UC-NRLF $B 37 SLD ■. I o I ^ O >- BOOKKEEPING BANKING GEORGE W. MINER GINN AND COMPANY V«n«ii itmmn wmmmmmmmmmmm Digitized by the Internet Archive in 2007 with funding from IVIicrosoft Corporation http://www.archive.org/details/bookkeepingbankiOOminerich MOORE AND MINER SERIES BOOKKEEPING BANKING BY GEORGE W. MINER GINN AND COMPANY BOSTON • NEW YORK • CHICAGO ■ LONDON COPYRIGHT, 1902, 1903, BY JOHN H. MOORE and GEORGE W. MINER COPYKIGHT, 1913, BY GEORGE W. MIXER ALL RIGHTS RESERVED 313.1 GINN AND COMPANY • PRO- PRIETORS • BOSTON • U.S.A. PKEFACE As banking is a highly specialized subject, it is treated in a separate book. A reference to the Contents will show the practical character of the work presented. The revised edition has been read in manuscript by George E. Allen, educational director of the American Institute of Banking, and O. Howard Wolfe, secretary of the Clearing House Section of the American Bankers' Association, both of New York City. The helpful and valuable suggestions which they have given increase the value of the text both theoretically and practically. iii 324922 CONTENTS PAGE Banks axd Banking 1 Utility of Banks . 1 National Banks 2 Powers of and Restrictions on National Banks 6 National Bank Officers and Clerks 7 Opening Entries of a National Bank 8 Trust Companies 10 State Banks 11 Private Banks 12 Bank Bookkeeping 14 Work of the Discount Clerk 15 Work of the Collection Clerk 21 AVork of the Receiving Teller 27 Work of the Paying Teller . . 31 . Work of the Note Teller 37 Work of the Correspondence Clerk 40 Work of the Individual Bookkeeper . 46 Work of the General Bookkeeper 50 The Clearing House 82 Letters of Credit 91 Appendix A . 95 Notes on Forms of Record 95 Reconcilement Form 97 Certificate of Protest 98 Notice of Protest 99 Appendix B 100 Commercial Terms defined 100 Index 103 BOOKKEEPING BANKS AND BANKING THE UTILITY OF BANKS A Bank, in its simplest form, is an institution for the safe-keeping of money ; but the commercial bank of to-day is designed to render the public many varied and important services. The general utility of commercial banks may be stated as follows : 1. They provide a place for the safe-keeping of money and securities. 2. They afford a business man an opportunity to borrow money to carry on his enterprises while his capital is locked up in merchandise or in the hands of his debtors. The credit of many mercantile houses is worth as much to them as the capital they possess. ' 3. They save the transmission of money from one place to another, thus avoiding great risks and keeping money in more active circulation. Settlements are effected by issuing to customers (a) bankers' drafts ; (V) bills of exchange ; (c) Jetters of credit. 4. They facilitate the payment of bills by permitting money deposited to be withdrawn upon a simple order called a check. This check when issued serves the business man in various ways, as follows : a. It saves time in paying large sums of money. h. It obviates the risk that attends the handling of money. c. It constitutes a record of expenditures and furnishes the business man convenient data from which to make entries in his books. d. When the check is canceled it serves the purpose of a receipt. Fully 90% of bank bookkeeping grows out of the use and collection of checks and other negotiable instruments. 5. By issuing letters of credit they afford people who travel a means of securing money in distant places without risk. 6. They afford excellent facilities for the collection of negotiable paper, — bills, notes, bonds, coupons, etc. 7. They are often a source of useful business information pertaining to investments and other matters. 1 2 BOOKKEEPING 8. They are a means of organizing capital. 9. They tend to encourage thrift, honesty, and punctuality. Sources of a Bank's Profits. — The principal sources of a bank's profits may be specified as follows : 1. Money earned for discounting business paper and from lending money on good security. The available funds of a bank for lending purposes accrue from a. Amounts paid in by stockholders. h. Amounts deposited by individuals, corporations, bankers, etc. c. Accumulated surplus. 2. Charges for collecting notes, drafts, etc. 3. Interest upon bonds deposited with the United States Treasurer to secure circulation, if it is a national bank. 4. Fees for issuing drafts, bills of exchange, etc. 5. Profit on circulation, if it is a national bank. Sources of a Bank's Expenses. — The prmcipal sources of a bank's expenses may be specified as follows : 1. Interest on special deposits. 2. Fees for collecting foreign paper. 3. Taxes. 4. Salaries and various other office expenses. Kinds of Banks. — Banks may be classified as follows : 1. National. 2. State. 3. Private. NATIONAL BANKS Distinguishing Features. — Some of the distinguishing features of a national bank may be stated as follows : 1. It is organized under the National Bank Act. Note. — Authentic information with reference to the organization of national banks may be obtained upon appUcation to the Comptroller of Currency, Wash- ington, D.C., for a copy of each of the following pamphlets: "National Bank Act " and " Instructions Relative to the Organization and Management of National Banks." These pamphlets contain valuable suggestions for all interested in the business of banking. The Comptroller has also published a valuable book entitled " National Bank Act as Amended." 2. It is always an incorporated institution. 3. It has general authority to issue circulating notes as well as to conduct an ordinary banking business. 4. It is under the direction of the Comptroller of Currency. BANKIKG 3 5. Its general methods of conducting business are consistent with those of every other national bank in the United States. 6. Its stockholders are liable for twice the amount of their subscrip- tion; that is, in case a bank fails and is in need of funds to meet its liabilities, a stockholder who owns $5000 worth of stock is liable to the Comptroller to the amount of $5000 in cash in addition to the loss of his stock. 7. A definite proportion of its stock must be invested in United States bonds. 8. It must have at all times on hand an available lawful money reserve. This amount ranges from 15% to 25% of its deposits, depending upon the city in which the bank is located. 9. It must form a surplus fund. Before making a dividend it must carry to its surplus fund one-tenth of its net profits since the last pre- ceding dividend, until the fund shall amount to at least 20% of the capital stock, thereby establishing a reserve fund from which losses may be met. Organization of a National Bank. — The successive steps required to organize a national bank, together with the prescribed forms of articles of association and by-laws, are given in the pamphlets referred to on page 2. A summary of the necessary steps may be given as follows : 1. There must be at least five persons. Corporations, etc., cannot become organizers of a national bank. 2. No national bank can be organized with a capital smaller than $25,000. The minimum capital stock with which a national bank may organize varies with the size of the town or city ; as : a. Minimum capital for banks organized in towns with a population of not over 3000, $25,000. h. For towns with a population of not more than 6000, $50,000. c. For towns or cities with a population of more than 6000 and less than 50,000, $100,000. d. For towns or cities with a population of 50,000 or more, $200,000. 3. A paper is prepared, which it is expected people will sign, stating the amount of capital it is desired to raise and the number and value of the shares. This paper is circulated until the requisite amount is subscribed. 4. A name must be selected. This may be any name that does not conflict with one already in use in that particular town or city. 4 BOOKKEEPING 5. Written application is made to the Comptroller of Currency at Washington, giving: a. The name and location of the proposed bank. h. The amount of the capital stock. c. The names of at least five persons who are to be stockholders. 6. If the application receives the Comptroller's approval, the sub- scribers unite in Articles of Association. 7. Having executed the articles of association, the stockholders then execute a paper entitled Organization Certificate. This certificate defi- nitely specifies : a. The name and location of the association. h. The capital stock. c. The names and residences of the stockholders and the number of shares held by each. d. A general statement as to why the certificate is made. 8. The Organization Certificate is then signed, acknowledged, and filed with the Comptroller. 9. The stockholders meet and elect directors. To be eligible as a director a stockholder must a. Be a citizen of the United States. h. Own at least 10 shares of the capital stock of the bank if the capi- tal exceeds $25,000 ; if it does not, he must own at least 5 shares. c. Three-fourths of the directors must have resided in the state in which the association is located for a yeai* or more preceding their elec- tion ; they must also continue to reside there while they remain in office. 10. The directors then proceed to elect a president, a vice president, a cashier, etc., and call in at least 50^ of the capital stock. Note. — Fifty per cent of the capital stock of a bank must be paid in before the Comptroller will give it authority to commence business, and the remainder must be paid in in five equal monthly installments. Thus the entire capital stock must be paid in within six months from the time the bank is authorized to commence business. In many cases a surplus fund is created by the payment of an additional sum, this surplus fund serving to enhance the bank's credit and stability. 11. Another certificate is then made and sworn to by a majority of the directors. This paper certifies the following : a. The amount of paid-in capital. h. The name, residence, and number of shares of each stockholder. c. That the bank has complied with the various requirements of the National Bank Act. BANKING 5 12. A portion of the capital stock must then be invested in United States bonds and deposited with the Treasurer of the United States. This amount varies ; as : a. It cannot be less than one-fourth of the capital stock if the capital stock is $150,000 or less. h. If the capital stock is more than $150,000, $50,000 in bonds must be deposited. 13. After the Comptroller has given authority for the bank to do business, a code of by-laws is adopted for the government of the bank. 14. If the Comptroller is assured that all the requirements of the law have been executed, he will give to the bank a certificate stating that it is authorized to commence business. This certificate must be published in the town or the city in which the bank is located, for sixty days or more after it is issued. Circulating Notes of a National Bank. — Whether a bank avails itself or not of the privilege of taking out circulating notes, the law requires the above-mentioned deposit of United States bonds. Having complied with the law in depositing bonds, a national bank is entitled to receive its circulating notes, equal in value to the par value of the bonds depos- ited, unless the bonds should be below par, in which case it may receive circulating notes for only the market value of the bonds. A national bank is not required to take out circulating notes ; but having invested a part of its capital m the above manner, it is usually desirous of utilizing its credit by getting as many notes as the law per- mits. The profits on these circulating notes consist of the interest at the current rate on the amount invested, plus about 1% or 2% on the capital employed. Tax on Circulation. — A national bank is required to pay to the Treas- urer of the United States a tax of l % each half year upon the average amount of notes in circulation, secured by 2% gold bonds, or Panama Canal bonds. Circulating notes secured by all other classes of bonds are subject to a semiannual tax of |%. Interest on United States Bonds. — The Comptroller authorizes the payment of interest on the bonds deposited to the bank depositing them. From this income to the bank no deduction is made for taxation, since United States bonds are exempt from taxation. Redemption Fund with the United States Treasurer. — National banks are required to keep at all times on deposit with the Treasurer of the United States 5% of their circulation. This fund is to be held and 6 BOOKKEEPING used by the Treasurer for the redemption of worn, mutilated, or defaced national bank notes that may be received from time to time and redeemed in sums of |1000 or any multiple thereof. CORPORATE POWERS OF AND RESTRICTIONS ON NATIONAL BANKS The Powers possessed by national banking associations may be enu- merated as follows : 1. To adopt and use a corporate seal. 2. To have succession for twenty years, unless sooner voluntarily dissolved or their franchises become forfeited by some violation of law. 3. To sue and to be sued. 4. To elect and appoint directors, and by the directors to appoint a president, cashier, etc. 5. To adopt necessary by-laws not inconsistent with law. 6. To make contracts. 7. To exercise by the directors such incidental powers as may be necessary to carry on the general business of banking, such as dis- counting paper, receiving deposits, loaning money on personal security, buying and selling exchange, etc., obtaining and issuing circulating notes. The Principal Restrictions placed upon national banking associations may be enumerated as follows : 1. National banks can hold real estate on the following conditions: a. Such as may be needed for their immediate accommodation in the transaction of business. h. Such as may be mortgaged or conveyed to them in good faith by way of security for debts previously contracted. c. Such as they shall purchase at sales under judgments, etc., lield by the association. Possession of real estate under mortgage, or title and possession of any real estate purchased to secure debts due to national banks, cannot be held for a longer period than five years. 2. No increase or reduction of the capital stock of national banks can be made without the approval of the Comptroller. No increase is valid until the full capital stock has been paid. 3. They are prohibited from loaning a person or a firm an amount exceeding one-tenth part of their capital and surplus, providing the amount loaned does not exceed 30% of the capital. This restraint is to prevent excessive loans, which always impair the general usefulness of a bank. BANKING 7 4. They cannot use their own circulating notes to pay for or increase their capital stock. 5. They are expressly prohibited from certifying a check in excess of a depositor's account. 6. They may not establish branches. NATIONAL BANK OFFICERS AND CLERKS Officers, -r- The officers of a national bank are chosen by the board of directors to superintend and direct its affairs. These are usually : President. Vice President. Cashier. Assistant Cashier. Clerks and Employees. — Among the clerks and employees of a bank are : receiving teller, paying teller, note teller, general bookkeeper, indi- vidual bookkeeper, discount clerk, collection clerk, correspondence clerk or transit manager, runner, porter, watchman, and such other assistants as the character and extent of the business may demand. The President is the official head of the bank. The bank is dependent upon him for its standing, and it is therefore important that he should be a man of honor and integrity, with a very considerable knowledge of men and financial affairs. He should, by considerate action, by an accurate knowledge of character, by a keen interest in the movements of trade, have under his command all the forces that tend to enhance his bank's interests. His most important duties may be specified as follows: 1. To preside at all the meetings of the board of directors. 2. To furnish such information concerning the bank's transactions as may be desired by the directors. 3. To adopt a policy which will govern the bank in its operations. 4. To be influential in securing depositors. 5. To sign circulating notes and certificates of stock. 6. To be alert in watching the loans of the bank to see that they do not go beyond safe limits. The Vice President, in the absence of the president, takes his place and performs the duties of the office. In some of the larger banks of the country this officer shares the responsibility of the president and aids in extending the efficiency of the bank's service. The Cashier ranks next to the president and the vice president, and has certain duties to perform. These duties are mentioned in the law under 8 BOOKKEEPING which the bank exists. His most important duties may be stated in a general way as follows : 1. He acts as secretary of the board of directors and keeps a record of all business transacted at their meetings. 2. He supervises various departments of work and sometimes employs clerks and prescribes their duties. 3. He conducts the correspondence of the bank. 4. He signs certificates of stock and circulating notes. 5. He pays out the bank's funds and borrows money in the name of the bank. 6. He indorses all paper that is sent away for collection. 7. He signs the checks of the bank and draws drafts on correspondents. 8. He may indorse the bank's paper for the purpose of securing loans. 9. He should aim to build up the business of the bank and commend it to public favor. The Assistant Cashier is employed only in the larger banking institu- tions of the countiy. His official signature is recognized in everything the same as the cashier's, except in the bank's reports to the Comp- troller of Currency. He assists in performing any of the duties ordi- narily devolving upon the cashier. PROPOSITIONS ILLUSTRATING THE OPENING ENTRIES OF A NATIONAL BANK 1. (a) A national bank is organized with a capital stock of $300,000. (b) The capital stock is fully paid in. (c) Also a surplus fund of $50,000 is created and paid, (d) United States bonds with a par value of $100,000 are purchased for $101,500 cash, (e) Circulating notes to the extent of $100,000 are received from the Comptroller of Currency and duly signed. (/) $5000 is forwarded to the Treasurer of the United States, as provided by banking laws, to redeem worn-out and mutilated circulating notes, (g) Disbursements ordered by the board of directors amount to $2900. Required the necessary opening entries. Give them in ordinary journal form. To THE Student. — The above proposition gives a statement of the usual transactions resulting from the organization of a national bank. If you have the successive steps of organization well in mind you are now ready to study the follow- ing entries. To show the various debits and credits, the entries are all given in journal form. After a careful study of the entries for proposition No. 1, take a sheet of journal paper and make the entries for proposition No. 2. BANKING Necessary Entries (a) Subscription To Capital Stock Cash To Subscription Cash To Surplus Fund (P) $300000 300000 $300000 Premium on U.S. Bonds U.S. Bonds to secure Circulation To Cash (e) Cash To Circulation (/) Redemption Fund with U.S. Treasurer To Cash (,9) Expense To Cash 50000 1500 100000 100000 5000 2900 300000 50000 101500 100000 5000 2900 2. (a) A national bank is organized with a capital stock of $200,000. (5) The first installment of 50% of the capital stock is duly paid. (OOKKEEPING Discount DATE DIS- COUNTED FOR WHOM DISCOUNTED MAKER OR PAYER INDORSER WHERE PAYABLE NUM- BER DATE OF PAPER 1^- June 20 20 20 20 D. E. Avery Powers & Sprague E. V. Buckley & Son J. H. Crandall Dodge Bros, Wilson & Son C. Rear don & Co. W. O. Radcliife Frey & Mason Rogers, Peet & Co. Cook Bros. Bates Bros. Alliance Nat'l, City Farmers Bank, Chicago First Nat'l, Syracuse Our Bank Traders Nat'l, Phila. 230 231 252 233 234 ID- Apr. May Apr. June 20 1 1 15 15 As soon as paper is accepted for discount it is entered in the discount register, the due date is written across its face in red ink, and it is recorded in the discount tickler under the proper number and date. After these records have been completed the notes are carefully checked back from the tickler. The tickler is generally ruled in sections for each day in the year. At the top of each section is printed the day and date. The Remarks column is used for noting irregularities in payment, etc. Monday, NO. PAYER WHERE PAYABLE TO WHOM SENT 800 C; W. Hall & Co. Our Bank 821 Morton & Davis First National Bank, Buffalo Traders National, Buffalo 827 C. W. Carey Allston & Co., Bankers, City Tuesday, 782 Raymond Bros. Union Trust Co., City 790 Stickney,Poor&Co. National City Bank, Brooklyn Chemical National Bank, N.Y. 765 F. E. Sherman Our Bank 778 De Young Bros. Citizens Bank, Troy Farmers Bank, Albany Paper to be entered in the Discount Tickler. — The following dis- counted paper is now in the possession of the bank and is shown by the uncanceled records in the discount tickler. Take your discount tic- kler and enter this paper, being guided by the accompanying model. BANKING 17 Register TIME WHEN DUE TERM OF DIS- COUNT RATE OF DIS- COUNT AMOUNT OF PAPER INTEREST AND DISCOUNT COLLECTION AND EXCHANGE PROCEEDS TO BE CREDITED TIC- KLER CK. REMARKS 3 mo. 3 mo. 90 da. 90 da. 30 da. 19- July Aug. June July 20 1 30 14 15 30 da. 42 da. 10 da. 24 da. 25 da. 6% 6% 6% 6% 6% 2000 1500 900 6000 3000 10 10 1 24 12 50 50 50 3 88 75 1990 1487 898 5976 2983 62 50 75 Issued Cashier's Ck. 13400 58 50 5 63 v/ 13335 87 Write dates in the discount tickler as follows : March 1, 2, 3, 4, 5, 6, 9, 11, 12, 16, 25, 26, 29, 31, and April 1. Do not show any totals at this time, as the entries in the general debit and credit books will not be made until the general bookkeeper's work is given. Note. — In this work all paper maturing on Sundays or legal holidays should be entered in the ticklers under the date of the first business day following. The statutes of the different states, however, are not uniform on this point. Feb. 15, 19- Tickler BY WHOM DISCOUNTED AMOUNT TO BE COLLECTED CK. REMARKS Decker Bros. D. E. Avery E. L. Howard 7500 1500 9000 Cash Charged to Traders, Buffalo Certified, Allston & Co., Bankers 18000 Feb. 16. 19- W. I. Pratt £500 V Protested. Fees, $1.75. Charged to Pratt J. 0. Baker 3000 V Charged to C. N. B., New York Powers & Sprague 4500 V Charged to F. E. Sherman 2000 V Charged to Fanners, Albany 12000 V Paper maturing Monday, March 1 No. 889. Note of W. I. Pratt, at 30 days from Jan. 30, discounted for Decker Bros., payable at our bank, for §2750. ^18 BOOKKEEPING No. 866. Note of B. M. Vosburg & Co., at two months from Jan. 1, discounted for Mace, Gilmore & Co., payable at Traders National Bank, Buffalo, for $7500. Sent to Traders National Bank. No. 842. Note of Gregory Mfg. Co., at three months from Dec. 1 last, discounted for Spencer, Mead & Co., payable at Third National Bank, Buffalo, for $5000. Sent to Traders National Bank, Buffalo. No. 893. Note of Dillon Bros., at 30 days from Jan. 30, discounted for D. B. Roberts, payable at Merchants National Bank, City, for $7550. No. 901. Note of D. S. Davenport, at 10 days from Feb. 19, dis- counted for E. L. Howard, payable at Eliot National Bank, City, for $9500. Paper maturing Tuesday, March 2 No. 902. Note of Novelty Mfg. Co., at 10 days from Feb. 20, dis- counted for Fernald, Son & Co., payable at Alliance National Bank, Springfield, Mass., for $18,500. Sent to Alliance National Bank. No. 869. Note of F. M. Elery & Son, at two months from Jan. 2, discounted for Thomas Bennett & Co., payable at Union Bank, Worces- ter, for $32,400. Sent to Alliance National Bank, Springfield. No. 868. Note of Daniels Novelty Co., at 60 days from Jan. 1, discounted for Mace, Gilmore & Co., payable at our bank, for $33,210. No. 895. Note of Powers & Lawler, at 15 days from Feb. 15, dis- counted for W. I. Pratt, payable at Farmers Bank, Albany, for $28,890. Sent to Farmers National Bank, Albany. No. 867. Note of Baush & Lomb, at 60 days from Jan. 1, discounted for C. E. Selover & Co., indorsed by Anderson & Page, payable at our bank, for $16,500. Paper maturing Wednesday, March 3 No. 897. Note of I. M. Lyons, at 15 days from Feb. 16, discounted for D. E. Avery, payable at our bank, for $29,900. No. 882. Note of Kennedy Soap Co., at 20 days from Feb. 11, discounted for J. H. Crandall, payable at Union Trust Co., City, for $24,750. No. 883. Note of Cobb, Bates & Co., at 20 days from Feb. 11, discounted for Burgess & Co., indorsed by Ginn & Co., payable at Colonial National Bank, City, for $12,250. No. 875. Note of Cobb & Co., at 30 days from Feb. 1, discounted for George D. Hatch & Co., payable at Shoe and Leather Bank, City, for $25,625. BANKING 19 Paper maturing Thursday, March 4 No. 884. Note of W. E. Denman, at 20 days from Feb. 12, dis- counted for C. E. Denison, payable at Chemical National Bank, New York, for |37,000. Sent to Chemical National Bank. No. 906. Note of David W. Parker, at 15 days from Feb. 17, dis- counted for C. E. Denison, payable at our bank, for 130,000. No. 907. Note of Marsh & Grant, at 15 days from Feb. 17, dis- counted for Thomas Bennett & Co., payable at our bank, for $17,295. No. 876. Note of G. S. Murray, at 30 days from Feb. 2, discounted for Decker Bros., payable at Chemical National Bank, New York, for 112,460. Sent to Chemical National Bank. No. 857. Note of Fred M. Everitt & Co., at 60 days from Jan. 3, discounted for Fernald, Son & Co., payable at Farmers Bank, Albany, for 116,792. Sent to Farmers Bank. Paper maturing Friday, March 5 No. 908. Note of Stanley Carriage Co., at 10 days from Feb. 23, discounted for J. H. Crandall, payable at Union Trust Co., City, for $23,680. Paper maturing Saturday, March 6 No. 910. Note of Jamison, Baker & Co., at 10 days from Feb. 24, discounted for Freeman, Austin & Co., payable at Park Square National Bank, City, for $31,720. No. 890. Note of Fowler Mfg. Co., at 30 days from Feb. 4, dis- counted for C. E. Selover & Co., payable at Chemical National Bank, New York, for $31,750. Sent to Chemical National Bank. Paper maturing Tuesday, March 9 No. 844. Note of C. B. Conroy & Co., at three months from Dec. 9 last, discounted for Lane, Rowell & Co., payable at our bank, for $25,750. Paper maturing Friday, March 12 No. 847. Note of D. D. Eldred, at three months from Dec. 12 last, discounted for F. E. Sherman, payable at our bank, for $15,950.50. Present the discount tickler to your teacher for approval. The Duties of the Discount Clerk may be specified as follows : 1. He takes charge of the bills receivable accepted for discount. 2. He keeps the records of the loaning department of the bank. 20 BOOKKEEPmG Transactions for the Discount Clerk, March 1 The following paper has been offered and accepted for discount to-day. As discount clerk make the proper records in the discount register. Examine the model for discount register given on pages 16 and 17. Consult your instructor when in doubt on any point. In the following memoranda of transactions, where the paper contains no other indorsement than that of the holder, the indorser is not stated, and the column Indorser in the discount register may be left blank. Unless otherwise stated, discount is computed at 6% per annum. No. 920. Note of Wells, Osborn & Co., at 30 days from March 1, discounted for Mace, Gilmore & Co., payable at Old Colony National Bank, City, for $2960. Discount, $14.80. Proceeds credited. No. 921. Note of Baker & Small, at 30 days from Feb. 23, indorsed by King & Chappell, discounted for Decker Bros., payable at First National Bank, Worcester, for 17500. Discount, f30. Collection and exchange, 17.50. Proceeds credited. No. 922. Note of Wyckoff & Co., at 30 days from March 1, dis- counted for W. I. Pratt, payable at Old Colony National Bank, City, for 11500. Discount, $7.50. Proceeds credited. No. 923. Note of C. A. Seaver & Co., at 15 days from March 1, indorsed by Boswell, Mason & Co., discounted for Wyckoff, Seamans & Benedict, payable at our bank, for $10,000. Discount, $25. Proceeds credited. No. 924. Note of F. E. Harris, at 10 days from March 1, discounted for J. H. Crandall, payable at Farmers Bank, Albany, for $9000. Dis- count, $15. Collection and exchange, $9.50. Collection WHEN LEFT NO. PAYER INDORSER WHERE PAYABLE Feb. 16 610 C. W. Young Union Trust Co., City 16 611 E. 0. Frey & Co. .' Traders Nat'l, Bulfalo 16 612 Geo. A. Ward Wood & Garson Park Nat'l, Providence 16 613 F. E. Brown Scranton & Co. Our Bank 16 614 Mason, Quigley & Co. Our Bank 16 615 Reardon & Ellis Rowland & Haviland Alliance Nat'l, Springfield 16 616 Novelty Mfg. Co. Our Bank 16 617 Ellis Soap Co. Robert Simpson Monroe Bank, City 17 618 C. H, Bryant Our Bank BANKING 21 As discount clerk the student should now proceed as follows : 1. Rule and foot the discount register. Examine the model given. 2. Prove the footings. The total of the Proceeds column plus the total of the Discount and Collection and Exchange columns should equal the total of the Amount column. 3. Post the entries from the discount register to the discount tickler. Leave the columns Where Sent and Remarks in the discount tickler blank for the time being. These will be filled out later as the work progresses. Submit the discount register and discount tickler to your instructor for approval. The Auxiliary Books kept by the discount clerk are of significant importance in a bank, but they are so simple in character and so self- explanatory that it is thought best not to attempt to use them in these records. They are : 1. The Offering Book^ containing information with reference to the parties applying for loans. 2. The Discount Ledger^ contaiuing a record of the amount of paper discounted for each customer. 3. The Customers' Bill Book, containing a detailed statement of the various papers offered for discount by the customers of the bank. WORK OF THE COLLECTION CLERK The records of the collection clerk are now to be examined. They are found principally in the collection register and collection tickler. The Collection Register contains a record of all commercial paper received by the bank for collection. Many banks keep two collection Register DATE OF DRAFT OR NOTE TIME WHEN DUE FOR WHOM COLLECTED AMOUNT TO BE COLLECTED CK. REMARKS Feb. 9 2 mo. April 9 Fields Milling Co. 1650 \/ 2 3 mo. May 2 Charles J. Kennedy 2500 v/ 2 60 da. April 3 E. V. Buclcley & Son 10000 V Jan. 29 3 mo. 29 Wyckoff , Seamans & Benedict 75 20 V IG 4 mo. May 16 F. E. Sherman 1150 22 V 21 4 mo. 21 Freeman, Austin & Co. 95 GO V Feb. 2 GO da. April 3 C. E. Denison 1250 V 3 30 da. March 5 D. E. Avery 9500 v/ 7 2 mo. April 7 Alliance Bank, Springfield 215 90 v^ 9'-) BOOKKEEPING registers, one for city collections and one for collections payable out of town. The paper entered in the collection register is generally num- bered consecutively. The foregoing model is self-explanatory. The column Indorser need not be filled out except when there is an indorser other than the owner of the paper. If any time paper is interest-bearing, the amount of the interest should be added to the face of the paper before it is recorded in the collection register. Since no record is needed in the collection register at the maturity of paper, it will not be necessary for the student to enter the collection paper on hand in the collection register. The Collection Tickler. — As soon as paper is properly recorded in the collection register it is classified in the collection tickler under its date of maturity. The object of the collection tickler is to remind the bank clerks of the maturity of paper leceived for collection. The following collection paper is now in the possession of the bank and is shown by the uncanceled records in the collection tickler. Record it in your collection tickler. (See page 95.) Collection Monday, NO. PAYER WHERE PAYABLE TO WHOM SENT 590 592 593 595 596 C. W. Gray L. 0. Sweetland N. P. Pond D. E. Anderson & Co. Frey, Miller & Co. Our Bank Alliance Nat'l, Springfield Traders Nat'l, Buffalo Union Trust Co., City Park Nat'l, City Alliance Nat'l, Springfield Fourth Nat'l, Buffalo Tuesday, 572 D. O. Dale & Co. First Nat'l, Albany Farmers Bank, Albany 581 Covey & Dudley Co. Traders Nat'l, Albany Farmers Bank, Albany 598 Paine Cutlery Co. Union Bank, Worcester Alliance Nat'l, Springfield 601 F. C. Rowland Our Bank 602 C. E. Reardon Suffolk Nat'l, City 60C Sampson & Newell Mechanics Nat'l, Springfield Alliance Nat'l, Springfield Write dates in the collection tickler as follows : Feb. 25, 2G, March 1, 2, 3, 4, 5, 6, 9, 10, 18, 27, 31, April 1 and 2. Write March 3 twice. BANKING 23 Collections maturing Thursday, Feb. 25 No. 650. Note signed by Wentworth & Son, dated Nov. 25 last, at three months, indorsed by J. K. Miner, payable at Albany, N.Y., for i725. Sent to Farmers Bank. To be collected for E. V. Buckley & Son. No. 702. Note signed by Daly Bros., dated Dec. 25, at two months, payable at Albany, N.Y., for |1200. Sent to Farmers Bank. To be collected for J. O. Baker. No. 723. ,Draft dated Jan. 25, at one month from date, on F. W. Edwards & Son, payable at Fourth National Bank, Brooklyn, for $1005.25. Sent to Chemical National Bank, New York. To be col- lected for Powers & Sprague. Collections maturing Friday, Feb. 26 No. 726. Note signed by E. B. Munroe, dated Jan. 27, at 30 days, payable at Providence, for $4900. Sent to Chase National Bank, Provi- dence. To be collected for Decker Bros. Tickler Feb. 15, 19- FOR WHOM COLLECTED AMOUNTTOBE COLLECTED WHEN AND HOW DISPOSED OF Spencer, Mead & Co. Mace, Gilmore & Co. W. I. Pratt Alliance Nat'l, Springfield Chase Nat'l, Providence 9000 752 1750 7200 1625 50 90 Paid, 2/15. Chgd. Alliance Nat'l, 2/19. Our coll., 750; bank's coll., $1 Chgd. Fourth Nat'l, 2/20. Our coll., 1^1.75; bank's coll., !g2.25 Certified, 2/15, Union Trust Co. Our coll., $7.20 Certified, 2/15, P. N. B. Our coll., $1.65 Feb. 16. 19. W. I. Pratt 2100 Chgd. Farmers Bank, 2/22. Our coll., $2.10; bank's coll., $4 D. E. Avery 1650 Chgd. Farmers Bank, 2/22. Our coll., $1.65; bank's coll., $3 C. E. Denison 662 90 Chgd. Alliance Nat'l, 2/21. Our coll., mi o K/he >^nlational ^Jjank of i^ommerce CLiM-eAt c/. €aM-cy\yvi has deposited in this *Jjanh zPciycihle to the order of kvm.^&t'l^-^^--^-^^-^^^--^-.^-.^'.^^^^^^ on the return of this (Certificate properly indorsed (Cashier Cashier's Checks. — Cashier's checks are quite similar to the ordinary checks of customers, except that they are signed by the cashier of the bank on whom they are drawn. They are sometimes used instead of bank drafts and in paying the proceeds of paper discounted, but are I BANKING 29 more frequently employed in paying the general expenses of the bank, except small incidental items, which are usually paid by means of charge tickets signed by the cashier. CO ^ ^Boston, ^Mass,, <^e-(^. I^, 79 ^o, 7^0 K//ie ^^latlonal K/janU of fj\.eoemption ^ay to the orden of ^^^y. ^li.'yttU V ^a. //i'f^.^-^ (Bashien \ Nature of Deposits. — As deposits come in from customers they may consist of any one, or all, of the following items : 1. Currency. 2. Orders payable through the clearing-house association. 3. Orders payable out of town. 4. Orders payable by our bank. 6. Orders payable by bankers in our city not members of the clearing-house association. Classifying Items on the Deposit Ticket. — As a deposit comes in, the receiving teller places the deposit ticket before him and pro- ceeds to count the coin and bills. If they are found to agree with the amounts on the ticket, a check mark ( V) is placed at the left of the items listed. Each check, draft, or other bankable instrument is then carefully examined to see if it is properly indorsed. If this paper is approved, it is next checked off and classified on the deposit ticket as follows : 1. If payable by a bank which is a member of the clearing-house association, the clearing-house number of that bank is written at the left of the item. 2. If payable by an out-of-town bank, a cross ( X ) is written at the left of the item. Note. — Sometimes deposit tickets are provided with a separate column for items payable out of town. In such cases the out-of-town items are sufficiently classified when the deposit ticket comes in to the receiving teller. 30 BOOKKEEPING 3. If payable by a city bank not a member of the clearing-house association the letter O is written at the left of the items. Note. — O is intended to signify Office, a term meaning that the paper is payable at some banking or business office in the city instead of through the clearing-house association. These items are sent by runners and payment received in cash or by an acceptance payable at a clearing-house bank. If the paper is accepted instead of paid, it is returned and entered with the exchanges for the clearing-house associa- tion for the following day. 4. If payable by our bank, the letter B is written to the left of the items. DEPOSITED IN THE J^atlonal Citi/ ^ank 3Si/ Jr^imn/i'yb l^ Gcyrul ^Boston. ^^(>- f^, 79- J^oUars Cents Specie v^ ^'00 Bills v/ 700 Check . ^S7 2^0 c^q ^ / SOO 60 #/^ / ^00 X. 500 B 700 J /f/ ^Cf Transactions for the Receiving Teller, March 1 Take the blank for receiving teller's daily check sheets and enter the following deposits. Study very carefully the form given on page 27, and if you do not understand any point, consult your instructor. The nature of the deposit in the following transactions is indicated by the characters just explained. BANKING 31 Decker Bros., V $600, B $1500, B $720.50. Mace, Gilmore & Co., V 1720, V |400,# 61 $1290, #4 $1500, #31 $650. Spencer, Mead & Co., B $1250.20, B $340.20, X $1340.20, X $1343.46, $342.90 ; less collection, $2.75. D. B. Roberts, V$120, V $60, #32 $950.60, O $1625, B $72.60. Fernald, Son & Co., V $725, B $650.60, O $900, X $1750 ; less col- lection, $1.75. W. I. Pratt, V $120, B $1625, X $1900; less collection, $1.90. F. E. Sherman, O $156.90, B $1750, #15 $165.90, V $7200. C. E. Denison, X $1590.60, V $2500, B $200, #12 $1560; less col- 5ction, $1.50. Thomas Bennett & Co., V $400, B $262.90, B $40.50, B $200, 60$4126.20, #11 $2142.10, #5 $1462.90, #3 $2460.10, X $1325.62, $1462.91, X $142.10; collection, $2.25, paid in cash. Note. — When the collection charges on any paper deposited are paid in cash le amount is not deducted from the deposit slip. On the receiving teller's sheet the items of deposit and collection charges are entered as usual, and, in addition, the imount of the collection charges is written in the Currency column. E.L.Howard, V$1450, B $1242.10, X $1121.40, x $24.16, X $142.60 ; [ess collection, $1.25. Charles J. Kennedy, V $350, #17 $1210, #27 $1620.40. E. V. Buckley & Son, x $621.40, x $340, x $4000; less collec- Lon, $1. Foot the columns of the receiving teller's daily check sheet. The mm of the first five columns should equal the sum of the last two. Make out the Recapitulation and Proof blank. Bills on hand, $10,760 ; 5oin, $987.25. You have given to the paying teller during the day J2900. The remaining items of the proof are taken from the receiving jUer's daily check sheet footings. The debit and credit sides of your proof should balance. Submit the receiving teller's work to your instructor for approvah WORK OF THE PAYING TELLER The records of the paying teller in this set are to be found on the [paying teller's daily check sheets. Paying Teller's Daily Check Sheet and Proof. — A great variety of Eorms of this sheet is used by banks. The nature of the records in this lepartment would depend upon the general routine and volume of the [work of any particular bank. The sheet on pages 32 and 33, with BOOKKEEPING Paying Teller's Daily PAYMENTS CK. B OUR BANK # CLEARING HOUSE X OUT-OF-TOWN CITY OFFICE EXPENSE 1 j V^ Fields Milling Co. 200 y/ Charles J. Kenned^/ 13000 V C. E. Selover & Co. 720 V C. E. Dmison {N. Y. D.) 560 75 V D. E. Avery {N. Y. D.) 240 50 - V J. H. Crandall 1001 50 V W. I. Pratt Bunker Rill Traders Park Square Traders, Buffalo Alliance, Springfield Farmers, Albany Mechanics Powers Coal bill Carpenter work 238 75 10160 300 560 40 1346 7645 1900 50 90 40 200 150 5 9 50 50 15961 50 11020 40 10892 SO 350 15 Recapitulation RECEIPTS 1. Cctsh from yesterday 90150 50 2. neceiving Teller 9200 50 3. Note Teller 11420 4. Jteceiving Teller {Special) 14000 5, Collection and Exchange S.oo^ 12. oo 15 6. New York J>ra/ts 2100 7. Balance from, Clearing House 7120 50 . .- 134006 50 * i BANKING 33 Check Sheet and Proof Saturday, April 7, 19 RECEIPTS SALE OF NEW YORK DRAFTS SOLD FOR CASH /. M. Cox & Co. R. Bdble & Co. SOLD FOR CHECK C. E. Denison D. E. Avery Balance front yesterday's proof Receiviny Teller, from yesterday Note Teller, from yesterday Receiving Teller (Special) (< (( (t Balance from Clearing House AMOUNT 500 800 560 2100 00 SUNDRY RECEIPTS 90150 9200 11420 9000 5000 7120 131891 50 50 SUNDRY COLL. & EXCH. 12 00 and Proof PAYMENTS 1. Checks on our Bank 15961 50 2. Clearing- House Checks 11020 40 3. Out-of-town Checks 10892 80 4. City Office Items 350 S. Sundry Expense 15 6. Balance to Clearing House 7. Cash on hand 05766 80 134006 50 34 BOOKKEEPi:NrG slight modifications, is representative of the paying teller's records in many large banks of the country. As will be readily seen, all money paid out or received by the paying teller at the time of such disbursement or receipt is entered on this daily check sheet. Recapitulation and Proof. — At the close of each day's business the paying teller prepares the proof, showing the character and condition of the cash on hand, and the receipts and disbursements during the day. The items of this proof may be explained as follows : Receipts 1. Balance on hand from the previous day's proof. 2. Bills and coin received from the receiving teller at the close of the previous day's business. 3. Bills and coin received from the note teller at the close of the previous day's business. 4. Cash transferred from the receiving teller during the day. 5. Receipts for collection and exchange. 6. Receipts for the sale of drafts. 7. Balance (if any) paid by the clearing house. The clearing-house balance may appear on either side of the paying teller's proof sheet. If the amount of the checks, drafts, etc., taken to the clearing house is greater than the amount of checks received there, the clearing house pays the settling bank the difference, and the amount is counted among the receipts on the paying teller's proof. If the amount of the checks received at the clearing house is greater than the amount of checks brought, the bank settling pays the clearing house the difference, and this amount is counted among the payments on the paying teller's proof. Payments The items on this side are self-explanatory, since they are merely the footings of the payments on the check sheet summarized. The cash on hand is the total bills and coin in the possession of the paying teller at the close of the day's business. These bills and coin are generally classified as follows: 1. National bank notes. 5. Silver certificates. 2. Gold coin. 6. Legal-tender notes. 3. Gold certificates. 7. Subsidiary silver coin. 4. Silver dollars. 8. Minor coin. BANKING 35 The Duties of the Paying Teller may be specified as follows : 1. He is the custodian of the cash, and the general disbursing officer of the bank. 2. He cashes checks presented by customers and others. 3. He certifies the checks of customers. 4. He may sell bank drafts. The paying teller's position is charged with more responsibility than that of any other person in the bank, except the officers. He must be a man of the -strictest integrity, possessed of tact, and thoroughly con- versant with the laws governing bank checks and drafts. His most responsible duty is to see that no money is paid out improperly. Among the many things that he should have in mind when checks are presented the most important may be stated as follows: 1. Signatures of customers. 2. New signatures, powers of attorney, notices stopping payments of checks, etc, 3. Definite knowledge of the parties presenting vouchers. 4. Average balances of customers, so that overdrafts may be prevented. When checks, etc. are received the paying teller should note : 1. That they are properly dated. 2. That they are indorsed. 3. That the amounts written in words agree with the amounts written in figures. Form of Certified Check J^o.720 'dollars 1 ^tidyyuAf, S'oo The Certified Check Book. — The paying teller preserves a record of all checks certified, in a book kept especially for this purpose. From 36 BOOKKEEPING this book the customer is charged in the individual ledger and Certified Checks credited. The following is the usual form of this book. Certified Check Book ^ DATE CERTIFIED DRAWER OF CHECK FOR WHOM CERTIFIED CK. AMOUNT OF CHECK WHEN PAID AMOUNT PAID 19— Peb. 15 15 15 D. B. Roberts Thos. Bennett & Co. Spencer, Mead & Co. W. I. Pratt J. 0. Baker Decker Bros. F. E. Sherman D. B. Roberts M. D. Borrows W. W. Bennett W. I. Pratt Elwood & Sperry Reardon & Smith F. E. Sherman V V V 6000 1750 2000 19— Feb. Feb. 18 17 19 18 23 5000 1750 1500 2000 1500 8750 Feb. 16 16 16 16 1500 2000 7249 1500 20 12249 20 i Transactions for the Paying Teller, March 1 Take the blank for paying teller's daily check sheets and enter the following transactions. Study very carefully the form given on pages 32 and 33. Consult your instructor if you need to. 1. Checks on our bank paid to-day are as follows : Charles J. Kennedy (New York draft), 1420.75; F. E. Sherman, $1200; Powers & Sprague, $1000; Lane, Rowell & Co., |300; Wyckoff, Seamans & Benedict, $450 ; Janis, Cooper & Tremper, 11500; Fields Milling Co., $500; J. O. Baker, $1049.75; W. 1. Pratt, $725. 2. Checks on clearing-house banks paid to-day are as follows : Bunker Hill National Bank, $920; Suffolk National Bank, $750; Colo- nial National Bank, $609.05 ; Shoe and Leather Bank, $500 ; Third National Bank, $400; Metropolitan National Bank, $725 ; Eliot National Bank, $1250.40; Citizens National Bank, $4120.40; Park Square National Bank, $2140.50; New England National Bank, $1440.50. 3. Checks on out-of-town banks paid to-day are as follows : Manufacturers and Traders Bank, Philadelphia, $700.50; collection, 75/. Bank of Commerce, Baltimore, $1300; collection, $1.25. Fourth National Bank, Hartford, $3250 ; collection, $3. Farmers Bank, Albany, $1500; collection, $1.50. 4. Checks on banks in our city not members of the clearing house, paid to-day, are as follows: Union Trust Co., $300; Powers Bank, $572.50. I r BANKING 37 Sold the following drafts on Chemical National Bank, New York. 1. Sold for cash : Frey & Thomas Co., $1500; exchange, 81.50. David Gray, 1500; exchange, 50/. Charles M. Miner, $750; exchange, 75/. 2. Sold for check : Charles J. Kennedy, $420.50; exchange, 25/. Enter the above on the paying teller's daily check sheet. Open the certified check book. There is but one unpaid check, as follows: check of Wyckoff, Seamans & Benedict, dated Feb. 23, certified for Elliot Mfg. Co., $17,500. Draw a double red line immediately under this amount, so that it will not be counted when the certified checks for to-day are footed. Certify the following checks: J. H. Crandall, $1200; C. E. Denison, $500; W. I. Pratt, $600. Enter the above in the certified check book. Pay cashier's charge ticket for 2 tons of coal, $9.50. The items for the Sundry Receipts column are as follows : Bills and coin from yesterday's proof, $206,710.81; bills and coin received from the receiving teller at the close of yesterday's business, $15,280.45 ; bills and coin received from the receiving teller during the day, $2900; bills and coin received from the note teller at the close of yesterday's business, $5504.40; received from the clearing house for to-day's exchanges, $31,863.11. Add the columns of the paying teller's daily check sheet. Make out the Recapitulation and Proof blank. A careful count of the cash now on hand under various heads (subdivisions of bills and coin only) shows an amount of $237,804.92. Foot the certified check book. Submit your paying teller's records to your instructor for approval. Note. — The paying teller makes out his proof before the cash from the receiv- ing teller and note teller has been turned over to him. After the receiving teller and note teller respectively make their proofs they turn over the balance of cash in their hands to the paying teller. These amounts appear on the paying teller's proof on the day following. WORK OF THE NOTE TELLER The Duties of the note teller are difficult to define, since there is a wide difference among banks as to the work assigned to this clerk. In nearly all banks, however, he is required to present for payment such notes, acceptances, coupons, etc., as are due and payable in the city, 38 BOOKKEEPING and to collect the city office items turned over to him at the close of each day by the receiving teller, paying teller, and correspondence clerk. The Runners of the bank are generally under the supervision of the note teller. These runners are assigned a definite route, which they cover daily, and present for payment or acceptance such paper as may be allotted to them. They keep a route hooh^ in which is recorded a full description of such paper. The Note Teller's Records. — As a rule the charge and credit tickets, letters, or other memoranda which affect the general ledger, the credit tickets for the proceeds of bills discounted, and collection items for the individual ledger pass through the note teller's hands before reaching the general and individual bookkeepers. To make this work as simple as consistent with approved banking practice, we have deviated from this plan to the extent of deferring these items until the enumeration of the memoranda for the general and individual bookkeepers' transac- tions is given on subsequent pages. The note teller's daily check sheets and proofs will therefore be omitted. The sagacious student, however, would soon perceive the offices and possibilities of these sheets in banks making use of them. Charging Notes to Out-of-Town Banks. — Notes and drafts discounted, payable out of town, are usually sent away for collection about ten days before they are due. At the maturity of these notes and drafts they are charged to the banks to which they are remitted, without waiting for letters advising collection. Each morning the discount clerk takes the bills discounted, payable in the city and falling due on that particular day, from the note file and compares them with the items listed on the discount tickler, after which they are handed to the note teller for collection. As the paper is disposed of a record is made in the Remarks column of the discount tickler. Make the proper records in the discount tickler for the paper disposed of to-day. In the Remarks column write : For No. 889, Charged to Pratt For No. 866, Charged to Traders National, For No. 842, Charged to Traders National, For No. 893, Certified, M. N B. For No. 901, Certified, K N, B. Note. — Nos. 866 and 842 will be charged to the banks specified at their face. It is customary with banks not to make any record of collection and exchange on such items until the bank to which the notes were remitted sends notice of collection. BANKING 39 Rule and foot the discount tickler. (See model, pages 16 and 17.) Each morning the collection clerk proceeds, in much the same manner as the discount clerk, to turn over to the note teller the collections payable in the city and falling due on any particular day. As this paper is disposed of a record is made in the Remarks column of the collection tickler. Make records in the collection tickler for the paper disposed of to-day. In the Remarks column write : For No. 744, Paid, 3/1. For Ko. 755, Paid, S/L Collections are not charged to the banks to which they are sent until a report of collection has been received. Farmers Bank, Albany, reports that collections 650 and 702 have been paid and placed to the credit of your account. In the Remarks column of the collection tickler write : For No. 650, Charged Farmers Bank, 3/1. Bank's collection, $1.75; our collection, 75 ff. For No. 702, Charged Farmers Bank, 3/1. Bank's collection, $1.20; our collection, $3. Form of Letter advising of Collections Credited John 0. Norris, President Robert Hall, Vice President L. H. PiERSON. Cashier National Exchange Bank Albany, N.Y., c^^^. is, 19 Mr. ^Aa^. la. /{-a.^n^lltcyn., Cashier JSoatcyyv, 7lia-2^^. Dear Sir, — We credit your account this day for the proceeds of collections as stated below. Respectfully yours, L. //-. S'l^x^cy)^, Cashier YOUR NO. PAYER AMOUNT CHARGES PROCEEDS 7/6 7/0 ^. €. /Scyyvoi 10'. ^. La^uf 800 ^00 760 600 2 2 /- / 60 60 26 7^8 8^7 7^8 60 60 76 2^60 i r 26 2^^2 76 40 BOOKKEEPIKG WORK OF THE CORRESPONDENCE CLERK The province of this clerk is to keep the accounts of all the out-of- town banks with whom we have dealings. All cash items received from or sent to these banks are handled by this clerk, and so kept entirely separate from the items received for collection by the collection clerk. Checks and sight drafts received on deposit, which are payable out of town, are remitted to our correspondents (out-of-town banks with whom Ave have regular dealings) the same as cash. Sometimes the collection clerk handles checks on out-of-town banks and sight papers payable out of town. If any paper is received for collection, it should be turned over to the collection clerk, entered in the collection register, and transferred to the collection tickler. If any paper is received on deposit, it should be turned over to the corre- spondence clerk and entered in the remittance register to the credit of the bank making the remittance. (See page 95.) Remittance Register and Chemical National DATE OF C. B. FOLIO EXPLANATION OF TRANSACTION DESCRIPTION OF REMITTANCE ITEMS TRANSACTION INDORSER PAYER Feb. 2 Balance 3 Remitted for credit F. E. Sherman A. B. Lyman Remitted for credit C. E. Denisou Ruggles & Co. Remitted for credit Powers & Sprague Filens & Co. 41 Remitted for credit Fernald, Son & Co. Moore & Freeman 3 41 Discount No. 590, charged 3 40 Total items received for credit d^^K 4 41 Discount No. 565, charged '^^^v 4 40 Total items received for credit '^^B 4 40 Drafts per draft register ^B Remittance Register and Out-of-Town Banks Ledger. — This book con- tains a record of all transactions with out-of-town banks. It serves the double purpose of registering remittances and giving a full and detailed ledger account of all out-of-town banks. The aggregate balances of the accounts in this book should at all times agree with the balance Out-of-Town Banks account in the general balance ledger. BANKIKG 41 ^■the present time. W raders ]N"ational Bank, Buffalo Manufacturers and Traders Bank, Philadelphia Bank of Commerce, Baltimore Fourth iSTational Bank, Chicago ^H Ninth National Bank, Hartford ^B Chase National Bank, Providence ^BChemical National Bank, New York ^■Farmers Bank, Albany ^■Alliance National Bank, Springfield ^Brirst National Bank, New York (Approved Ke ^H serve Agent) I Bank. Ne-w York Dr. $2754.90 Cr. $1472.20 648.90 3240.95 15219.65 3752.60 7572.20 75920.50 5214.90 162240.70 Enter the above balances in the remittance register, one account to a page. The amounts of all balances in this book are written in red ink. Out-of-Town Banks Ledger fc CHARGED LEDGER STATEMENT OF THE ACCOUNT 1 WHERE PAYABLE DATE OF PAPER AMOUNT DEBIT BALANCES CHARGES CREDITS CREDIT BALANCES I IIDO CO ■ Your bank Feb. 1 500 90 ■ Ninth National 1 650 Traders Nat'l, Brooklyn 2 750 1 Second National 2 920 2820 7500 10320 90 90 9115 75 1000 2G95 3620 6590 10210 75 90 90 95 15 This morning's mail contained the following amounts from the banks named, for credit. Enter the amounts in the remittance register, being very careful to record everything correctly. Study the accompanying model. Only the total remittances are given below, since the items need not be recorded in the remittance register. The letters containing an itemized statement of this paper are filed for reference, and may be 42 BOOKKEEPING examined whenever it is necessary to look up any of the details relating to any particular remittance. Traders National Bank, BufPalo $1142.90 Bank of Commerce, Baltimore 1642.95 Fourth National Bank, Chicago 4694.25 Chemical National Bank, New York 560.20 Manufacturers and Traders Bank, Philadelphia 4500. Chase National Bank, Providence 1721.42 Farmers Bank, Albany 4921.62 Alliance National Bank, Springfield 3752.88 Form of Letter advising Remittance of Cash Items for Credit HENRY L. MILLER, President GEO. A. DUNKLE. Vice President G. W. WILLIAMS, Cashier >,^m.anufacturers and K/raders fjjank Philadelphia. ^ct„ ^eA. 27, 19— ^Mn, €. ^. ^OLUf-e., Cashier SDear Sir, 9?lease find herewith for CREDIT to our account the items listed Below . DATE DRAWEE ITEMS AMOUNT CHARGED c^5^. 2^ 23 26 yo-iih ISa/nk Hid ^otcyyi^f c/iatuyyuLl 760 2^0 600 ^/O /6(fO c^O Very respectfully yours, c^. ^. 14Mtlla.viQ^, Qashier The following are the drafts drawn on Chemical National Bank, New York, as per stubs in the draft book. No. 430, $1500; No. 431, $500; No. 432, $750; No. 433, $420.50. i BANKING 43 Enter the foregoing drafts in the draft register. Foot the draft register and credit Chemical National Bank in the remittance register for the total. Check the amount transferred. The Draft Register. — Bank drafts are taken from a book resembling an ordinary check book. They are in reality checks of one banking institution upon another banking institution. In due time they find their way to the banks upon which they are drawn ; they are charged to the banks drawing them, and then returned in much the same manner as the checks, of resident depositors. These drafts are transferred from the draft book to the draft register, — a blank provided with two columns, one for the numbers, and one for the amounts of the drafts. At the close of the day the draft register is footed, and the total com- pared with the footing of the draft column of the paying teller's daily check sheet, and posted to the remittance register. ^ruft ^i £>rafts on eqtster (^/lemtcal >^atlonal cSi arik DATE CK. i NO. AMOUNT 1 DATE V NO. AMOUNT /9_ f 6 / 6 / 6 16 / 6 / 6 / 6 /6 /6 / 6 326 326 327 328 32^ 330 760 260 600 / 600 760 60 ^6 66 1 /6 /6 /6 /6 336 336 337 338 220/ 800 608 600 80 20 f/^f ^\ ^260 60 S'&(j-. 33/ 332 333 33^ 720 280 600 700 ^0 90 60 220/ 80 44 BOOKKEEPING Special Agents or Correspondents A bank does not enter into busi- ness relations with every individual bank from which checks and drafts may be received. In the course of a month a large bank would have paper for collection payable at many hundred banks located at different points throughout the country. To send this paper to the various banks upon which it is drawn would be most inconvenient as well as expensive. To obviate this, banks have special agents or correspondents located at convenient centers through which it makes its collections. This arrangement simplifies the whole business of collecting paper and reduces the correspondence of the bank to a minimum. We have this day made the following remittances to out-of-town banks for credit. (See form for remittance letter, page 42.) To Traders National Bank, Buffalo. Check of Bates, Torey & Co., dated Feb. 26, on Second National Bank, Buffalo, indorsed by Spencer, Mead & Co., for 11340.20; check of A. B. Murray, dated Feb. 25, on Central Bank, Rochester, indorsed by Manu- facturers and Traders Bank, Philadelphia, for $1321.72 ; draft of First National Bank, Worcester, dated Feb. 25, on Traders National Bank, Buffalo, indorsed by Alliance National Bank, Springfield, for $722.40. To Bank of Commerce, Baltimore. Check of F. E. Barry, dated Feb. 25, on Commercial Bank, Balti- more, indorsed by Spencer, Mead & Co., for $342.90 ; check of M. E. Gay, dated Feb. 24, on Bank of Commerce, indorsed by Alliance National Bank, Springfield, for $142.16. To Fourth National Bank, Chicago. Check of A. B. Tonner, dated Feb. 23, on First National Bank, St. Louis, indorsed by Alliance National Bank, Springfield, for $1721.95 ; check of D. O. Manning, dated Feb. 23, on Commercial Bank, Cincin- nati, indorsed by Farmers Bank, Albany, for $122.75 ; check of F. W. Wayne & Co., dated Feb. 23, on Union Bank, Minneapolis, Minn., indorsed by Farmers Bank, Albany, for $1420.50. To Chemical National Bank, New York. Check of C. E. BoUes, dated Feb. 23, on Eliot National Bank, Poughkeepsie, indorsed by Spencer, Mead & Co., for $1343.46 ; check of Morton & Mills, dated Feb. 21, on City National Bank, Peekskill, indorsed by Thomas Bennett & Co., for $1325.62; check of D. E. Brown, dated Feb. 21, on Second National Bank, Brooklyn, indorsed BANKING 45 by Thomas Bennett & Co., for $1462.91; check of Earl & Henderson, dated Feb. 20, on Merchants Bank, Paterson, indorsed by Thomas Bennett & Co., for $142.10; check of A. B. King, dated Feb. 24, on Rockland National Bank, Brooklyn, indorsed by E. L. Howard, for $142.60. To Alliance National Bank, Springfield. Check of C. W. Gray, dated Feb. 24, on Bay State Bank, Worcester, indorsed by C. E. Denison, for $1590.60 ; check of C. H. Thurber, dated Feb. 26, on A-lliance National Bank, Springfield, indorsed by E.L.Howard, for $1121.40 ; check of W. H. Greeley, dated Feb. 24, on National City Bank, Northampton, indorsed by E. L. Howard, for $24.16. To Ninth National Bank, Hartford. Check of Jones Dairy Co., dated Feb. 23, on City Bank, Hartford, indorsed by E. V. Buckley & Son, for $621.40 ; check of Oak Grove Creamery Co., dated Feb. 23, on Citizens Bank, Torrington, indorsed by E. V. Buckley & Son, for $340. To Chase National Bank, Providence. Check of C. F. Gray, dated Feb. 21, on Second National Bank, Provi- dence, indorsed by Fourth National Bank, Chicago, for $1694.25 ; check of E. C. Delano, dated Feb. 21, on Union Bank, Providence, indorsed by Fourth National Bank, Chicago, for $1500 ; check of C. A. Snow, dated Feb. 20, on Union Bank, Providence, indorsed by Alliance National Bank, Springfield, for $1166.37. To Farmers Bank, Albany. Check of F. E. Smith, dated Feb. 23, on Central Bank, Troy, indorsed by Fernald, Son & Co., for $1750 ; check of Crescent Mfg. Co., dated Feb. 24, on Commercial Bank, Utica, indorsed by W. I. Pratt, for $1900. Enter the above paper in the remittance register, showing each item in detail. The letters containing a description of this paper are sent away, and unless we take a copy of such letters we have nothing to show in detail the amounts of our remittances from time to time. The note teller has advised you, by means of charge tickets, of the following debits to out-of-town banks. Traders National Bank, Buffalo, note for $5000 (discount No. 842) Traders National Bank, Buffalo, note for $7500 (discount No. 866) Farmers Bank, Albany, proceeds of collection No. 650, $723.25 Farmers Bank, Albany, proceeds of collection No. 702, $1198.80. 46 BOOKKEEPING Enter the foregoing items in the remittance register. Consult your instructor if necessary. Form of Charge Ticket ^Jhe ^Jruders .Rational ^Jjank Boston, >^ass., f'iuyi& 2, /9 Ghange 7600 7^6 60 S)tscount Slerk On a line with the last item entered extend the balances for all the accounts in the remittance register. Note particularly the two columns for balance. The debit balances are written on the left and the credit balances on the right in red ink. (See model, pages 40 and 41.) Present your remittance register to your instructor for approval. WORK OF THE mDIVIDUAL BOOKKEEPER The work of this clerk is to be found in the individual ledger. The Individual Ledger contains all the accounts with depositors. It is a book of original entry for the various cash transactions which affect these accounts, the entries being made directly from the deposit tickets, checks, charge and credit tickets, etc. The names of the depositors should be written in alphabetical order. Many large banks have a line of depositors that they can count upon as regular and permanent, and in such cases have the names of these depositors printed in the individual ledger when the book is made, a few blank lines being left after each letter for any additional accounts which it may be found necessary to open from time to time. At the close of each day's business the columns of this book are footed and proved. The totals of the Deposits and the Total Checks columns are transferred daily to the debit and credit sides of the general BANKING 47 cash book, crediting and debiting Deposits. The total of the Balance column shows the total amount on hand to the credit of depositors and should at all times agree with the balance of the account with deposits in the general balance ledger. (See page 96.) Individual Ledger BALANCE MONDAY, FEB. 15. 19_ TUESDAY, FEB. 16. 19— NAME CHECKS IN TOTAL DEPOSITS BALANCE CHECKS in! TOTAL DEPOSITS BALANCE DETAIL CHECKS DETAIL 1 CHECKS 42 16 19 20 600 Andrews, E. B. 11258 20 110 100 500 38 171 74 150 11236 46 1400 16 249 40 80 2000 9236 46 Bennett, D. W. 12301 85 4C0 ICOC 1200 12501 85 750 278 20 10 1010 40 2016 40 13501 85 Comer, Geo. A. 6619 99 2400 9019 99 721 4000 90 1000 1750 9769 99 Ernst Mfg. Co. 18044 54 4500 10 238 07 76 49 4500 07 175 D1900 90 13720 37 258 42 12,5 80 11 60 4258 80 2129 40 11590 97 Freeman & Co. 4812 CO 628 70 877 95 500 6334 C5 720 90 225 887 71 2887 71 8334 65 Goodwin & Co. 121'J CO 1219 00 75 90 124 40 39C 829 60 Jennings, C. W. 9216 40 750 lOD 750 C500 84CC 40 1125 60 1340 2340 CI 000 50 58 9466 90 Moore, Geo. II. 7216 25 9i;o 50 1000 2500 9216 25 42 321 60 80 D1200 92 11417 75 Rowell & T-ane 621 50 150 932 10 200 175 D1119 40 59G 50 250 292 500 60 10 615 18 50 Smith & Seanians 7360 90 1250 2212 10 1460 7728 20 400 1192 10 C192 10 6728 20 Wilson, D. O. 6510 50 140C 7910 50 7910 50 Certificates of Deposit 750 300 500 175C 250C 500 500 2000 Certified Checks 240C 700 1500 lOOC 190C 250 25C 1650 Cashier's Acct. — — V — 15C0 1500 — — — 1500 v/ V V Total Balances .S8332 33 12211 m 12211 86 17730 JO 93850 II 13450 01^ 13450 01^ 13517 -51 93936 87 Total Overdrafts 18 50 Net Balances 93918 37 The accounts in the individual ledger for the last business day show the following balances. Decker Bros., 112,486.18 ; Mace, Gilmore & Co., $19,874.15 ; Spencer, Mead & Co., $28,652.90; D. B. Roberts, 1752.91; E. L. Howard, 111,216.94; Fernald, Son & Co., $21,724.92; Thomas Bennett & Co., $12,172.41; W. I. Pratt, $7296.84; D. E. Avery, $15,162.40; 48 BOOKKEEPING J. H. Crandall, 174,652.40 ; C. E. Denison, $16,240.90 ; Freeman, Austin & Co., 811,200.50; C. E. Selover & Co., 819,200 ; Lane, Rowell & Co., $37,500.06 ; F. E. Sherman, $12,172.45 ; Wyckoff, Seamans & Benedict, $77,314.31; E.V. Buckley & Son, $24,214.93; J. O. Baker, $51,342.40 ; Powers & Sprague, $15,294.63; Janis, Cooper & Tremper, $37,582.69 ; Charles J. Kennedy, $45,272.75 ; Fields Milling Co., $14,352.90 ; Certi- fied Checks, $17,500; Certificates of Deposit, $5000; Cashier's Checks, $2000 ; Total, $590,180.57. Open the above accounts in the individual ledger in alphabetical order, one account to a line, after which present your ledger to your instructor for approval. The Individual Bookkeeper's Duties may be briefly referred to as follows; 1. He takes charge of the bank's accounts with depositors. 2. He meets depositors and answers questions with reference to their accounts. 3. He writes up the depositors' pass books. In large city banks there are frequently many thousand accounts with depositors, and the individual ledger is necessarily subdivided, a section of accounts being given to each of the several individual bookkeepers employed. Note. — The student should remember that the assignment of work to the various clerks of a bank would necessarily differ with different banking institutions. In the smaller banks one clerk would fill offices that in larger banks would be assigned to several clerks, while in the largest banks of the country the work of many of the departments would be subdivided among different clerks. Transactions for the Individual Bookkeeper, March 1 The individual ledger being a book of original entry, the bookkeeper in charge of this department usually makes the entries directly from the deposit slips, checks, charge and credit tickets, etc., passed on to him by the receiving teller, paying teller, note teller, and correspondence clerk. The deposits from customers for to-day may be found in the Amount Credited column of the receiving teller's daily check sheet. Enter these deposits in the Deposits column of the individual ledger. Place a check mark by the side of the customer's account on the receiving teller's sheet. The note teller has turned over credit tickets for the proceeds of the following paper collected for customers to-day : Nos. 650, 702, 744, and 755. Enter the proceeds of these collections in the Deposits column of the individual ledger. The amounts are shown by the records in the BANKING 49 collection tickler. Be sure to deduct all collection charges. Check the items transferred. Straight deposits require no explanation in the individual ledger, but discounts and collections are generally designated by writing D and C respectively before the amounts. (See model individual ledger, page 47.) Qommerciul ^^atlonal KJjartk en^dlt ^Boston, ^Mass,, ^dy. 26, 79— NUMBER OF COLLECTION ACCOUNT TO BE CREDITED 1 1 PROCEEDS 720 6(f0 7fO ^62 7/2 8^/ 60 ^0 20 jahw /if. CLvynyUZ&acL, Credit tickets have also been received from the note teller for paper discounted for customers to-day. Enter the proceeds of these notes in the Deposits column of the indi- vidual ledger. Refer to the discount register for the amounts. Check the items transferred. The total of the checks certified for to-day, as reported by the paying teller, is 12300. Enter the amount in the Deposits column, opposite Certified Checks. Check the amount in the certified check book. Checks of depositors have been received by the paying teller and turned over to the individual bookkeeper, as shown in the Our Bank column of the paying teller's daily check sheet. Enter these items in the Checks in Detail column of the individual ledger opposite the names of the drawers. Check the items transferred. Charge tickets have been received from the paying teller on account of certified checks. Refer to the certified check book for the amounts of these tickets. Enter the amounts in the individual ledger the same as regular checks. Check the items transferred. Checks of depositors have been received by the receiving teller, entered on his check sheets, and turned over to the individual bookkeeper. A ist of these checks, with the names of the drawers, is as follows ; 50 BOOKKEEPING Mace, Gilmore & Co., $720.50, $1500; Decker Bros., 81250.20; Spencer, Mead & Co., $340.20; Fernald, Son & Co., $72.60; W. I. Pratt, $650.60; F. E. Sherman, $1625; C. E. Denison, $1750; Thomas Bennett & Co., $200, $1242.10; E. L. Howard, $40.50; Charles J. Kennedy, $200, $262.90. Enter the above items in the Checks in Detail column. The note teller has turned over a charge ticket for discount No. 889. Refer to the discount tickler for the amount. Check the item transferred. The following depositors' checks have come in from the clearing house. D. E. Avery, $625, $127.52; J. O. Baker, $1275; Thomas Bennett & Co., $2500 ; E. V. Buckley & Son, $115.40 ; J. H. Crandall, $462.50; Decker Bros., $1200, $750.42, $500; Freeman, Austin & Co., $1750; E. L. Howard, $75.40; Charles J. Kennedy, $400.60; Mace, Gilmore & Co., $120, $40.50; D. B. Roberts, $22.40; WyckofP, Seamans & Benedict, $167.50, $125; F. E. Sherman, $750, $211.40, $600. Enter the above in the Checks in Detail column. The correspondence clerk has turned over the depositors' checks received from out-of-town banks. Enter them in the Checks in Detail column. Spencer, Mead & Co., $650; Fields Milling Co., $850; Janis, Cooper & Tremper, $560; Lane, Rowell & Co., $721.42; Powers & Sprague, $1000. Extend the sum of the checks drawn by each depositor into the Total Checks column of the individual ledger. Foot the Checks in Detail, Total Checks, and Deposits columns. The sum of the Total Checks column should agree with the sum of the Checks in Detail column. Determine the new balance to the credit of each depositor by adding the deposits and subtracting the total checks for the day. Enter the new balance in the Balance column for March 1. Foot the Balance column. Prove the correctness of the individual ledger as follows : Add the total deposits for to-day to the total balances for yesterday. From this sum subtract the total checks for to-day. If no error has been made, the difference so found should be the same as the total balances for March 1. Present your individual ledger to your instructor for approval. WORK OF THE GENERAL BOOKKEEPER The records of the general bookkeeper are principally found in the general balance ledger and general cash book. BANKING 51 The General Balance Ledger contains a summary of the entire operations of the bank, systematically collated from the various departments. It is provided with three columns for each business day in the week. The first column contains the balances of the various accounts. The debit balances are written in black ink, and the credit balances in red ink. It is a regular double entry ledger; therefore the total of the red ink balances should at all times equal the total of the black ink balances. The next two columns are for daily debit and credit additions to the accounts in this ledger. Among the advantages of this form of ledger over the old form of mercantile ledgers are : 1. It furnishes more convenient data for preparing the daily statement of the bank. 2. It requires less clerical work. 3. It serves the purpose of a trial balance. General Balance Ledger Monday, Feb. 5, 19 BALANCE DEBITS CREDITS BALANCE Cash 281600 28 70605 90 58665 90 299690 28 Out-of-Town Banks 121200 72 75240 10 81240 16 115200 72 Bills Discounted 129640 CO 32500 32129 84 130010 46 Redemption Fund 4500 4500 Furniture and Fixtures 6000 6000 Premium on U. S. Bonds 2000 2000 Real Estate 7500 7500 Expense 240 50 04 290 04 U.S. Bonds 100000 100000 Capital Stock 200000 200000 Circulation 100000 100000 Collection and Exchange 2002 34 120 10 3022 44 Deposits 220008 57 72840 10 84840 10 242008 57 Surplus Fund 100000 100000 Undivided Frofits 12500 75 12500 75 Discount 7350 G4 300 10 7659 74 052771 30 665191 50 652771 30 257296 20 257296 20 665191 50 The General Cash Book contains a record of all amounts affecting the general balance ledger of the bank. Any account that does not appro- priately belong to the special books already referred to is recorded directly in this book. It is not essentially different from the cash book used by mercantile houses. The left side is provided with four 52 BOOKKEEPING General Monday, F ACCOUNT AND EXPLANATION COLLEC- TION AND EXCHANGE OUT-OF- TOWN BANKS GENERAL TOTALS Balance On hand 162W0 50 3 Bills Discounted D. T. 12000 v/ Alliance Nat'l Bank, Springfield 2400 50 ^ Bank of Commerce, Baltimore, ISOO.w, 729.«» 2529 40 \/ Farmers Bank, Albany, 200.oo, 821.oo 1021 >/ Fourth Nat'l Bank, Chicago 12000 \/ Coll. and Exch. Disc. R. 72 40 3 Interest and Discount Disc. R. 270 50 s/ Coll. and Exch. 11. Teller 14 50 V Coll. and Exch. T. Teller, S.'-o, 11 .» 14 70 y/ Coll. and Exch. C. T., l.», 2.oo, i.:o 4 75 3 3 3 Deposits I. L. Coll. and Exch. Total for day Out-of-Town Banks Total for day Is 90 178240 lOG 17950 95 35 90 208CC8 lOG 17950 70 371509 20 n 11 1 columns, one for collection and exchange, one for receipts from banks, one for sundry receipts, and one for totals. The right side is pro- vided with three columns, one for cash remittances to banks, one for sundry payments, and one for totals. The difference between the sides of this book should at all times show the balance of cash on hand. The General Bookkeeper in a largo bank occupies a position of special responsibility. He is the chief accountant of the bank, all the work in each of the several departments coming under his general supervision. Upon him devolves the work of classifying the general results of the bank and the rendering of statements required by the board of directors and by the regulations of the bank. He usually has personal charge of the general cash book and the general balance ledger. Transactions for the General Bookkeeper, March 1 The general balance ledger exhibited the following balances at the close of Saturday, Feb. 27, BANKING 53 Cash Book Feb. 15, 19. F ACCOUNT AND EXPLANATION 1 OUT-OF- 1 TOWN BANKS GENERAL TOTALS 3 V Bills Discounted Alliance Nat'l Bank, Springfield Chemical Nat'l Bank, N.Y., 7240 .«>, 2500.oo Farmers -Bank, Albany Chase Nat'l Bank, Providence, 120.«>, 4(X).<» Ninth Nat'l Bank, Hartford Traders Nat'l Bank, Buffalo, 2500.oo, 320.*" Disc. n. 1 1 7500 9740 7240 520 162 2820 50 11 50 40 40 125C0 3 3 Deposits Out-of-Town Banks r Paying Teller's Currency I. L. Total for day 166901.^^ 152240 27983 95 91 192724 27983 91 8C Balance < Clearing-House Checks on hand 112407^ 178784 34 [^ Cash Items {City and Foreign) on hand 642.^ -^-^^ = 371509 20 Credit Balances V Capital Stock $400000. V Circulation 200000. V Collection and Exchange 21275.10 V Deposits 590180.57 Interest and Discount 16240.10 Surplus Fund 100000. Undivided Profits Loss and Gain Protest Fees Debit Balances 6728.14 V Cash $238995.66 Bills Discounted 496722.60 Protested Paper V Out-of-Town Banks 273795.30 Due from U.S. Treasurer 2000. V U.S. Bonds to secure Circulation 200000. Salaries 4750. Stocks and Bonds 62500. \ Real Estate 27500. Redemption Fund with the U.S. Treasurer 10000. Furniture and Fixtures 12625.50 Premium on U.S. Bonds 4000. Expense 214.96 Taxes 320. 54 BOOKKEEPING Enter the above balances in the general balance ledger. Write the credit balances in red ink and the debit balances in black ink. When the accounts are properly opened ascertain if the footings of the debits and credits are equal. Present your work to your instructor for approval. Write the balance of cash on hand, $238,995.66, in the general cash book. (See model, pages 52 and 53.) In practice the general bookkeeper would have before him charge and credit tickets, letters, etc., from which to make entries in the general cash book. These entries are generally made when the day's trans- actions have been completed. Then all the tickets can be assorted so that they may be recorded conveniently. The debits and credits for the general cash book March 1 are as follows : 1. From the discount register debit Bills Discounted for the total of the Amount of Paper column, and credit Collection and Exchange for the total of the Collection and Exchange column, and Interest and Dis- count for the total of the Interest and Discount column. Properly check these totals in the discount register. 2. From the discount tickler credit Bills Discounted for the total of the Amount to he Collected column. Properly check the item transferred. 3. From the remittance register credit the several banks for the amounts in the Credits column, and debit them for the amounts in the Charges column. Properly check the items transferred. If there is more than one item in the debit or the credit column, short extend the amounts in the general cash book. 4. From the individual ledger credit Deposits for the total of the Deposits column, and debit Deposits for the total of the Total Checks column. Properly check. 5. From the collection tickler credit Collection and Exchange for our collection charges on Nos. 650 and 702. 6. Fro::i the receiving teller's daily check sheet credit Collection and Exchange for the total of the Collection and Exchange column. Properly check. 7. From the paying teller's daily check sheet debit Expense for the total of the Expense column, and credit Collection and Exchange for the totals of the Sundry Collection and Exchange and Exchange columns. Properly check. Prove the cash. The amount of bills and coin on hand is 1258,884.32. Clearing-house items on hand amount to $26,205. Cash items (city and foreign) on hand amount to $11,623. ( BANKING 55. Rule and foot the general cash book. Proceed carefully and make absolutely no errors. Study the model given on pages 52 and 53. Before bringing down your balance for Tuesday, March 2, present your general cash book to your instructor for approval and suggestions. Post the general cash book to the general balance ledger. Post only the totals of the Collection and Exchange and Out-of-Town Banks columns. Debit Cash in the general balance ledger for the total receipts, and credit it for the total payments for the day. Foot the D'ehit and Credit columns of the general balance ledger. If correct, they should agree. Determine the new balances in the general balance ledger. Foot these new balances. If correct, the red and black ink totals should agree. Compare your balance ledger with the model given on page 51, and see if anything remains to be done. If not, present all your books to your instructor for criticism. Transactions for the Discount Clerk, March 2 The following paper has been offered and accepted for discount. Make proper records for it in the discount register. Deduct the dis- count for the time notes have to run. No. 925. Note of Boyd Bros., at 60 days from Jan. 31, discounted for F. E. Sherman, payable at Manufacturers and Traders Bank, Phila- delphia, for .'117,250. Collection and exchange, $17.50. Proceeds credited. No. 926. Note of Peterson Bros. & Co., at three months from Jan. 1, discounted for D. B. Roberts, payable at Fourth National Bank, Chicago, for $11,390. Collection and exchange, 111.50. Pro- ceeds credited. No. 927. Note of C. P. Jameson, at 15 days from March 1, indorsed by Janis, Cooper & Tremper, discounted for D. E. Avery, payable at our bank, for $9275.80. Proceeds credited. No. 928. Note of A. P. Littlo & Co., at 30 days from Feb. 23, indorsed by Merrill & Co., discounted for Fields Milling Co., payable at First National Bank, Worcester, for $6290. Collection and exchange, $6.30. Proceeds credited. No. 929. Note of W. I. Pratt, at 30 days from March 2, payable at Merchants Bank, Torrington, Conn., indorsed by Wells, Osborn & Co., discounted for Charles J. Kennedy, for $12,795. Collection and exchange, $12.75. Proceeds credited. 56 BOOKKEEPING No. 930. Note of Powers and Sprague, at 30 days from Feb. 24, discounted for Thomas Bennett & Co., payable at our bank, for 13275. Proceeds credited. No. 931. Note of W. V. Brown, at 30 days from Feb. 27, discounted for Spencer, Mead & Co., payable at our bank, for $1500. Proceeds credited. Rule and foot the discount register. Prove the footings as explained at the close of discount clerk's work March 1. Post the entries from the discount register to the discount tickler. Follow instructions to the discount clerk March 1. Be sure to properly check all items transferred. Transactions for the Collection Clerk, March 2 The following is a list of paper received for collection to-day. Enter it in the collection register. No. 806. Note signed by D. Appleton & Co., dated Feb. 8, at 30 days, indorsed by C. W. Ellis, payable at our bank, for $7200. To be collected for Ninth National Bank, Hartford. No. 807. Note signed by Scott & Lucas, payable two months from Jan. 4, at Park Square National Bank, City, for $5162.50. To be col- lected for Fourth National Bank, Chicago. No. 808. Note signed by Fanning & Cook, payable in 60 days from Jan. 4, at Union Trust Co., City, for $2750. To be collected for Bank of Commerce, Baltimore. No. 809. Draft dated Jan. 8, at 60 days from date, on Trenholm Bros., payable at Briggs Bank, Westfield, for $2152.90. To be collected for Farmers Bank, Albany. No. 810. Draft dated Jan. 8, at 60 days from date, on W. S. Stanton, Springfield, for $1500. To be collected for Fourth National Bank, Chicago. No. 811. Sight draft dated March 2, on Taylor Bros., City, in favor of Powers & Sprague, payable at our bank, for $1950. To be collected for Powers & Sprague. No. 812. Sight draft dated March 2, on William Sloan & Son, Pough- keepsie, in favor of Lane, Rowell & Co., for $2750. To be collected for Lane, Rowell & Co. No. 813. Sight draft dated March 3, drawn on E. C. Baldwin, Spring- field, in favor of E. L. Howard, for $1357.60. To be coUected for E. L. Howard. BANKING 57 No. 814. Note of David Wells, at 30 days from Feb. 16, with interest at 6%, payable at our bank, for $750. To be collected for J. H. Crandall. Compute the interest on the $750 for 30 days. Add this interest to the face of the note and write the total in the Amount column of the collection register. This should be done with all interest-bearing paper. No. 815. Note of L. F. Chappell, payable at Fourth National Bank, Chicago, at three months from Jan. 1, for 11250. To be collected for Thomas Bennett & Co. No. 816. Note of W. B. Burdick, at two months from Jan. 27, with interest, payable at Merchants Bank, St. Louis, Mo., for $2790. To be collected for Thomas Bennett & Co. No. 817. Sight draft dated March 2, on Bradley & Co., Buffalo, N.Y., [for 1290.50. To be collected for Thomas Bennett & Co. No. 818. Sight draft dated March 1, on Winslow & Co., Rochester, [N.Y., for $375.62. To be collected for Decker Bros. Post the collection register to the collection tickler. (See instructions to collection clerk, March 1.) Transactions for the Receiving Teller, March 2 The following are the regular deposits for to-day. Enter them on the receiving teller's daily check sheet. Wyckofe, Seamans & Benedict, V $1600, V $562, B $2500, B $750, B $12,200. Spencer, Mead & Co., V $1740, V $190, #61 $400, #4 $800, #16 $1290. D. E. Avery, B $14,270, B $640.70, X $1162.95, X $1436.52, X $1349.20; less collection, $4.15. J. O. Baker, V $11,400, V$45, B $1600, B $9250, B $5450, x $1400; [less collection, $1.40. Thomas Bennett & Co., V $240, V $60, #7 $1950, #9 $2325, #15 ^600, O $400. J. H. Crandall, X $2400, X $1500; less collection, $4. Decker Bros., V $3700, B $5210, O $900, x $4500, less collec- ^tion, $4.50. Freeman, Austin & Co., # 21 $2145, # 27 $1360. E. L. Howard, V $2400, B $3262.90, B $3040.50, B $6200. Janis, Cooper & Tremper, V $1500, B $1100, B $2400, # 3 $1140.60, [#27 $11,000. 58 l^OOKKEEPING Charles J. Kennedy, #17 f2410, v/ $4000, x '^1621.40; less collec- tion, li'l.GS. Mace, Gilmore & Co., O '$1100, B f6270, x 11125.60, #25 -$1460, #31 $1652; less collection, $1.25. Foot the columns of the receiving teller's daily check sheet. Make out Recapitulation and Proof blank. Balance on hand: coin, $712; bills, $18,000. You have given to the paying teller during the day $8725. The debit and credit sides of y^ur proof should always balance if the work is correct. Transactions for the Paying Teller, March 2 The following are lists of checks paid by the paying teller to-day. Enter them on the paying teller's daily check sheet. 1. Checks on our bank: Wyckoff, Seamans & Benedict (New York draft), $14,260 ; Spencer, Mead & Co. (New York draft), $4500 ; F. E. Sherman (New York draft), $3762.50; D. B. Roberts (New York draft), $1000; Powers & Sprague, $7265; W. I. Pratt, $1217.50 ; Mace, Gilmore & Co., $8290 ; Charles J. Kennedy, $400; E. L. Howard, $350; Freeman, Austin & Co., $2790; Fields Milling Co. (New York draft), $1400. 2. Checks on clearing-house banks : Bunker Hill National Bank, $1940 ; Suffolk National Bank, $1875 Colonial National Bank, $2750.06; Shoe & Leather Bank, $2500 Third National Bank, $400; Metropolitan National Bank, $1700 Park Square National Bank, $3400.60 ; Citizens National Bank, $6250.50; Eliot National Bank, $4000; New England National Bank, $3257. 3. Checks on out-of-town banks : Traders National Bank, Buffalo, $17,500, $750, and $1600; collec- tion, $19.85. Bank of Commerce, Baltimore, $400, $1450, and $1725; collection, $3.60. Manufacturers and Traders Bank, Philadelphia, $8500; collection, $8. Fourth National Bank, Chicago, $4685; col- lection, $4.75. Chase National Bank, Providence, $4500.50 ; collec- tion, $4.50. Ninth National Bank, Hartford, $3250; collection, $3.25. Chemical National Bank, New York, $1100, $2500, $1650, $9250; collection, $14.50. Eliot National Bank, Springfield, $4792.50 ; collec- tion, $4.60. 4. Checks on banks in our city not members of the clearing house : Powers Bank, $172.50; Union Trust Co., $150. BANKING 59 Sold the following drafts on Chemical National Bank, New York. 1. Sold for check : Wyckoff, Seamans & Benedict, $14,260; exchange, 114.25. Spencer, Mead & Co., $4500 ; exchange, |4.50. D. B. Roberts, $1000 ; exchange, II. Fields Milling Co., $1400; exchange, $1.40. F. E. Sherman, $3762.50; exchange, $3.75. Note. — The exchange items on the above drafts were, in this instance, paid in cash. The record on the paying teller's sheet will be identically the same as where these items are covered by check. By referring to the checks covering these drafts on the left side of the sheet it will be seen that the amounts entered are for the face of the drafts only. 2. Sold for cash: A. L. Hopkins, $2000; exchange, $1. T. Y. Smith, $1500; exchange, 75^. Certified the following checks. Enter them in the certified check book. Lane, Rowell & Co., $11,250 ; Charles J. Kennedy, $7295 ; Decker Bros., $1254; J. O. Baker, $9265. Pay cashier's charge tickets for the following items : Postage, $12.50 ; stationery, etc., $25.90 ; blank books, $142.60. The items for the Sundry Receipts column are as follows : Bills and coin from yesterday's proof, $237,804.92 ; bills and coin received from the receiving teller at the close of yesterday's business, $11,747.25; bills and coin received from the receiving teller during the day, $8725; bills and coin received from the note teller at the close of yesterday's business, $9332.15; received from the clearing house for to-day's exchanges, $28,349.17. Add the columns of the paying teller's daily check sheet. Make out Recapitulation and Proof blank. A careful count of the cash now on hand under various heads (subdivisions of bills and coin only) shows an amount of $187,006.03. Foot the certified check book. Transactions for the Note Teller, March 2 Make the proper records in the discount tickler for the paper disposed of to-day. In the Remarks column write : For No. 902, Charged Alliance National Bank. For No. 869, Charged Alliance National Bank. For No. 868, Paid, S/2. For No. 895, Charged Farmers Bank. For No. 867, Paid, 3/2. 60 BOOKKEEPING Rule and foot the discount tickler. Advices have been received that the following collections have been paid. Make records in the collection tickler for these collections. In the Remarks column write : For No. 723, Charged to Chemical National Bank. Bank's col- lection, $1; our collection, ^1.10. For No. 726, Charged to Chase National Bank. Bank's collection, $If; our collection^ $5, For No. 742, Charged to Chase National Bank. Bank's collection, $5; our collection, $5.20. For No. 743, Charged to Bank of Commerce, Baltimore. Bank's collection, $1; our collection, $1.25. Collections Nos. 756, 800, and 811 have been paid. In the Remarks column of the collection tickler write : For No. 756, Paid, For No. 800, Paid, For No. 811, Paid, Transactions for the Correspondence Clerk, March 2 This morning's mail contained the following remittances from the banks named, for credit. Enter in the remittance register. Traders National Bank, Buffalo $9273.40 Bank of Commerce, Baltimore 4213.93 Manufacturers and Traders Bank, Philadelphia 5272.50 Fourth National Bank, Chicago 6395.40 Ninth National Bank, Hartford 5427.30 Chase National Bank, Providence 8216.50 Farmers Bank, Albany 5324.80 Alliance National Bank, Springfield 4152.70 The following are the drafts drawn on Chemical National Bank, New York, as per stubs in the draft book. No. 484, 114,260 ; No. 435, $4500 ; No. 436, $3762.50 ; No. 437, $1500; No. 438, $1000; No. 439, $2000; No. 440, $1400. Enter these drafts in the draft register. Credit Chemical National Bank in the remittance register for the total. We have this day made the following remittances to out-of-town banks for collection. In the To Whom Sent column of the collection tickler write the name of the bank to which the paper is sent. No other record BANKING 61 is needed at this time. Nos. 804, 805, 809, 810, 813, sent to Alliance National Bank, Springfield; No. 812 sent to Farmers Bank, Albany; Nos. 815 and 816 sent to Fourth National Bank, Chicago; Nos. 817 and 818 sent to Traders National Bank, Buffalo. Form of Letter to accompany Paper remitted for Collection and Credit C. H. THURBER, PRESIDENT J. W. MACE, VICE PRESIDENT CHAS. W. HAMILTON, CASHIER MERCHANTS NATIONAL BANK Boston, Mass., SeA. d, I9_ €. W-. S>&aA(>d^, Esq., Cashier cAeAA^ yanJc (^IXa^ Dear Sir, — I inclose for collection and credit the itcnis stated below. NO. PAYER AMOUNT 720 6(^0 7ff fcyulom., 7J'HvQ.k V ^. 72^0 ^72 f26f 16 Please advise us of the payment of the items inclosed. Paper not paid at maturity should be returned to us at once. Very respectfully yours ^kcM^. Zi^. /"foAmltcyyi, Cashier We have this day made the following remittances to out-of-town banks for credit. Enter them in the remittance register. To Chemical National Bank, New York. Check of C. W. Ellis, dated Feb. 26, on Ninth National Bank, Brook- lyn, indorsed by E. L. Brown, for fllOO; check of Daniel L. Coon, dated Feb. 25, on Union Bank, Peekskill, indorsed by C. W. Gray, for 62 BOOKKEEPING $2500; check of D. A. McMillan, dated Feb. 24, on Union Bank, Peekskill, indorsed by Bailey & Bailey, for $1650 ; check of Arthur R. Briggs & Co., dated Feb. 24, on Second National Bank, Brooklyn, indorsed by Novelty Mfg. Co., for $9250 ; check of Brown Bros., dated Feb. 23, on Second National Bank, Brooklyn, indorsed by D, E. Avery, for $1162.95 ; check of Wilson & Co., dated Feb. 25, on Second National Bank, Brooklyn, indorsed by D. E. Avery, for $1436.52. To Farmers Bank, Albany. Check of Hillis Mfg. Co., dated Feb. 25, on Farmers Bank, indorsed by Temple & Co., for $1500 ; check of R. E. Porter, dated Feb. 24, on Commercial Bank, Troy, indorsed by D. E. Avery, for $1349.20; check of Garson & Myers, dated Feb. 25, on Merchants Bank, Utica, indorsed by J. O. Baker, for $1400. To Chase National Bank, Providence. Check of Warren & Sprague, dated Feb. 24, on Second National Bank, Providence, indorsed by J. H. Crandall, for $1500 ; check of J. M. Evans, dated Feb. 23, on Union Bank, Providence, indorsed by J. H. Crandall, for $2400 ; check of Whitman & Smith, dated Feb. 24, on Chase National Bank, Providence, indorsed by Brown Bros., for $4500.50. To Ninth National Bank, Hartford. Check of E. L. Conway & Co., dated Feb. 23, on City Bank, Hart- ford, indorsed by Decker Bros., for $4500 ; check of Wheeler Mfg. Co., dated Feb. 23, on Fourth National Bank, Hartford, indorsed by Dorman & Co., for $3250; check of Freeman & Co., dated Feb. 24, on Ninth National Bank, indorsed by Briggs, Slote & Co., for $3250. To Alliance National Bank, Springfield. Check of Wheeler & Wilson, dated Feb. 25, on Eliot National Bank, Springfield, indorsed by Fulton Boiler Works, for $4792.50 ; check of Salisbury & Gray, dated Feb. 24, on National City Bank, Northampton, indorsed by Charles J. Kennedy, for $1621.40 ; check of E. L. Howard, dated Feb. 23, on Bay State Bank, Worcester, indorsed by Traders National Bank, Buffalo, for $1324.40 ; check of Simpson & Frey, dated Feb. 23, on Bay State Bank, Worcester, indorsed by Traders National Bank, Buffalo, for $1142.60. To Fourth National Bank, Chicago. Check of Jones Dairy Co., dated Feb. 24, on Fourth National Bank, indoi-sed by D. W. Manning & Son, for $4685 ; check of Raymond & BANKraG 63 Son, dated Feb. 24, on First National Bank, St. Louis, indorsed by Alliance National Bank, Springfield, for $1427.52 ; check of Armour & Co., dated Feb. 23, on Commercial Bank, Cincinnati, indorsed by Chase National Bank, Providence, for 13142.50. To Traders National Bank, Buffalo. Check of R. H. White & Co., dated Feb. 25, on Traders National Bank, indorsed by Mason & Hamlin, for $1600; check of E. W. Bloser, dated Feb. '24, on Traders National Bank, indorsed by A. J. Graham, for $750 ; check of Cushman Bros., dated Feb. 23, on Traders National Bank, for $17,500 ; check of A. L. Gilbert, dated Feb. 23, on Com- mercial B.ank, Rochester, N.Y., indorsed by Alliance National Bank, Springfield, for $372.70. To Bank of Commerce, Baltimore. Check of J. W. Walker, dated Feb. 24, on Bank of Commerce, indorsed by Mason & Hamlin, for $400 ; check of J. E. Seaver, dated Feb. 23, on Bank of Commerce, indorsed by Mason & Hamlin, for $1450; check of H. G. Healey, dated Feb. 24, on Bank of Commerce, indorsed by D. E. Avery, for $1725; check of J. A. Kinsley, dated Feb. 23, on Union Bank, Washington, indorsed by Chase National Bank, Providence, for $4126.30 ; check of D. Appleton & Co., dated Feb. 23, on Central National Bank, Paterson; N. J., indorsed by Fourth National Bank, Chicago, for $3162.50; check of Charles H. Dean, dated Feb. 25, on Bank of Commerce, indorsed by W. I. Pratt, for $1300. To Manufacturers and Traders Bank, Philadelphia. Draft of Union Bank, Schenectady, dated Feb. 23, on First National Bank, Philadelphia, indorsed by J. H. Crandall, for $700.50 ; draft of Commercial Bank, Albany, dated Feb. 21, on Manufacturers and Traders Bank, indorsed by Taylor Bros., for $8500. Letters requesting Immediate Returns. — When paper is sent for collection to out-of-town banks that are not our regular agents or corre- spondents, it is usually accompanied by letters asking for immediate returns. The model on page 64 is suggestive of the form of letter used. The note teller has advised you, by means of charge tickets, of the following debits to out-of-town banks. Enter these items in the remit- tance register. Alliance National Bank, Springfield, for discount No. 902, $18,500 ; Alliance National Bank, Springfield, for discount No. 869, $32,400; L 64 BOOKKEEPING Farmers Bank, Albany, for discount No. 895, $28,890 ; Chemical National Bank, New York, for the proceeds of collection No. 723, $1004.25 ; Chase National Bank, Providence, for the proceeds of collection No. 726, $4896; Chase National Bank, Providence, for the proceeds of collection No. 742, $5195 ; Bank of Commerce, Baltimore, for the proceeds of collection No. 743, $1249. Letter requesting Immediate Returns W. J. MILLER, President J. H. MERRILL, Vice President D. M. GOSNELL, Cashier The Commercial National Bank • Boston, Mass., S'eA. 7, 19 Mr. W-. d. f-fvYiAyvouyv, Cashicr Dear Sir, — I inclose for COLLECTION and RETURNS the paper listed below. NUMBER PAYER AMOUNT 6^2 la. /if, ^iemmAf V ^. Roo^eA>-dt V ^cyyi 7/S 70 60 Unless otherwise instructed, properly protest and return to us at once all paper not paid in due course. Yours very truly 3. m. ^omveR, Cashier The note teller has also advised you that collection No. 756 has been paid and credited to Farmers Bank, Albany, at its face, $79.23. Extend the balances on the remittance register as explained March 1. Present your remittance register to your instructor for approval. BANKING 65 Transactions for the Individual Bookkeeper, March 2 Enter the deposits from customers in the individual ledger. The amounts are found on the receiving teller's daily check sheet. The note teller has turned over credit tickets for the proceeds of the following collection paper collected for depositors to-day: Nos. 723, 726, 742, 743, 800, and 811. Enter the proceeds of these collections in the Deposits column of the individual ledger as explained March 1. Credit tickets have also been received from the note teller for paper discounted for customers to-day. Enter the proceeds of these notes to the credit of depositors in the individual ledger. The total of checks certified to-day as reported by the paying teller is $29,064. Enter to the credit of Certified Checks as explained March 1. Checks of depositors have been received by the paying teller and turned over to the individual bookkeeper as shown on the paying teller's daily check sheet. Enter these items in the individual ledger as explained March 1. Charge tickets have been received from the paying teller on account of certified checks. Refer to the certified check book for the amounts and enter them in the individual ledger. Checks of depositors have been received by the receiving teller, entered on his check sheet, and turned over to the individual book- keeper. A list of these checks with the names of the drawers is given below. Enter these items in the individual ledger. Wyckoff, Seamans & Benedict, $6200, $2400 ; Mace, Gilmore & Co., $1100; F. E. Sherman, $3262.90; C. E. Selover & Co., $3040.50; J. O. Baker, $6270, $5210; Thomas Bennett & Co., $5450; E. V. Buckley & Son, $9250; Powers & Sprague, $1600; Lane, Rowell & Co., $14,270, $640.70- Fernald, Son & Co., $12,200; Spencer, Mead & Co., $750, $2500. The following depositors' checks have come in from the clearing house. D. E. Avery, $1205 ; J. O. Baker, $916 ; Thomas Bennett & Co., $500; E. y. Buckley & Son, $702.50 ; J. H. Crandall, $19,500 ; Decker Bros., $620.50 ; C. E. Denison, $40.90 ; Fields Milling Co., $700 ; Free- man, Austin & Co., $1200; E. L. Howard, $240; Janis, Cooper & Tremper, $700, $800 ; Lane, Rowell & Co., $1200, $1500 ; Mace, Gil- more & Co., $5260; W. I. Pratt, $60; Powers & Sprague, $75.90; C. E. Selover & Co., $370.50; Spencer, Mead & Co., $2160; Wyckoff, 66 BOOKKEEPING Seamans & Benedict, f 17,300; F. E. Sherman, 11764; Certificate of Deposit, $2500 ; Certified Checks, $17,500. Certified checks are credited when issued and debited when paid. Debit Certified Checks for the $17,500 above and show the payment in the certified check book. The correspondence clerk has turned over the following depositors' checks received from out-of-town banks. D. B. Roberts, $1272.50 ; Charles J. Kennedy, $1100.40; Fernald, Son & Co., $1500.90 ; Spencer, Mead & Co., $1100.50 ; Wyckoff, Sea- mans & Benedict, $7250. Extend the balances of the customers' accounts in the individual ledger. Foot and prove the individual ledger. Present your individual ledger to your instructor for approval. Transactions for the General Bookkeeper, March 2 Make the records in the general cash book as outlined March 1. 1. Enter the items from the discount register. 2. Enter the items from the discount tickler. 3. Enter the items from the remittance register. 4. Enter the items from the individual ledger. 5. From the collection tickler credit Collection and Exchange for our collection charges on collections Nos. 723, 726, 742, and 743. 6. From the receiving teller's daily check sheet credit Collection and Exchange for the collection items listed there. 7. From the paying teller's daily check sheet debit Expense for the total expense items, and credit Collection and Exchange for the totals of the Sundry Collection and Exchange and Exchange columns. Prove the cash. The amount of bills and coin on hand is $215,819.76. Clearing-house checks on hand amount to $49,710. Cash items (city and foreign) on hand amount to $7848.10. Rule and foot the general cash book. Post the general cash book to the general balance ledger. Extend the new balances on the general balance ledger. Prove the general balance ledger. Present all your books to your instructor for approval. Transactions for the Discount Clerk, March 3 The following paper has been offered and accepted for discount. No. 932. Note of Mason & Hamlin, at 30 days from Feb. 24, payable at our bank, discounted for J. O. Baker, for $2500. Proceeds credited. BANKING 67 No. 933. Note of Zaner & Bloser, at 60 days from Jan. 25, payable at our bank, discounted for Fields Milling Co., for $4250. Proceeds credited. No. 934. Note of Gilbert Bros., at 30 days from March 1, payable at Commercial Bank, Rochester, N.Y., indorsed by Cushman Bros., dis- counted for Freeman, Austin & Co., for $5250. Collection and exchange, $5.25. Proceeds credited. No. 935. -Note of D. Appleton & Co., at one month from Feb. 25, payable at First National Bank, Springfield, indorsed by M. E. Graham, discounted for E. L. Howard, for $7352. Collection and exchange, $7.35. Proceeds credited. No. 936. Note of M. O. White, at two months from Feb. 1, payable at Traders National Bank, Buffalo, discounted for D. E. Avery, for $9000. Collection and exchange, $9. Proceeds credited. No. 937. Note of D. B. Roberts, at three months from Jan. 1, dis- counted for C. E. Selover & Co., payable at our bank, for $7000. Collection and exchange, $7. Proceeds credited. No. 938. Note of C. A. Wesp, at three months from Jan. 1, discounted for C. E. Denison, payable at Commercial Bank, Rochester, N.Y., for $8750. Collection and exchange, $8.75. Proceeds credited. Rule and foot the discount register. Prove the footings. Post the entries to the discount tickler. Traksactions for the Collection Clerk, March 3 The following is a list of the paper received for collection to-day. No. 819. Sight draft dated March 1, on Walker Bros., City, for $12,265. To be collected for Traders National Bank, Buffalo. No. 820. Sight draft dated March 1, on Morgan & Allen, City, for $5723.60. To be collected for Manufacturers and Traders Bank, Philadelphia. No. 821. Sight draft dated March 1, on Gilman & Brown, City, for $7321. To be collected for Ninth National Bank, Hartford. No. 822. Sight draft dated March 2, on Healey & Kinsley, City, for $3721.50. To be collected for Chase National Bank, Providence. No. 823. Sight draft dated March 2, on F. E. Smith, City, for $2129.74. To be collected for Farmers Bank, Albany. No. 824. Note signed by Curtis & Bender, dated Feb. 8, at 30 days, payable at Merchants National Bank, City, for $5625. To be collected for Alliance National Bank, Springfield, 68 BOOKKEEPING No. 825. Note signed by Arnold & Co., payable two months from Jan. 4, at Park Square National Bank, City, for $1365. To be collected for Spencer, Mead & Co. No. 826. Note signed by Ray & Co., payable at 60 days from Jan. 4, at Union Trust Co., City, for $3000. To be collected for J. O. Baker. No. 827. A draft dated Jan. 8, at 60 days from date, on Joiner & Co., payable at Briggs Bank, Westfield, for $175.40. To be collected for Thomas Bennett & Co. No. 828. Draft dated Feb. 1, at 30 days from date, on Houghton & Button, City, for $426.50. To be collected for J. H. Crandall. No. 829. Sight draft dated March 3, on E. L. Grant, City, in favor of Freeman, Austin & Co., for $725. To be collected for Freeman, Austin & Co. No. 830. Note of Gardner & Son, at 30 days from Feb. 16, payable at Park Square National Bank, City, with interest, for $2000. To be collected for Wyckoff, Seamans & Benedict. No. 831. Note of Frank Miller, at three months from Jan. 1, for $1724.50, payable at Union Trust Co., City. To be collected for Farmers Bank, Albany. No. 832. Note of I. A. Wilcox, at two months from Feb. 2, payable at Merchants Bank, St. Louis, Mo., with interest, for $3000. To be collected for Chase National Bank, Providence. Post the collection register to the collection tickler. Transactions for the Receiving Teller, March 3 The following are the regular deposits for to-day. Wyckofe, Seamans & Benedict, V $4900, B $1700, B $1200, B $1400, X $1100, #61 $750, #4 $300 ; less collection, $1.10. Certificate of Deposit, V $200, V $400. Spencer, Mead & Co., #7 $500, #9 $1720.40, #21 $850.60. F. E. Sherman, V $500, B $1900, B $5273.50. C. E. Selover & Co., #27 $60, ^ $^300, B $1950, #3 $1430.40. J. O. Baker, V $1100, B$1340, #11 $1500, #7 $1324. Thomas Bennett & Co., X $1590.40 ; less collection, $1.60. Decker Bros., X $2462.50 ; less collection, $2.45. E. V. Buckley & Son, V $4900, ^/ $60, #12 $2163.40. D. E. Avery, X $1590.60 ; less collection, $1.60. J. H. Crandall, B $11,290, B $14,360 ; #7 $9353.60, O $240.50, O $130.60. BANKING 69 Freeman, Austin & Co., O ^7320, #9 812,950, #14 $7110.50. Charles J. Kennedy, V '^5800, X $1724.50 ; less collection, $1.75. C. E. Denison,V $4900, V $16.50, #1 $1150.60, #7 $1200, #15 $1900, #31 $6200. Fernald, Son & Co., V $2400, B $500, B $6000. Fields Milling Co., X $240, x $1200, x $1500 ; collection, $2.95, paid in cash. Janis, Cooper & Tremper, X $1500, X $3000 ; collection, $4.50, paid in cash. Powers & Sprague, V$1100, V $260, X $5000, x $50.32; collection, $5, paid in cash. Lane, Rowell & Co., O $1212.50. Foot the columns of the receiving teller's daily check sheet. Make out Recapitulation and Proof blank. Balance on hand; coin, $848.95; bills, $18,800. You have given to the paying teller during the day $7200. Transactions for the Paying Teller, March 3 The following are lists of checks paid by the paying teller to-day. 1. Checks on our bank: Certificate of Deposit, $1000; E. L. Howard (New York draft), $562.50 ; Mace, Gilmore & Co. (New York draft), $1100 ; W. I. Pratt (New York draft), $4150; Spencer, Mead & Co. (New York draft), $62.50; Freeman, Austin & Co., $6409.50; E. V. Buckley & Son, $4150.90; D. B. Roberts, $9250; F. E. Sherman, $800; Lane, Howell & Co., $2150 ; E. L. Howard, $8790.50. 2. Checks on clearing-house banks : Old Colony National Bank, $1200 ; Park Square National Bank, $1500; Bunker Hill National Bank, $2100 ; SufPolk National Bank, $1100.50; Colonial National Bank, $3160; Shoe and Leather Bank, $3750; Third National Bank, $900 ; Metropolitan National Bank, $2160.50 ; Citizens National Bank, $1325; Eliot National Bank, $5260; New England National Bank, $150 ; Mechanics Bank, $52.60. 3. Checks on out-of-town banks : Traders National Bank, Buffalo, $400 ; collection, 50/. Bank of Commerce, Baltimore, $160, $200 ; collection, 40/. Manufacturers and Traders Bank, Philadelphia, $750, $1200; collection, $2. Fourth National Bank, Chicago, $500, $1500 ; collection, $2. Merchants Bank, New York City, $1200, $1100 ; collection, $2.25. Farmers Bank, Albany, 70 BOOKKEEPING $100 ; collection, 15/. Union Bank, Albany, $400, $200 ; collection, 75/. Merchants and Traders Bank, Providence, $1500 ; collection, $1.50. Peoples Bank, Worcester, $1200; collection, $1.25. 4. Checks on banks in our city not members of the clearing-house association : Powers Bank, $400. Sold the following drafts on Chemical National Bank, New York. 1. Sold for check : E. L. Howard, $562 ; exchange, 50/. Mace, Gilmore & Co., $1098.90 ; exchange, $1.10. W. I. Pratt, $4145.85; exchange, $4.15. Spencer, Mead & Co., $62.25 ; exchange, 25/. 2. Sold for cash : Smith, Perkins & Co., $1475 ; exchange, $2. Hendricks & Son, $1100; exchange, $1.25. Hopkins & Weeks, $350; exchange, 50/. E. V. Rhodes, $100; exchange, 25/. Certified the following checks : Freeman, Austin & Co., $1200 ; C. E. Selover & Co., $3200 ; Thomas Bennett & Co., $2700. Pay cashier's charge tickets for the following items : Coal, $42.50 ; telephone service, $40.50 ; cleaning bank, $9.50. The items for the Sundry Receipts column are as follows : Bills and coin from yesterday's proof, $187,006.03 ; bills and coin received from the receiving teller at the close of yesterday's business, $18,712; bills and coin received from the receiving teller during the day, $7200 ; bills and coin received from the note teller at the close of yesterday's business, $10,101.73; received from the clearing house for to-day's exchanges, $14,503.50. Make out the paying teller's proof. Cash on hand, $174,451.06. Foot the certified check book. Submit your paying teller's records to your instructor for approval. Transactions for the Note Teller, March 3 Make records in the discount tickler for the paper disposed of to-day. In the Remarks column write : For No. 897, Protested, For No. 882, Paid, 3/S. For No. 883, Certified, C, JST. B. For No. 875, Certified, S. ^ L. B, Rule and foot the discount tickler. BANKIKG 71 Advices have been received that the following collections have been paid. Make the proper records in the collection tickler. In the Remarks column write: For No. 752, Charged to Alliance National Bank. Bank's collec- tion^ 75fi; our collection^ 75 f. For No. 757, Charged to Traders National Bank. Bank's collec- tion^ $1.75; our collection., $2. Collections Nos. 765, 819, 820, 829, 822, 823, and 828 have been paid. In the Remarks column of the collection tickler write : For No. 765, Paid, 3/S. For No. 819, Paid, 3/3; collection, $12.25, For No. 820, Paid, 3/3; collection, $5.75. For No. 829, Paid, 3/3. For No. 822, Paid, 3/3; collection, $3.75. For No. 823, Paid, 3/3; collection, $2.15. For No. 828, Paid, 3/3. Collection No. 821 has been protested. In the Remarks column write: Protested, 3/3; fees, $3.25. Transactions for the Correspondence Clerk, March 3 This morning's mail contained the following remittances from the banks named, for credit : Chemical National Bank, New York $1350.25 Alliance National Bank, Springfield 3200.90 Traders National Bank, Buffalo 3160.50 Bank of Commerce, Baltimore 4200. Manufacturers and Traders Bank, Philadelphia 7371.80 Chase National Bank, Providence 5150.20 Ninth National Bank, Hartford 2625.80 Fourth National Bank, Chicago 1200.52 The following are drafts on Chemical National Bank, New York, as per stubs in the draft book. No. 441, $562; No. 442, 11098.90; No. 443, 11475; No. 444, 14145.85; No. 445, fllOO; No. 446, |100; No. 447, 1350; No. 448, $62.25. Enter the above drafts in the draft register. Foot the draft register and credit Chemical National Bank in the remittance register for the total. Check the amount transferred. 72 BOOKKEEPING We have this day made the following remittances to out-of-town banks for collection. In the To Whom Sent column of the tickler write the name of the bank to which the paper is sent. No other record is needed at this time. Discounts Nos. 921 and 928 sent to Alliance National Bank, Springfield; discount No. 926 sent to Fourth National Bank, Chicago ; discount No. 929 sent to Ninth National Bank, Hartford ; discount No. 925 sent to Manufacturers and Traders Bank, Philadelphia; collection No. 827 sent to Traders National Bank, Buffalo. We have this day made the following remittances to out-of-town banks for credit. To Farmers National Bank, Albany. Check of Sears & Co., dated Feb. 27, on Farmers Bank, indorsed by J. W. Cook, for $100 ; check of Ginn & Co., dated Feb. 27, on Union Bank, Albany, indorsed by Day Bros., for $400; check of Talton Bros., dated Feb. 26, on Union Bank, Albany, indorsed by Howard & Brown, for $200 ; check of Seymour & Co., dated Feb. 25, on First National Bank, Albany, indorsed by Wyckoff, Seamans & Benedict, for $1100. To Chemical National Bank, New York. Check of C. G. Warner & Co., dated Feb. 25, on Ninth National Bank, Brooklyn, indorsed by Thomas Bennett & Co., for $1590.40 ; check of W. C. Lord, dated Feb. 26, on Second National Bank, Brook- lyn, indorsed by Decker Bros., for $2462.50; check of AV. L. Howard, dated Feb. 24, on Merchants Bank, New York City, mdorsed by Frey «& Co., for $1200 ; check of A. L. Allen, dated Feb. 25, on JNlerchants Bank, New York City, indorsed by S. C. Williams, for $1100 ; check of M. M. Shea, dated Feb. 26, on City National Bank, New York, indorsed by D. E. Avery, for $1590.60. To Manufacturers and Traders Bank, Philadelphia. Draft of Union Bank, Poughkeepsie, dated Feb. 25, on Bank of the Republic, Philadelphia, indorsed by Cliarles J. Kennedy, for $1724.50; draft of City Bank, Utica, dated Feb. 25, on First National Bank, Phila- delphia, indorsed by Fernald, Son & Co., for $1500; draft of Merchants Bank, Rochester, N.Y., dated Feb. 25, on Manufacturers and Traders Bank, indorsed by Smith & Co., for $1200 ; draft of Commercial Bank, BACKING 73 Buffalo, dated Feb. 26, on Manufacturers and Traders Bank, indorsed by John Stuart, for $750. To Traders National Bank, Buffalo, N.Y. Check of J. W. Cody, dated Feb. 27, on Traders National Bank, indorsed by Charles Good, for $400 ; check of W. D. Adams, dated Feb. 27, on Central National Bank, Rochester, N.Y., indorsed by Fields Milling Co., for |1200; check of W. D. McKay, dated Feb. 25, on Merchants Bank, Rochester, N.Y., indorsed by Fields Milling Co., for 1240. To Bank of Commerce, Baltimore. Check of C. W. Smith, dated Feb. 24, on Bank of Commerce, indorsed by C. W. White, for $160; check of Perdy & Co., dated Feb. 23, on Bank of Commerce, indorsed by Allen & Co., for $200 ; check of Carter & Co., dated Feb. 24, on Central Bank, Baltimore, indorsed by Janis, Cooper & Tremper, for $3000; check of Clay & Co., dated Feb. 25, on Bank of Commerce, indorsed by Janis, Cooper & Tremper, for $1500. To Fourth National Bank, Chicago. Draft of Briggs Bank, Westfield, dated Feb. 28, on Commercial Bank, Chicago, indorsed by Powers & Sprague, for $50.32 ; draft of Merchants Bank, Providence, dated Feb. 24, on Central National Bank, Chicago, indorsed by Powers & Sprague, for $5000 ; check of Simpson & Frey, dated Feb. 24, on Fourth National Bank, indorsed by Frost & Co., for $500 ; check of W. A. Harris, dated Feb. 24, on Fourth National Bank, indorsed by W. W. West, for $1500. To Chase National Bank, Providence. Check of Graham & Co., dated Feb. 25, on Merchants and Traders Bank, Providence, indorsed by C. W. Hunter, for $1500; check of White, Hayes & Co., dated Feb. 24, on Chase National Bank, indorsed by Chemical National Bank, New York, for $1350.25. To Alliance National Bank, Springfield. Check of Hyde & Page, dated Feb. 27, on Peoples Bank, Worcester, indorsed by Fourth National Bank, Chicago, for $1200.52. The note teller has advised you of the following charges to banks. Alliance National Bank, Springfield, proceeds of collection No. 752, $721.75 ; Traders National Bank, Buffalo, proceeds of collection No. 757, $1748. 25. 74 BOOKKEEPING Letter of Advice and Remittance. — When banks remit by New York draft for collections a form similar to the following is used. F. E. ROGERS, President S. C. WILUAMS, Vice President ' CHAS. H. PALMER. Cashier K/Zie (chemical >^atlonal ^Jjank J^eiv yonk, ^eA. 2S, 79— fi'-. UK €U^, Ssq., CasAlef ^A>t(yyiial cAatuyyuA.1 SoLnk JS(>^t(yyi, 7lla^^'. £bean Sir, Please find heneiuitk oun draft ^o, //^-T on S'k& cAaluyyial BamJo o-f R&cLeAn/JdA/yyv for ^///^.^^ in pay= ment of collections as stated 6eloiv, YOUR NO. DATE OF YOUR LEHER PAYER AMOUNT 6/^ <^^^. / R. UK ffcdt /060 720 /O fS. €. li^tiia^n.2^ ^72 60 72^ /o (l. E S've.if V d'o^ 700 7^2 /f €. UK ^n^oM^ V' ^. Uotal collected 6000 7722 60 Uess Collection and Exchange >Ji mount remitted 7 72 77f^r 7S Very respectfulli/ yours ^kaof. fi^. ^aZ'yyv&v, Qashier The note teller has also advised you that the following collections have been paid and the proceeds credited to the banks named. Proceeds of No. 752, credited to Traders National Bank, Buffalo, $721 ; proceeds of No. 757, credited to Alliance National Bank, Spring- field, $1746.25 ; proceeds of No. 819, credited to Traders National Bank, Buffalo, $12,252.75 ; proceeds of No. 820, credited to Manufacturers and Traders Bank, Philadelphia, $5717.85 ; proceeds of No. 822, credited to Chase National Bank, Providence, $3717.75; proceeds of No. 823, credited to Farmers Bank, Albany, $2127.59. BANKING 75 The note teller advises that collection No. 821 has been protested and the protest fees, $3.25, charged to Ninth National Bank, Hartford. Extend the balances in the remittance register. Transactions for the Individual Bookkeeper, March 3 Enter the deposits from customers in the individual ledger from the receiving teller's daily check sheet. The note teller has turned over credit tickets for the proceeds of collection paper, collected for depositors to-day as follows : Nos. 765, 828, and 829. Enter the proceeds of these collections in the individual ledger. Credit tickets have also been received from the note teller for paper discounted for customers to-day. Enter these notes to the credit of depositors directly from the discount register. The total of checks certified to-day, as reported by the paying teller, is $7100. Enter this amount to the credit of Certified Checks. Checks of depositors have been received by the paying teller and turned over to the individual bookkeeper, as shown on the paying teller's daily check sheet. Enter these items in the individual ledger. Charge tickets have been received from the paying teller on account of certified checks. Refer to the certified check book for these amounts, and enter them in the individual ledger. Checks of depositors have been received by the receiving teller, entered on liis sheet, and turned over to the individual bookkeeper. A list of these, with the names of the drawers, is given below. Enter the items in the individual ledger. Spencer, Mead & Co., $1900 ; Wyckoff, Seamans & Benedict, $5273.50, $1950, $14,360; E. V. Buckley & Son, $1400, $1200; C. E. Selover & Co., $1700 ; Fernald, Son & Co., $1340 ; Powers & Sprague, $500; Decker Bros., $11,290; F. E. Sherman, $6000. Checks of depositors have come in from the clearing house as follows : Wyckoff, Seamans & Benedict, $17,700; Spencer, Mead & Co., $15,000, $1800; F. E. Sherman, $960.50; C. E. Selover & Co., $300; D. B. Roberts, $750; Powers & Sprague, $1200; Janis, Cooper &; Tremper, $2400; Mace, Gilmore & Co., $1500; Lane, Rowell & Co., $1250 ; D. E. Avery, $900 ; J. O. Baker, $1700 ; Thomas Bennett & Co., $3100 ; E. V. Buckley & Son, $9150.60 ; J. H. Crandall, $45,120 ; Decker Bros., $15,200; C. E. Denison, $25,300; Fernald, Son & Co., $1300 ; Fields Milling Co., $10,500. 76 BOOKKEEPING The correspondence clerk has turned over depositors' checks received from out-of-town banks. Wyckoff, Seamans & Benedict, 1625.80, $2000 ; Charles J. Kennedy, $150.20, $2500 ; W. I. Pratt, $2500. Extend the balances of customers' accounts in the individual ledger. Foot and prove the individual ledger. Transactions for the General Bookkeeper, March 3 Make the records in the general cash book for the following. 1. Items from the discount register. 2. Items from the discount tickler. 3. Items from the remittance register. 4. Items from the individual ledger. 5. From the collection tickler credit Collection and Exchange for our collection charges on tho following collections: Nos. 752, 757, 819, 820, 822, and 823. 6. From the receiving teller's daily check sheet credit Collection and Exchange for the collection and exchange items listed there. 7. From the paying teller's daily check sheet debit Expense for the total expense items, and credit Collection and Exchange for the totals of the Exchange and Sundry Collection and Exchange columns. 8. From the collection tickler credit Protest Fees for $3.25, the notary's charges for protesting collection No. 821. 9. From the discount tickler debit Protested Paper for discount No. 897, $29,900. Note. — Nearly all national banks have some bank official qualified as a notary public. In the majority of cases this official receives all protest fees which are paid to the bank for protesting paper. He is usually a person of high standing in the bank, such as cashier, discount clerk, etc. When these fees go to an official of the bank they are charged to Protest Fees in the general balance ledger. At the end of any given period the notary may draw such fees by check. No protest fees are entered on discount No. 897 at this time. They are not recorded until collected, unless they are charged to an out-of-town bank. Prove the cash. Tho amount of bills and coins on hand is $222,624.52 ; clearing-house checks, $33,997.04 ; cash items, $15,229.20. Rule and foot the general cash book. Post the general cash book to the general balance ledger. Extend the new balance in the general balance ledger. Prove the general balance ledger. Submit your book to your instructor for approval. BANKING 77 Closing the Banking Set Inventories, March 3, 19 — Real Estate : Banking house and lot $27000 Furniture and Fixtures : Estimated value $12500 United States Bonds : At cost $200000 Stocks and Bonds : Present value ' $63750 Interest and Discount : Accrued on United States bonds $650 Trial Balance. — No trial balance is necessary in this set, as the general balance ledger is in itself a trial balance of the general ledger accounts of the bank. Dividends. — It is customary for national banks to declare dividends semiannually and close their books. Before any dividend can be declared every national bank must carry at least one-tenth part of its net profits for the half-year immediately preceding to its surplus fund, until the same shall amount to 20% of its capital stock. After the surplus fund has been deducted the directors may declare a dividend of so much of the profits remaining as they deem expedient. Statement of Resources and Liabilities. — A statement of resources and liabilities is usually made out daily in all large national banks. Such a statement gives the condition of all the general ledger accounts of the bank, together with a detailed exhibit of the cash account. All items of information entered on this statement are properly classified, thus furnishing data for the computation of the bank's reserve, and for the necessary reports to the Comptroller of Currency. The National Bank Act also requires that every national bank shall make to the Comptroller of the Currency not less than five reports during each year. These reports must be made in accordance with a prescribed form and be published in a newspaper where the bank is established. They exhibit in detail the resources and liabilities of the bank, the amount of each dividend, and the net earnings in excess thereof. In this set you will make but one general statement of resources and liabilities. Carefully study the form given on pages 78 and 79, and then proceed to make your statement of resources and liabilities. 78 BOOKKEEPING Statement of (Commercial >^citional cBank, Cash Resources Bills and Coin Exchanges for Clearing House Cash Items (City and Foreign) Bills Receivable Bills Discounted Protested Paper Stocks and Bonds U.S. Bonds with U.S. Treasurer (per inventory) Premium on U.S. Bonds Other Stocks and Bonds (per inventory) Properties Real Estate (per inventory) Fixtures (per inventory) Out^of-Town Banks, Dr. Due from Reserve Agents United States Treasurer 5% Redemption Fund Due from U.S. Treasurer Overdrafts 243700 55166 6240 405750 7200 150000 6000 103500 17500 5200 7500 1000 40 305107 412950 259500 22700 22940 100000 8500 620 1132318 72 32 ft 40 60 40 Statement of So/n/nefcia/ ^^ational ^ank. Losses Current Expenses Salaries, due and paid Taxes, due and paid Incidental Expenses, total paid Depreciation Furniture and Fixtures Real Estate Dividends, 4% of Capital Stock Surplus Fund, 10% of Net Gain Undivided Profits, balance of Net Gain 4500 960 240 150 500 93 5700 650 IGOOO 2415 5735 30501 09 93 14 BANKING 79 Resources and Liabilities SBoston, .^ass., Marcli 3, 19 — LiaUlities • Capital Stock 400000 Surplus Fund 93630 16 Undivided Profits 9250 60 Circulation 160000 Out-of-Town Banks, Cr. 12650 90 Deposits Cashier's Checks Certificates of Deposit Certified Checks Individual Deposits Protest Fees 4050 17500 19295 401750 90 60 40 442696 140 90 Undinided Prqfits {Net Gain) 24150 16 ^^^^^^^ 1132318 72 Losses and Gains -" SBoston, ^m/TLass., Marcli 3, 19 Gains Revenue Receipts Interest and Discount, net amount earned Collection and Exchange, net amount earned Interest (per inventory), due on U.S. Bonds Stocks and Bonds, increase in value 16500 12500 600 29501 1000 09 30601 09 80 BOOKKEEPING Hand your statement of resources and liabilities to your instructor for approval. Statement of Losses and Gains. — Preparatory to declaring dividends and closing the ledger make a statement of losses and gains. Before proceeding with this statement carefully study the form given on pages 78 and 79. The net gain will be divided as follows: To Dividend account, 4<^ of the capital stock; to Surplus Fund, 10% of the net gain ; to Undivided Profits, the balance of the net gain. Hand your statement of losses and gains to your instructor for approval. Closing the Ledger. — When a bank employs the form of ledger used in this set, the loss and gain accounts should be closed by journal entries. To take the gains out of the several gain accounts and carry them to the Loss and Gain account, an entry similar to the following should be made in the journal. Interest and Discount Collection and Exchange Stocks and Bonds Interest To Loss and Gain Net amount earned Net amount earned Increase in value Due on U.S. bonds Total gains 1C500 12500 1000 500 40 30501 09 To take the losses out of the several loss accounts and carry them to the Loss and Gain account, an entry similar to the following should be made in the journal. Loss and Gain To Expense Salaries Taxes Real Estate Furniture and Fixtures Total losses Incidental expenses Due and paid Due and paid Depreciation Depreciation C350 93 240 4500 960 600 150 93 To close the Loss and Gain account, an entry similar to the following should be made in the journal. Loss and Gain To Dividends Surplus Fund Undivided Profits Net gain 4% of capital stock 10% of net gain Balance of net gain 24150 16 16000 2415 5735 After making the necessary entries to close the loss and gain accounts post them to the general balance ledger. Dividends are usually paid by cashier's checks. Dividend account is debited and Cashier's Checks account is credited when dividends are BANKING 81 paid. You will omit the dividend checks, as no list of stockholders has been given. Extend the new balances in the general balance ledger. Prove the general balance ledger. Prove the correctness of the out-of-town banks ledger by an abstract similar to the following. ^- Abstract of Out-of-Town Banks Ledger, March 3, 19 Union Bank, Troy Traders National Bank, Buffalo Chemical National Bank, New York Merchants Bank, Philadelphia Mechanics National Bank, Baltimore City Bank, Providence Balance as per Out-of- Town Banks in G. B. L. 7200 31250 2692 1790 429.34 906 1200 42934 See if Deposits account in the general balance ledger agrees with the individual ledger. Prove the discount tickler. The total of the unpaid notes shown in the discount tickler should equal the balance of Bills Discounted account in the general balance ledger. Present all your books to your instructor for examination. 82 BOOKKEEPING THE CLEARING HOUSE A Clearing House is an institution organized by associated banks to simplify and facilitate daily exchanges of items and settlements of balances resulting from such exchanges. Many clearing-house associations also look after the mutual welfare of their members by prescribing rules to govern in various important matters ; as, uniform rates of collection and exchange, interest, etc. Origin. — Before clearing houses were organized each bank in a given city had to keep an account with practically every other commercial bank in that city. Statements of these accounts were made up daily and given to "runners," who took them, together with the items of charge, to the debtor banks for settlement. All amounts were usually paid in gold. In the larger cities this work was very laborious and unsatisfactory. To facilitate matters these runners conceived the idea of meeting at a given point and adjusting balances. From these first crude gatherings has sprung the stupendous clearing-house system. The Officers of a clearing-house association are usually president, vice president, secretary, treasurer, manager, and clearing-house committee. Frequently there are one or more special committees ; as, conference committee, nominating committee, arbitration committee, etc. Preparing Exchanges for Delivery. — When exchangeable paper is received at a bank it is classified according to the bank at which it is payable. The work of assorting the items for delivery to the clearing house is facilitated by the use of a case of compartments. This case is provided with a compartment for each member of the clearing house. The compartments are designated by the clearing-house numbers of the banks. Before the items are placed in these compartments they are stamped with the receipted indorsement usually required by clearing-house associations. The form of this indorsement is not always the same, but it should always indicate the channel through which the paper has passed. Received Payment through the Boston Clearing House, Feb. 16, 19—. WiNTHROP National Bank. The above is a common form of indorsement used for items paid through the clearing house. BANKING 83 At the close of the day, or at intervals during the day, the exchanges are taken from the compartments, and the amounts listed on a blank entitled Exchange Slip^ as shown in the accompanying illustration. The first total on the ex- change slip represents the amount of exchanges received by No. 24 before the close of banking hours on Feb. 15, to be sent to the clearing house the following day. The addi- tional items represent the morn- ing exchanges which are received by mail or among the deposits before ten o'clock. The second total is, then, the amount of claims carried to the clearing house by No. 24, Faneuil Hall National Bank, against No. 22, the National Bank of Commerce. A separate exchange slip, appropriately labeled, is pre- pared for each member of the clearing house. Duplicate lists of all items taken to the clearing house are made by the bank and preserved for future reference. The totals of the exchange slips are next copied on a blank entitled Settling Clerk'' s State- ment. The Settling Clerk's Statement contains a printed list of the names and numbers of all the banks connected with the clearing-house association. The first debit column of this sheet is usually made up from the exchange slips at the close of each busi- ness day, thus completing the heaviest part of the work the day before clearing. On the morning of clearing the second debit column is filled out from the final totals of the exchange slips. The credit column is 1 EXCHANGED SIvIP NO. 22 COIVLIVIERCE KRONl NO. 24 Date S^&(^. /6, /^ 62¥-0 760 ^00 fO 7666 60 ^60 76 36^2 60 ^00 6600 /^2 SS ^ 6/ /200 ^0 660 2886/ 6^ 760 60 (fO 6^ 2^26/- 84 BOOKKEEPING Settling Clerk's Statement No. 37- NATIONAL BANK OF REDEMPTION Tuesday, May 20, 19 NO. BANKS FIRST DEBIT ADDITIONS TOTAL DEBIT BANKS CR. NO. 1 Massachusetts National G5198 11 29827 71 1 2 National Union 29767 29 19569 67 2 3 Old Boston National 1.3413 12 1904 81 3 4 State National 74646 39 46131 40 4 5 New England National 87391 81 79384 08 6 12 Atlantic National 17604 30 19678 91 12 13 Merchants National 92694 99 122665 24 13 15 National Hamilton 40635 19 20446 16 15 17 Second National 92069 05 199000 35 17 18 Atlas National 71649 76 30921 52 18 20 National Shawmut 642618 69 385833 63 20 21 National Exchange 84249 17 77924 75 21 22 Nat'l B'k of Commerce 130984 52 ^ ■ 249681 75 22 24 Faneuil Hall National 39426 09 5206 56 24 Z5 National Webster 1950 83 2251 64 25 26 Eliot National 214234 90 248014 63 26 28 Suffolk National 85573 82 39980 14 28 31 Freemans National 9192 09 19051 61 31 32 Boylston National 6854 45 13825 75 32 37 Nat'l B'k Redemption 37 39 First National 12132 91 66300 81 39 41 Nat'l B'k of Republic 171745 26 123536 76 41 C3 Mt. Veraon National 6345 06 2614 90 43 ^_6 National Security- 8697 70 10800 38 46 -iS Central National 89203 36 25580 27 49 CO Colonial National 21438 57 12175 44 50 51 Fourth National 36105 94 102526 31 61 52 Metropolitan National 13667 09 • 5600 66 52 53 Winthrop National 67338 76 10159 08 53 55 Mechanics National 8947 19 13280 66 55 56 Commercial National 14849 40 13940 64 56 100 Boston Clearing House 165844 36 411388 32 14 09 100 Footings 2416470 23 09 14 Balance Gain = 2409865 6605 0605 2409865 2416470 23 BANKING 85 left blank to be filled out at the clearing house when each settling clerk has received from the various members all the items to be paid by his bank. When the exchange slips have been completed, and the amounts have been transferred to the settling clerk's statement, each slip is attached to the package of items which it represents. Note. — The Boston banks have the settUng clerk's statement arranged with four columns, but these banks usually make use of but two columns, as shown on page 84. "W^ere but two columns are used only the final totals of the exchange slips are copied on the settling clerk's statement. The Check Ticket. — The amounts of the exchange slips are also entered on Check Tick- ets. A check ticket is made out for each member of the clearing-house association and delivered to the proper settling clerk at the clearing house to enable him to check off the amounts he receives from other banks, in case there is an error. The Credit Ticket. — Before going to the clearing house the settling clerk foots and proves the Total Debit column of the settling clerk's statement. If this footing is correct it should agree with the totals of the clearing-house checks on the receiving, paying, and note tellers' and correspondence clerk's daily check sheets. When this footing has been proved correct the settling clerk enters it on a Credit Ticket. J{o, 26 S/iot National, ^ank From No. 51 %Tourth ymA/atlonal t/janli Form of Credit Ticket LU LU No. 21. Boston Clearing House Credit National Exchange Bank S^eA. /6, I9_ f. If. BeyyidsA., Settling Clerk How Non-Members clear. — Besides the regular members, there are a number of trust companies that make their clearings at the Boston 86 BOOKKEEPING Clearing House through the agency of other banks which are members. These non-members keep adequate funds on deposit at their clearing bank, as a compensation for services rendered and as a guarantee against loss. They prepare their exchanges in practically the same manner as the regular members, but deliver their packages of items to their agents for deposit instead of to the clearing house for settlement. These agents classify and distribute the paper of the non-members just as they do the regular items received on deposit. The return exchanges for non-members at the clearing house are delivered to the clearing agents just as if they were payable by them. After these items are charged to the non-members by the clearing agents they are promptly transmitted by runners to the banks where they are to be paid. Procedure in making Clearings. — Each business day at ten o'clock the exchanges take place between the banks. About five minutes before the hour designated the clerks begin to arrive. These clerks are usually two in number, each bank sending to the clearing house a delivery clerk and a settling clerk. On his arrival at the clearing house the settling clerk leaves at the desk of the proof clerk, sitting in the manager's office, his credit ticket showing the amount of exchanges with which his bank is to be credited. The proof clerk immediately tran- scribes this amount under Banks Cr, on a blank called the Clearing- House Proofs as illustrated on page 87. The aggregate of the credit tickets presented to the proof clerk rep- resents the total exchanges sent in by the various banks, and is called Credit Exchanges, The desks in a clearing house are usually arranged in long rows, one desk being provided for each member. At one minute before ten o'clock the manager sounds a gong as a signal for the clerks to take their proper places. The settling clerks occupy their separate desks on the inside of the counter, while the delivery clerks form on the outside with their exchanges arranged for convenient distribution. Promptly at ten o'clock the manager again sounds the gong, and the delivery of the exchanges begins. Each delivery clerk advances, one desk at a time, with military precision. At each desk he hands over to the settling clerk the exchange package for that particular bank. At the same time, in an opening in the desk provided for that purpose, he deposits a check ticket, corresponding in amount to the amounts listed on the exchange slips. The settling clerk takes the amount on the exchange slips and enters it to the credit of the proper bank on his own state- ment. After the circuit has been completed each delivery clerk is at BANKING 87 Boston Clearing House Proof Tuesday, May 20, 19 NO. BANKS BALANCES DUE TO CLEARING HOUSE EXCHANGES BANKS D:^. banks CR. BALANCES DUE TO THE BANKS NO. 1 Massachusetts National 137116 01 691195 70 554079 09 1 2 National Union 87417 48 391522 85 354105 37 2 3 Old Boston National 8G101 85 243422 29 157320 44 3 4 State National 454779 21 567671 69 112892 48 4 5 New England National 190038 36 240816 86 50778 50 5 12 Atlantic National 146654 11 227212 02 80557 91 12 13 Merchants National 132056 29 1351212 39 1219156 10 13 15 National Hamilton C4170 54 395649 79 341479 25 15 17 Second National 613635 51 1104116 94 490481 43 17 18 Atlas National 1025G8 01 398617 81 296049 80 18 20 National Shawmut 335824 88 4109685 56 3773860 68 20 21 National Exchange 38771 98 938973 65 900201 67 £1 22 Nat'l B'k of Commerce 908658 45 1174063 77 265405 32 22 24 Faneuil Hall National 23898 97 189501 57 165602 60 24 25 National Webster 54331 39 65216 89 10885 50 25 26 Eliot National 89495 03 1196253 14 1106758 11 26 28 Suffolk National 94489 10 690275 61 595786 51 28 31 Freemans National 111167 50 155111 74 43944 24 31 32 Boylston National 68422 21 81747 05 13324 84 S2 37 Nat'l Bank Redemption 2409865 14 2416470 23 6605' 09 37 39 First National 122675 28 539383 18 416707 90 39 41 Nat'l Bank of Republic 1086691 28 1279888 23 193196 95 41 43 Mt. Vernon National 11046 74 76455 77 65409 03 43 46 National Security 4121 63 74626 44 70504 81 46 49 Central National 68804 57 317969 52 249164 95 49 50 Colonial National 3338 12 262315 20 258977 08 50 51 Fourth National 371878 03 476835 03 104957 51 52 Metropolitan National 2830 85 78607 03 75776 18 52 53 Winthrop National 210240 230718 68 20478 68 53 55 Mechanics National • 34286 67 108049 77 73763 10 55 56 Commercial National 14493 34 144410 69 129917 35 56 100 Boston Clearing House 1816532 10 1816532 10 100 Aggregates 1393507 94 20641021 25 20641021 25 1393507 94 88 BOOKKEEPING the point from which he started, and the settling clerk has on his desk exchange packages received from each of the other banks. Being now at lil^erty, each delivery clerk gathers up tlic packages against his bank, usually called Debit Exchanges, and returns with them, while the settling clerks remain until the clearing-house proof has been made. After the amounts of all the exchange packages have been properly entered, the settling clerk proceeds to foot his statement and ascertain the amount his bank is to receive or pay. He then makes out a balance ticket, which is sent to the proof clerk's desk. This ticket shows the total exchanges brought to and received at the clearing house, together with the balance to be received or paid by his bank. Form of Balance Ticket UJ LU z ^ No. 1. Boston Clearing House Dr. Massachusetts National Bank, Am't Rcc'd. %2^6,/37.'' Cr. '• €1 « Am't Bro't. $J^i',^c5'^.^' Balance $ — ^^-^duc Clearing House, % Balance due the Massachusetts National Bank, $ 67,0^7°"^ f. f-f. Be/yLcUv, Settling Clerk When the proof clerk receives the balance tickets from the several settling clerks he immediately transcribes the debit exchanges (the amount received by any bank) in the Banks Dr. column, and the dif- ference between the debit and credit exchanges in the Due Banks or the Due Clearing House column, as the case may be, on the clearing- house proof. The credit exchanges having been previously entered, the proof clerk now proceeds to complete his proof. As the total exchanges brought must be the same as the total exchanges taken away, the debit and credit columns of the proof should agree if the work is correct, as also the total due banks and the total due the clearing house. While the preparation of the proof is in progress the settling clerks are verifying their work by means of check tickets. If there are no BANKING 89 errors in the clearing-house proof the manager announces the fact and the settling clerks return to their banks. If there is an error, and this is not infrequently the case, the proof clerk announces the difference to the manager. The manager then announces the difference to the set- tling clerks, who proceed to search for it. When this announcement is made the settling clerks have usually completed a revision of their statements, and can many times locate discrepancies as soon as they are announced -by the manager. Various methods are resorted to in locating differences. Usually the manager calls for an exchange of sheets to the right or to the left for an examination of footings, and in cases where an error in entry is apparent the amounts are called back. This revision i3 final, and if the additions are correct it must make the proof balance. The accompanying Clearing-House Proof and Settling Clerk's State- ment are actual forms used in transactions at the Boston Clearing House. Debtor and Creditor Banks. — Thus far no money has entered into the exchanges at the clearing house. The clearing, however, is not yet complete. If the total of the items brought to the clearing house by any particular bank is less than the total of the items brought by other banks against it, the bank owes the clearing house the difference between such totals. On the other hand, if the items brought to the clearing house by any bank are greater than the totals brought against it, that bank u entitled to receive from the clearing house the difference between such totals. To complete the clearing, therefore, it is necessary to make settlement for the debit and credit balances. Form of Manager's Receipt 1 No. 50. Boston Clearing House in ?9raA^ s, 19— 1- Received from COLONIAL NATIONAL BANK LU S^W'emty-Q^eA)-em. ^ko-vxuM^cL c^C^& /f^^m-dv&d ofi/ycti^ ^ Dollars lOO LU in full for balance due the Clearing House. 1 Manager 90 BOOKKEEPIKG At 12.15 P.M. each day except Saturday, and then at 11.30 a.m., the debtor banks must pay to the manager at the clearing house the balances due from them respectively, either in coin or in such other currency as the laws of the United States shall require, or in such certificates as shall be authorized by the clearing-house association, excepting sums less than one thousand dollars, which may be paid in bills of the debtor banks. Receipts signed by the manager are given to the banks making the payments. (See page 89.) At 1.30 P.M. each day except Saturday, and then at 12 M., the creditor banks shall receive from the manager at the clearing house the balances due them respectively. Receipts signed by the cashiers of the creditor banks are given to the manager of the clearing house. Form of Cashier's Receipt National Security Bank % 2^,6^0. *>^ Boston. InoA^k 26, \^ Received from C A. RUGGLES. Manager of the Boston Clearing House, by /^o-6-£aZ 10^. ^va,rX , Messenger of this Bank, ^w-€/nty-j(yuA^ ij^kose and use of the paying teller's daily check sheet. 27. Explain the manner of proving the paying teller's daily check sheet. 28. Briefly outline the principal duties of the note teller. 29. When are bills discounted that have been sent away for collection charged to the banks to which they are sent? 30. For what purpose are notes, drafts, etc., certified? 31. In your state are notes, etc., made payable at a bank charged to the depositor's account, at maturity, or is it usual for business men to pay this paper by check? 32. When is a note or other negotiable paper protested ? 33. Explain the method of protesting paper. 34. What is a notice of protest? 35. To what officer are notary fees usually paid? 36. Briefly outline the principal duties of the corre- spondence clerk. 37. What is the purpose of the draft register ? IIow is it posted ? 38. What two books are combined in the remittance register. 39. Explain fully the purpose and use of the remittance register. 40. IIow is the remittance register posted? How proved? 41. Briefly outline the principal duties of the individual bookkeeper. 42. From what sources does the individual bookkeeper get his items for entry in the individual ledger ? 43. Explain the use of the individual ledger. 44. How is the individual ledger proved ? 45. Explain how an overdraft is treated in the individual ledger. 46. What books are generally kept by the general book- keeper? 47. Explain the use of the general balance ledger. 48. Name all the sources from which items are obtained for entry in the general cash book. 49. Define (a) letter of credit ; (b) clearing house ; (c) dividends ; (d) surplus fund. 50. Give a three-minute talk on clearing-house associations ; on letters of credit. APPENDIX A NOTES ON FORMS OF RECORD Discount Register. — The column headings in the Discount Register may vary slightly in ditferent banks, and, in addition to those shown in the text, may include the time or tenor of the paper. Many banks carry the Liability Ledger also, in which is recorded against the name of each customer the paper on which that customer's name appears as maker or indorser. Collection Tickler. — Since collection items must be recorded individually, not in totals as checks are recorded, the bookkeeping incidental to collection items requires more entries. As the Collection Register or the Collection Tickler can be handled only by one clerk at a time, many banks are substituting for these books a carbon system, and an individual record in duplicate is made of each item, on slips of convenient size. This record is identical with that contained in the bound regis- ters when these books are used. At maturity the fate of each piece is recorded on these slips, and the bookkeepers post to the accounts directly from them ; the slips are then filed away as a perma- nent record. Receiving Teller's Daily Check Sheet. — That part of the bookkeeping which is done by the receiving teller has three distinct objects : first, to prove the deposit ticket ; second, to subdivide the checks into convenient groups for a final settlement by the other departments of the bank ; third, in the accomplishment of these results, to handle the checks as few times as possible. This subdivision is best accomplished by the block or batch system. Under this system the currency is verified and the indorsements noted by the teller, but the addition is not proved. A clerk assorts the checks into the several divisions or departments of the bank and makes a total of each list on an adding machine ; a recapitulation proves the amount of the ticket. The most extended division is made of those checks which are received in the greatest number. Remittance Register and Out-of-Town Banks Ledger. — Many banks omit from this register the columns headed Indorser, Payer, and Where Payable, as this infor- mation, when needed, is secured from the book or record of original entry. An exact copy of these inter-bank transactions is made and forwarded monthly to each out-of-town bank correspondent. This form of statement is known as the account current. The reconcilement form, the form or statement by which the ac- counts of one bank are reconciled with those of another bank (see illustration, p. 97), is the form used by the Bank Examiner. Letters are used to indicate the nature of certain entries, as follows: D for drafts, N for notes, and C for collections. As a means of avoiding the writing of names many times, banks have devised what is termed a transit number. A prefix number is used to designate a certain city or state, and each bank is also given a certain number. For instance, the Webster 95 96 BOOKKEEPING and Arias Bank, of Boston, is designated as 5-25, 5 indicating the city, and 25 the bank. Banks print the designated number on all their checks. As a convenience for the student the fuller explanatory terms are retained in the blanks used with this set. Individual Ledger. — Many different systems are in use for keeping the accounts of the depositors. The one given in the text is the most convenient for the use of the student in the classroom. The loose-leaf system is finding a place in many banks. Each account is given a separate sheet, and as a sheet is filled, the balance is transferred to a new sheet, and the old one is filed away. At the end of the year these sheets are bound and consti- tute an individual ledger for the year. The loose-leaf system has two special advantages, namely, the dead or inactive accounts are easily and readily set aside and a proof is quickly made at the end of the day by writing the balances on an adding machine. The introduction of adding and duplicating machines has greatly enlarged the use of loose-leaf devices, and tends to lessen the labor involved in handling many details. BANKING 97 Reconcilement Form The First National Bank of Chicago, 111, In Account with. Potomac National Bank ., Of. Baltimore (Please write the Name and Address here) To H. L. Droegemueller, Auditor First National Bank Chicago, 111. 4/5 19. .showing balance Your statement of account rendered to April i of $ 25.422?^ Hne us has been examined and agrees with our books as per recon- cilement noted below. ^&a. fi-. ja^JcQxyn, (ZiicLiZav (This must be signed by some one whose signature we have on file) 28 29 14 We Debit (not in your account) C. Jones Our Remittances in Transit In returning this Recon- cilement please inclose, seal, and mail only in envelope herewith ad- dressed to H. L. Droegemueller, Auditor You Debit (not on our Books) (State whether since Credited by you) Ret 1st Chicago, Balance Total 25 |28 16 120 210 220 422 989 22 16 42 16 16 12 DATE 22 18 We Credit (not in your account) Note Smith C Jones Total Drafts Issued (Outstanding) #1622 1623 You Credit (not on our Books) (State whether since Debited by you) Our Balance Total 27 $28 400 27 124 500 224 713 989 16 10 86 12 Correspondents will confer a favor by filling up and returning the above blank. In report- ing outstanding items be particular to state Bate of Charge or Credit and also whether since charged or credited by you. In referring to Remittances please advise Date of letter. 98 BOOKKEEPING Certificate of Protest Commontoealtf) of JHassacijusetts County of Suffolk City of Boston On the temtk day of ^ae^vUf-e/v, in the year of our Lord one thousand nine hundred aA^cL tw-dA>-&, %t li)-. CI. IV^tUeAy, Itiotarp Pnblic, duly admitted and sworn, and practicing in said Commonwealth, at the request cf L&iok If. JSuA^oxyyi, Cfiiq., Ca£;|)ier of the ^^yifviyLeA^ial cAdtuyyiat BamJo, went with tJie original not^', which is hereunto annexed, the time therein limited having fully elapsed, and demanded payment tliereof at tk& (^x^e&loAxyi/ cAatuyyiat Ba/Kk/, curuL wff, oO Postage 0^ m. CI. WlUeV $/.^^ Botarj) public APPENDIX A 99 Notice of Protest Commercial ^J\[ational ^anJ^ Boston, Mass., ^e^. fO, f^- ^2 IV^&oZ ^t., ^Ojif Dollars licyw, dated Dear Siro,: You are hereby notified that a ^yioto for c4iyyi& flfiim^dv&ci cfi/xt/^ ■ drawn hy £&^&v, B^injb V- ^. , cuni^ indorsed hy Q^eyfst. 10, 19 , payable thA^&& mxyntk^ after date, has been protested by me for non-payment after due demand at tk& (ooc^&Imx^v cAatuyyicil fSamJo this day, and that you are held answerable for the amount, with all legal costs, interests, and damages in consequence of the non-payment thereof. Respectfully yours APPENDIX B 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. 100 APPENDIX B ■xn Coupon. A certificate of interest due, printed at the bottom of trans- ferable bonds, designed to be cut off 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 falfing 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 security 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. A^^ ^ 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 affairs 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- scription and shipping directions of goods sent by railroad. Wholesale. Selling large quantities, usu- ally in unbroken packages. INDEX PAGE Abstracts, out-of-town banks ledger 81 Auxiliary books Customers' bill book 21 Discount ledger 21 Dividend book 14 Installment book 14" Minute book 14 Offering book 21 Stock certificate book 14 Stock ledger 14 Stock transfer book 14 Subscription book 14 Balance ticket 88 Bank, definition of 1 Bank accounting, books for .... 14 Banks Expenses of 2 Kinds of 2 Profits of 2 Utility of 1 Cash book, model forms of ... 52, 53 Cashier's check 29 Cashier's receipt 90 Certificate of deposit 28 Certified check 35 Certified check book 36 Charge ticket 46 Charging notes 38 Check ticket 85 Clearing house Definition of 82 Exchanges of 82 Officers of 82 Origin of 82 Clearing-house proof 87 Collection charges 25 Collection clerk Duties of 25 Work for . . . 22-26, 56, 57, 67, 68 Collection register Description of 21, 22 Model form of 20, 21 Collection tickler Description of 22 Model form of 22, 23 Correspondence clerk Duties of 40 Work for 41-46, 59-64, 71-75 Credit exchange 86 Credit ticket 40, 85 PAGE Debit exchange 88 Deposit ticket 30 Discount clerk Duties of 15 Work for . . . 16-21, 55, 56, 66, 67 Discount register Description of 15 Model form of 16, 17 Discount tickler Description of 15, 16 Model form of 16, 17 Dividends 77, 80 Draft register 43 Exchange slip 83 General balance ledger Description of 51 Model form of 51 General bookkeeper Duties of 52 Work for .... 52-55, 66, 76-81 Individual bookkeeper Duties of 48 Work for . . . 48-50, 65, 66, 75, 76 Individual ledger Description of 46, 47 Model form of 47 Letters Accompanying paper remitted for collection and credit ... 61 Accompanying paper remitted for collection and returns ... 64 Advising that collections have been credited 39 Advising remittance of cash items for credit 42 Making remittance 74 Letters of credit Description of 91-93 Model form of 92, 93 Manager's receipt 89 National banks Capital stock of 3 Circulating notes of 5 Clerks of 7 Corporate powers of 6 Distinguishing features of . , . 2 Officers of 7 Organization of 3 Redemption fund of 6 Restrictions upon 6 Tax on circulation of 6 103 104 BOOKKEEPING PAGE Note teller Duties of 37 Work for . . . 38, 39, 50, 60, 70, 71 Opening entries for national banks 8, 9 Paying teller Duties of 35 Work for ... 36, 37, 58, 59, 69, 70 Paying teller's daily check sheet and proof Description of 31, 34 Model form of 32, 33 Private banks Functions of 12 Organization of 12 Protection to creditors of ... 12 Protest Certificate of 98 Fees 76 Notice of 99 Protested paper 70, 76 Receiving teller Duties of 28 Work for ... 30, 31, 67, 58, 68, 69 PAGE Receiving teller's daily check sheet and proof Description of 28 Model form of 27 Reconcilement, form of 97 Remittance register and out-of-town banks ledger Description of 40, 41 Model form of 10, 41 Review questions 12 Runners 38 Settling clerk's statement 84 Special agents 44 State banks Compared with national banks . 11 Contrasted with national banks . 11 Organization of 11 Statements, model forms of . . . 78, 79 Surplus fund 77, 80 Trust companies Business of ... 10 Organization of 10 Undivided profits 80 UNIVERSITY OF CALIFORNIA " t,-„^^ Jl THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN THIS BOOK ON THE DATE DUE. THE PENALTY WILL INCREASE TO SO CENTS ON THE FOURTH DAY AND TO $1.00 ON THE SEVENTH DAY OVERDUE. SEP 12 »y^^ SEP 131935 ,, MAR 21-^^'^' LD 21-100m-7,'33 YC 24012 321^2 y L UNIVERSITY OF CALIFORNIA LIBRARY L