to the j BOStOH, MaSS., JulV 1, 10 — terms on back hereof, which are hereby agreed to. ) ^ *■■' hereby agreed Xo Wm. M. Brown & Co. New York City- Ship fast freight twenty number sixty library tables Manning, Ball & Co. S^=READ THE NOTICE AND AGREEMENT ON BACK=:^ SET V. JOBBING FURNITURE 165 THINGS TO BE OBSERVED IN WRITING TELEGRAMS 1. Omit the salutation, the complimentary close, and all superfluous words. Avoid such expressions as, Ship immediately hy American Express, etc. Here, and in all similar expressions, such words as immediately, at once, etc. are entirely unneces- sary. A telegram in itself implies urgency. 2. Make all messages as short as possible, but clear and definite. A fixed charge is made for all messages, except those sent by cable, not exceeding ten words, and for every word in excess of that number there is an additional charge. All charges are regulated somewhat by distance. 3. No charge is made for the name and the address of the person who is to receive the message, or for the name of the sender. 4. The sender of a message should never include his street number, when writ- ing his address. A charge is made for everything in the address except the name of the city or the town, the state, and the date. If you are not generally known in a large city or town, give the sending operator your street address, and answers will be delivered promptly, and no additional charge made. 5. Numbers should be written in full, since the charge is the same for a figure as for a word. For example. Send hy fast freight 20 j^lOOO mahogany library tables would be counted as fourteen words, while Send fast freight twenty number one thousand ma- hogany library tables would be counted as ten words. 6. Except in a cable message, each part of a compound word is counted as an entire word. For instance, twenty-five is counted as two words. 7. Each initial of a name is charged as a separate word ; but a few abbreviations are counted as one word ; as, f.o.b., C.O.D., a.m., p.m., etc. 8. In cable messages a charge is made for the name and the address of the one to whom the message is sent, and for the signature as well as for the message. 9. Many kinds of cipher language are used to guard the secrecy and reduce the expense of messages. This plan is found very serviceable when the cost of transmis- sion is great, or when very important matters are to be telegraphed without giving information except to those entitled to it. Almost all cable messages are in cipher. To telegraph or cable in cipher, business men employ what is called a code, — a system of abbreviations in which a single word stands for a whole phrase or sentence ; as, Autumn might stand for Knowlton, Beach ^ Co., Butleigh, Glastonbury, England, or We arrived here this morning, or any other expression understood by both the sender and the receiver of a telegram or a cable message. 10. All messages of importance should be repeated. For one half the original cost of a telegram the sender of any message can have the receiving operator re- peat it to the operator who sent it. Errors in important telegrams are in this way avoided. 11. Night messages are taken at reduced rates. These can be sent at any time after 6 p.m., but they are not delivered until the next morning. 12. Night letters will be received not later than midnight, to be transmitted for delivery on the morning of the next business day. Fifty words or less may be sent for the day rate of ten words. Additional charges are made for more than fifty words. 13. Day letters will be transmitted at one and one-half times the standard night letter rate for fifty words or less. Additional charges are made for more than fifty words. 166 BOOKKEEPING July 7 J. E. Bender, 127 Main St., Troy, orders : 15 #396 Mahogany Hall Stands 9 #68 Oak Bookcases 10 #76 A Oak Chamber Sets Fill the order. Terms : 3/5, 2/10, net 30 da. Prepare the bill of lading as under July 5. July 8 Receive a check from J. E. Bender for the amount of the invoice of July 7, less 3%, Form 8. Enter the check on the left side of the cashbook. Refer to the second entry in the model cashbook, under cash receipts, page 144. Note the manner of recording the Merchandise Discount. Merchandise Discount is an allowance for the payment of an invoice within a specified time from its date. It is usually the result of giving optional terms of settlement to the buyer, as 3/ 10^ 1/30^ ^^160 ; that is, a reduction of 3% if payment is made within 10 da., or 1% if paid after the 10 da. and within 30 da., or the face of the bill if payment is made after the 30 da. and within 60 da. Because the buyer has this option the invoice is billed without reduction, as it is not known which option the buyer will choose. If he pays within the time for which the discount is allowed, a record is made of this discount as a regular entry, under the title Merchandise Discount July 10 The Metropolitan Carting Co. has just delivered the goods shipped to you by W. H. Stearns & Co., Chicago, 111., Form 9. Accept the draft, payable at The Union Bank, Form 10, place it in an envelope addressed to W. H. Stearns & Co., and hand it m. Make the required journal entry, and then record in the bill book. Samuel W. Bradley, Bedford, returns your draft of July 5, on him, accepted. Form 11, together with an acceptance, Form 12, payable 30 da. from July 12, drawn on J. E. Farley, City, in favor of himself, for |179. Form 12 is transferred to you by full mdorsement. Make a journal entry for each draft, and then record them in the bill book. Each acceptance is journalized under the same name. Place them in the Unpaid Bills envelope. SET V. JOBBING PURNITUEE 167 Telegraph S. T. Udell & Co., Chicago, 111., asking them to ship you by fast freight : 11 #10 China Closets 19 #50 Mah. Parlor Tables Limit the message to fourteen words. Hand it in, and pay 75^ charges in currency. July 11 G. H. Ingalls & Co., Springfield, order: 25 #20 Corner Chairs 25 #17 A Eoman Chairs They inclose a New York draft to cover the cost of the order, Form 13. Fill the order. Terms: cash, less 3%. Write the invoice, deducting the 3% allowed for cash. Prepare the straight bill of lading and the duplicates, in the usual form. Enter the draft in the cash- book, but do not record the dis- count, as the persons have been charged in the sales book with only the proceeds of the invoice. THE UNION BANK DEPOSITED BY LUKE S. WARDEN July 12, 19- July 12 Deposit in the bank the check on hand ; also the New York draft and the sight draft on Benj. P. Freeman & Co. Collection J^ % on the check. Note. Banks usually charge their depositors a small fee for collecting out-of-town checks. There is no uniform custom in charging for checks, sight drafts, and the various other negotiable instruments offered for collection. Nearly always a small charge is made for collecting any paper pay- able out of town. These charges range from -^q% to \%. As a rule, no charge is made to a regular depositor for collecting paper payable in the city nor to a customer who keeps a large bank account. The student will be instructed when the bank makes any charges. Make out a deposit ticket and deduct the collection. Indorse each paper and then enter the deposit in the check book. Debit Collec- tion S^ Exchange for the bank's charges. Credit Benj. P. Freeman ^ Co. for the sight draft in the cashbook, for no entry was made when the draft was drawn. Please list each check separately RillQ PtoIH Silver Chf^rts 1140 15 511 20 278 75 1930 10 Less Ex( :hange 1 14 1928 96 168 BOOKKEEPING July 12 Leave J. B. Maxwell's note at the bank for collection. Take J. B. Maxwell's note from the Unpaid Bills envelope, indorse it, and then hand it to the bank teller. No record will be made in the pass book until the bank reports the collection. Discount Samuel W. Bradley's acceptance for the invoice of July 5, and receive credit for the proceeds. Take Bradley's acceptance from the Unpaid Bills envelope, indorse it, and then make out a discount memorandum similar to the following : Form of Discount Memorandum DISCOUNT MEMORANDUM Discoiinted for_ Date (/^.^y / u ^ ^/ /. /; 19^=1 Maker. ^ ^^ M/>^^.^,^^?^ ^ry ^Total. fs^^^— Coll., I Total. fjJZrfr Proceeds , \ ^f< r- Compute the discount at 6%. Pin the discount memorandum and the acceptance together, place them in the pass book, and then hand it to the bank teller, who will give you credit for the proceeds. Enter the proceeds as a deposit in the check book. In the cashbook remember to credit the acceptance for its face value; debit Interest for the discount. In the bill book, in the Date Discounted column, write July 12. SET V. JOBBING FURNITURE 169 Give Cobb, Bates & Co. a check for the invoice of July 3, less the discount allowed for prompt payment. Write the check, hand it in, and make the entry in the cashbook. The cashbook entry will be the same, except the amounts, as the fifth entry in the model cash- book, under payments, page 145. Receive the goods ordered of C. W. Allen & Co., on July 1, Form 14. July 13 The Metropolitan Carting Co. has delivered the goods ordered of William Leavens & Co. Look up the invoice. Form 15, and enter it in the invoice book. Note that William Leavens & Co. have deducted the discount on the invoice. You will receive their sight draft on you for the net amount of the invoice in 10 da. No entry is made for the trade discount. Why ? Remit C. W. Allen & Co. a check for invoice of July 9, less the dis- count allowed for prompt payment. Also order the following : 5 #59 A Cheval Glasses 17 #572 Drawing-room Suites Write the check and have it approved ; enter it in the cashbook. Write a letter, inclosing the check and ordering the goods. Your acceptance in favor of Derby Manufacturing Co., made payable at your bank, is due to-day. The bank charges the amount to your account. THE CIRCUMSTANCES UNDER WHICH A BANK WILL CHARGE A DEPOSITOR WITH A NOTE OR A DRAFT 1. Banks are not uniform in their practice of charging notes, accepted drafts, etc. In some places, notably in Chicago and several other large Western cities, they require their patrons to meet all such paper by check. 2. The practice followed by some banks is to pay notes, acceptances, etc. out of a firm's deposit, and to charge the depositor the same as they would had he drawn a check. Court decisions and special laws in force in a number of states hold that notes, acceptances, etc. made payable at a bank are orders upon that bank and may be charged to a depositor's account at maturity the same as a regular check. 3. These special laws and decisions are in operation in New York, Massachusetts, Connecticut, and a few other states. In these sections many banks charge notes, etc., to their patrons' accounts at maturity. Enter the amount in the check book on the regular stub, and include this item in the total that is carried forward to the next stub. Debit Bills Payable in the cashbook. Mark the acceptance paid in the bill book. 170 BOOKKEEPING July 15 Your bank has received cash for J. B. Maxwell's note and the interest due to-day. Enter the sum of the note and the interest as a deposit in the check book. Accept, payable at your bank, Stoddard & Co.'s draft in favor of themselves, at 15 da. from July 14, for |400, Form 16. Do not date the acceptance. Why? Make the journal entry, and then record the acceptance in the bill book. Receive of E. F. Green & Co. a draft drawn in your favor, payable 30 da. from July 14, on H. B. Claflin & Co., City, for $400, Form 17. Present the draft to the instructor ; he will give you directions about having it accepted for H. B. Claflin & Co. Receive the goods ordered of Randall Manufacturing Co. on July 5, Form 18. July 16 Give Randall Manufacturing Co. your check for the amount of the invoice of July 8, less 3%. July 17 M. N. Overman, 493 King St., Albany, orders : 3 #693 Antique Wardrobes 30 #Q^ Turkish Rockers 3 #73 Sofa Beds References are satisfactory and you fill the order. Terms : 3/10, 1/30, net 60 da. Write the invoice and have it approved, and then record it in the sales book. Place the invoice and the bill of lading in an envelope and hand it in. Receive a telegraphic order from Chas. B. Lyman, Springfield, for 4 pr. Blue Chenille Curtains 5 pr. #91 Lace Curtains The goods are to be shipped by express C.O.D. Make out a receipted invoice ; enter it in the sales book as follows : ~^.CaUJ^ i^^U>c.^t^-ti^^i^ J~.-^^2^t< #^/c^^^-C-,5^"^li;^,^.^^^>?Z T^ m:^d.,J2tCy. In account fiiff^ ':yCx^^^^^ji:~-.,A^^^^>/^^^ A f^~^/^ ^£^ ^ £. r UL c;o4^ ,xp »a^-^^ ^^^^^^^^^^ l^OJl -^ '~^:^C^'~(^ gj^^-^r^ Z7 /^f f(?(P 4Lf0j2. ^MjL ZA. REVIEW EXEECISES 179 EXERCISE 58 A Written Review The following review exercises are suggested ; 1. Journalize orally or in writing each transaction in the month of July. All amounts may be omitted, as the value of the exercises is in determining debits and credits. 2. Make the following opening entries, referring to pages 137 and 138 to determine the correct form of entry: Student begins business this day with the following resources and liabilities : a. Cash in drawer, $231.40 Deposit in First National Bank, $1674.50 Stock of merchandise valued at $9645.50 The following owe you on account : Henry A. Pell, $67.50 Morris & Co., $253.10 M. M. Bell, $167.25 Amos T. Young, $76.45 You owe the following on account : Barber & Co., $56.75 Young & Brown, $100.50 Thos. L. Parr, $25.25 h. Cash in drawer, $325 Deposit in The Union Bank, $2365.10 Store and lot valued at $4200 Stock of merchandise valued at $11,457.20 The following owe you on account : Warren & Son, $176.25 John K. Lamb, $200 C. H. Hartman, $423.50 D. B. Vance, $153.95 You owe the following on account : Marshall & Co., $235 Henry Marvel, $310 Chas. L. Burt, $65.70 You hold notes against the following : H. T. Inman, $125 ; interest accrued for 60 da. L. L. Pond, $250 ; interest accrued for 30 da. Mason & Son, $230 You have the following notes outstanding : R. N. Banks, $200 ; interest accrued for 45 da. T. S. Little, $100 ; interest accrued for 75 da. Alden & King, $75 180 BOOKKEEPING 3. Make the usual statements from the following trial balances : a. John A. Smart, Prop. $125. $10500. Cash 1165.50 Merchandise 7796.25 Expense 250.50 Real Estate 3005.20 Bills Receivable 270.45 Accounts Receivable 1256.10 Accounts Payable 2645.50 Bills Payable 964.25 Interest 42.10 61.95 Merchandise Discount 89.40 Office Fixtures 150. Horse and Wagon 200. $14261.10 $14261.10 Inventories : Merchandise $9857.50 Real Estate 3000. Expense 25.50 Office Fixtures 145. Horse and Wagon 190. h. L. S. Woods, Prop. $150. $12500. Cash 1346.20 Merchandise 9865.45 Expense 265. Real Estate 2500. Office Fixtures 210.50 Horse and Wagon 225. Bills Receivable 265.70 Bills Payable 826.55 Accounts Receivable 1950.75 Accounts Payable 3625.40 Interest 75.85 Merchandise Discount 97.50 $16951.95 $16951.95 Inventories (Resource) : Merchandise $12345.25 Expense 43.50 Real Estate 2500. Office Fixtures 197.50 Horse and Wagon 209.75 Inventory (Liability) : Merchandise, unpaid freight bill $110.40 Note. The liability inventory is treated in each statement in just the reverse way from the resource inventory, — as a liability, in the resource and the liability statement. In the loss and gain statement it is subtracted from the resource inventory before finding the gain on merchandise. SET V. JOBBING EUENITURE 181 PARTNERSHIP The work for August is a continuation of the work in July. You are desirous of extending your business, and not having suffi- cient capital to do so, you have decided to enter into a partnership agreement with Harvey L. Manning. For the resources enumerated below you admit Harvey L. Manning as an equal partner in your business. Draw up articles of copartnership between yourself and Manning, embodying the following conditions. (See Form V, Appendix F.) 1. The firm name shall be Student & Co. 2. Student shall contribute the net resources shown by his July state- ment of resources and liabilities. 3. Manning shall invest : Cash $7000 Merchandise 1500 Account with Foley Bros, due him 5725 4. Each partner shall devote his entire time to the business. 5. Neither partner shall engage in any other business. 6. The gains and the losses shall be divided equally. 7. The partnership shall continue for two years unless sooner dis- solved by mutual consent. Hand the articles of copartnership to the instructor for criticism. If they are correct, he will sign for Harvey L. Manning. Model for Briefing Articles of Copahtxership between Student and Harvey L. Manning Aug. 1, 19 — Make a copy of the July statement of resources and liabilities, attach it to the articles of copartnership, fold the sheets together, and in the outer right-hand corner at the top brief as shown in the Model for Briefing on this page. 182 BOOKKEEPING Note. Some business men prefer to make the reference to investments in the articles of copartnership cover merely the net amounts invested in the business by each partner, and then transfer all rights and interests in goods and personal property by means of a bill of sale. However, if the articles of copartnership are drawn up in accordance with the above directions, the bill of sale is wholly unnecessary. Each partner should receive a copy of the articles of copartnership. Real property cannot be transferred by the ordinary bill of sale nor by articles of copartnership ; a deed is necessary. In order not to multiply complicated forms at this point of the work, it is assumed that the student's real estate has been transferred by a warranty deed drawn this day by his attorney, Fred V. Smith, and placed on file in the office of the new firm. Ordinarily, a business man does not draw up his own warranty deeds, articles of copartnership, etc., but employs an attorney. When any change in the personnel of a business occurs, all who have had dealings with the house should be notified promptly, by means of circular letters or otherwise. In this case it is assumed that these letters have been written and mailed. Incoming Business Forms for August In this connection the student is referred to the instructions given for the business forms in the month of July, page 151. Remember that the business is now conducted under the firm name of Student & Co. Form 29. Check of Harvey L. Manning, dated City, Aug. 1, drawn on Traders National Bank, in favor of your firm, for |7000. Form 30. Invoice of J. K. Levy & Co., New York City, dated July 31. Terms: cash, less 2%. 15 #693 Antique Wardrobes Deduct the discount from the amount of the invoice ; receipt it, per your initials. Form 31. New York draft, dated Olean, Aug. 1, drawn by The Union Bank of Olean, on Chemical National Bank of New York, in favor of M. L. Covey & Co., for |283.72, W. D. Byron, Cashier. Transferred to Student & Co. by full indorsement. Form 32. Draft on your firm by Stoddard & Co., in favor of Curry, Browning & Co., dated City, Aug. 3, payable at 10 days' sight for 11500. Form 33. Invoice of Cobb, Bates & Co., City, dated Aug. 3. Terms : 3/10, net 30 da. Items as follows: 25 #5932 Empire Toilet Tables 18 #1008 Oak Sideboards 25 #76 A Oak Chamber Sets Remember that all goods bought are now billed to your firm. SET V. JOBBIKG FURKITUEE 183 Form 34. Invoice of Derby Mfg. Co., City, dated Aug. 3. Terms : draft at 10 da. for the amount, less 2%. Items as follows: 5 #16 A Comp. Dining-]*oom Sets 5 #693 Antique Wardrobes 10 #89 Mahogany Chamber Sets Deduct the 2% discount, but do not receipt the bill. Form 35. Draft of Derby Mfg. Co., City, on your firm, in favor of them- selves, for the net amount of the above invoice, dated Aug. 3, payable at 10 days' sight. Form 36. Invoice of C. W. Allen & Co., Trenton, N.J., dated Aug. 3. Terms: 2/30, net 60 da. Items as follows: 20 pr. Blue Chenille Curtains 20 pr. #91 Lace Curtains Form 37. Check of David E. Teeter, City, dated Aug. 6, drawn on Traders National Bank, in favor of Student & Co., for 1589.30. Form 38. Bill of Ward, Macey & Co., dated City, Aug. 6, for 1 letter file and cabinet, |65. Terms : cash. Receipt the bill. Form 39. Bill of Tracy Coal Co. to Harvey L. Manning, dated Aug. 6, for 3 T. coal at |5. Terms : cash. Receipt the bill. Form 40. 0.0. D. envelope. Data as follows: Cash inclosed, |22. Goods were shipped by your firm to J. W. Clark, Waltham, Aug. 5. Note. Refer to the note under Form 21, page 153. ' Form 41. Check of David E. Teeter, City, dated Aug. 9, drawn on Traders National Bank, in favor of your firm, for $1248.87. Form 42. New York draft, dated City, Aug. 11, drawn by The Union Bank, in favor of your firm, on Chemical National Bank, New York, for |438.55, Chas. H. Palmer, Cashier. Form 43. Sight draft of S. T. Udell & Co. on your firm for $479.50, dated Chicago, 111., Aug. 10 ; drawn payable to W. D. Lapham. Form 44. Check of J. E. Bender, dated Troy, Aug. 11, drawn on Traders National Bank, in favor of your firm, for 1 9 20. 9 5. Form 45. Draft of J. O. Moran, drawn on your firm, in favor of Geo. L. Jones, dated City, Aug. 13, payable in 60 da. from date, for $1900. Form 46. Check of Walker, Brown & Co., dated Albany, Aug. 12, drawn on Traders National Bank, in favor of your firm, for $712.95. 184 BOOKKEEPING Form 47. Check of H. B. Claflin & Co., dated City, Aug. IB, drawn on Traders National Bank, in favor of your firm, for $400. Form 48. Invoice of C. W. Allen & Co., Trenton, N.J., dated Aug. 14. Terms : 2/30, net 60 da. Items as follows : 50 #176 c Piano Chairs 20 #6387 Hall Settles 25 #835 Music Cabinets 50 #170 English Clothes Poles Form 49. Invoice of Cobb, Bates & Co., City, dated Aug. 22. Terms : 3/10, net 30 da. Items as follows : 25 #16 L. Dressing Cabinets 25 #36 b Gentleman's Chiffoniers 25 #5932 Empire Toilet Tables Form 50. Invoice of Fowler Furniture Co., Rochester, dated Aug. 22. Terms: cash, less 2%. Items as follows: 10 #245 Cedar Chests 10 #2229 Oak Dining Tables 10 #687 Ornamental Tables 15 #17 a Eoman Chairs Deduct the discount and receipt the bill. Form 51. New York draft, dated Springfield, Aug. 24, drawn by The Union Bank of Springfield, on Chemical National Bank, New York, in favor of G. H. Ingalls & Co., for $732.35, A. R. Shef- field, Cashier. Transferred to your firm by full indorsement. Form 52. Check of Samuel W. Bradley, Bedford, dated Aug. 26, drawn on Traders National Bank, in favor of your firm, for |1587.60. Form 53. Note of Chas. B. Sherman, Rochester, dated Aug. 25, at 30 da., with interest at 6%, in favor of your firm, for |352.69. Form 54. Draft of Traders National Bank, Bangor, dated Aug. 26, drawn on Chemical National Bank, New York, in favor of your firm, for |454.06, W. H. Gould, Cashier. Form 55. Invoice of William Leavens & Co., New York, dated Aug. 27. Terms: sight draft in 10 da., for the amount of the bill, less 2%. Items as follows: 25 #5926 Secretary Book Cabinets 40 #68 Oak Bookcases 50 #396 Mahogany Hall Stands Form 56. Bill of the Metropolitan Carting Co., City, dated Aug. 31. Items as follows: Aug. 1, Freight and Cartage, $24.25 16, Freight and Cartage, 57.50 22, Cartage, 8.50 23, Freight and Cartage, 43.50 30, Freight and Cartage, 139.50 Receipt the bill. SET V. JOBBING FURNITURE 185 Memoranda of Transactions for August August 1 Draw a check in favor of Student & Co., on The Union Bank, for the amount of the balance on deposit. Have the check approved, and place it in the Business Cash envelope. This check is drawn in order that the bank account with the student may be closed. Presently this check will be deposited to the credit of the new firm. Receive Harvey L. Manning's check on Traders National Bank, for the amount of his cash investment. Form 29. Carry the July balance to a new page in the cashbook. On the first line below the balance, credit Manning for his cash investment, $7000. Indorse the two checks on hand and deposit them in The Union Bank in the name of the new firm. Above the student's name on the pass book write the firm name. Make a memorandum in the journal, setting forth the change in the personnel of the business. Make a journal entry for the merchandise and the personal account invested by Manning. Remember to check every cash item that is entered in both the journal and the cashbook. Your bank reports that the draft on P. R. Brown, attached to a bill of lading, has been collected. Collection, $1. Have the amount entered in the pass book, and record it in the check book. The entry in the cashbook is the same as the entry of the C.O.D. shipment to Lyman, July 22. Debit Collection and Exchange for the $1 collection. The Metropolitan Carting Co. has delivered to you the goods ordered of J. K. Levy & Co. on July 24, Form 30. Draw a cash check for office expenses, $25. Ask for $5 in change. Enter in the check book only. Telegraph C. W. Allen & Co., Trenton, N.J., ordering: 20 pr. Blue Chenille Curtains 20 pr. #91 Lace Curtains Limit the message to fifteen words. Pay the charges in cash, 60^. The draft drawn on Walker, Brown & Co., July 2, and left with the bank for collection, has been paid. Collection, 75(f. The bank teller will make the proper record in your pass book. Enter the amount in the check book and the cashbook. Make the proper record in the bill book. 186 BOOKKEEPING August 2 J. E. Bender, Troy, sends the following order. Fill the order at the prices given herewith : 50 #15 C. Dining Chairs at |2.25 5 #495 W. Iron Bedsteads at |5 10 #16 Wool Mattresses at $4 5 #65 Turkish Rockers at |24.75 50 #16 K L. Dining Chairs at $9.50 3 #73 Sofa Beds at |38 3 #626 Mahogany Office Chairs at $16.50 Terms: 3/5, 2/10, net 30 da. M. L. Covey & Co., Olean, order : 3 #396 Mahogany Hall Stands 2 #68 Oak Bookcases 3 #20 Corner Chairs Fill the order. Terms: cash, less 3%. Deduct the discount on the invoice and in the sales book. Prepare the bill of lading as usual. A New York draft was inclosed in pa3rment of the order. Form 31. Make a cashbook entry for the draft. Note. But few special instructions will be given to the student for entering the trans- actions of this month. He is supposed to be sufficiently familiar with the different books and the various transactions recorded therein to proceed without a guide. If in doubt at any time, he should consult the instructor. Place the following orders over the telephone : Cobb, Bates & Co., City : 25 #5932 Empire Toilet Tables 25 #76 a Oak Chamber Sets 18 #1008 Oak Sideboards Derby Manufacturing Co., City : 10 #89 Mahogany Chamber Sets 5 #693 Antique Wardrobes 5 #16 A Complete Dining-room Sets Note. Some memorandum should be made of each order placed as above. When these orders are frequent, a special order book is used. In this set the memoranda for all orders placed over the telephone may be written on a sheet of paper and filed with the incoming papers. August 3 Draw a draft, payable at 30 days' sight, on J. E. Bender, for the amount you owe W. H. Steams & Co. Make the required journal entry. Write a letter to W. H. Stearns & Co. and inclose the draft. Also, write a letter to J. E. Bender, informing him of the draft drawn. Refer to similar letters under July 1. SET V. JOBBING FUENITUEE 187 Accept, payable at The Union Bank, Stoddard & Co.'s draft, on your firm, in favor of Curry, Browning & Co., drawn at 10 days' sight, for $1500, Form 32. Make the journal entry. Record the draft in the bill book, and then hand it in. You have received the goods, ordered of Cobb, Bates & Co. on Aug. 2, Form 33. Goods ordered of Derby Manufacturing Co. have been delivered. Form 34. Accept the draft which they inclosed, payable at The Union Bank, Form 35. The goods ordered of C. W. Allen & Co., on Aug. 1, have been received, Form 36. August 5 A telegraphic order has been received from Henry L. Miller, Provi- dence, for : 15 #5932 Empire Toilet Tables 15 #1008 Oak Sideboards Fill the order, subject to the order of The Union Bank, less 2%. Deduct the discount on the invoice, and treat in the same manner as the ship- ment to P. R. Brown, July 19. A telegraphic order has been received from J. W. Clark, Waltham, for : 2 pr. #91 Lace Curtains 2 pr. Blue Chenille Curtains The goods are to be shipped by express C.O.D. Treat the same as the order of Chas. B. Lyman, July 17. David E. Teeter, City, has given you the following order over the 'telephone : Fill the order at the prices given herewith : 5 #5932 E. Toilet Tables at $50 10 #693 Antique Wardrobes at |25.75 3 #396 M. Hall Stands at |65 3 #1008 Oak Sideboards at |195 ^ Terms: 3/5, 1/30, net 60 da. ' '^ \ August 6 Receive of David E. Teeter his check, for the invoice of July 27, less 1%, Form 37. Pay by check Ward, Macey & Co.'s bill for a letter file and cabinet for use in the office, |65, Form 38. Charge Office Fixtures. Pay by check Charles B. Hanley for sundry repairs, $10.50. 188 BOOKKEEPING Pay by check Tracy Coal Co.'s bill for coal for private use of Harvey L. Manning, |15, Form 39. Leave J. E. Farley's acceptance, received July 10, with the bank for collection. Deposit the check and the New York draft on hand. August 8 Acceptance in favor of W. H. Stearns & Co. is due to-day, payable at the bank. In the month of July our notes and acceptances payable at the bank were charged to the depositor's account. This matter was explained under July 13. Hereafter such notes and acceptances will be paid by check, the check being made payable to the payee of the note or the acceptance. Issue a check in payment. Enter in the cashbook, and make the usual record in the bill book. Write a letter to C. W. Allen & Co., Trenton, N.J., ordering the following : 50 #176 c Piano Chairs 25 #835 Music Cabinets 50 #170 English Clothes Poles 20 #6387 Hall Settles August 9 Benj. P. Freeman & Co., City, order : 5 #10 China Closets 10 #16 Wool Mattresses 5 #495 White Iron Bedsteads 5 #65 Turkish Rockers 2 #5926 Secretary Book Cabinets Fill the order. Terms : sight draft in 10 da. for the amount, less 3%. Treat in the same way as their order of July 2. Walker, Brown & Co., Albany, send in the following order. Fill the order at the prices given herewith : 5 #89 M. Chamber Sets at |80 5 pr. B. Chenille' Curtains at $5 15 pr. #91 Lace Curtains at |6 2' #16 a C. Dining-room Sets at fl.iO Terms : 3/5, net 30 da. J. B. Cox & Co., Somerville, order: 7 #572 Drawing-room Suites 3 #59 a Cheval Glasses 5 #3016 Fancy Rockers 12 #2546 Ant. Library Rockers Fill the order. Terms : 20-da. draft for the amount of the bill Treat in the same way as the order of Walker, Brown & Co., July 2. Receive returns, for C.O.D. shipment of Aug. 5, Form 40. SET V. JOBBING FUEKITUEE 189 August 10 Receive of David E. Teeter his check for the amount of the bill of Aug. 5, less 3%, Form 41. August 11 Your bank has collected J. E. Farley's acceptance due to-day. Take your pass book to the bank and receive credit for the amount. Leave the acceptance of Rogers, Peet & Co. with the bank for collec- tion ; also deposit |20 currency and the check on hand. You receive frequent calls for a line of furniture manufactured by the Fowler Furniture Co., Rochester. From their catalogue you have made the following selections : 10 #687 Ornamental Tables 10 #245 Cedar Chests 10 #2229 Oak Dining Tables 15 #17 a Roman Chairs Write a letter, ordering the above goods and inclosing a New York draft to cover the amount, less 2%. Give references and some informa- tion about the volume of your business. The volume of business is shown by the total sales. Write the check and receive the draft, Form 42. The bank makes no charge for the draft. August 12 Pay by check S. T. Udell & Co.'s sight draft on you, in favor of W. D. Lapham, $479.50, Form 43. Receive of J. E. Bender, Troy, his check for the invoice of Aug. 2, less 2%, Form 44. August 13 Accept J. O. Moran's draft, payable GO da. from date, in favor of Geo. L. Jones, for |1900, Form 45. Receive of Walker, Brown & Co. their check for the invoice of Aug. 9, less 3%, Form 46. Receive from H. B. Claflin & Co. their check, for their acceptance due to-day. Form 47. Make the following record in red ink across the face of the £?ra/J:, and then hand it in: Paid in full 8/13 Student & Co., per (^Student's initials). Note. A canceled draft, note, or check should always be kept and filed as a receipt. 190 BOOKKEEPING Your acceptances, in favor of Curry, Browning & Co. and Derby Manufacturing Co., are due to-day. Write checks for the payment of these notes, hand them in, and receive the canceled acceptances. August 15 Deposit the checks on hand and the currency received from the C.O.D. shipment Aug. 9. Collection on the checks, |1.50. Your bank informs you that the acceptance of Rogers, Peet & Co., due yesterday, has been collected. Your bank informs you that the draft on Henry L. Miller has been paid. Collection, |2. August 16 The Metropolitan Carting Co. has this day delivered to you the goods ordered of C. W. Allen & Co., on Aug. 8, Form 48. E. F. Green & Co., Bangor, order the following. Fill the order at the prices given herewith: 15 #176 c Piano Chairs at $17 5 #835 Music Cabinets at $5 15 #170 E. Clothes Poles at $5.50 5 #6387 Hall Settles at $23.25 Rumors are current to the effect that the resources of E. F. Green & Co. are in an unsatisfactory condition, and you think it advisable not to sell them anything on account. Prepare the usual bill of lading. Make a sight draft on E. F. Green & Co., in favor of your firm, for the amount of the invoice, less 5%, and attach it to the bill of lading. Deduct the discount on the invoice and in the sales book. (Refer to the comment on the shipment to P. R. Brown, July 19.) Indorse the draft to the bank to which it is to be sent. Write a letter, inclose the draft and the bill of lading, and send it direct to Traders National Bank, Bangor, for collection. E. F. Green & Co. have consented to the terms of this shipment. August 17 Your offer to prepay your acceptance in favor of Geo. L. Jones is accepted. Refer to the bill book for all details regarding this acceptance. Deduct the discount for the time the acceptance has yet to run, and write a check for the proceeds. Have the acceptance canceled, and keep it as a receipt. August 18 Give C. W. Allen & Co. a check for the invoice of Aug. 14, less 2%. August 19 Take the draft on Benj. P. Freeman & Co., drawn Aug. 9, from the Business Cash envelope, indorse it properly, and deposit it in the bank. SET V. JOBBING FURNITURE 191 August 20 Samuel W. Bradley, Bedford, sends in the following order. Fill the order at the prices given herewith : 5 #36 B G. Chiffoniers at $10 10 #27 c W.-wire Mattresses at $3.25 150 #16 K L. Dining Chairs at |9.50 50 #15 C. Dining Chairs at |2.25 Terms : 3/5, 2/10, net 30 da. G. H. Ingalls & Co., Springfield, send in the following order. Fill the order at the prices given herewith : 5 #2546 A. Library Rockers at $12 5 #635 Brass Bedsteads at $22.50 5 #626 M. Office Chairs at $16.50 5 #572 D. Suites at $100 Terms : 3/5, 2/10, net 30 da. Give Cobb, Bates & Co. the following order over the telephone : 25 #36 B Gentleman's Chiffoniers 25 #5932 Empire Toilet Tables 25 #16 Lady's Dressing Cabinets August 22 Write a letter to William Leavens & Co., New York City, ordering : 50 #396 Mahogany Hall Stands 40 #68 Oak Bookcases 25 #5926 Secretary Book Cabinets The Metropolitan Carting Co. has delivered the goods ordered of Cobb, Bates & Co., on Aug. 20, Form 49. M. N. Overman, Albany, orders : 10 #50 Mahogany Parlor Tables 10 #10 China Closets Fill the order. Terms: 3/10, 1/30, net 60 da. August 23 Give Cobb, Bates & Co. a check for the invoice of Aug. 22, less 3%. You and your partner each withdraw from the business, by check, $150. Hand in Manning's check. Have yours cashed at the bank and put the currency into the Personal Cash envelope. Pay Chas. O. Rigdon, by check, $52.50 for stabling and feeding your horses. Also pay James Lundergan, by check, $9.20 for horseshoeing, etc. These are Expense items. The Metropolitan Carting Co. has delivered to you the goods ordered of the Fowler Furniture Co. on Aug. 11, Form 50. 192 BOOKKEEPING August 24 Chas. B. Sherman, Rochester, sends in the following order. Fill the order at the prices given herewith : 5 #5932 E. Toilet Tables at |50 5 #50 M. Parlor Tables at $21.25 Terms: 30-da. note with interest, less 1%. Deduct the discount on the invoice and in the sales book. The note will be received later ; make no entry until it is received. Take the sight draft on Chas. B. Sherman, dated to-day, from your Business Cash envelope, and deposit it in the bank, together with all the cash on hand. Collection on the draft, 50^. This draft is for the invoice of July 25. Enter in the cashbook. August 25 Receive of G. H. Ingalls & Co. a New York draft, in payment of the invoice of Aug. 20, less 3%, Form 51. August 26 Receive of Samuel W. Bradley his check, on Traders National Bank, in payment of the invoice of Aug. 20, less 2%, Form 52. August 27 Receive of Chas. B. Sherman his note, dated Aug. 25, in favor of your firm, for the net amount of the invoice of Aug. 24, Form 53. Receive a New York draft, from Traders National Bank, Bangor, for the amount of the sight draft on E. F. Green ,& Co., Aug. 16, less 75(f collection, Form 54. The account should be credited in the cashbook for the amount of the invoice in the sales book. Note. The amount of the draft is the face of the invoice less 75(^. E. F. Green & Co. deducted the collection, and this necessitates a charge on your books for the 75^, as it was paid by you. August 30 Deposit the check which you received of Samuel W. Bradley on Aug. 26, and the two New York drafts on hand. The collection on Bradley's check is |1.50. Your bank informs you that the draft drawn on J. B. Cox & Co., Aug. 9, has been paid. Collection, |1. SET V. JOBBING FUKKITURE 193 The Metropolitan Carting Co. has delivered to you the goods ordered of William Leavens & Co., on Aug. 22, Form 55. Discount at The Union Bank the note received of Chas. B. Sherman on Aug. 27. The bank gives you credit for the face of the note. Note. It is customary for many banks to give depositors credit for the face of interest- bearing notes discounted within a few days after they are made. The interest is the com- pensation received by the bank. August 31 Give J. L. Bidwell & Son a check for $125 for one carriage horse. Charge this to the account of Harvey L. Manning. Pay by check the bill of the Metropolitan Carting Co., for freight and dray age to date, 1 2 73. 25, Form 56. Charge Merchandise in the cashbook. Pay salaries to date by checks as follows : Harry K. Sutton $60 Michael Donovan $30 Harvey L. Grant 50 Daniel L. Coon 48 Geo. W. Ainsley $40 Enter these salaries in the cashbook as one item. Closing the Work for August The student should now proceed to close the work for this month as follows : 1. Have the monthly bank statement made, and compare it with the check book. 2. In posting, allow one third of a page for all new accounts. As Harvey L. Manning is now one of the proprietors, write his name on the lower half of page 1. 3. Rule, foot, and post the sales book and the invoice book. 4. Prove the cash, and balance and post the cashbook. 5. Prove the bill book. 6. Make out monthly statements for the customers. 7. Make a trial balance of the balances of your ledger accounts, and hand it to the instructor for approval. 8. An inventory of everything on hand has been completed by Mr. Sutton. A statement of it follows. Copy it in the journal in the usual way, computing the value at cost prices. 194 BOOKKEEPma Inventories, August 31, 19 — Merchandise : 5 #3116 Antique Card Tables 12 #626 M. Office Chairs 14 #693 Antique Wardrobes 4 #50 M. Parlor Tables 10 #16 B Brass Easels 54 #396 M. Hall Stands 20 #635 Brass Bedsteads 17 #89 M. Chamber Sets 13 pr. Blue Chenille Curtains 20 #835 Music Cabinets 10 #245 Cedar Chests 25 #76 a Oak Chamber Sets 50 #15 Cane-seat Dining Chairs 10 #687 Ornamental Tables 2 #59 A Cheval Glasses 17 #2229 Oak Dining Tables 10 #71 A Child's Cribs 12 #73 Oak Writing Desks 7 #20 Corner Chairs 43 #68 Oak Bookcases 25 #16 A C. Dining-room Sets 5 #20 d Parlor Cabinets 5 #572 Drawing-room Suites 35 #176 c Piano Chairs 25 #5932 Empire Toilet Tables 10 #57 Reclining Couches 35 #170 English Clothes Poles 15 #17 a Roman Chairs 7 #3016 Fancy Rockers 9 #73 Sofa Beds 32 #36 B G. Chiffoniers 28 #5926 Sec. Book Cabinets 25 #6387 Hall Settles 10 #65 Turkish Rockers 50 #16 K L. Dining Chairs 14 #27 c W.-wire Mattresses 5 #169 c Library Tables 4 #16 Wool Mattresses 13 pr. #91 Lace Curtains 2 #495 White Iron Bedsteads 30 #16 Lady's Dressing Cabinets Office Fixtures : Cost 1515. Depreciation 5.15 |509.85 Horse and Wagon : Cost ' $450. Depreciation 60. |390. Real Estate : Cost $7000. Depreciation . 350. $6650. Expense : Unexpired Insurance $130. 9. Make the statements and the verification, and have them approved. Show the net gain as a total on the loss and gain statement, and the present worth as a total on the resource and liability statement. 10. If the statements are correct, close the ledger as follows : a. Close the loss and gain accounts. 5. Close the Loss and Grain account into the Proprietors^ account. In closing the Loss and Gain account, remember that the net gain is to be divided equally between the partners. DISSOLUTION OF PARTNEESHIP 195 c. Close the Proprietors' accounts. d. Rule the personal accounts that balance. e. To give your ledger a more finished appearance, close aU other accounts by Balance. 11. Hand in all books to the instructor for approval. DISSOLUTION OF PARTNERSHIP It has been decided to dissolve the partnership existing between yourseK and Harvey L. Manning. You dispose of your interest to Manning for the following: A note at 60 da., with interest at 6%, $7500. A check for the balance of your present worth as shown by your ledger account after closing, Aug. 31. Write the note and have the instructor sign for Manning. Make the journal entry, and then record the note in the bill book. Write the check for the balance of your present worth. Make the cashbook entry. Post both the entries to yo^^r account in the ledger and close the account. Harvey L. Manning is to conduct the furniture business at the old stand under the name of Harvey L. Manning. He is to have the net resources and assume all the liabilities of the old firm. Draw a check in favor of Harvey L. Manning for the balance of the cash in the bank in the name of the old firm, and hand it in. It is assumed that your attorney, Fred V. Smith, has drawn up the contract of sale and the warranty deed necessary to transfer the title to all the chattels and the real estate to Manning. These documents, it is assumed, are on file with other important papers. Consequences of Dissolution of Partnership. The direct consequence of a dissolution of partnership is the necessity of taking effectual steps to close the partnership affairs. Some disposition must always be made of the partnership effects. Sometimes articles of copartner- ship provide that property on hand shall be taken at dissolution by one of the partners according to a prescribed mode, and in that case the business may be continued without interruption. In this case there was no such agreement, but the partners between themselves entered into an arrangement whereby Manning continues the business and Student^ for a sufficient consideration, consents to withdraw. 196 BOOKKEEPING Notice of Dissolution. A dissolution of partnership, so far as it con- cerns its own members, may be immediate, but with reference to the pubhc the element of notice requires consideration. When Notice is Unnecessary. A notice of dissolution is unnecessary : 1. When a partnership expires by its own limitation. 2. When a partnership is dissolved by the operation of law. 3. When dissolution occurs by the death of one of the partners. 4. When a dormant, or silent, partner retires. Manner of giving Notice. A notice of dissolution should be published in one of the usual advertising newspapers of the city in which the busi- ness has been conducted. This notice is deemed sufficient for all those who have not had previous dealings with the firm. A special notice of the dissolution should be sent to those who have had previous dealings with the firm. (See Form II, Appendix F.) Prepare a notice of your withdrawal from the firm. (See Form III, Appendix F.) Hand in the notice. It is assumed that a notice of dissolution has been inserted in one of your usual advertising newspapers, and that circulars embodying the facts stated in the notice have been mailed to each of the firms with whom you have had dealings. After writing the circular, the work of sending it to the various firms is purely mechanical, and it is thought best not to require the student to do all this work. After notices have been circulated as outlined above, your liability, so far as new debts are concerned, ceases. GENERAL REVIEW QUESTIONS 1. Under what circumstances would a gain or loss on real estate be likely to occur ? 2. What are the principal advantages of the invoice book ? 3. Explain the posting of (a) the separate bills in the invoice book ; (h) the weekly, the monthly, or the quarterly totals of the invoice book. 4. Explain the advantages of the bill book. How is it proved ? 5. What provision was made in the cashbook of Set V for mer- chandise discounts ? What are the principal advantages of these special columns ? Explain how they are posted. 6. Explain the meaning of 3/5, 1/30, net 60 da. 7. What is a discount memorandum ? 8. In which column of the sales book should discounts be deducted? Why? 9. Define and differentiate merchandise discounts and interest and discount. 10. What is a bill of lading? How is it usually drawn? What is done with each copy? 11. Are bills of lading assignable by indorsement? 12. Should transportation companies ever deliver goods without receiving the bill of lading? Why? 13. Explain the meaning of the following terms : (a) C.O.D. ; (b) f.o.b. ; (c) shipper's order. 14. Describe the usual method of making a shipment by express C.O.D. 15. Outline briefly the usual process for entering C.O.D. shipments (a) in the sales book ; (Z>) in the ledger. 16. What REVIEW EXERCISES * 197 means have railway and steamship companies provided for shipping goods by freight C.O.D. ? Explain this method fully. 17. Would you deposit a draft at- tached to a bill of lading for shipper's order in your local bank, or would it be more desirable to forward the same to a bank located in the place to which goods have been consigned ? 18. Are the net resources of a firm any less after it has paid one of its own non-interest-bearing notes? Why? 19. Are the net resources of a firm any less after it has paid one of its own interest-bearing notes ? Why ? EXERCISE 59 A Written Review The following review exercises are suggested : 1. Journalize orally or in writing each transaction in August. All amounts may be omitted, as the value of the exercise is in determining the debits and the credits. 2. Make the following opening entries : a. James S. Brien and Howard A. Ferris began business with the fol- lowing resources and liabilities ; credit each proprietor with one half the net resources : Deposit in Traders National Bank, $4235.70 Store and lot valued at |6750 Stock of merchandise valued at $12,534.20 Office furniture valued at $425 Horse and wagon valued at $275 They have the following notes outstanding : George D. Raney, $1500 ; interest accrued for 2 mo. Henry D. Fowler, $725 ; interest accrued for 1 mo. Accounts receivable, $2256.45 Accounts payable, $1725.50 For estimated early payments make the following allowances : on accounts receivable, 2% ; on accounts payable, 2%. Note. Debit accounts receivable for the face value, and credit Mdse. Disc, for the 2% allowance. Credit accounts payable for the face value, and debit Mdse. Disc, for the 2% allowance. h. Jolm S. Brady & Son began business with the following resources and liabilities ; credit the firm with the net resources : Stocks and bonds on hand, $4200 Interest accrued on above, $156.20 Stock of merchandise valued at $11,645.50 Unpaid freight bill on merchandise, $76.25 (Liability) Real estate valued at $5500 198 BOOKKEEPING They hold notes against the following : Murray & Co., $450 ; interest accrued for 3 mo. James E. Marston, $320 ; discount allowed for 2 mo. J. H. Belden, $250 They have the following notes outstanding : Thomas D. Eales, $350 ; interest accrued for 2 mo. Derby & Son, $300 ; discount allowed for 1 mo. Office fixtures valued at $325 Horses and wagons valued at $500 Accounts receivable, $2450 ; estimated discount, 1 % Accounts payable, $1800; estimated discount, 2% 3. The formation of partnerships. The following illustrations apply to the formation of partnerships : Firsts the formation of a partnership on the basis of equal investment by each partner at the beginning of the business. The necessary entry is of the simplest character, as follows : Cash $4000 A $2000 B 2000 When posted, each partner's account will appear as follows : A 19— Jan. 2000 B 19— Jan. 2000 Second^ the formation of a partnership by the individual proprietor when he sells a half interest in an established business. Illustration : A has an established business worth $15,000 ; he sells B a half interest for $7500 ; thus B becomes an equal partner. The money received by A is not a part of the capital of the new firm ; it is his individual possession, and the capital of the firm is $15,000. On A's books, as proprietor, the capital account appeared as follows : 19— Jan. 15000 REVIEW EXERCISES 199 Under the partnership agreement one half of this sum must be credited to each partner, and this is accomplished by the following journal entry : A $7500 B 17500 When this entry is posted, the accounts of the proprietors, on the books formerly used by A, will appear as follows : A 19— Jan. '500 19— Jan. 15000 B 19- Jan. 7500 Third, the formation of a partnership when the incoming partner makes an investment equal to the value of the established business. Illustration: A has a business worth |18,000; B invests a like sum and becomes an equal partner. The money invested by B is a part of the capital of the firm, which is now 1 3 6, 000. On A's books, as proprietor, the capital account appeared as follows : A 19- Jan. 18000 The following entry should be made when B makes his investment : Cash $18,000 B 118,000 After posting this entry in the books formerly used by A, B's account will appear as follows : B 19— Jan, 18000 A's account will remain unchanged, and each partner is now credited for one half of the capital of the firm. Note. The cash items in the iUustrations may be entered in the cashbook ; the journal entry has been used simply to set forth the debit and the credit items more clearly. Only two partners have been considered, but the principles are the same whether there are two partners or more than two, and whether the investments are equal or unequal. 200 BOOKKEEPING Make entries for the following partnership arrangements : a. Henry T. Jackson and James Young form a partnership, as follows : Henry T. Jackson invests cash, |1500, and a stock of merchandise valued at $2750. James Young invests cash, |1250, and a store and lot worth |3000. h. Student and Fred S. Carmen form a partnership, as follows : Strident invests cash, |2000, and R. S. Good's note which he holds ; face of the note, |500, with accrued interest for 4 mo. Fred S. Carmen invests cash equal to the total investment of Student. c. Harold D. Powers owns a dry-goods business the present value of which is $16,450. He sells a half interest to Bernard F. Shaw for $8225. d. George D. Fuller owns a drug store, and he values the store, fixtures, and stock at $12,600. Ealph F. Varley becomes an equal partner with Fuller by investing cash, $7600, and a stock of drugs worth $5000. e. Henry S. Carey, George R. Downey, and Harry S. Mason form a part- nership on the following conditions : the capital is to be $25,000, of which Carey invests $12,500, Downey $7500, and Mason borrows $5000 of Carey and invests it in the business. Note. How much of the Mason investment and loan should be entered on the books of the business ? SET YI. WHOLESALE GROCERY BUSINESS The Object of this set is to illustrate in a brief way a system of bookkeeping adapted to a general wholesale business. Special Features. Among the special features of the set are : 1. Introduction and use of : a. Auxiliary ledgers. h. Special-column cashbook. c. Special-column journal. d. Proprietors' private accounts. 2. Adjustment of interest in the Proprietors' accounts. 3. Suggestions bearing upon business correspondence. The Books used are the cashbook, the sales book, the invoice book, the journal, the general ledger, the purchase ledger, the sales ledger, the bill book, and the check book. The bill book and the check book are the same as in the preceding sets. Form for making Closing Entry in Sales Book 20 pkg. S. Yeast Cakes 1.05 21 600 lb. P. Tapioca H 20 25 bbl. R. P. Flour 4.75 118 75 40 doz. bottles M. Pickles 16 2.25 90 — 672 98 24 J. M. Martin & Co., Albany 2/10, net 30 da. 25 bx. W. L. Soap 2.00 50 5 bbl. C. R. Oatmeal 6.50 27 50 5 bbl. S. P. Flour 4.25 21 25 150 gal. P. R. Molasses 30^ 45 14 150 gal. N. 0. Molasses Total sales for month Accounts Receivable 40^ CO 203 75 6762 95 0762 95 16 Mdse. 6762 95 Sales Book. This book is treated in the same way as the one illustrated on page 64, except the posting. The amounts of the various sales are posted separately to the debit of the personal accounts in the sales ledger. 201 202 BOOKKEEPING Price List for September and October ARTICLE DESCRIPTION HOW PUT UP FOR SALE COST SELLING PRICE Baking Powder Royal Cases of 1 doz. 1-lb. cans |3.60 case $4.80 (( <( Cleveland's (( (( (( 3.50 case ^4.50 Beans Lima Bulk 3.25 bu. 3.50 " New York Medium " 2.50 bu. 2.75 Butter Color Boxes 1.50 box 2.00 Cocoa Baker's 1-lb. cans .48 lb. .60 (< Huyler's 5-lb. and 1-lb. cans .43 lb. .58 Coffee Plain Rio 125 lb. to bag .24 lb. .28 (( Genuine Mocha 150 lb. to bale .20 lb. .24 (t Fancy Java 75 lb. to mat .23 lb. .30 Chocolate Hasty Lunch 24 1-lb. tins in box .29 lb. .35 (( Baker's 12 1-lb. tins in box .27 lb. .34 Crackers Oyster GO lb. to bbl. .08 lb. .10 (( Cream Soda (< (( .00 lb. .08 Candy Stick Pails .12 lb. .14 « "' Standard Mixed (( .10 lb. .12 <( Empire Chocolate Drops 5-lb. boxes .07 lb. .10 « Peppermint Creams 30-lb. pails .04 lb. .06 « Mixed Creams Pails 1.40 pail 2.10 Diamond Salad Dressing Evaporated Fruits Cases of doz. bottles .90 case 1.20 Apricots 25-lb. boxes .08 lb. .10 <( <( Apples 50-lb. boxes .m lb. .06 <( t< Raspberries Bulk .17 lb. .22 Fish Cream Codfish 40-lb. boxes .07^ lb. .09 it No. 1 Mackerel 20-lb. pails 1.80 pail 2.40 Flour Roller Process Barrels 3.50 bbl. 4.75 <( Searchlight Pastry " 3.35 bbl. 4.50 «( Puritan Pancake Cases of 20 5-lb. sacks .12 sack .15 <( Chef Pastry << (( (( .15 sack .18 Horse-radish Cases of 1 doz. bottles .65 case .90 Insect Powder Boxes .16 box .24 Mucilage Boxes of 3 doz. bottles .90 box 1.20 Matches Gates 3-gro. pkg. .90 pkg. 1.20 <( Parlor l-gro. boxes 1.15 box 1.53 Molasses Porto Rico Bbls. of 50 gal. .25 gal. .30 <( New Orleans « «< .30 gal. .36 Mixed Pickles Doz. bottles 1.70 doz. 2.20 Oatmeal Cedar Rapids Barrels 4.50 bbl. 6.00 <* H. O. 24 2-lb. pkg. in box 2.35 box 3.10 Olives Pint cans 2.20 doz. 2.75 Kaisins London Layer 20-lb. boxes .07 lb. .10 *< California 50-lb. boxes .07 lb. .09^ Sugar Standard A 325-lb. bbl. .04 lb. .05 Fine Granulated <( << .05 lb. .06 « White C 330-lb. bbl. .03 lb. Mh <( Brown C 300-lb. bbl. .02i lb. Soap Sunlight Boxes of 100 bars 3.00 box 4:'m «« Wool Boxes of 100 cakes 3.00 box 4.00 « Water Lily Boxes 1.70 box 2.20 Salt Ice Cream 200-lb. bags 280-lb. bbl. .57 bag .75 (( Lehigh Lump 1.50 bbl. 1.75 Starch Golden Grain 160-lb. bbl. .03 lb. .04 (( Hoyt's Wheat (( (( .05 lb. 'osl a Laundry (( (( .02i lb. Tea Choice Japan 75 lb. to half chest .26 lb. !35 « Medium Young Hyson 70 lb. to half chest .21 lb. .28 (i Finest Oolong 60 lb. to half chest .35 lb. .51 Tapioca Pearl Bulk .03 lb. Mh it Flake << .03* lb. .04f << Rio << .06 ■'lb. .09 Yeast Cakes National Pkg. of 1 doz. cakes .37i pkg. .50 (( it Sunlight Pkg. of 3 doz. cakes .75''pkg. 1.00 SET VI. WHOLESALE GROCERY 203 When the sales book is closed, the total sales are posted regularly to the debit of Accounts Receivable and to the credit of Merchandise in the general ledger. The sales hook of some large concerns is provided with an extra column for cash sales ; the different amounts in this column are not posted to the sales ledger, but the total is entered in the cashbook daily, and credited to the Merchandise account at regular intervals. The general practice, however, is to treat all cash sales to regular customers in just the same way as sales on account, that is, the goods are charged to the customer from the sales book and his account is credited through the cashbook for the amount received. The latter practice is followed throughout the intermediate portion of this text. The chief arguments in favor of this plan are as follows : 1. In most wholesale houses cash is understood generally to mean payments that are made within five or ten days from the date of the bill. 2. Wholesale houses would not be justified in quoting the same terms to all customers ; those who buy in large quantities can be given better terms than those who buy in small quantities. As a basis for determining the best possible terms, a customer's ledger account should be consulted. This account is incomplete, not furnishing full information, if the cash sales are not entered in the customer's account in the ledger. . 3. In some instances a customer, for good business reasons, might call for a statement of all his transactions for a year, and it would be to any dealer's advan- tage to be able to furnish such a statement readily. Cashbook. The cashbook used in this set is designed to illustrate the desirability of using special columns to meet the requirements of certain lines of business. The model cashbook on pages 204 and 205 is self-explanatory. Note. Additional columns may be placed in the cashbook, when special columns are used, if their introduction will lessen the work and increase the value of the cashbook records. The first two columns on the left are reserved for receipts from customers on account. These columns are similar to those illustrated in Set V, but in this set they are used for personal items only. The sepa- rate items in these columns are credited to the customers in the sales ledger. At the end of the month, or as often as may be found desirable, the total of the first column is posted to the debit of Merchandise Dis- counts and to the credit of Accounts Receivable in the general ledger. (See page 204.) The total of the net proceeds column is posted to the credit of Accounts Receivable in the general ledger. All receipts of cash, aside from the items from personal accounts, are entered in the General column on the left side of the cashbook, and these items are posted separately. 204 BOOKKEEPING Cash Receipts, September, 19 — DATE Sept. ACCOUNT TO BE CREDITED Balance R. K. Traver Bills Bee. W. A. Harman F. E. Gardiner & Co. Tenny Bros. & Co. Bills Eec. Interest Bills Kec. Interest W. M. Fair Sam'l W. Hershey Williams, Harding & Co. F. E. Rogers W. W. Baker & Co. Mdse. Disc. Dr. To Accts. Rec. Accts. Rec. In bank Investment Note of W. E. Frey Inv. 8/6, less 2% Inv. 8/30, less 3% Inv. 8/30, less 3% Note of R. O. Cook Int. on above note Note of J. H. Bair Int. on above note Inv. 9/3, less 3% Inv. 9/4, less 2% Inv. 7/15 Inv. 7/30 Inv. 9/16, less 3% Total discounts allowed on sales for month Rects. on account for month ACCOUNTS RECEIVABLE DISC. DR. 46 20 10 AMOUNT RECEIVED 490 1251 1513 1105 392 356 392 1455 (i956 20 29271 SET VI. AVHOLESALE GROCERY 205 Cash Payments, September, 19 — ACCOUNTS PAYABLE UJ CO DATE DISC. CR. AMOUNT PAID X UJ -! " o "^ o Sept. 1 1 1 2 2 4 5 5 6 9 9 11 11 12 13 15 16 17 18 19 19 22 23 23 24 25 26 26 28 28 29 30 30 v/ 37 V 39 16 6 V 47 54 ^ 9 V 42 40 16 5 V 10 10 V 1 1 42 V v' 16 11 Expense Expense Expense Jordan, Marsh & Co. Coll. and Exch. N. P. Pond & Co. Bills Pay. Interest Coll. and Exch. A. B. Curtice & Co, C. 0. Bond & Co. Expense Expense Mdse. Coll. and Exch. Expense Expense R. H. White & Co. Sibley, Lindsay & Curr Bills Pay. Interest Coll. and Exch. Office Fixtures Office Fixtures Expense Expense R. R. Traver Jas. R. Bender R. H. White & Co. Coll. and Exch. Coll. and Exch. Bills Pay. Accts. Pay. Rent for Sept. Insurance premium Bill for stationery, etc. Inv. 8/16, less 2% On foreign checks Inv. 8/31, less 3% Note favor E. S. Lee Int. on above note On foreign checks Inv. 7/10 Inv. 7/16 Stamps Office stationery Freight Aug. 1 to Sept. 1 On foreign checks Telegram Traveling salesman Inv. 8/12, less 2% Inv. 8/18, less 2% Note favor A. Swan Int. on above note On foreign checks Safe for office Letter press Coal bill to date Salaries to date Private account Private account Inv. 8/31, less 2% On above N.Y. draft On Brown's check Note favor J. Green Total discounts on pur- 42 30 34 18 8 132 2058 970 395 1193 1666 882 392 62 64 150 120 27 5 16 125 13 220 50 42 98 75 50 2 3 1 15 05 75 25 40 1000 10 109 1500 250 9 100 100 400 50 50 50 30 30 30 8 11 14 To Mdse. Disc. Accts. Pay. Expense chases for month Pay'ts on acct. for month Total for month 15 7557 679 7557 26 26 67!) 15 30 18 Coll. and Exch. Total for month ~8" "2^ 8 20 30 Balance In bank 17480 09 29271 ^ 206 BOOKKEEPING The first two columns on the right are reserved for payments to the creditors on account. These columns are for personal items only, and are similar in use to the columns for accounts receivable on the left side, except that they are posted to the debit of the separate accounts with the creditors in the purchase ledger. At the end of the month, or at other regular intervals, the total of the first column is posted to the debit of Accounts Payable and to the credit of Merchandise Discounts in the general ledger. (See page 205.) The total of the net proceeds column is posted to the debit of Accounts Payable in the general ledger. All items of expense are entered in the Expense column, and only the total of this column is posted. All items of collection and exchange are entered in the Collection and Exchange column, and only the total of this column is posted. All the other cash payments are entered in the G-eneral column, and these items are posted separately. F S^ jA ^ Form for making Closing Entry in Invoice Book .19=:, r5 ^ ^^^^^^^%7^A^^,^^^.^r-A^.^^^y K^ ''a, . £ />t!r..<^1>-7.<^- ^ V^^Y^^ Af-. ^19=. W7 .--i ^ rQ 2^^ ^ . K10^ , Z£^ .fr^-.-^ ^o Qray, Salisbury & Co., T>r, 'TTerms : /"f , .,-7^ ' APPENDIX A lU Cash Payments Jan. 2 sj Expense Rent of store 100 5 V Bills Pay. Note, favor N. Cass 360 6 Amos Lees On account 287 50 9 V Expense Office stationery 12 50 20 V Bills Pay. Note, favor J. Reed 260 24 5 V D. J. Bailey Personal accts. Balance In full of account Total On hand 175 462 1823 31 462 50 50 31 89 3018 89 Cashbook. In the explanatory part of the text, at the beginning of this set, it was noted that the cashbook is very nearly the same in single entry as in double entry. The above form is easily understood. All items that are to be posted are placed in the first money column. Journal. The form on page ii is a single-entry journal. As the student is now familiar with the principles of debit and credit, this form will be readily understood. Just at the left of the first money column it is neces- sary to write either Dr. or Cr. as a means of determining how the item is to be posted. As only personal items are posted in single entry, only the names of persons appear in the journal. Bill Book. This book is used for recording all notes received or issued by the business. It is generally divided into two parts, one for bills receivable and the other for bills paijable. A full description of all notes received or issued should be recorded in the bill book. All canceled notes should be marked j^^iid in this book. The notes recorded in the model bill book are from the single-entry set. Bill Book Receivable WHERE PAYABLE TIME WHEN DUE MONTH DAY AMOUNT WHEN AND HOW DISPOSED OF 6 tP ,-^fflC'£^^. / (P .-z^^z^ 2-S 3 ^iU>T^. f XJ Payable WHERE PAYABLE TIME WHEN DUE AMOUNT YEAR MONTH DAY ^ .^I X2 / ¥yo i ^ ;i2- 7^.^ iv BOOKKEEPING Memoranda of Transactions Directions and Suggestions. Observe the following directions and suggestions : 1. David Easton is the proprietor. Student acts as bookkeeper and manager. 2. No business forms are used. 3. No days of grace are allowed on any notes. 4. The business is general merchandise. Jan. 1. The following were the resources at the beginning of the business : Cash on hand, $2000 Store and lot, valued at $4000 Geo. Wilson's note, dated Dec. 10, at 60 da., $500 Enter the preceding items in the journal. Refer to the model journal, page ii. Enter the cash in the cashbook, second column. Record the note in the bill book." Refer to the model bill book, pages ii and iii. 2. Bought of W. E. Story for cash : 40 bbl. Pork at $14 Enter Jfdse. in the cashbook, second column. 2. Paid A. R. Deneen cash, for sundry repairs, $50. 5. Bought of James Selden on account : 50 bbl. Beef at $17 60 bbl. Salt at $1.50 Enter in the purchase book. 4. Sold Edward White for cash : 20 bbl. Pork at $16 Enter Mdse. in the cashbook, second column. 5, Sold John Harrison on account : 20 bbl. Beef at $18.50 10 bbl. Salt at $1.60 Enter in the sales book. 5. Paid J. D. Russell cash, for office stationery, $12.25. 6. Paid James Selden cash for one half the invoice of Jan. 3. Enter in the cashbook, first column. 7. Sold Jesse Blaine on account : 10 bbl. Pork at $16.50 10 bbl. Beef at $19 10 bbl. Salt at $1.62 8. Bought of William Edison on account : 25 bbl. Pork at $13.50 30 bbl. Beef at $16.50 APPENDIX A V Jan. 9. Discounted Geo, Wilson's note, and received cash for tlie proceeds. The term of discount is the time from the date of discount to the maturity of the note. Enter the face of the note on one side of the cashbook and the discount, under Interest, on the other side, each item in the second column. 10. Sold E. C. Bartlett on account : 6 bbl. Pork at $15 10 bbl. Beef at $18.25 11. Sold Howard Stetson on account : 12 bbl. Beef at $18.75 15 bbl. Salt at $1.65 12. Qave James Selden a note at 10 da., with interest, for the balance of the invoice of Jan. 3. Enter the note in the journal and record it in the bill book. 12. Paid Page & Co. cash, for an office safe, $85. 13. Sold Henry White, one half cash, balance on account : 12 bbl. Pork at $16.25 20 bbl. Salt at $1.70 Enter the whole amount in the sales book, and then enter the cash received in the cash- book, first column. 14. Bought of Samuel Jones, one half cash, balance on account : 50 bbl. Beef at $16.50 100 bbl. Salt at $1.48 Enter the whole amount in the purchase book, and then enter the cash paid in the cash- book, first column. 15. Bought of H. C, Benton on account : 60 bbl. Pork at $14.75 15. Received John Harrison's note at 10 da., with interest, for $300, to apply on the invoice of Jan. 5. Record in the bill book. 16. Received of Jesse Blaine cash, to apply on the invoice of Jan. 7, $250. 17. Sold P. H. Williams on account : 25 bbl. Pork at $16.75 17. Gave William Edison a note at 15 da., with interest, for $500, and cash for the balance of the invoice of Jan. 8. Enter the note in the journal and record it in the bill book. Enter the cash in the cash- book, first column. 18. Sold W. B. Emerson on account : 25 bbl. Beef at $18.75 20 bbl. Salt at $1.70 18. Bought of Williamson & Son on account : 40 bbl. Flour at $5.25 , VI BOOKKEEPING Jan. 19. Keceived of Jesse Blaine cash, for balauce of the invoice of Jan. 7. 19. Received of E. C. Bartlett his note at 15 da. for $200, and cash for the balance of the invoice of Jan. 10. 20. Sold D. V. Negley on account : 15 bbl. Flour at $6.50 20. Received of Howard Stetson cash, for the invoice of Jan. 11. 21. Sold Thomas Fleming on account : 12 bbl. Pork at |16.90 15 bbl. Beef at $19 21. Sold Warren Phelps, one half cash, balance on account : 20 bbl. Pork at $16.80 18 bbl. Beef at $18.80 30 bbl. Salt at $1.65 22. Paid James Selden cash, for note and interest due to-day. Enter both the note and the interest in the cashbook, second column, and mark the note paid in the bill book. 23. Sold Jesse Blaine on account : 12 bbl. Beef at $18.75 15 bbl. Flour at $6.50 23. Gave the proprietor a check for private use, $150. Enter in the cashbook, first column. 24. Bought of William Edison on account : 35 bbl. Pork at $14.25 24. Gave H. C. Benton cash, on account, $625. 24. Received of P. H. Williams cash, on account, $325. 25. Bought of James Selden on account : 40 bbl. Beef at $16.75 25. Received of D. V. Negley cash, for the invoice sold him on Jan. 20. 25. Paid Williamson & Son cash, for the invoice of Jan. 18. 25. Received of John Harrison cash, for his note and interest due to-day. 26. Received of Warren Phelps his note at 10 da., with interest for the balance of the invoice of Jan. 21. 26. Sold John Harrison on account : 12 bbl. Pork at $16 26. Sold E. C. Bartlett on account : 20 bbl. Beef at $18 27. Bought of Williamson & Son on account : 25 bbl. Flour at $5.40 APPENDIX A vii Jan. 27. Sold Howard Stetson on account : 10 bbl. Flour at f 6.50 10 bbl. Salt at $1.68 27. Received of W. B. Emerson cash, on the invoice of Jan. 18, $400. 28. Received of Thomas Fleming cash, on account, |250. . 28. Sold D. V. Negley on account : 10 bbl. Pork at $16.20 29. Sold Warren Phelps on account : 12 bbl. Beef at $18.25 30. Paid Bell Printing Co. cash, for advertising, $19.65. 31. Paid Albert Force, a clerk, cash, for one month's salary, $32.50. Inventories, January 31, 19 — Merchandise : 33 bbl. Pork $14. 16 bbl. Beef ' 16.75 45 bbl. Salt 1.50 25 bbl. Flour 5.20 Expense : Office Safe at cost $85. Real Estate : Store and Lot $4000. Closing the Work for Single Entry After recording all transactions, have them corrected by the instructor, Close the cashbook. (See model, pages ii and iii.) Posting. In posting, observe the following : 1. Place three accounts on each page of the ledger. 2. The Proprietor's account should be placed first. 3. Open an account with each person whose name appears in the sales book or the purchase book. 4. Debit each person whose name appears in the sales book. 5. Credit each person whose name appears in the purchase book. 6. Post from the journal. The debit or the credit of each item in the journal is indicated. 7. Post from the cashbook. Each item in the first column on the left side of the cashbook should be posted as a credit ; each item in the first column of the cashbook on the right side should be posted as a debit. 8. The above completes the posting. Note. Posting directly from the sales book, the cashbook, and the purchase book is a modification of the older methods of single entry, but the plan here suggested saves much time both in recording and in posting transactions. viii BOOKKEEPING The Statement. Make a statement as follows : 1. The total of the balances of all the accounts in the ledger in which the debit is the larger represents accounts receivable. 2. The total of the balances of all the accounts, the Proprietor's account excepted, in which the credit is the larger represents accounts payable. 3. The unpaid notes in the bill book are to be used in making the statement. Before making the statement of resources and liabilities, it is suggested that the student examine the records in the bill book to find out if each note issued or re- ceived has been recorded, and if all notes either paid or discounted have been so marked in the bill book. It is easier to avoid errors than to correct them. Resources : Accounts Receivable, per ledger Beal Estate, per inventory Expense, per inventory Merchandise, per inventory Bills Receivable, per bill book Cash, per cashbook Liabilities : Accounts Payable, per ledger Bills Payable, per bill book The present worth equals the difference between the resources and the liabilities. The present worth minus the net credit equals the net gain. Enter the net gain in the journal as follows : David Easton Cr Net gain, per statement Post the net gain to the Proprietor's account and show the present worth as in double entry. Changing to Double Entry. Change to double entry as follows : 1. Debit each of the following accounts in the ledger with the amount appearing in the statement: Real Estate • Expense Merchandise Bills Receivable 2. Credit Bills Payable with the amount appearing in the statement. 3. Take a trial balance from your ledger ; use the cash balance from the cashbook. Note. Some bookkeepers prefer to journalize the items which enter into the change of single entry to double entry. Various entries may be made to bring about the desired effect, but a record similar to the following is generally preferred, since by it all the resources and all the liabilities of the business are shown in a form convenient for transfer- ring to the ledger. APPENDIX A January 31, 19 — IX V 5 3 2 3 C.B. 3 V Accounts Receivable Real Estate Expense Mdse. Bills Receivable Cash Bills Payable Accounts Payable C. D. Lewis, Prop. Per ledger 2310 Per inventory 4000 Per inventory 50 Per inventory 920 Per bill book 428 Per cashbook 1650 Per bill book 365 Per ledger 2560 Per ledger 6433 The items that are already in the ledger are marked V so that they will not be posted. After the above entry has been posted, the accounts of the business are in double-entry form. A Double-Entry set of books may be changed to a single-entry set by leav- ing out of the ledger all accounts except personal accounts. The Use of Other Sets for Single Entry. If the instructor thinks it desirable to liave additional work in single entry, it is suggested that any set in the Introductory portion of the textbook may be written in single-entry form. Journal paper and ledger paper may be used for this additional work. REVIEW EXERCISES The following review exercises are suggested : 1. July 1 Frank Wilson and Chas. K. Peck began a Provision business with the following resources and liabilities : Resources Cash $1350 Merchandise ^ 4250 Office Fixtures 240 Horse and Wagon 200 Accounts Receivable 850 Liabilities Bills Payable $800 Accounts Payable 940 The partners had an equal interest in the business. The books had been kept by single entry. October 1 the partners decided to change the books to double entry, resources and the liabilities on that date were as follows : The Resources Cash $925 Merchandise 4150 Office Fixtures 240 Horse and Wagon 200 BOOKKEEPING Resources (conlinued) Accounts Receivable : A. H. Kern $150 Thos. L. Fuller 135 E. R. Lakey 165 H. M. Hanna 175 Henry S. Arnold 250 Henry I. Brook 110 Liabilities Bills Payable $325 Accounts Payable : H. J. Gould 100 Jas. L. Burgess 140 A. H. Francis 200 Geo. F. Hatfield 85 a. On a ledger sheet credit eacli partner with one half of the net resources on July 1. b. Make a statement showing the net gain on October 1. c. Credit each partner in the ledger with one half of the net gain, and show the present worth of each partner. d. Change the books to double entry by debiting in the ledger each re- source item, and crediting each liability item, on October 1. e. Take a trial balance of the ledger. Note. If the instructor so desires, the change to double entry may be accomplished by making the journal entry as illustrated on page ix. 2. The following is a trial balance from a double-entry ledger. From this trial balance open a single-entry ledger, four accounts to the page. James L. Gary, prop. $3500 Harvey A. Phelps, prop. 3500 Cash $1645 Merchandise 3256 Real Estate 1625 Expense 87 Office Fixtures 310 Horse and Wagon 250 Bills Receivable 195 A. T. F. Ry. Stock 1000 Accounts Receivable : 505 S. M. Aker $150 D. A. White 85 Roy & Co. 45 Edward Wise 130 John Gross 95 Bills Payable 933 Accounts Payable : 940 James Hyde 230 H. C. Alden 50 A. R. Waite 115 E. S. Dent 175 A. S. Flint 120 David R. Race 250 $8873 $8873 APPENDIX B DEFIXITIONS AND EXPLANATIONS Bookkeeping is the art of making a systematic record of business transac- tions, enabling the proprietor to ascertain the condition of his business. A Business Transaction is an exchange of values. There are two methods of bookkeeping, Double Entry and Single Entry. In Double Entry, accounts are kept not only with persons but with all sources that affect the results or the condition of the business. In Single Entry, accounts are kept, usually, with persons only. There are two classes of accounts : Resource and liability accounts ; Loss and gain accounts. An Inventory is an itemized statement or schedule, in writing, showing the amount of certain assets owned by the business, or certain liabilities owed by the business. Allowances are made for the use of money, for the early payment of in- voices, etc. Interest and discount are allowances. Capital, at the beginning of business, usually is the amount invested ; at other times it is the excess of resources over liabilities. Merchandise includes all commodities which are held for purposes of exchange. Expense is any expenditure to carry on the business. Interest is the compensation allowed by law or fixed by the parties for the use or forbearance or detention of money. — Huffciit. Discount is usually an allowance for early payment. Bills Receivable are the written promises of others to pay us: Bills Payable are our written promises to pay others. Posting is a process of transferring debit and credit items to their respective accounts in the ledger. Present Worth of the Proprietor's account : Is net credit plus net gain.; or Net credit minus net loss ; or The excess of resources over liabilities. A Receipt is a written acknowledgment of money or other value received. A Voucher is a written statement proving that some transaction has occurred. When resources exceed liabilities a business is Solvent. When liabilities exceed resources a business is Insolvent. xil BOOKKEEPING A Statement of the business shows the results and the present condition ot the business ; a Statement of a ledger account is an abstract of the account, and shows the balance remaining unpaid. The Journal is a book in which the debits and the credits of business transactions are arranged systematically ; the history of each transaction and the amount are included. The Ledger is a book containing the accounts of the business, the debits and the credits having been collected from other books of entry. A Book of Original Entry is a book in which entries are made first. An Auxiliary Book is subordinate to a book of original entry. A Bill Book contains an itemized record of all notes received or issued by the business. The term Charge, as used in bookkeeping, means debit. Red Ink is used for AH rulings ; Recording inventories in ledger accounts ; Entering items in the ledger that are to be transferred. In closing accounts, a single red line means that the items above it are to be added ; double red lines mean that the account is closed, the items and the totals above this ruling are not to be used again. An Invoice is an itemized statement of goods bought or sold. It includes the names, the quantities, the prices, and the amounts. RULES FOR JOURNALIZING General Rule : Debit the account that stands for a value received, or for a person or a thing that causes value to go out. Credit the account that stands for a value given, or for a person or a thing that brings in value. Rule I. Proprietor's Account. The proprietor is debited ; For withdrawals from the business for personal use ; For his liabilities assumed by the business j For net loss when the books are closed. The proprietor is credited : « For all investments in the business ; For net gain when the books are closed. Rule II. Property Accounts. Under its given name property is Debited when it comes into possession of the business ; Credited when the business parts with it. Property includes cash, merchandise, real estate, notes, etc. That the journalizing of bills receivable and bills payable may be more clearly under- Stood, separate rules are given herewith. APPENDIX B xiii Rule III. Bills Receivable. Under this title they are Debited when received by the business ; Credited when the business parts with them. Rule IV. Bills Payable. Under this title they are Debited when redeemed by the business ; Credited when issued by the business. Rule V. Accounts with Persons. Persons are debited : When they get into our debt ; When we get out of their debt. Persons are credited : When we get into their debt ; When they get out of our debt. Personal accounts are open accounts with individuals, firms, or corporations. Generally they are the result of buying or selling on account. Rule VI. Expense Account. This account is Debited for any expenditure to carry on the business ; Credited for the proceeds of the sale of any item previously charged to expense. Expense includes rent, salaries, insurance, and other like items. In a large business a separate account is kept with each of these items. Rule VII. Allowances. Under the given names these items are Debited when we allow them to others ; Credited when allowed by them to us. APPENDIX C LOOSE-LEAF METHODS AND FILING DEVICES Modern business men have adopted many inventions for saving time, reducing labor, and lessening expense. Many of these have been applied to bookkeeping and to general office work. At the very outset it ought to be noted that these devices have nothing whatever to do with the principles that govern bookkeeping ; debit and credit are unchanging factors, no matter what form of record may be made. Different kinds of business and different methods in the same business make various plans desirable and even necessary. This fact is responsible for the production of a multitude of devices for carrying on office work and keeping accounts. So many systems are in use that only a brief reference can be made to them here. The character of the business and the manner of conducting it determine what devices may be used advantageously. The value of any of them depends on the volume of business transacted and the records required for giving necessary information concretely and in accessible form. Loose-Leaf Methods. Books equipped with locking devices so arranged that leaves may be inserted or removed at will are used generally and have many advantages. The suggestions here given apply particularly to a loose-leaf ledger, but they have a bearing on any one of the many books where loose leaves are used. As insertions or removals in any book may be made to conform to require- ments, smaller pages may be used than in a bound book. Pages containing accounts that are closed may be removed and filed in transfer covers or binders for subsequent reference, if such reference be- comes necessary. This keeps the ledger volume for current use free from dead accounts. It also obviates the necessity of opening new books, as only live accounts remain permanently in the ledger. By the use of projecting leather tabs, index leaves may be inserted, so the book is practically self-indexing, as the removal of a leaf or the insertion of a new one does not affect the index division. The ability to remove leaves from a book of account at will is open to the objection that it may suggest to an unreliable person the possibility of tampering with important records, as one leaf can be easily withdrawn and another substituted. For this reason some have maintained that this form of record should not be used in certain books, such as the general ledger. xlv APPENDIX C XV Card Systems. All are familiar with the card index found in a public library. This is illustrative of many card-index systems now in use in modern busi- ness offices. The following may be named as a special advantage : The readiness with which unused accounting or statistical material may be eliminated, and, correspondingly, new material may be inserted. The CARD LEDGER is a series of cards ruled in regular ledger form, filed in a box or a cabinet, and properly indexed with projecting guide cards. It is a substitute for a regular ledger. The following are its advantages : All closed accounts are readily eliminated and new accounts are as readily inserted. Monthly statements of customers' accounts may be made by several persons working on the ledger at the same time ; in a bound ledger only one person can thus work. Any account required for reference may be taken from the file, and the regular work of the bookkeeper on the ledger will not be interrupted. The use of projecting tabs affords an easy method of indexing. Duplicate Billing. By using carbon paper a duplicate or several duplicates of any writing may be made, either with the pen, or with a typewriter, or with a billing machine. For instance, instead of entering all sales in a sales book, a duplicate may be made, which insures a copy identical with the bill sent to the customer; the postings may be done from the carbon records, which, when bound, constitute the sales book. The saving of time and the avoidance of errors are real advantages. Carbon duplication may be used in a multitude of ways, and may be applied to many forms of record. Billing machines, and typewriters with billing attachments, afford ideal facilities for both original and duplicate work. Filing Devices. The vast accumulation of letters, documents, pamphlets, and the like, in a large business office, makes some system absolutely neces- sary, if material is to be readily available for use when needed. This is pro- vided for by modern filing systems, usually vertical for accessibility, which meet the two essential requirements of a modern business office, namely, classification of material and ready reference. So successfully are these requirements met by manufacturers that the production of filing systems has become a large industry. The following are special features : systems of indexing in any form that may be required, alphabetical, numerical, by subject, or otherwise ; provisions for classification and for elimination. The most common form of filing devices is a cabinet of drawers so arranged that the papers or documents may be filed in either a flat or a vertical position, and may be com- bined in various forms appropriate to the business to be served. Note. If deemed desirable, the instructor may secure a catalogue containing many illustrations of filing devices, and give some attention to the matter in his class. APPENDIX D COMMERCIAL TERMS DEFINED Acceptance. The name of an accepted draft; an agreement, by signature, to the terms named in the draft. Account Current. An open or a running account; a detailed statement of transactions between two persons or two firms. Account Sales. An itemized statement of sales and expenses, rendered by a commission merchant to his prin- cipal. Acknowledgment. A formal admission, made before a notary or other quali- fied officer, that the act described was done voluntarily; the officer's certificate of such admission. Affidavit. A written statement made under oath. Agent. One who acts for, or in place of, another, by authority from him ; a deputy. Assignee. One appointed by another to do some act or to enjoy some right ; generally, one to whom property is transferred for the benefit of the creditors. Attachment. A seizure or taking into custody by virtue of a legal process. Auditor. A person appointed to examine accounts. Bankrupt. Any person whose property becomes liable to administration under the bankruptcy laws. Bill of Lading. A receipt of a transpor- tation company, containing an ac- count of the goods shipped and the conditions of shipment. Bill of Sale. A writing given by the seller of personal property to the buyer. Board of Trade. In the United States, a voluntary organization of business men for the advancement of com- mercial interests. Bona Fide. In good faith. Bond. A written promise under seal, binding a person to do a certain thing or not to do it. Bonus. Something given in addition to what is strictly due the recipient. Broker. An agent between buyer and seller; a dealer on the stock ex- change. Capital. The investment in a busi- ness. Cashier. One who has charge of money ; in banks, the financial officer. Certified Check. A check that has been accepted by the bank on which it is drawn, thereby making the bank security for its payment. Clearing House. An institution in a city where daily settlements are made between banks by the mutual ex- change of checks, drafts, etc., the difference between such exchanges being paid in cash. Collateral. A security additional to the personal obligation. Common Carrier. One who undertakes the office of carrying either goods or persons for hire. Copartnership. The voluntary associa- tion or joining of two or more per- sons in a business enterprise. The same as partnership. Copyright. A right of control granted by a government to an author or a publisher. APPENDIX D XVU Coupon. A certificate of interest due, printed at the bottom of trans- ferable bonds, designed to be cut ofE and presented for payment when the interest is due. Credit Memorandum. A notice sent to a purchaser stating that an allow- ance has been made for goods re- turned, or for other causes. Deed. A contract under seal, usually transferring the title of real estate. Depreciation. A falling of value. Dishonor. A refusal to pay an obliga- tion when due, or to accept a draft when presented for acceptance. Dividend. The allotment to each stock- holder in the division of profits. Drayage. Charges for conveying goods from one place to another. Exchange. The method by which debts are discharged without the actual transference of money ; the rate at which such exchange can be made. Extension. An allowance of further time for the payment of a debt. Fixtures. That part of the furnishings of a store or an office which is not movable. Footing. The adding of a column of fig- ures, or the result of such addition. Forgery. The writing of another's name, as a signature, with fraudu- lent intent, or the altering of a written document. Franchise. A certain right or privilege, granted by a government to indi- viduals or corporations. Freight. Compensation paid for the transport of goods or other property; that with which anything is laden for transportation. Good Will. The value, in a business, of established reputation or patronage. Guaranty. An agreement by which one person promises to make another secure in the possession or enjoy- ment of something; a security against loss. Honor. To accept a draft, or to pay it when due. Income. , The total amount of the earn- ings and the receipts of money from all sources. Index. An alphabetical table of contents. Indorse. To write one's name on the back of a note, a check, or a draft ; to record a partial payment on the back of a note. Installment. A sum of money paid in stated portions. Insurance. Indemnity against loss ; the premium paid for insuring. Jobber. A merchant who buys goods from importers and manufacturers, and sells to either wholesale or retail merchants. Liquidation. Act or process of settling debts. Lease. A contract, usually in writing, for the temporary possession of real estate or other property. Letter of Credit. A letter usually issued by a bank, addressed to banks in foreign cities, directing payment of a stated amount to the holder. Such letters are usually carried by travelers. Manifest. An invoice of a ship's cargo. Mercantile Agency. An institution which obtains and furnishes information regarding mercantile enterprises, their financial standing, their busi- ness reputation, etc. Money. Current coin; any circulating medium. Mortgage. A conditional transfer of the title to real estate or chattels as se- curity for the payment of a debt. Negotiate. To treat with another with a view to reaching an agreement; to transfer for a valuable considera- tion. Net. Clear of all charges or deductions. Notary. A public officer who takes ac- knowledgments of legal documents and protests paper for nonpayment. XVIU BOOKKEEPING Open Account. A running or an unsettled account. Open Policy. An insurance policy cover- ing undefined risks and admitting of subsequent indorsements or ad- ditions. Outstanding Accounts. Book accounts remaining unpaid. Overdrawn. A term applied to a bank account when a check has been issued for an amount greater than one's credit balance. Patent. An exclusive right to an inven- tion, issued by a government. Pawnbroker. One who makes a business of lending money on personal prop- erty pledged and in his keeping. Power of Attorney. A legal authority to act for another. Premium. The consideration paid for a contract of insurance ; a sum or bonus in addition to the capital. Protest. A formal notice, issued by a notary to the indorser or the in- dorsers of a note or draft, of the nonpayment of a note or a draft, or the nonacceptance of a draft. Quotations. The published or current prices of stocks, bonds, or any com- modity. Rebate. An allowance for overcharge, for early payment, or for other reasons. Receiver. A person appointed by the court to hold in trust property which is the subject of litigation, pending the suit; or one who is appointed to wind up the aifairs of a partner- ship or a corporation on its dissolu- tion. Retail. To sell in small quantities. Short-extend. To enter individual amounts at the left of the money column, to be extended in total in the money column. Sinking Fund. A fund set apart for the redemption of bonds or for other specific uses. Sundries. Many different or small things. Syndicate. A combination of capitalists who unite their resources to advance some specific business enterprise. Tariff. A lawful rate of duty on imports. Terms. Conditions of sale or of agree- ment. Tickler. A book containing memoranda of all time paper, and arranged so as to serve for a reminder to pay or to collect. Trustee. One intrusted with property for another. Underwriter. One who insures. Valid. Binding in law. Void. Not binding in law. Way Bill. A document containing a de- scrij)tion and shipping directions of goods sent by railroad. Wholesale. Selling large quantities, usu- ally in unbroken packages. APPENDIX E ABBREVIATIONS AND GENERAL TERMS A ..... America ; American A I First class Acct. or acct. . . Account Acct. Cur. . . Account Current Acct. Sales . . Account of Sales Adv. or adv. . . Advertisement Agt Agent A.M Before noon ; Master of Arts Amt Amount App Appendix Asst Assistant Atty Attorney Av. or Ave. . . Avenue Bal. ... . Balance B.B Bill Book bbl Barrel bdl Bundle Bk. ..... Bank B/L ..... Bill of Lading Bld'g .... Building bu Bushel bx. ..... Box ^ Cent Cash Cashier Ck ' Check Co Company; County C.O.D Collect on Delivery Coll Collection; Collector Cr Credit; Creditor cwt Hundredweight da Day Dep't .... Department Dis Discount do. o . . . . The same doz Dozen Dr Debtor; Doctor £. & 0.£. . . Errors and omissions excepted xi: ea Each e.g For example Esq Esquire etc. or &c. . . And so forth Ex Example Exch Exchange fig Figure, Figures F.O.B. or f .o.b. . Free on board Fol Folio, or page ft Foot gal Gallon gr- ..... Grain gro Gross hhd Hogshead hund Hundred i.e That is in Inch Ins Insurance inst. . . . . Instant ; the present month Int Interest Inv Invoice Jr Junior kg Keg lb Pound L.B Letter Book L.F Ledger Folio Ltd Limited M Thousand Mdse Merchandise Mem Memorandum Messrs. . . . Gentlemen ; Sirs Mfg Manufacturing min Minute Mme Madam mo Month Mr Mister Mrs Mistress MS Manuscript XX BOOKKEEPING MSS Manuscripts N.A North America N.B Take notice No. or no. . • Number O.K All correct Oz. or oz. . . Ounce p Page Pa3rt. or payt. . Payment pc Piece Pd Paid per By Per cent or per cent .... By the hundredths pk Peck pkg Package P.M Postmaster; After- noon P.O Post Office pp Pages pr Pair Pres President prox Proximo; of the next month pt Pint P.S Postscript qr Quire; Quarter qt Quart Rec*d .... Received Ret'd .... Returned Rev Reverend R.R Railroad Ry Railway Sec Secretary Shipt Shipment sq. ft Square feet Sr Senior St Street; Saint Str Steamer Sunds Sundries Supt Superintendent Tr Transpose Treas Treasurer ult Ultimo; of the last month U.S.M. . . . United States Mail via By way of viz Namely ; to wit vol Volume vs Against W/B .... Way Bill wk Week wt Weight Yd. or yd. . . Yard Yr. or yr. . . Year Arbitrary Signs a/c Account @ At or to c/o Care of ^ Cent \/ Check mark ♦ .- Dollar jjt Number, if written before a figure ; pounds, if written after a figure % Per cent I* One and one fourth I^ One and two fourths I* One and three fourths r Feet w Inches APPENDIX F FORMS AND LEGAL DOCUMENTS Form I. Letter of Remittance W. O. Weaver C. W. Fbey W. D. Radcliffe Office of W. O. Weaver & Co. WHOLESALE GROCERS t xxi xxii BOOKKEEPING Form II. Notice of Dissolution of Partnership oJjoZiAixj' 6-&t/ii/'&&rL (LU^-eAt X. ^'WLith/ am^d^ ^A&oZ&v €.. jo-n&o^, ^oruieA^ w-iJZ ^fciy amA' cl\jQyeAa^u^& alt cCeXyto' omA/ tuAyiUXAyt^, am^ci v&e&Ov-& a,tt vuyyL&yO' ji}^M^a{yt& to tA& qaMxI Cat& ^AA/m,. f (Zt{)-&\t %. ofwiXA iSigned\ -l Form in. Circular announcing the Retirement of a Partner W. D. Mabtin a. S. Wakd Office of Martin & Ward Boston, ^ass., Clucf. 26, /9— ^a/xX/yyi, ^M-£At V ^' RcxsA&oZeAy, c4.y. H'yi tA& S/qZ i/Kot. th& jii'aAX''yvey'\jQALjii' hiXA&ito e/XAjotAyvKf (>■&- Tn/iot/icaZ e^(yyiQ.&nt. CCit&v tkaZ cLaZ& tk& (yu^AjyieA^ wttt 6-& s^cyyi- cLueX/ey(£ (^u THv. IA^oaA cyyi hl^ (yi^n a/M^cywrit am^cl v?i hioy cyv^n naAn,&. chb ootL^iXAAUZ a, &(yyitimoayyi&& at uoniA' voutueA ^aZuyyia^cf& ^i^& a^QyQA4.v& ucyw tkat no- v&cLiiitixyyv w-vll 6-& 'vyioAe, vyv tk& ^a/Jn^iXx^t o-j' tA& (yii^vyi&Q^, a/yu£ tAat att iZo, a^luHyiO' w^tt 6-& e-& hereunto set auA, handoy and seala, this Vw-£Attif-tvvat day of CL^u^^vQZ in the year one thousand nine hundred and tu>-&tv-&. [Signed] <^. ZC^. l^kyitkiAU^to^ V" ^. [seal] xxiv BOOKKEEPING Form V. Articles of Copartnership 9lttf CUlS of COpattltttjSl^ip made and entered into this first day of August, one thousand nine hundred and twelve, between Malcolm D. Gilbert, of the City of Boston, County of Suffolk, and Commonwealth of Massachusetts, and Chas. M. Wentworth, of said Boston : \a\tnz0tti) : SfiVHU This copartnership is formed for the purpose of carrying on in said City of Boston a Jobbing Furniture business under the firm name of M. B. Gilbert & Co., and shall continue for two years from the date hereof unless sooner dissolved by mutual consent. ibttUXCa* As his contribution to the capital of the firm said Malcolm D. Gilbert hereby transfers to the said firm his business now located at No. 467 East Street, and said firm assumes and agrees to pay the outstanding liabilities of the said business. Said business is taken over at the net value of ^14,225, and is more particularly de- scribed in the Schedule of Assets and Liabilities hereto annexed. ^hivH* Said Chas. M. Wentworth contributes as his share of the capital as follows: cash, ^7000 ; stock of furniture, ^1500 ; account with Foley Bros., $5725 ; total, $14,225. iFotttt|)« Each partner shall, semi-annually, be credited on the books of the firm with interest at the rate of 6 per cent per annum on his share of the capital for the time being standing to his credit, before any division of profits is made, such interest charge to be treated as an expense of the business. iFiftf)* Each partner shall be credited with the sum of $100 per month as salary, and he may withdraw the same monthly, for services rendered, or, at his option, any balance remaining undrawn may be carried to such partner'' s capital account. Such salaries shall be charged as an expense of the business and not reckoned as profits. ^ipi^* Profits and losses shall belong to, and be borne by, the said partners in equal shares. ^etaentf)* Neither partner shall, for the ben^ of any third person, indorse any notes or negotiable paper, or become surety or guarantor or otherwise- liable for the benefit of third parties, without the assent in writing of the other partner first obtained. xDi^^ib* An account of the stock and of the debts and liabilities of the firm shall be taken at least annually, and the profits or losses computed and credited or charged to each partners capital account. After such accounting, either party shall be at liberty to withdraw his share of any net profits of the firm, and any profits not so withdrawn shall be added to and deemed a part of the capital account of such copartner. JBlintl)* Neither partner shall engage in any other business, but each shall devote his entire time and attention to and put forth his best efforts and energy for the further- ance of the business aforesaid. QLtXltl)* Complete and accurate books of account shall be kept, used in common, and each partner shall, at all times, have access thereto. To the faithful performance of all the terms and conditions of these Articles of Copartnership, the undersigned partners hereby bind themselves each to the other, his heirs, executors, administrators, and assigns. Jn ffititnectd ^Ml^tXtOl, the parties have hereto affixed their hands and seals, in duplicate, the day and year first above written. , ?yicut(S/}ty>v 3. ^M-eAt [seal] \Signed\ \ 010^. TH. W'&nX/w-cyitk [seal] APPENDIX F XXV Form VI. Power of Attorney B.noto all JEen h^ tijese presents that w-e^; f^' y^' 7fl(yu^a/yv amci Ro4>-£aZ /ifalt, eA>n^it(X/ictim^ tA& lAJbyn. oi IS. W-. ?yi(yufam^ If (^., of the City of JSa^Xxyyi, THcm^,, have made, constituted, and appointed, and hy these Presents do mahe, constitute, and appoint, ^kcivte^ TH. RoAfmxyyvcL, of the City of cAeAvtyan, ?Ha,QAy., cyuA^ true and lawful Attorney, for uQy and in cyu/b name, place, and stead to- tAMyyio^i^t (yiLQA/yL&QyQy cuyicL to- QAxp^ c{/yicC vyicUyvQy& oavu xyv alt ot tA& ^yiote^-, (i.k&