PACKARD'S
NEW MANUAL
OF
3OOK-KEE1 NG
AND
CORRESPONDENCE.
BY
S. S. PACKARD,
(President of Packard's (Business Gotlege,
of the " BRYANT & STRATTON BOOK-KEEPING SERIES," the u PACKARD COMMERCE*
ARITHMETICS," and " PACKARD'S COMPLETE COURSE OF BUSINESS TRAINING."
NEW YORK:
S. S. PACKARD, 101 EAST 23D ST.
'. *;*.*'." * **.
.COPYRIGHT, 1884, BY
S. S. PACKARD,
PBIKTRD KY
HKNRV I. CAIN fc SON,
NBW YORK.
PREFACE.
THIS little book is aimed at a real want felt in most commercial schools
and commercial departments of high schools. It does not presume to supply
all the material requisite for a complete training in Book-keeping and Cor-
respondence, and yet it aims at giving the best form of instruction in each, as
far as it goes. And in this matter it is not, in any sense, an experiment, but
the result of years of experiment and faithful labor. The first part of the
book that which relates to the subject of accounts has been substantially in
use in the commercial schools for the past twelve years, and has received the
best form of endorsement from eminent teachers that of constant use in
their classes. The original book, of which this is a revision and enlarge-
ment, has served as a book of initiatory instruction in accounts in a large
share of the business colleges of the country, while it has been used, as a
complete text-book, in many of the commercial departments of high schools
and academies in the United States and Canada.
While the sets in the " Business Series " were and are well adapted to
develop the subject of Book-keeping, it has been long felt by the more exact-
ing teachers that the preliminary instruction was too brief and too restricted
in its application ; for while the plan of teaching the science by first intro-
ducing separate accounts (original with this treatise) was felt to be the only
true and logical plan, it was found that these exercises were not rendered
sufficiently simple, and that there was a lack of sufficient material to enforce
the lessons upon minds not able to grasp an idea or a principle upon its
presentation ; and so teachers have been forced to supplement the work of the
book with material of their own. The revision has fully remedied this fault,
and has, besides, developed the subject in a more gradual and better classified
method. There has been no chance work here. Every step has been taken
cautiously and with a view to final results, and nothing has been omitted
which was deemed essential to a complete logical enforcement of the subject.
The first part of the book, in the form of "Advance Sheets," was sent out
nearly a year ago, and has been faithfully tried in a large number of business
M111787
11 P It E FA C E.
colleges, where it is still in use; and the positive opinion of those who
thus tested it leaves 110 dnubt in the author's mind that he has, at last, com-
pletely satisfied their demands.
The addition of a chapter on Business Correspondence is deemed of the
first importance ; for, although there are plenty of text-books on Letter-
Writing and English Grammar, there are very few, so far as the author is
aware, that can be used economically or effectively in this connection. The
same general idea which has prevailed in preparing 1 the matter for Book-
keeping is carried out in this part, viz. : to give but little preliminary instruc-
tion, and that the most important and most readily applied, and to place in
the student's hands plenty of material whereby he may work out the practical
results, either by himself or under the guidance of his teacher. There is no
thought to do away with the study of English Grammar or English Composition,
as such, but rather to show the importance of such study, and to make some
progress in it necessary. There is no book, so far as the author knows, that
comprises so much material for work in Correspondence as is embraced in
these thirty pages ; and it is believed that if this material is properly used, it
will be sufficient in most cases to correct prevailing errors in Letter- Writing.
The Appendix is an important part of the book, not merely for its forms,
but more for the additional matter for practice which it contains. Those who
have felt the need, in the old book, of forms for principal books and methods
of using them will find this omission happily supplied in the Appendix, while
the extra material for test-work, and especially for the adjustment of partners'
interests under various conditions, will find favor in the eyes of thorough
teachers and earnest pupils.
In short, the NEW MAISTTAL is offered to teachers as covering an important
part of business training, and while it does not seek to displace other books
on the same subjects, it is confidently believed to contain matter which will
aptly supplement any such book now in use.
And with this estimate of its place among commercial text- books, tha
author respectfully submits it.
NEW YOBK, August 1, !&&.
CONTENTS.
CHAPTER I.
ACCOUNTS
Cash account
Personal accounts - ... - 7
Rills Receivable account -
Bills Payable account
Merchandise account
Real Estate account 15
Shipment or Adventure account 17
Commission and Service account -
Interest account
Securities account
Incidental accounts
Proprietary accounts 26
STATEMENT OF PRINCIPLES
NOTES AND ACCEPTANCES 30
QUESTIONS
CHAPTER II.
TRANSACTIONS AND THEIR RECORD
EXERCISES IN JOURNALIZING
A MODEL SET OP BOOKS
Memorandum of Transactions -
Day Book (Separate) 39
Journal (Separate)
Day -Book and Journal Combined - - - 42
Ledger (Current Condition)
Trial Balance 46
Analytic Statement - 47
Showing Full Results in the Ledger 48
Ledger (Closed) 49
Closing the Ledger - 52
Balance Sheet 54
Vouchers accompanying Model Set 57
MATERIAL FOR CONTINUATION OF MODEL SET 60
'QUESTIONS 62
CHAPTER III.
BUSINESS SERIES 63
Set I. Produce Business (Single Proprietor)
Set II. Grocery Business (Single Proprietor) - 66
Set III. Dry Goods Business (Single Proprietor) 67
S -t IV. Furniture Business (Single Proprietor)
Set V. Furniture Business Continued (Partnership) 70
Set VI. Grocery Business Shipments (Partnership)
S;t VII. Commission Business (Single Proprietor)
Set VIII. Commission Contain, 'd (Partnership) 75
CONTENTS.
CHAPTER IV.
TEST EXERCISES AND FORMS. PAGE
Synthesis ... 77
Analysis 78-
Vouchers (to accompany sets) - 81
CHAPTER V.
BUSINESS CORRESPONDENCE - 89
Structure of a Letter 89
Expression - 92
Briefing Letters !)7
MATERIAL FOR PRACTICE.
Arrangement 98
Spelling 98
The Choice of Words 100
Grammatical Construction 104
Punctuation and the Use of Capitals 106
Style 106
Briefing 108
GENERAL LETTERS.
Letters of Introduction 110
Ordering Goods 112
Advising of Shipments 113
Miscellaneous - - - - - - -113
Circulars, Advertisements, and Telegrams 116-
APPENDIX.
SET IX. CLOTHING AND GENTLEMEN'S FURNISHING (Partnership) 119-
FORMS OP BOOKS 122
Journal - 123
Sales-Book 124
Cash-Book 126
Ledger 128
Statement 131
Bill-Book - 132
Columnar Journal .... 134
SET X. CONTINUATION OF SET IX (Partnership) - 137
SET XI. PUBLISHING BUSINESS (Partnership) 139
SET XII. BROKER'S BUSINESS (Partnership) - 143
FORMS OF AUXILIARY BOOKS.
Cash-Book (Two forms) 146
Sales-Book 147
Commission Sales-Book 148
Check-Book and Auxiliaries - 148
PARTNERSHIP SETTLEMENTS 150
MISCELLANEOUS EXAMPLES 154
DETECTION OF ERRORS IN TRIAL BALANCES - 158-
BOOK-KEEPING
803--
CHAPTER I.
ACCOUNTS.
1. BOOK-KEEPING is the recording of the dealings of a
business.
2. This is best done through the form of Accounts.
3. AN ACCOUNT is a collection of items so arranged under
a proper head, as to show a definite result.
4. Among the results shown by accounts are: 1. The
amount of money on hand ; 2. What is owed to the business,
and what the business owes ; 3. What has been gained or lost.
5. The amount of cash on hand is shown by the Cash
account. What is owed to the business, and what the busi-
ness owes is shown in accounts with persons and in accounts with
notes and acceptances. [The notes and acceptances in our favor
are called Bills Receivable, and the notes and acceptances against
us are called Bills Payable.] What has been gained or lost is
shown in accounts recording the activities or the operations of the
business.
6. The statements and examples which follow are intended
to cover the objects and methods of these different classes of
accounts.
I. CASH ACCOUNT.
7. 1. The Object. To show the dealings in cash, and
the amount of cash on hand.
8. 2. The Method. When cash is received, the
amount is placed on the left or debit side ; and when paid,
the amount is placed on the right or credit side. The excess
of the debit over the credit will be the amount on hand.
'6
AC CO UNTS
*
V. EXAMPLE OF CASH ACCOUNT.
Items.
2. Received cash, $15. 75.
2. Paid cash, $5.
3. Received $50.
4. Paid $3. 75.
5. Paid $4.50.
6. Paid $12.
7. Received $15.
8. Received $2.50.
9. Paid $14.80.
10. Paid $9.
11. Paid $12.15.
Dr.
Oasli.
Or.
Cash received.
Cash paid
1
15
75
2
5
3
50
4
3
75
7
15
5
4
50
8
2
50
6
12
83
25
9
14
30
10
9
11
12
15
60
70
Received - - $83.25
P&id - - - 60.70
On hand - - $22.55
MATERIAL FOR PRACTICE.
1O. (FiRST SERIES.) Items. 1. Received cash, $125.
2. Paid cash, $25.13. - - -3. Paid $12.35. - - 4. Paid $19.75.
. Received $119. - - 6. Received $49.25. - - 7. Paid $27.
S. Paid $U.83. - - 9. Paid $12.17. - - 1O. Received $13.50.
11. Paid $14.75. - - 12. Paid $93.75.
Required, 'balance of cash on Jiand.
11. (SECOND SERIES.) Items. 1 . Received cash from the pro-
prietor, $175. - 2. Received cash on account of Jones & Co., $75. -
3. Paid cash for goods, $29.12. - - 4. Received cash for goods, $182.35.
5. Paid office boy, $7. - - 6. Paid for stationery, $25. -
7. Received on J. Triplet's note, $180. - - 8. Received for goods, $125.
9. Paid salaries, $112.50. - - 1O. Paid to proprietor, $50. -
11. Received on Abram Stuart's account, $37.50. - - 12. Paid store
rent, $150.
Required, balance of cash on hand.
12. (THIRD SERIES.) Items. 1. Cash invested by H. B. Bryant
(partner), $1000. - 2. Cash invested by C. E. Carrol (partner), $1200.
- 3. Paid cash for merchandise, $450. - - 4. Received cash for
merchandise, $29.12. - - - 5. Received cash for merchandise; $73. 25. - -
6. Paid cash for our note, $300. 7. Paid cash for interest due ou
PERSONAL ACCOUNTS. 7
mortgage, $112.50. - - - 8. Paid cash for store rent, $150. - - .9. Received
cash on Jones's account, $102. - - - 1O. Paid cash to H. B. Bryant (partner^,
$7-~>. -1.1. Borrowed cash on our note, $490. - - 12. C. E. Carrol
(partner) drew cash on private account, $50. - - 1 3. Paid cash for insur-
ance on goods, $125. - - - 14:. Received cash from H. B. Bryant, $200.
- 15. Paid cash to book-keeper, $100.
Required, the balance of cash on hand.
13. Debts owed to the business, and debts owed by the
business are shown in accounts with persons under their proper
names, and in accounts with notes and acceptances under the
titles, Bills Recervable and Bills Payable.
II. PERSONAL ACCOUNTS.
14. 1. The Object. To show our dealings with persons,
and what they owe us or we owe them.
15. 2. The Method. All items in our favor are
placed on the debit side of the account of the person who thus
owes us, and all items against us are placed on the credit
side of the account of the person whom we thus owe. The dif-
ference will be the fact of debt for or against us. If the debit
side is the larger, the person owes us the difference ; and if the
credit side is the larger we owe the person the difference. If
the sides are equal, the indebtedness is, of course, canceled.
16. EXAMPLES OF PERSONAL ACCOUNTS.
Dr. H. E. Hibbard. Cr.
i
Items.
1. DEALINGS WITH H. E. HIBBARD.
1 . Sold him goods for $15.75.
2. Received from him, cash, $10.
3. Sold him goods for $25.
4. Sold him goods for $18. 75.
Received his note for $30.
Against him.
In his favor.
1
15
75
2
10
3
25
5
30
4
18
75
40
59
50
Total debits - $59.50
Total credits - 40
He owes us
$19.50
vl <J CO
Dr. W. A. 3Iiller. Or.
Items.
2. DEALINGS WITH W. A. MILLER.
1. Bought goods of him, at $75.
2. Bought goods of him, at $50.
3. Paid him cash, $25.
4. Gave him our note for $60.
Items.
3. DEALINGS WITH E. R. FELTON.
1. He owes us $100.
2. He buys goods of us, at $62.50.
3. He pays us cash, $50.
4. He buys goods of us, at $37.50.
5. He gives us his note for $150.
Against him.
In his favor.
3
25
1
75
4
60
g
50
85
125
Dr.
Total credits - $125
Total debits - 85
We owe Mm - $40
E. K. Felt on. Cr.
Against him.
In his favor.
1
100
3
50
o
62
50
5
150
4
37
50
200
200
Total debit*. $200. Total credits, $200.
Canceled.
MATERIAL FOR PRACTICE.
17. (FIRST SERIES.) Items. 1. Thomas Hunter owes us a
balance of $100. - - 2. He buys of us on credit, goods amounting to
$27.50. - - 3. He pays us cash, $25. - - 4. He borrows of us cash,
$50. - - o. He gives us his note to apply on account, for $5u.
. He pays a debt for us of $75. - - 7. He works for us four days for
which we credit him $8. - - 8. He loans us cash, $75. - - .9. We sell
him goods amounting to $25.
Required, the balance of indebtedness for or agaiuxt him.
I
18. (SECOND SERIES.) Items. 1. We deposit in State Bank,
$375. 2. We pay a bill by check on the Bank, .SV-7. - 3. The
Bank collects a note for us, and credits us with the amount as a deposit, $150.
4.. Paid for goods by check, $19.75. - - 5. Deposited, $;->n.
6. Paid for note by check, $150. - - 7. Bank pays for our note left for
collection and charges amount to us, $110.
Required, the balance in Bank.
19. (THIRD SERIES Four Separate Accounts.} Items. 1. Sold
Robert Hall on credit, 3 brls. Flour, at $10 per brl., ? - - *?. Bought
on credit of A. Stuart, dry goods for $127.50. 3. Sold Peter Cooper
BILLS RECEIVABLE AC C UN T. &
on credit, merchandise for $425. - - 4. Received cash from Peter Cooper,.
$1X0. - 5. Sold goods on Thomas Jones's order, for $25. - - 6*. Bor-
rowed cash of Thomas Jones, $125. - - 7. Paid cash on A. Stuart's order,
$127.50. - - cV. Sold Robert Hall 20 bush. Wheat, at $1.25 per bush.,
$ - .9. Sold Peter Cooper 20 brls. Flour, at $9.25, $
JO. Bought of A Stuart, dry goods for $350. - -11. Sold merchandise
on A. Stuart's order for $200. - - 12. Paid A. Stuart cash, $150. -
1,'i. Received cash from Peter Cooper, $200. - - 14. Gave Thomas Jones
our order on Peter Cooper for the balance of his (Jones's) account, ,? .*
- 15. Lent Robert Hall, $75. - - 16. Bought of Peter Cooper a set
of double harness for $250. - - 17 Received Rob't Hall's note for $50.
Required, the standing of the several accounts.
2O. Notes and acceptances are written evidences of debt.
A NOTE is a direct promise to pay a certain sum of money at a
certain time ; and an ACCEPTANCE is a similar promise in a dif-
ferent form. [Full descriptions of these documents are given in
83, page 30.]
21. Other people's notes and acceptances which come into-
our hands are called Bills Receivable because we are to receive
the amount stipulated therein ; and our notes and acceptances
which pass into other people's hands are called Bills Payable,
because we are to pay the amount stipulated. Thus, Bills-
Receivable account will show what others owe us on written
promises, and Bills Payable account will show what we owe others
on written promises.
III. BILLS RECEIVABLE ACCOUNT.
22. 1. The Object. To show our dealings in other
people's notes and acceptances, and the amount of such notes
and acceptances on hand.
23. 2. The Method. When other people's notes or
acceptances are received the amount written upon the face is
entered on the debit side of the account, and when such paper is
paid, or in any way disposed of, the amount of the face is
entered on the credit side of the account. The difference, if
any, will be the amount of other people's paper on hand.
* In this case the person who owes us pays the person "'bnig w<> owg- T$H
should be credited, and the latter, debited.
10
AC C UNTS.
24. EXAMPLE OF BILLS RECEIVABLE ACCOUNT.
Dr. Bills Receivable. 6V.
Items.
1. Received J. Phillip's note, in pay-
ment of account, for $375.
2. Received Charles Jones's note for
$150.
3. Disposed of Phillip's note, $
4. Received Samuel Felton's accept-
ance in payment for goods, $215.
-5. Chas. Jones pays his note, *
Notes and Accept-
ances received.
Notes and Accept-
ances disposed of.
1
375
3
375 !
2
150
5
150
4
215
525
740
Received - - $740
Disposed of - 525
On hand - - $215
MATERIAL FOR PRACTICE.
25. (FiEST SERIES.) Items. 1. We have on hand F. Luick's
note of $250. - - 2, Received Smith & Co.'s acceptance in payment for
goods, $1^9.50. - - 3. Received H. Seymour's note to apply on his account,
$75. - - 4. F. Luick pays his note, $ - - 5. Sold H. Seymour's
note, $ - - 6. Received H. Potter's note in settlement of account,
$137.40. - - 7. Exchanged H. Potter's note for goods, $
8. Received of J. Cuyler, in settlement of account, P. Cooper's acceptance
for $250. - - .9. Smith & Co. have paid on their acceptance $50. -
1O. Sold merchandise to J. Sizer, receiving his note therefor, for $110.
Required, the amount of business paper on hand.
26. (SECOND SERIES.) Items. 1. Have on hand the following
paper : H. Cornell's note of $500 ; P. Dickson's acceptance of $75 ; B. Horton's
acceptance of $125 (enter separately). - - 2. Sold C. Randall merchandise,
and received his note for $117.50. - - 3. Gave P. Dickson's acceptance in
part payment for goods, .* - - 4. Received of B. Wise, to apply
on his account, his note for $175. - - 5. Sold B. Horton's acceptance,
-f - 6. Exchanged notes with F. C. Woodbury for our mutual
accommodation, $200. - - 7. Received Robert Anderson's note in payment
for goods, $75. - - 8. Sold A. J. Rider merchandise, and received his note
for $100 in part payment. - - 9. Received cash for F. C. Woodbury's
note, $
Required, the notes and acceptances on hand.
27. (THIRD SERIES.*) Items. 1* Sold merchandise to G. Wake-
man for $200, receiving his note at 30 ds. in payment. - - 2. Received of
James Parton, his note at 10 ds. in full of his account, $129. 3. Sold
* The amounts to be entered in Bills Receivable account appear in italics.
BILLS PA Y A B L E ACCOUNT.
11
Wak email's note of $200 at a discount ; receiving cash, $199.33 ; discount off,
$0.07. - - 4. Bought EL B. Bryant's note of $400 1 due in 3 months, at a
discount of $6. Paid net cash, $394. J. Paid cash, less discount, for
the following notes : J. Smith's, having 20 ds. to run, $300 discount off, $1 ;
(\ E. Stuart's, 15 ds. to run, $375 discount off 69? ; J. H. Pollock's, 17 ds. to
run, $350 discount off, $1.05. - - 6*. Received cash for J. Smith's note,
now due, $ , 7. Paid out C. E. Stuart's note, to apply at face
value on J. Rantoul's account, , c> S. Received E. G. Folsom's
aote, at 30 ds., in full of account, $210. - - 9. Paid cash for F. Goodman's
acceptance of $400, favor of G. A. Gaskell, at 30 ds. discount allowed, $2.
- - 2O. J. Parton pays his note of $129 in cash, with the accumulated
Interest thereon of $3.50.
Required, the notes and acceptances on hand.
IV. BILLS PAYABLE ACCOUNT.
28. 1. The Object. To record our issues of notes and
our acceptances of drafts and to show, at any time, our out-
standing paper.
29. 2. The Method. When we issue a note, or
aucept a draft, the face or amount of such paper is entered
on the credit side of the account, and when we redeem such
paper its face or amount is entered on the debit side of the
account. The difference, if any, will express the amount of
paper we have outstanding.
3O. EXAMPLE OF BILLS PAYABLE ACCOUNT.
Dr. Bills Payable. Or.
Items.
/. Issued our note to Peter Cooper
for $300.
2. Gave our note in payment for
goods, $175.
o. Accepted Jones's draft for $150.
4. Paid our note, $175.
5. Issued note to G. West for $250.
6*. Issued note to P. Roberts for
$100.
7* Paid our acceptance, $150.
Our promises red'd.
Our promises issued.
1
*300
4
175
g
175
7
150
3
150
835
5
*250
6
*100
975
* 300 Issued - - -
* 250 Redeemed -
_*100 Outstanding -
$975
325
$650
650
AC C O UXTS.
MATERIAL FOR PRACTICE.
31. (FiKST SERIES.) Items. 1. We have the following outstand-
ing obligations : Note in favor of John Jones for $300 ; note in favor of
S. Whitney for $150 ; acceptance, favor of Thos. Stevens, for $450.
2. Bought merchandise of H. Clark, and gave our note for $475. - - - - 3. Rec'd
of John Brown, in part payment for goods, our note, favor of John Jones,
$300. 4:. Paid cash for our note, favor of S. Whitney, 5'
o. Gave our note to P. Morton, in settlement of account, $175. (i. Ac-
cepted Peter Cooper's draft for $200. - - - 7. Bought goods of P. Shaft,
.giving in part payment our note for $375.
Required, the amount of our outstanding paper.
32. (SECOND SERIES.) Items. 1. Bought goods of C. C. Bowen,
.giving our note for same, $375. 2. Accepted J. Smith's draft to apply
on our account, $125. 3. Exchanged notes with W. A. Miller, for
our mutual accommodation, $1000. 4. Sold merchandise to A. Brown,
receiving therefor our note, favor of C. C. Bowen, $ 5. Accepted
G. A. Gaskell's draft, at 10 ds., to apply on our account, $250. 6*. Sold
goods to A. J. Rider for $1500, receiving in part payment therefor, our note,
favor of W. A. Miller, : <? ; cash for balance. 7. Bought of
Stewart & Co., on our note at 30 ds., goods for $350. 8. Paid our
.acceptance, favor of G. A. Gaskell, in cash, & >. Bought goods
of Peake, Opdyke & Co., amounting to $675. Paid cash, $425 ; our note at
30 ds. for balance, $
Required, our outstanding paper.
33. (THIRD SERIES.) Items. 1. Have the following outstanding
notes : one in favor of Smith & Bailey, due in one month, for $635 ; one,
favor of Thomas Acton, due in 17 days, for $500. 2. Bought goods of
White & Taylor for $1500 ; paid cash, $375 ; our note at 3 months for balance,
$ .----- 3. Sold goods to Jones & Smith for $720 ; received in part
payment, our note, favor of Smith & Bailey, for $ ; cash for balance.
4. Exchanged notes with Thomas Horton,ior our mutual accommoda-
tion, each at 30 ds., for $150. ----- 5. Redeemed our note, favor of White
& Taylor, now due, in cash, ? # Sold goods to J. Woolsoii,
receiving in full payment our note, favor of Thomas Acton, : g -
7 Bought goods of Jaffray & Co. for $575 ; paid cash, $175 ; our note at
4JO ds. for balance, f <V. Accepted Benj. Wise's draft at 30 ds.,
to apply on account, $ 150. f>. Paid cash for our accommodation note,
favor of Thomas Horton, $ ; less discount for 15 ds., $0.38.
1O. Redeemed our note, favor of Jaffray & Co., before due, f paying
eash for same, less discount for 20 ds., $3.33.
Required, our outstanding paper.
MERCHANDISE ACCOUNT. 13
34. The purpose of business is to acquire wealth, and
business enterprises are undertaken and pursued to this end. All
such enterprises, however, are attended with more or less risk,
and oftentimes the effort put forth to gain results in loss.
35. Hence, accounts which exhibit the progress of the
business must be susceptible of showing either a gain or a loss.
As in Cash account, receipts and payments are placed against
and cancel each other, the difference being the cash on hand, so
in these accounts of the business, cost and returns oppose each
other, the difference being the gain or loss.
36. The accounts used to mark these enterprises are vari-
ous, as the enterprises themselves are various, and the names of
the accounts are generally significant of the operations grouped
under them. In a business of buying and selling goods, Mer-
chandise account is commonly used ; in a manufacturing
business, Manufacturing or Manufactures account ;
in a professional business, Service or Labor / in a commission
or agency business, Commission, etc., etc.
37. The accounts which follow are all of this class ; and
while they, by no means, embrace the entire list, they are intended
to be fairly representative of the class.
V. MERCHANDISE ACCOUNT.
38. 1. The Object. To show our dealings in merchan-
dise, and the result of such dealings as to gain or loss.
39. 2. The Method. When goods are purchased, or
any cost is incurred for which merchandise is responsible, the
account should be debited with the cost; and when goods
are sold, or when they produce value in any way, the account
should be credited with the returns. When the goods are
all disposed of, the difference between the two sides of the
account, as it stands, will be the gain or loss. If it is
desired to show, in the account itself, the gain or loss before
the goods are all disposed of, it will be necessary to add to
the credit side of the account, the present market value of the
unsold goods, or what it would cost to replace them.
A CCO UXTS.
4O. EXAMPLE OF MERCHANDISE ACCOUNT.
Dr. Merchandise. Or.
Items.
2. Bought goods of Simpson & Co.
for $500.
2. Bought goods of J. McCreery for
$950.
3. Sold goods to Isaac Moore for
$137.50.
4. Sold goods for cash, $75.
5. Sold goods for cash, $37.50.
6'. Sold goods to A. S. Hewitt for
$1S9.50.
7. Value of unsold goods, $1169.50.
Cost.
Returns.
1
500
S
137
50
i
950
4
75
1450
5
37
50
6
129
80
7
1169
50
1549
Returns
Cost -
Gain, -
$1549
1450
$99
MATERIAL FOR PRACTICE.
41. (FIRST SERIES). Items. 1. Bought goods, on %, of J. M.
Stuart, $750. - - - 2. Paid cash for freight and cartage on above good-
3. Sold goods to J. Jones for cash, $125. 4=. Sold goods to>
E. R. Felton, on %>$47.50. ,5. Sold goods to W. H. Sadler, receiving his
note therefor, $150. 6. Bought goods of J. McCreery, giving our note
for same, $1259.75. -7. Paid cash for insurance on goods, $12.50.
S. Sold goods for cash, as per petty cash-book, $35.19. 9. Value of
goods unsold, $1789.56.
Required, the gain or loss.
42. (SECOND SERIES.) Items. J. Bought for cash, 200 brls.
Fl >ur, at $10 per brl., $ - 2. Bought on our note at 30 us.. 500
bush. Wheat, at $1.50, $ - - #. Sold for cash, 50 brls. Flour, at
$11, $ - 4. Paid cash for storage, $7.1* - - 5. Paid cash
for clerk hire, S.'.'. - 0. Sold for cash, 100 bush. Wheat, at $1.75.
$ - 7. Sold B. Hill on his note at 10 ds., 150 bush. Wheat, at
$1.7:3, $ - <V. Our goods unsold consist of 150 brls. Flour, worth
$11 per brl., $1650 ; 250 bush. Wheat, worth $1.75 per bush., $437.50 =
$2087.80.
, the gain <>r loxs.
* Items of expense, like this and in the succeeding record, are sometimes charged to a.
separate account, but they are a part of the general cost of merchandise, and are BO con-
sidered here.
HEAL ESTATE ACCOUNT.
15
43. (THIRD SERIES.) Items. 1. Merchandise on hand, $3750.*
- 2. Bought of Arnold & Constable on %, invoice of Silks, at $1500. - - - -
3. Sold for cash, 40 yds. Silk, at $2, $ - 4. Sold for cash, hill
of Hosiery and Domestics, amounting to $1:>5. - - 5. Sold for cash, bill
of Fancy Uoods, $-J12.50. - - 6*. Sold J. Mott on %, bill of assorted Dry
Goods, amounting to $318.75. 7. Paid cash for insurance premium,
covering goods in store, $50. - #. Bought for cash 53 pcs., 2500 yds.,
Prints, at 5| cents per yard, p .9. Sold for cash 512 yds. Prints,
at 11', $ 1O. Bought for cash 3 cases, 2500 yds., Gingham, at
12 K, $ -11. Sold for cash 317 yds. Gingham, at 14^, -*
----!. Sold John Brown on his note at 10 ds., 750 yds. Prints, at 7^,
p 13. Goods on hand valued at $3800.
Required, the gain or loss.
VI. REAL ESTATE ACCOUNT.
44. 1. The Object. To show our dealings in and on
account of real estate.
45. 2. The Method. The account is debited for all
costs and credited for all returns; the difference between
the two sides, when all the facts are shown, will be the {fain
or loss.
[NOTE. The costs of Real Estate cover not only purchases, but all subse-
quent expenditures for improvements, etc. ; end the returns cover not only
sales, but income from rents and the real value of the property on hand.]
46. EXAMPLE OF REAL ESTATE ACCOUNT.
Dr. Real Estate. Gr.
Items.
1. Bought House and Lot in Seven-
tieth St. fcr $35000.
2. Paid for repairs on same, $1500.
3. Paid for insurance, $10.
4. Paid for taxes, $317.50.
5. Received for rent, $3000.
6. Sold the property for $37500.
Cost.
Returns.
1
35000
5
3000
v
1500
6
37500
3
10
40500
4
317
50
36827
50
Returns - $40500
Cost - - 36827.50
Gain - - $3672.50
* The merchandise on hand at the beginning of business should be regarded the same
fcs a purchase, and charged for its purchase value.
16 ACCOUNTS.
MATERIAL FOR PRACTICE.
47. (FIRST SERIES.) Items. 1. Bought Tenement property in
Spring St. for $40000. 2. Bought House and Lot in Banks St. for
$15000. - - - 3. Paid for repairs on Spring St. house, $875. 4. Received
cash for rent of Spring St. house, $200. o. Received cash for rent of
Spring St. house, $375. - 6*. Paid Water tax, Banks St. house, $15.
- 7. Paid for repairs, Banks St. house, $93.75. - - 8. Paid taxes
Spring St. house, $417.50. 9. Paid for insurance on both houses, viz
Spring St., $75 ; Banks St., $25. - 1O. Received for rent of Banks St
house, $1200. 11. Received for rent, Spring St. house, $2500. - - - -
12. Value of Spring St. property, $42500 ; of Banks St. property, $12500.
Required, the gain or loss.
48. (SECOND SERIES.*) Items. ! Have on hand, Store Build-
ing in Tremont St., worth $60000; Dwelling House in Beacon St., worth
$25000. 2. Bought Warehouse property on Charles River for $150000
cash. 3. Received cash for rent of Beacon St. house, $125.
4. Paid cash for insurance on Warehouse, $750. - 5. Received cash for
rent of Warehouse, one month, $1200. f>. Paid taxes on Tremont St.
property, $575. - - 7. Received cash for rent of Tremont St. Stores, $2000.
- S. Received cash for rent of offices, Tremont St. Building, $1500. -
9. Warehouse consumed by fire; received cash in settlement of losses,
$75000. -- - 1O. Estimated value of Beacon St. property, $25000; of
Tremont St. Building, $65000 ; of Lot on Charles River, $04000.
Required, 1st, the gain or loss on the property together ; 2d, the gain o'i losr
on each piece of property,
49. (THIRD SERIES.) Items. 1. We own the following prop,
erty : Farm in Dutchess County, with improvements, worth $20000 ; Dwelling
House in East Seventy-third St., worth $30000 ; Stock Farm near Trenton, N. J.,
worth $25000 Total, $75000. - - - 2. Paid cash for fertilizers for Dutchess
Co. Farm, $150. 3. Paid cash for help, Dutchess Co. Farm, $75. -
4. Paid plumber's bill for Seventy-third St. House, $125. - - - - 5. Received
cash for pasturage, Stock Farm, $150. - - 6*. Paid cash for insurance,
Seventy-third St. House, $25. - - - - 7. Paid cash for farming implements,
Dutchess Co. Farm, $37.50. - -8. Paid cash for yoke of oxen, Dutchess
Co. Farm, $120. - -9. Received cash for rent, Seventy-third St. House,
$750. - - 1O. Paid cash for repairing fences, Stock Farm, $17.50. -
11. Paid cash for blacksmith bill, Dutchess Co. Farm, ..',s'. - - 12. Rec'd
cash for horse board, Stock Farm, $259. - 13. Sold produce for cash,
Dutchess Co. Farm, $817. - -14. Sold Seventy-third St. House for
$:j5000 cash. - - 15. Paid cash for stable repairs, Stock Farm, $75. -
* These transactions may be placed to one account, Heal Estate, or to separate account*.
as Tremont St. Store, Beacon St. Home* etc Both plans are suggested.
,S // / P Jf /; .V T , O 11 A D V E N T U R E A C C U A T . 17
lit. Received cash for produce, Dutchess Co. Farm, $513.75. - -17. Rec'd
cash for horse board, Stock Farm, $432.50. 18. Estimated value of
Stock Farm, $22000. - - - 19. Estimated value of Dutchess Co. Farm and
appurtenances, $20000.
Required, the gain or loss in each enterprise.
VII. SHIPMENT, OR ADVENTURE ACCOUNT.
5O. 1 . The Object. To show the gain or loss on goods
sent away to be sold on account of the shipper.
51. 2. The Method. When the goods are shipped, or
expense is incurred, the account is debited with the cost, and
when an account of the sales is received it is credited with
the returns. The difference will be the gain or loss.
52. EXAMPLES OF SHIPMENT ACCOUNT.
Items.
l t Shipped goods from store to
Jackson & Co., Philadelphia, to be sold
on our %, at a cost of $1575.
2. Shipped from store to Justin &
Poole, Boston, for our account, 5 hhds.
Sugar, at a cost of $1042.50.
3. Bought for cash and shipped
Simpson & Mead, Toronto, for our
account, 15 brls. Mess Pork, $315;
paid freight on same, $35 = $850.
4. Received an account of the sales
of Philadelphia shipment ; net pro-
ceeds remitted, $1750.
>. Shipped Brown & Co., Jackson-
ville, from store, consignment of
Pork, at a cost of $543.75.
(>. Received account of sales of
shipment to Toronto, the net pro-
ceeds of which are $317.50.
7. The two shipments remaining
unsold are valued at cost.
[NOTE. These items involve four
shipment accounts, two of which only
are illustrated.!
Dr. Shipment to Philadelphia. Cr.
Cost.
Returns.
1
1575
4
1750
Returns - - $1750
Cost - - - 1575
Gain
- - - $175
Dr. Shipment to Boston. Cr.
Cost.
...
Returns.
2
1042
50
7
1042
50
Canceled.
18 ACCOUNTS.
MATERIAL FOR PRACTICE.
53. (FIRST SERIES.) Items. 1. Shipped from our stock to Paul
Brown, Boston, 25 boxes Cheese, 850 Ibs., at 20.*, $170 ; paid freight on same
in cash, $12.50, $ =. 2. Shipped Jacob Sterne, Portland, from our
stock, 20 kegs Ohio Butter, 1490 Ibs., at 35?, $521.50. 3. Paid cash
for insurance on shipment to Portland, So. 21. 4. Received account of
sales of shipment to Boston, the net proceeds of which are $152.50. -
/>. Bought for cash and shipped Hazzard & Brown, St. Louis, 15 hhds.
Molasses, 1775 gals., at 80^, $ 6*. Paid cash for insurance and
freight on shipment to St. Louis, $27.50. 7. Received account of sales
of shipment to Portland, the net proceeds of which are stated at $659.50. - - -
S. The Molasses shipped to St. Louis was destroyed en route, by the burning
of the freight car. Received in cash from Insurance Co. the amount called
for on our policy, $1000.
Required, the gain or loss on the several shipments.
54. (SECOND SERIES.) Items. 1. Shipped from store to G. Cleve
land & Co., Buffalo, for our account, 15 hhds. Sugar, 14000 Ibs., at 5|' f , $770 ;
15 tierces Rice, 7500 Ibs., at 4^, $300 ; 20 bags Coffee, 1670 Ibs., at 15'*,
$250.50 ; freight on same, $175 Total, $ 2. Shipped G. Cleve-
land & Co., Buffalo,* for our account, 12 hhds., N. O. Molasses, ',20 gals., at
42^, $302.40. - - 3. Bought for cash, and shipped Bannister & Cross,
Philadelphia, for our account, 20 kegs Orange Co. Butter, 1500 Ibs., at 29< ; ,
$4^5. 4. Paid cash for freight on above shipment, $10. - - - - o. Paid
cash for insurance, in transit u, on shipments to Buffalo, $14. f>. Rec'd
ah account of the shipments to Buffalo, the net proceeds, held by consignee,
being $2275. 7. The value of the property shipped to Philadelphia
is estimated at cost.
Required, the gain or loss on the several shipments.
VIII. COMMISSION AND SERVICE ACCOUNT.
55. 1. The Object. To show the returns from persona!
services.
56. 2. The Method. Usually, the entries will be on the
credit side alone, as the result of a service to the person rendering
it should be a gain, if anything. There may be offsets, however,
which should appear on the debit side. When services produce
the account should be credited, and when they
* Let the different shipments to this firm be entered in one account, under the head of
Shipments to Buffalo."
C MM IS SI 02V AND SERVICE ACC UN T.
Mibject us to cost, it should be debited. The difference will
ordinarily be a f/aiti, but may possibly be a loss.
[It may seem anomalous that one can lose by rendering service ; and yet
?uch a thing is possible. The intent, and the legitimate outcome of service,
-however, is to gain.]
Dr.
Profession.
Cr.
Cost.
Returns.
5
1
37
50
4
10
3
117
50
6
30
5
93
75
8
25
7
125
10
50
9
59
75
130
433
50
Returns - $4a3.50
Cost - 120
Gain - $313.50
57. EXAMPLE OF SERVICE ACCOUNT.
Items.
(THE BUSINESS OF A DOCTOR.)
J. Received cash for professional
services, $37.50.
X. Paid cash for instruments, $5.
,V. Received cash for surgical oper-
ation and attendance, $117.50.
4. Paid cash for office boy's serv-
ices, $10.
5. Rendered bill to John Drew for
attendance on family, $93.75.
f>. Paid cash for horse board, $30.
Y. Received cash during the week
for office practice, $125.
8. Paid cash for medicines, $25.
if. Received cash for medical at-
tendance, $59.75
#Y>. Paid cash for office rent, $06.
MATERIAL FOR PRACTICE.
58. (FIRST SERIES.) THE BUSINESS OF A LAWYER. Items.
1. Received cash as retaining fee in the case of Rollins vs. French, $50.
2. Paid amanuensis cash, $25. 3. Received cash in full for services
in the Jones' Will case, $975. 4. Paid office rent, $50. - - - 5. Paid
*ash for attorney's assistance, $75. 6*. Received cash in full for serv-
ices in Rollins vs. French, $375. 7. Paid cash for copy of Revised
'Statutes, $7. - - 8. Paid cash for stationery, $17.50. f>. Received
vcash for services in searching title and drawing up deeds, $75.
Itcquired, the net returns.
59. (SECOND SERIES) THE BUSINESS OF A REAL ESTATE AGENT.
Items. 1. Received cash of Mrs. Folke, commission for selling her house
in West Nineteenth St., $125. - - 2. Paid cash for stationery, $G.50.
.. Paid cash to office boy, S5. - - 4. Received cash, commission for
renting houso in Fifth Ave., $67.50. - - - - 5. Received cash, commission on
auction sales, SI 17. 50. f>. Paid Lawyer's fees, $20. - - - 7. Rented
'Goldsrni :h's house in West Tenth St., for which he owes us commission, $90.
S. Received casb for my percentage on collections this week, $210. - - -
20
AC CO UXTS.
f>. Received casli for making out conveyance, $17.50. 1(). Paid ga&
bill in cash, $7. 11. Received cash, commission for sale 01 building-
lot on Western Boulevard, S~>7.
Required, the net returns.
IX. INTEREST ACCOUNT.
6O. 1. The Object. To show the gain from lending
and the loss from borrowing money.
61. 2. The Method. When we use other people's money
we pay for the use, and when other people use our money we ]jet
paid for the use. In the first case, interest costs us value, and
in the second, interest produces or returns us value. When we
pay for interest we debit the account, and when we yet. pa id
we credit it. The difference between the sides will thus, at any
time, show the gain or loss.
62. EXAMPLE OF INTEREST ACCOUNT.
Dr.
Items.
./. Paid cash for our note of $2000,
favor of John Mills, and for interest
thereon, $75.60. 2. Paid cash for
our note of $1000, due 60 days hence,
less interest thereon, $10* 3. Re-
ceived cash for stated interest due on
on note, $19.50. 4. Received cash
for interest on Government bonds,
$150. 5. Paid cash for our note of
$1000, due in 45 days ; allowance for
discount, $15.\ - - - 6. Received cash
for Jones's note of $5000, due in 60 ds.,
less discount for the time, $50. \ - - -
7. Bought for cash Stuart's note of
$4000, due in 70 ds., at a discount of $46.67.%
Required, the gain or loss on interest.
Interest.
Cr.
Cost.
Returns.
1
75
60
2
10
6
50
3
19
50
1S5
60
4
150
S
15
7
46
67
2-11
1 7
Returns - - $241.17
Cost - - - 155.60
* If we pay a note before it is due, the person to whom the money is paid haft tin >ixe
thereof for the unexpired time, and pays us for it in abatement of the amount payable at
due date.
t At the end of 45 days, when our note is due, we are to pay for it $1000. By paying for
it now, surrendering the use of our money for 45 days, we get an abatement, or discount^
of $15 really receive $15 for interest.
t This note pledges to us $5000 in 60 days. As we want the money now, we are required
to pay for the use of it for the unexpircd time, the interest rate, $50. Hence, interest costs
as $50.
This transaction is similar to that of the 5th, the only difference being that in the
previous case we discount our own note, and in this we discount another's. In both instances:
we get paid for the use of our money.
SECURITIES A C CO UN T. <51
MATERIAL FOR PRACTICE.
63. (FmsT SERIES.) Items. 1 We have on hand notes upon
which interest has accumulated, as follows : P. Jones's note of $500 J, interest,
$75; H. Durand's note of $1500, interest, $50* - - 2. Bought for cash
Hiram Power's note of $3000, due in 60 ds., at a discount of $30. - -
3. Sold for cash, P. Jones's note of $5000, with interest on same, $90.
4. Received cash for our note of $10000, due in 90 ds., less discount for the
time, $150.\ 5. H. Durand paid for his note of $1500, and interest
thereon, $SO. (I. Received cash for interest on Government bonds, $1 75.
7. Paid cash for semi annual interest on mortgage, $30.
Required, the gain or loss.
64. (SECOND SERIES.) Items. 1. Have on hand the following
notes with accumulated interest, as stated : John Seaman's of $2000 interest,
$17.50 ; Robert Holt's of $1500, interest, $10.30 ; James Harrington's of
|3000 interest, $14.75. 2. Bought for cash J. Simpson's note of $2500,
due in 90 days, at a discount of $37.50. 3. Received cash for Robert
Holt's note, $1500, and interest on same, $19.30. 4. Got our note of
$2000 discounted for 30 days, receiving cash for the face, less interest for the
time, $10. 5. Paid cash for interest on mortgage, $27.50.
{>. Received credit for interest on balance in Savings Bank, $62.50. - - -
7. Paid net cash in full of J. Astor's account of $1500, due three months
hence ; abatement for interest, $22.50. 8. Received cash for John
Seaman's note of $2000, and interest on same, $32. - - .9. We hold James
Harrington's note of $3000, on which there is accumulated interest of $25.%
- 1O. We hold J. Simpson's note of $2500, having 30 days to run.
The interest for that time is $12.50.%
Required, the gain or loss.
X. SECURITIES ACCOUNT.
65. 1. The Object. To show the gain or loss from
dealing in securities. ||
* Interest account should be debited with these amounts for the same reason that
Merchandise account is debited with the value of merchandise on hand at the beginning of
business. The transaction is equivalent to buying the notes with interest added.
t We paid $150 for the use of $9850, ninety days.
% This item should be entered as inventory on the credit side of the account.
We have already credited Interest, the full discount on this note for 90 days, $37.50.
There are thirty days yet unexpired, and we should, therefore, debit the account with the
interest for this time.
1 By securities is meant any form of written guarantee for the payment of money.
These are of various kinds, and may include even promissory notes and acceptances ; but
the class of securities dealt in are usually the issue, either in the form of stocks or of bonds
22 ACCOUNTS.
66. 2. The Method. When stocks or bonds are bought,
or cost anything, the account should be debited with the cost,
and when sold, or when they produce value in any way, the account
should be credited with the returns. The difference will be
the (/ain or loss.
67. EXAMPLE OF SECURITIES ACCOUNT/
Dr.
Securities.
Cr.
Cost.
Returns.
I
5010
. 3
472
50
2
973
5
40
4
1265
6
965
7
2250
S
46
9498
9
8075
9598
50
Items.
1. Have on hand 4000 U. S. Regis-
tered 3's,f at 10H, $4060 ; 1000 Michi-
gan Central Stock, at 95, $950 Total,
Sou 10. 2. Bought for cash 200
Mutual Un. Tel. Stock, at 2H, $43 ;
1000 St. Paul & Duluth (preferred), at
93, $930 Total, $973 - - 3. Sold for
cash 500 St. Paul & Duluth (preferred),
at 94|, $472.50. - - 4. Bo't for cash
1000 N. Y. Central R. R. Stock, at 126|,
$1265. 5. Received cash divi-
dend on Mich. Central Stock, 4 per
cent, $40. 6*. Sold for cash Mich.
Central R. R. Stock, 1000, at 96i,.S'.'";.-7.
- 7. Bought for cash 2500 Oregon
Improvement Mortgage Bonds, at 90,
$9850. - - 8. Sold for cash 200 Mutual Un. Tel. Stock, at 23, $46. - -
0. Have remaining on hand 4000 U. S. Registered 3's, worth 102, $4080 ;
1000 X. Y. Central Stock, worth $124, $1240 ; 500 St. Paul & Duluth (pre-
ferred), worth 96, $480 ; 2500 Oregon Improvement Mortgage Bonds, worth 91,
$2275 Total, $8075.
68. Instead, of keeping a general Securities account, sep-
arate accounts may be kept with each class of securities. The
following examples will show this method. [The items are the
same as those used in the general account.]
Returns - $9598.50
Cost - - 9498
Gain $ 100.50
of incorporated companies. The distinction between stocks and bonds is an important dis
tinction ; stocks are the proprietary shares of corporate enterprises, representing the invested
capital, and depending for income upon the financial success of the enterprises, while bonds
are the bills payable of the corporation issued to guarantee the payment of borrowed
money, with interest thereon. Thus, the income from shares or stocks is through the
earning of the business in form of dividends ; and the income from bonds is in the shape
of interest. Securities are bought and sold on speculation, the same as merchandise and
other commodities.
* Examples are here given, first of a general Securities account, and next of separate
accounts under distinctive titles, of the several securities.
t ' U. S. Registered 3's " are the 3 per cent Registered Bonds of the Government. The
nominal value is $4000, the real value, at 1 per cent premium, $4060.
SECURITIES ACCOUNT. 2
Dr. U. S. Registered 3's. Cr. Dr. Michigan Central Stock. Cr.
Cost.
Returns.
/ 4060
9
4080
<
\ II
Cost
Returns.
1
950
5
40
6
965
Dr. Mutual Un. Tel. Stock. Cr.
Cost.
Returns.
6)
43
8
46
MATERIAL FOR PRACTICE.
69. Items. 1. Bought for cash 10GO Chicago & Alton R. R.
at 129|, $1295. 2. Bought for cash 2500 Missouri Pacific R. R.
Stock, at 99f, $2490.62. - - 3. Sold B. Scott, on % % 500 Chicago & Alton,
at 131], 8656.35. 4. Bought of Roberts & Co., on %, 1500 Delaware &
Hudson Canal, at 107$, $1612.50. - 5. Received cash dividend cf 4 per-
,ce,a on 2500 Missouri Pacific, $100. - - - 6. Bought for cash 2000 Delaware
& Hudson Canal, at 106, $ * - - 7. Bought for cash 2000 Chicago &
Alton, at 132, $ - - 8. Sold for cash 3500 Delaware & Hudson
Canal, at 102i, $ - 9. Bought, on our note at 10 ds., 2500
Georgia Central (guaranteed) First Mortgage Bonds, at 111, $ -
1(). Received cash for semi annual interest on Georgia Central 1st Mortg. ,
3| per cent on $2500, $87.50. ----- 11. Sold for cash 1500 Georgia Central
1st Mortg., at 113, $ 12. Bought for cash 3000 Met. Elevated
R. R. Stock, at 85, $ 13. Sold J. Paton, on his note at 30 ds.,
1500 Met. Elev., at 83^, $ - - - - 14:. Received semi annual cash
dividend of 5 per cent on 1500 Met. Elev., $75. - - 15. Sold for cash 1500
Met. Elev., at 87i, $ 16. Have on hand 2500 Chicago & Alton,
worth 129; 1000 Georgia Central (preferred), worth 117 ; 2500 Missouri
Pacific, worth 97|.
Required, the gain or loss on the securities as a whole, and on the separate
classes.
* Railroad stocks are issued in shares of $100 each. Instead of stating the iiiantity of
purchase and sale in this way, however, we give the nominal price of the entire transfer.
Hence, instead of saying, as in this instance, 20 shares of Del. & Hud. Canal, at $106 per
share, we say, in effect, ^2000 of nominal value in Del. & Hud. Canal at a premium of
f> per cent.
24 ACCOUNTS.
XI INCIDENTAL ACCOUNTS.
7O. The purposes of business often require the keeping
of separate accounts with the various departments of outlay or
expense, embracing items which belong to, and are a part of, the
main business account; such, for instance, as rent, clerical or
other labor, office expenses, fixtures, commission (causing outlay),
interest (when it is an expense), etc. Sometimes these items, or
the most of them, are brought into one account, Expense ; and
unless there are particular reasons for keeping them separate,
this is a proper course to pursue. The Expense account is thus
an account of convenience, and may be said, in general terms, to
contain items of expenditure, not charged to any other
account. *
71. There are cases, also, where a general Expense account
would seem to be absolutely necessary such, for instance, as in
a business having co-ordinate departments or divisions, and where
such items as rent, salaries, gas, and stationery apply to all the
departments without the means of knowing at the time what
would be an equitable apportionment. It is customary, under
such circumstances, to keep a general Expense account during
the running of the business, and at the end of each fiscal period to
adjust the proportions according to the ascertained facts.
72. What may be said of Expense account, therefore, may
be said of anyone of the accounts embraced under the general title
of '"'incidental." The first thing that should be said is that it is
not expected that any account of this class will show a gain : and
if such a thing should by any possibility occur, it will appear
that the items would more properly have been placed in another
account. However, the same rule for debits and credits which
applies to any business account applies here, viz.: they are debited
for cost and credited for returns the difference being a net
loss or a net gain.
* The Expense account is not susceptible of exact definition, for the reason that scarcely
any two persons use it under the same limitations. To say that it covers the cost of carrying
on the business, would leave nothing to be charged to Merchandise, or any other of the main
business accounts as all outlay, of whatever kind, is for the purpose of " carrying on the
business." If an Expense account is kept at all, it is of little moment what class of items is
placed in it, so long as its limits are clearly understood, and the student is not iradvertentli
led to suppose that an Expense business might possibly be a good business to follow.
INCIDENTAL ACCOUNTS.
73. EXAMPLE OF EXPENSE ACCOUNT.
Dr. Expense.
Or.
Items.
1. Paid casli for stationery, $25.
2. Paid casli for gas bill, $18.75.
3. Paid cash for rent, $125.
4. Paid casli for janitor's services,
$50.
5. Paid cash for repairs, $17.50.
6*. Paid for postage stamps, $5.
7. Paid for revenue stamps, $3.
8. Paid for advertising, $45.
.9. Paid for coal, $62.50.
1O. Received cash for desk-room in
office, $15*
Cost.
Returns.
1
25
10
15
2
18
75
3
126
4
50
5
17
50
6
5
7
3
8
45
9
62
50
Cost
Retui
Loss
351
75
- - $351.75
ns - 15
- 9336.75
MATERIAL FOR PRACTICED
74. Items. 1. Paid cash for office fixtures, $210. ---- 2. Paid
cash for books and stationery, $17.50. ..... 3. Paid cash for clerk hire,
$87.50. ..... 4. Paid cash for reflooring warehouse, $150. ..... 5. Paid
gas bill, $17.504 ..... 6'. Paid coal bill, $22. \- -7. Paid for rent,
three months in advance, $500. - - - - 8. Paid cash for office safe, $325. - - - -
f>. Paid for extra services in moving goods, $37.50. ..... 1O. Paid for
insurance on goods in store, $62.50. ..... 11. Paid for insurance on goods,
in transit u,% $25. ....... 12. Paid Janitor's wages, $50. ..... 13. Paid for
new Ledger, $10.50. ..... 14. Paid for advertising, $45. ..... 15. Paid
printing, $15.%
1(>. Paid for repairing skylight, $150.
17. Paid for gas fixtures, $43.75. ..... 18. Paid for office partition,
* This item will, of course, go to the credit of Expense account, the effect being to
reduce our rent, expenses. In the same way we might relet our space at such favorable
rates that instead of our rent being a net outlay, it might be a source of profit. This is
simply a possible contingency, and not in any sense the idea of an Expense account.
t These items may be written up first, under a general Expense account, and next
under distinct heads, viz.: Kent, Fixtures, Stationery, Repairs, Services, Insurance, and
Expense.
* Items not provided for by special accounts should go to Expense.
That is, goods shipped to us, as per our order. The insurance is against lose b>
fire or shipwreck.
36 ACCOUNTS.
$117.50.* 19. The value of articles charged to Fixtures account ia
placed at $500. \ 2O. The value of unexpired rent which has been
paid for is $166. 67. J
Required, the condition of the several accounts.
XII. PROPRIETARY ACCOUNTS.
75. The relation which a proprietor sustains to his busi-
ness is personal, and the account which shows that relation is
Isept like any personal account. Its object is to denote the pro-
prietor's investment or deficiency in other words, what the
business owes him, or what he owes the business. The account
is credited with all sums invested and debited with all sums
withdrawn? the difference being the net investment or the
deficiency.
76. This is true whether there be one proprietor or more.
It is sometimes the custom in case of a single proprietor to keep
the investment account under the title of " Stock," rather than
the proprietor's name; but there is no good reason for it, and the
practice is apt to mislead a learner. In partnerships, the invest-
ment is entered under the partners' names ; and in joint stock
"business, under the general title of " Capital Stock."
77. It is proper, in any case, for a proprietor to have two
accounts one, an investment account, and the other, a private
or strictly personal account. In such case the investment account
would contain only the more permanent items which affect the
investment, and the private account would denote the temporary
dealings of the proprietor with his business.
* This item presents one of the difficulties that is likely to occur in keeping separate
accounts for expenditures There may easily be a doubt as to whether it should be charged
to Repairs or Fixtures. The question must be settled arbitrarily, and according to the best
judgment in each case.
t The Fixtures account is meant to cover that part of the expenses of the business indi-
cated by its title, but it does not follow that the amount paid for fixtures is an absolute loss.
In estimating the loss it is proper to credit the account with the value inhering in the
property that is, what the property could be sold for.
i As Rent account has been debited with the cost of rent for three months, and we are
estimating the gains and losses for only two months, it is plain that the cost for the unex-
.pired month should be deducted in other words, credited, leaving the account to show the
net cost for the two mouths.
PROPRIETARY ACCOUNTS.
78. EXAMPLES OF PROPRIETARY ACCOUNTS.
1. SINGLE PROPRIETORSHIP.
(One account.)
Items.
The proprietor invests $5000 cash.
Draws out for private use, $50.
The business assumes to pay a
debt for him of $150.
He transfers to the business from
his private Ledger personal ac-
counts (receivable), as follows :
H. E. Hibbard, $500; D. R.
Lilibridge, $325.
The net gain of the business is
$2100, which is to remain as
additional investment.
2. PARTNERSHIP Two PROPRIETORS.
(One account each.)
The partners are C. Monroe and J.
Parker.
Items.
1. Monroe invests cash, $2500.
2. Parker invests his stock of goods,
valued at $5000.
3. Monroe makes over to the concern
certain notes, worth $575.
4. Parker draws out for personal use,
5. The concern assumes a private
debt of Monroe's to Baldwin &
Co. of $3000.
6. The concern owes Monroe on sal-
ary, $150 ; and Parker, $300.
7. The net loss of the business is
$1500. Monroe's share two-
thirds ; Parker's one-third.
Dr.
Proprietor.
Cr.
Withdrawals.
Investments.
2
50
1
5000
3
150'
4
825
200
5
2100
7935
Investments $7925
Withdrawals - 200
Net investment -$7125
Dr
C. Monroe.
Or
Withdrawals.
Investments.
5
3000
1
2500
7
1000
3
575
4000
6
150
3325
Withdrawn
Invested -
Deficiency
Dr.
- $4000
$775
J. Parker.
Or.
Withdrawals.
Investments.
4
200
2
5000
7
500
6
300
700
5300
Invested - - $5300
Withdrawn ' * 700
Net investment
28 ACCOUNTS.
MATERIAL FOR PRACTICE.
79. (FIRST SERIES.) SINGLE PROPEIETOR TVw accounts.'* Items.
1. Proprietor (James Smith) invests cash, SoOuO. X . Adds to his
investment notes and personal accounts, amounting' to $1575. - - - - 3. Draws
out for private use, $150. 4. Puts in cash, on private account, $500.
- - - 5. Collected on private accounts belonging to proprietor, $175.
6*. Paid a personal bill for proprietor, $87.50. 7. Transferred from
private account to investment account, $400.\ 8. The net loss of the
business is $300, the investment being reduced by that amount.
Required, the investment at closing.
8O. (SECOND SERIES.) Two PROPRIETORS One account each. The
partners are Of. W. Brown and C. H. Peirce. Items. ! G. W. Brown
invests $7500 cash. 2. C. H. Peirce invests, in good will, $4500. *
3. Peirce draws out cash, $150. 4. Paid a private debt for Peirce,
$175. 5. Brown turns in some outstanding accounts of his former
business, amounting to $1750. ----- 6*. Brown draws out cash, $375.
7. Peirce renders an account of extra service, for which he is allowed X'/\5.
8. Paid a private debt for Brown of $17.35 9. One cf the
accounts rendered by Brown (5th item) proves worthless, and is charged back,
$125. 1O. Peirce pays in, cash, $114. 1 !> Brown's undrawn
salary for the month is $200. 12. Amount due Peirce for monthly
salary, $150. - - 13. Accepted a draft of $1000, drawn on Peirce. -
14. The net gain of the business is $1575, of which Brown is entitled to f
and Peirce, f .
Required, the net investment of each partner at the
81. (THIRD SERIES.) THREE PROPRIETORS Each two accounts.
The partners are Chas. Brown, James Moore, and Robert Mason. Items.
/. James Moore invests in cash, $7000. 2. Charles Brown invests in
notes, $7500. 3. Robert Mason invests in merchandise, $8000.
4. Robert Mason draws out on private account, $150. >. Charles
Brown adds to his investment, cash, $500. 6. Paid private bill for
Robert Mason, $75. 7 James Moore adds to his investment, cash,
$1000. 8. James Moore draws out on private account, $150. - - -
9. Chas. Brown puts in on private account, cash, $350. JO. Paid
private bill for Chas. Brown, $200, 11. The gains in the business are
$2400, each partner to be credited on his private account for one-third
thereof.
Required, the standing of the investment accounts and the private accounts
of each of the proprietors.
* Permanent investment items in one account (Proprietor), and current temporary
dealings in the other, using the proprietor's name.
t Debit private account (James Smith} and credit investment account (Proprietor).
STATEMENT OF PRINCIPLES. 29
82. STATEMENT OF PRINCIPLES.
1. CLASSIFICATION OF ACCOUNTS.
1. Accounts are of two classes ; one class showing resources and liabilities^
and the other showing gains and losses.
2. The first of these two classes embraces (1) CASH exhibiting the
amount on hand ; (2) PERSONS showing what individuals owe the business,
and what the business owes individuals on open account ; (3) NOTES AND
ACCEPTANCES (under the heads of Bills Receivable and Bills Payable*)
showing what is owing to the business and what the business owes on
icritten promises.
3. The second class embraces all records of active operations which
indicate the character of the business, and point out the sources of its
prosperity or its adversity. Among the accounts of this class are MER-
CHANDISE, REAL ESTATE, ADVENTURES, EXPENSE, INTEREST, SERVICES,
etc., etc.
4. Accounts belonging to the first class are appropriately called Financial
Accounts, or ACCOUNTS OF FINANCE, and those belonging to the second
class, Business Accounts, or ACCOUNTS OF BUSINESS.
2. DEBITS AND CREDITS.
1. Cash account is debited when money is received, and credited wheu
money is paid out.
2. Bills Receivable account is debited when other people's notes and
acceptances are received, and credited when they are disposed of.
3. Bills Payable account is credited when our obligations are issued,
and debited when they are redeemed.
4. A Personal account is debited when the person gets into our debt,
or we get out of his, and credited when we get into his debt, or he gets
out of ours.
5. Proprietors' or Stockholders' accounts are treated like other
personal accounts. They are credited when, by investment or otherwise,
the business becomes indebted to the persons, and debited when, by
withdrawal of funds or otherwise, the persons become indebted to the
business.
6. All accounts showing gains or losses are debited when that
which they represent costs value, and credited when that which they rep-
resent produces value.
* For full explanation of Notes and Acceptances see next page.
UNTS
83. NOTES AND ACCEPTANCES.
The two forms of negotiable paper owe their distinctive characteristics to the dif-
ferent circumstances of their origin. A note originates with the payer or maker, and is a
voluntary promise ; a draft originates with the payee or drawer, and is first a request, and
next an affirmative response, which is, in effect, a promise. A note has necessarily two
parties, the maker and the payee : a draft has three parties, the drawer, the payee, and the
drawee. The maker of a note corresponds with the drawee of a draft, and the payee of a
r.ete with the payee of a draft ; while the drawer of a draft has no equivalent in an un-
endorsed notehe being, in fact and in law, an endorser or guarantor. The two forms,
below will illustrate these points :
KTOTE-
$1000. New York, tfuJp -/, 188 J.
^
M after date cj/" promise to yay to
the order of d^WW Tg^z#^^ -.
") ,-^X /
7 ^^ Cx4^^?^-^^^ D OLLA R8, -value recc I ml.
V
$1000.
the order of
/'
Chicago, $u^ -/, 188 5.
after date, vay to
-/- DOLLARS, value received.
Of the note, S. S. Packard is the maker, and Peter Cooper the payee ; of the draft,
H. B. Bryant is the drawer, Peter Cooper the payee, and S. S. Packard the drawee. The
undertaking in each case is that S. S. Packard shall pay to Peter Cooper, or to any one whom
he may authorize to receive it, one thousand dollars in sixty days. When Packard, the
drawee of the draft, has responded by writing his acceptance across its face, the draft will
have this advantage over th* note, that two persons, instead of one, will be held to the
payment for the law makes the drawer a guarantor. Hence, to make the note an exact
legal equivalent of the accepted draft, it is only necessary that Bryant should endorse it, or
write his name across the back. The three parties will then hold exactly the same relations
to each other in both documents, and the two bills will be in all respects, except form.
Identical.
QUESTIONS. 31
QUESTIONS.
1. What is Book-keeping? 2. Through what form are the dealings
of a business best expressed ? 3. What is an Account ? 4. What
results are shown by accounts? 5. What does Cash account show?-
What accounts show indebtedness to and by the business ? What name is
given to notes and acceptances in our favor? What, to notes and accept-
ances against us? In what accounts are gains and losses shown?
7. What is the object of Cash account? 8. What is its method?
14. What is the object of personal accounts ? 15. How are they kept*
20. What are notes and acceptances ? How does a note differ from *m
acceptance? 21. What are other peoples' notes and acceptances which
come into our hands called, and why ? What are our notes and acceptances
called, and why? What does Bills Receivable account show? What does
Bills Payable account show? 22. What is the object of Bills Receivable
account? How is it kept? 28. What is the object of Bills Payable
account ? How is it kept ? 34. What is the purpose of business ? Is
this purpose always attained? 35. What must be the quality of an
account which measures the progress of the business ? What two ideas
oppose each other in accounts of this kind ? 36. What names are given
to some of the main accounts which represent the activities of business ?
38. What is the object of Merchandise account? 39. What is its
method ? In case it is desired to show the gain or loss on merchandise before
it is all disposed of, what is necessary ? 44. What is the object of Real
Estate account ? 45. What is the method of keeping it? 50. What
is meant by Shipment or Adventure ? What will a Shipment or Adventure
account show? 51. How is it kept? 55. What is shown in Com-
mission and Service account ? 56. On which side of the account are the
active entries usually made ? What is the theory of the account ? Is the
result of Commission and Service account usually a loss or a gain.
60. What is the purpose of Interest account ? 61. What is its theory?
When does Interest cost value? When does it produce value? 65. What
is meant by Securities ? What is shown in Securities account ? 66. What
is its method ? 68. Are separate accounts ever kept with the different
classes of securities? 70. What are incidental accounts? What is the
principal incidental account ? 71. Mention instances where it would seem
to be necessary to keep an Expense account. 72. Is it ever possible for
Expense account to show a gain ? In case it should show a gain, what is true
of the entries ? What are the rules for debiting and crediting Expense ?
75. W r hat relation does a proprietor sustain to his business? What is shown
in a proprietary account? 76. What title is sometimes given to the pro-
prietary account when there is a single proprietor? What names are used in
a co-partnership ? What in a joint- stock business ? 77. Is it ever propel
for a proprietor to have two accounts ? In such case, what is shown in each of
the accounts? 82. How many classes of accounts are there? Wliat is
shown in each class ? What accounts are embraced in the first class ? What
in the second class ? What name is given to accounts of the first class ? What
to those of the second class ? When is Cash account debited ? When credited?
When, Bills Receivable? When, Bills Payable? When, personal accounts?
When, proprietors' or stockholders' ? When are accounts showing gains
and losses debited, and when credited ?
CHAPTER II.
TRANSACTIONS AND THEIR RECORD,
84. A BUSINESS TRANSACTION, in its simplest form, is
the equal exchange of valuable things.*
85. An exchange of valuable things means that one valu-
able thing is received and another valuable thing given.
86. An exchange, or transaction, therefore, affects the
business in two directions ; and a competent record of a transac-
tion must show these opposite results.
87. In the illustrations in the previous chapter one side
only of the transaction is considered, the object being to show the
character and aim of the separate accounts. In this chapter both
sides are given, and it will be seen that every transaction necessi-
tates at least two entries one to the debit side of some account
and one to the credit side of some other account ; the sum of the
debits and sum of the credits being equal.
88. Frequently, however, the record may involve more
than two accounts. Preserving the equality of debits and credits,
the full record of a transaction may require any one of the fol-
lowing four forms :
1. One debit and one credit.
2. One debit and two or more credits.
3. Two or more debits and one credit.
4. Two or more debits and two or more credits.
ILLUSTRATIONS.
89. 1. One debit and one credit.
TRANSACTION.
Bought merchandise and paid cash, $200.
RECORD.
Merchandise, Dr. - - - 200 | Cash, Cr. 300
* This definition does not cover all the exigencies of business record, nor does it aim
to be philosophical. It is simply the best definition for this place, and is comprehensive
enough for the work in hand.
RECORD OF TRANSACTIONS. 33
9O. 2. One debit and two credits.
TRANSACTION.
Bought merchandise for $500; paid cash, $300, and note, $200.
RECOKD.
Merchandise, Dr. - - 500 I Cash, Cr. 300
I Bills Payable, Cr. .... 200
91. 3. Two debits and one credit.
TRANSACTION.
Sold merchandise for $400 ; received cash, $150, and note, $250.
RECORD.
ash, Dr. 150 I Merchandise, Cr. 4X)
Bills Receivable, Dr. - - - 250 I
9. Jj>. Two debits and two credits.
TRANSACTION.
Bought merchandise for $350, and house and lot for $5000 ; paid cash,
$3000, mortgage, $2850.
RECORD.
Merchandise, Dr. - - - - 350 I Cash, Cr. 3000
Real Estate, Dr. - - . 5000 I Mortgages Payable, Cr. - - 2350
93. A transaction may consist of an exchange between
(1) two commodities (things having substance) ; (2) between a
commodity and a claim (or promise) ; (3) between a claim and
a claim ; (4) between a commodity and a service ; (5) between
a service and a service.
ILLUSTRATIONS.
94. 1. Between Commodities.
TRANSACTION.
Bought 100 bush. Wheat for $150 in cash.
RECORD.
Wheat, Dr. 150 | Cash, Cr. ....... 1M
95. 2. Between a Commodity and a Claim.
TRANSACTION.
Sold James Benson on credit, 50 bush. Wheat for $85.
RECORD.
James Benson, Dr. - - - 85 | Merchandise, Cr. ' cfo
34 RECORD OF TRANSACTIONS.
96. 3. Between a Claim and a Claim.
TRANSACTION.
Received of James Benson his note in full of his account, $85.
RECORD.
Bills Receivable, Dr. ... 85 | James Benson, Cr. - - - - 85
97. 4- Between a Commodity and a Service.
TRANSACTION.
Received cash for one month's labor, $100.
RECORD.
Cash, Dr. .... ... 100 | Service, Cr. - 100
98. 5. Between a Service and a Service.
TRANSACTION.
Paid Dr. Hammond's bill for medical attendance, $150, by one year's
tuition for his son Charles.
RECORD.
Family Expense, Dr. - - - 150 | Tuition, Cr. 150
EXERCISES IN JOURNALIZING-.
99. To "journalize," in the book-keeping sense, is to
decide in the case of a transaction what shall be its record in the
Ledger; in other words, what account or accounts shall be debited,
and whafc account or accounts shall be credited.
1OO. The Journal, when used as a separate book, comes-
between the Day-Book, which simply records the transaction, and
the Ledger, which contains the classified results. It is more or
less formal in its arrangement, but of whatever form, its purpose
is the same that of deciding upon the debits and credits
of a transaction.
1O1. The "items" under the different subjects in the
preceding chapter are used to illustrate separate accounts. For
this reason, in the matter illustrated, as also in the first series of
the "Material for Practice," but one side of the transaction is
given. In the second and third series, however, the transaction
is fully stated, and thus is given an abundance of good material for
journalizing. Three forms of journalizing are here given, anyone
of which may be used. Beginning with the " Second Series " under
each head, let the student journalize all the items in Chapter I.
EXERCISES IN JOURNALIZING.
35
SECOND SERIES, UNDER CASH ACCOUNT. ( 11.)
>r, Cr. - - 175
Jones & Co., Cr. - - 75
Cash, Or. 29.12
Mdse., Cr. -. - - - - 182.35
7
Cash, Cr. 25
Bills Receivable, Or. 180
'r. 125
Cash, Cr. 112.50
Cash, Or. 50.
Abram Stuart, Cr. - - 37.50
Cash, Cr. 150
THIRD SERIES, UNDER BILLS RECEIVABLE ACCOUNT. ( 27.)
Item 1.
Cash, Dr. -
- 175 Pro
Item 2.
Cash, Dr. - -
- 75 Jon
Item 3.
Mdse., Dr.
- 29.12 Casl
Item 4.
Cash, Dr. - -
- 182.35 Mds
Item 5.
Expense, Dr. -
7 Casl
Item 6.
Expense, Dr. -
- 25 Cas:
Item 7.
Cash, Dr. - -
- 180 Bill
Item S.
Cash, Dr. -
- 125 Mds
Item 9.
Expense, Dr. -
- 112.50 Cas^
Item 10.
Proprietor, Dr.
. 50 Casl
Item 11.
Cash, Dr. -
- 37.50 Abr
Item 12.
Rent, Dr. -
- 150 Cas]
Items.
Debits.
Credits.
1
Bills Receivable - -
200
Merchandise - - -
200
2
Bills Receivable - -
129
James Parton - -
129
3
Cash - - - j
199
33
Bills Receivable -
200
Interest - - - 1
67
i
"P'll 1) ' Kl
.
n v.
Lash -I
394
4
.Dills xveceivaule
Interest - -
6
"R'll T? 1 1
onft
n v.
299
Ov/U
Lash -j
Interest - - - - (
1
"R'll T? " hi
97^
r i
Cash -1
274
31
Interest - - - - (
-V 1 ^
O-L
69
"Rilla "R Pfpi \TQ "hi P
qpjrt
r< i,
Lash -c
348
95
OiJlh -L\.t/Ct/I VdUJt?
Interest - - - - \
1
05
_
C* 1
OAA
T3M1 T> * Wl
300
7
J. Rantoul - - - -
oUU
275
jjiiis -tveceivaoie -
Bills Receivable - -
275
8
Bills Receivable - -
210
E. G. Folsom -
210
9
Bills Receivable - -
400
Cash - - -j
Interest - - - -|
398
2
10
Cash -
132
50
Bills Receivable - -j
129
Interest - - -(
3
M
36
RECORD OF TRANSACTIONS.
THIRD SERIES, UNDER KEAL ESTATE ACCOUNT. ( 49.)
(Usual Form.)
Debits. Credits.
Dr.
Or.
20000
QOOOO
ORJOOO
75000
<
150
150
75
fa oli
75
>
125
Cttoh . -
125
Cash , - -
150
Stock Farm ...
f*
150
25
fash
2S
37
50
fooV,
37
i
ion
fflcV,
120
750
Seventy- third St. House
750
EXERCISES IN JOURNALIZING.
3?
Debits. Credits.
7Y-CTM 1 fh
Dr.
Or.
17
fjn
fooh
17
"id
/ 1
OQ
Cash
12
28
Cash - . -
0*0
Stock Farm - - - -
1 1
259
Cash
Q17
Dutchess Co. Farm - -
1 J.
317
r a h
OKAAA
Seventy-third St. House
1 ^
OOUUU
35000
Stork Farm
iyK
Cash - ...
75
//
Cash
513
75
Dutchess Co. Farm - -
513
75
J- 4
Cash
432
50
Stock Farm - ...
1 *?
432
50
-<5
22000
Stock Farm, old %*
1*\
22000
20000
Dutchess Co. F'm, old %
20000
* Transactions of this kind do not occur in the current progress of the business. They
are incident to the closing of the books at the end of a fiscal period, and the opening of them
anew at the beginning of another fiscal period. It is not presumed that the student will
fully understand the entry at this time.
38 RECORD OF TRANSACTIONS.
A MODEL SET OF BOOKS.
1O2. A "Set" of Books comprises what are necessary to
record the happenings and the outcome of a business. These
may consist of two or of fifty, according to the extent and
character of the business, or according to the judgment and
taste of those who use them.
1O3. Ordinarily, three books comprise a set, viz. : the
DAY-BOOK, which tells what happens; the JOURNAL, which
decides how the facts shall appear on the Ledger ; and the
LEDGER, which presents the facts in a classified form. The
Day-Book and Journal are usually combined in one.
1O4. The "Model Set" here presented gives these simple
forms, and exhibits in the plainest way the characteristic features
and logical sequence of Double Entry Book-keeping. Its points
should be carefully studied for future reference.
1O5. MEMORANDUM OF TRANSACTIONS.
New York, January 1, 18 . H. B. Bryant, proprietor, invested
cash, $3000. - - Bought of H. Ely for cash, 125 brls. Flour, at $8, $1000.
Paid James Sturgis & Co. cash for two months' store rent, $75.
Jan. 1 0. Sold Craig & Co. for cash, 50 brls. Flour, at $10. 50, $525. - -
Bought of G. W. Brown on account, 30 ds., 500 bush. Wheat, at $1.75, $875.
- Sold A. E. Mac-key for cash, 100 bush. Wheat, at $1.90, $190.
Jan. 2O. Bought of S. S. Packard, giving in payment therefor our
note at 30 ds., 1000 bush. Oats, at 900, $900. - - Sold Riley & Jones for
cash, 500 bush. Oats, at $1, $500. - - Paid cash for services. $75.
Jan. 3O. Sold J. E. Soule on account, 200 bush. Oats, at %\ t $WO ;
200 bush. Wheat, at $1.95, $390. - - Received of J. E. Soule , in settlement
of account, his note at 30 ds., $590.
February 15. Bought of C. H. Taylor for cash, 225 brls. Flour, at
$8.66|, $1950.
Feb. 2O. Sold J. Jackson on his note at 30 ds., 50 brls. Flour, at $10,
$500. Paid cash for office expenses, $37.50.
Feb. 25. Sold D. R. Lillibridge on account, 100 brls. Flour, at $10.25,
$1025. Gave G. W. Brown on account, our sight draft on D. R. Lilli-
bridge for $500.
Feb. 28. Received cash in full for J. E. Soule's note, $590. - - - - There
remains unsold 150 brls. Flour, worth $10.25, $1537.50; 200 bush. Wheat,
worth $1.35, $270; 300 bush. Oats, worth $1, $300.
MODEL SET OF BOOKS.
39
1O6. DAY-BOOK. (SEPARATE.)
New York, January 1, 18 .
Began business with a cash investment of
Bought of H. EJy for cash,
125 brls. Flour $8 - - - 1000
Paid cash for store rent - - - 75
1O
Sold Craig & Co. for cash,
50 brls. Flour $10.50 - 525
Bought of G. W. Brown, on %,
500 bush. Wheat - $1.75 - - 875
Sold A. E. Mackey for cash,
100 bush. Wheat - - - $1.90 - 190
2O
Bought of S. S. Packard, giving in payment therefor
our note at 30 ds.,
1000 bush. Oats - - - 90^ - - 900
Sold Biley & Jones for cash,
500 bush. Oats - - $1 - 500
Paid cash for services 75
SO-
Sold J. E. Soule, on % ,
200 bush. Oats - - - - $1 $200
200 bush. Wheat 1.95 390 590
3000
40 RECORD OF TRANSACTIONS.
New York, January 3O y 18 .
Received of J. E. Soule in settlement of %, his note
at >n He
KQA
JFfh 1 ^t
Bought of C. H. Taylor for cash,
225 brls. Flour - - $8.66f - -
o/j
1950
Sold J. Jackson on his note at 30 ds,
50 brls. Flour $10
ff
500
Paid cash for office expenses -
o*r
37
50
Sold D. R. Lillibridge, on %,
100 brls. Flour - $10.25
//
1025
Gave G. W. Brown our draft on D. R. Lillibridge for -
00
500
Received cash for J. E. Soule's note
ff
590
Inventory of unsold merchandise.
150 brls. Flour - - - - - - $10.25 - -
900 hiiflh WVipflt 1 3*1
1537
970
50
300 bush. Oats 1.00
300
1O7. JOURNAL. (SEPARATE.)
New York, January 1, 18 .
Dr.
C'r.
Cash
3000
Proprietor -
//
3000
in/mr
1000
Cash
1000
MODEL SET OF BOOKS.
Neiv York. January 1 9 18 .
Dr.
Or.
Expense - -
Cash - - -
Cash
Flour -
Wheat
G. W. Brown
Wheat - -
20
Oats
Bills Payable
Cash
Oats - - -
Expense - - -
J. E. Soule - -
Oats - -
Wheat -
Bills Receivable
J. E. Soule
Feb. 15
Flour
Bills Receivable -
Expense
Cash ....
25
D. R. Lillibridge
Flour - - - -
G. W. Brown - -
D. R. Lillibridge
28
Bills Receivable
75
190
900
500
75
590
500
37
500
525
875
190
900
500
50
200
390
590
1950
500
37
1025
500
590
RECORD OF TRANSACTIONS.
1O8. DAY-BOOK AND JOURNAL COMBINED.
New York, January 1, 18 .
L. P. Dr.
Cr.
Cash . . . .
a>
3000
Proprietor -
1
3000
Investment.
ff
Flour ,
J
1000
Cash
1000
Bo't of H. Ely, 125 brls. - - @ $8
Expense ..........
/
75
Cash
2
75
Paid store rent.
1tk
Cash
V
525
Flour
9
Kf)K
Sold Craig & Co., 50 brls. - - $10.50
ff
Wheat
s
875
*
G. W. Brown ....
Bought 500 bush. - - - - - $1.75
ff
6
875
Cash ...
190
Wheat - -
K
IPO
Sold A. E. Mackey, 100 bush. - $1.90
9.A
&V
Oats
900
Bills Payable - - . -
Bought of S. S. Packard on our note at
30 ds., 1000 bush. 90^
ff
8
900
Cash
0)
"500
Oats
Sold Riley & Jones, 500 bush. - $1
oUu
MODEL SET OF BOOKS.
New York, January 20, 18 .
13
Expense - - - -
A
75
Cash
a
75
Paid for services.
3O
J. E. Soule
Oats, 200 bush., $1
Wheat, 200 bush., 1.95 -
Sold on %.
9
7
5
590
200
390
Bills Receivable
W
590
J E Soule - -
Q
590
Note at 30 ds. in settlement of %.
Flour . .
3
1950
Cash
Bo't of C. H. Taylor, 225 brls. - $8.66|
O/J
2
1950
Bills Receivable
Flour
10
500
500
Sold J. Jackson on his note at 30 ds,
50 brls. $10
ft
A
37
50
Cash
Office expenses.
37
5<*
D R Lillibridge ...
2j[
1025
Flour
3
1025
Sold him 100 brls. $10.25
G W Brown
A
pjOO
D. R. Lillibridge - -
Our draft on Lillibridge, favor of Brown.
11
500
Cash
2
590
Bills Receivable - . -
J. E. Soule's note.
10
590
44
RECORD OF TRANSACTIONS.
Dr.
1O9. LEDGER.* (CURRENT CONDITION.)
(1)
H. B. Bryant, Proprietor. Cr.
18
Jan.
1
Cash - -
1
!
300C
Dr.
(2)
Cash. Cr
W-
18
r
JTan.
1
Proprietor - -
1
3000
Jan.
1
Flour - - - -
'
1000
*
10
Flour ....
1
525
41
44
Expense - - -
1
75
44
Wheat ....
1
190
ii
20
Expense - - -
2
75
It
20
I
XAA
Feb
15
2
1 950
Feb.
28
Bills Receivable
a
590
t
20
Expense - - -
2
37
J_
Dr.
(3)
Flour.
18-
18
,--
Jan.
1
Cash ....
1
1000
Jan.
10
Cash ....
1
525
Feb.
15
** ....
2
1950
Feb.
20
Bills Receivable -
2
500
250
14
25
D. R. Lillibridge
2
1025
j
2050
(4)
J>r. Expense. <>
18
Jan.
1
Cash (rent)
1
75
"
20
*' (service)
2
75
Feb.
20
** (office) - -
2
37
50
1ST
so
!
(5)
Dr. Wheat. Or.
18-
18-
!
Jan.
10
G. W. Brown -
1
875
Jan.
10
Cash - ...
i
190
*
30
J. E. Soulfi - -
2
390
1
580
* Put three accounts on a page.
Dr.
MODEL SET OF BOOKS.
(6)
<3r. W. Brown.
Cr.
18
Feb.
25
Dft. on D. R. L. -
2
500
18
Jan.
10
Wheat - - - -
1
875
r
(7)
Dr. Oats. Cr.
18-
Jan.
20
Bills Payable
1
900
18-
Jan.
20
30
Cash ....
J. E. Soule" - -
1
2
500
200
(8)
Dr. Bills Payable. <>
18
Jan.
20
1
900
(9)
Dr. J. E. Scmle. Gr.
18-
Jan.
30
Sundries - - -
2
590
18
Jan.
30
Bills Receivable -
2
590
(10)
#?' Bills Receivable. Or.
18
Jan.
Feb.
30
20
J. E. Soule" - -
J, Jackson - -
3
3
590
500
1080
18
Feb.
28
Cash ....
2
590
(11)
Dr. r). R. Lillibridge. Cr.
18-
Feb.
25
Flour - - - -
2
1025
18
Feb.
25
Dft. fav. G. W. B.
2
500
4G
RECORD OF TRANSACTIONS.
ABSTRACT OF THE LEDGER.
11O. The following abstract usually called the Trial
Balance presents in a convenient and compact form the con-
dition of all the accounts, and also affords a proof of the work in
the equilibrium of the Ledger. As each transaction has equal
debits and credits, it follows that all the transactions taken
together should have equal debits and credits, and one object of
the Trial Balance is to ascertain if the amounts have been prop-
erly entered in the Ledger.
111. The Trial Balance test, however, is not a perfect
one, as there are numerous conditions under which the accounts
in the Ledger may balance, and still errors exist : 1. An entire
entry, or more than one, may be omitted ; 2. A debit or credit
entry may be taken to the right side of a wrong account ;.
3. One error may exactly offset another, etc., etc.
112. Ordinarily, however, when proper care with proper
safeguards has been taken, the equal footing of the sides of the
Trial Balance is taken as evidence of the correctness of the
Ledger.
ABSTRACT, OR TRIAL BALANCE.
ACCOUNTS.
FACE OF LEDGEB.
BALANCES.
Dr.
Cr.
Dr.
Or.
3000
3000
fish
480^
Q1Q7
KO
1Rfi7
rtn
FMrmr
OQRjO
onrtn
QOft
187
50
187
50
Wheat
875
580
295
G. W. Brown
500
875
375
Oats
900
700
200
Bills Payable
900
900
J. E. Soule
590
590
Bills Receivable ...
1090
590
500
D. R. Lillibridge
1025
500
525
.
12922
50
12922
50
4275
4275
MODEL SET O F B K S. 47
113. Most of the important facts of the business can be
gathered from the foregoing abstract, as it is. The inside columns
give the footings of the accounts, and the outside columns, the
differences or balances. Thus, we can know at once the amount
invested ; the balance of cash on hand ; the cost of the different
kinds of goods we deal in ; the returns from sales ; the outlay for
expenses; what we owe others, and what others owe us, etc. In
fact, we need but one more item of information to enable us to
present the exact state of the business at this point ; and that
item is the value of the unsold merchandise.
114. This value has been given in the memorandum of
transactions under date of Feb. 28, but has not been utilized in
the Ledger. The Analysis which follows made from the Trial
Balance, with the item of unsold goods added will give a
complete showing of the business, both in its progress and its
financial status.
115. ANALYTIC STATEMENT.*
/. Analysis showing Resources and Liabilities, taken from Ledger accounts
und from estimates of property.
1. From Ledger Accounts.
Resources.
Liabilities.
1667
500
525
1537
270
300
50
50
375
900
3595
Pa.ir1 out - - 3137 50
Dr 500
We owe him
FV *iflO
He owes us ......
f . From Estimates of Property.
WHEAT ----- 200 bush ----- 1 35 *
Difference, or net worth -
Prnrvf
4800
4800
1
* For practical form, see Appendix, p. 131
48
RECORD OF TRANSACTIONS.
2. Analysis showing Gains and Losses, as exhibited in the Ledger, ana
in the estimates of property.
Losses.
Gains.
Estimate of unsold - - - 1537.50
187
25
525
50
G37
100
50
Total returns 3587.50
Returns from sales - - 580
Estimate of unsold - - 270
Total returns ~ 850
Estimate of unsold - - - - 300
Total returns - 1000
Difference, or net gain -
737
50
737
50
3. Analysis showing that the investment increased by the net gain equals
the present worth.
PROPRIETOR. - Cr. - - - Amount invested (none withdrawn) - $3000
Add net gain, as above 525
Gives present investment or net worth $3525
SHOWING- FULL RESULTS IN THE LEDGER.
116. From the foregoing Ledger and statements we are
enabled to ascertain the exact progress and state of the business.
From the Ledger, as it stands, we get the amount of cash on
hand, what is owing to us, and what we owe ; and also, what the
goods in which we deal have cost us, and how much the sales
have produced ; and what have been our incidental expenses. We
lack only one item of information to put us in possession of all
the facts we need, and that is, the value of the unsold goods.
117. This item of information, for practical reasons, is not
available from any record which could be kept not because ' L ,he
quantity of goods on hand, in a business such as here repre-
MODEL SET OF BOOKS. 49
rented, might not be readily got at, but because the fluctuation
in prices makes it necessary to estimate the value whenever the
facts are desired.
118. So, it may be understood that no Ledger, in Us
current condition, will show all the facts of the business, and
that when it is desirable that such facts should be shown on the
Ledger, the business or the current record of it has to be
arrested, and the Ledger restored to the same condition which
it held at the beginning, viz. : it must exhibit, for the time,
a complete statement of resources and liabilities, and
nothing else.
119. The process through which this is done is called
*' Closing the Ledger," and the effect is to cancel the opposing
facts of the accounts, bringing the single results forward as a
basis for future record.
12O. These conclusions will appear more distinctly in
comparing the "open " Ledger as already shown with the "closed "
Ledger now presented.
121. LEDGER. (CLOSED.)
(1)
H. B. Bryant, Proprietor.
18-
18
~*
Teb
28
Balance (new a /c)
3525
Jan.
1
Cash ....
1
3000
Feb.
28
Loss & Gain - -
L12
525
3525
3525
Mar.
1
Balance (old %) -
3525
Cash.
18-
18-
Jan.
1
Proprietor - -
1
3000
Jan.
1
Flour - - - -
1
1000
"
10
Flour - --.
1
525
M
"
Expense - - -
1
75
"
"
Wheat --- -
2
190
"
20
Expense - - -
2
75
ifc
KAA
Feb
15
Flour - -
2
1950
Peb
28
Bills Receivable -
2
590
20
Expense - - -
2
37
50
"
28
Balance (new %)
1667
50
4805
__
4805
_.
JCar.
1
Balance (old %) -
1667
50
50
RECORD OF TRANSACTIONS.
(3)
Flour.
18- '
18-
Jan. 1 Cash 1
1000
Jan. 10
Cash - ... 1 5-25
Feb. 15
" ....
2
1950
Feb. 20
Bills Receivable -
2 500
" 28
|
Loss & Gain - -
12
637
50
25
28
D. R. Lillibridge
Balance (mw %)
2
1025
J537 50
Balance (old %)-
3587
50
3587 50
Mar. ; 1
1537
50
(4)
Expense.
18-
18-
! 1
Jan.
1
Cash (rent) - -
1
75
Feb.
28
Loss & Gain - -
Ll2
1 187
50"
"
20
" (service) -
2
75
Feb.
20
" (office) - -
3
37
50
=
==
187
50
187
50-
(5)
Wheat.
18- |
18
Jan. | 10
G. W. Brown -
1
875
Jan.
10
Cash - ---
1
190
"
30
J. E. Soule - -
2
390
Feb.
28
Balance (new %)
, ; 7<9 '
u
Loss & Gain -
Ll2
S5
875
875
Mar.
1
Balance (old %) -
270
(6)
G-. W. Brown.
18-
18
Feb.
25
Dft. on D. R. L. -
2
500
Jan.
19
Wheat - - - -
1
875
"
28
Balance (new %\
375
875
875
Mar.
1
Balance (old %) -
375
(7)
Oats.
18
Jan.
20
Bills Payable
2
900
Feb.
28
Loss & Gain - -
I/L2
100
looo~
Mar.
1
Balance (old %)-
300
18-
Jan.
20
Cash --.
1
500
M
30
J. E. Soul6 - -
2
200
Feb.
28
Balance (new %)
300
=
==
1000
-
MODEL SET OF BOOKS.
Bills Payable.
18
Jan.
20
Oats
1
900
(9)
J. E. Sould.
18-
18
^Jan.
30
Sundries ...
2
590
Jan.
30
Bills Receivable -
3
590
1
(10)
Bills T^eceivable.
18-
18-
-Jan.
30
J. E. Soule" - -
2
590
Peb.
28
Cash ....
3
590
Feb.
20
J, Jackson
2
500
"
"
Balance (new %)
500
1090
~~- -
1090
.Mar.
1
Balance (old %) -
500
(11)
33. R. Lillibridge.
18-
18
Feb.
25
Flour ....
2
1025
Feb.
25
Dft. fav. G. W. B.
2
500
M
28
Balance (new %}
525
1025
1025
Mar.
1
Balance (old %)
525
(12)
Loss &: Grain.
18-
18-
Feb.
28
Expense - -
L4
187
50
Peb.
28
Flour ....
L3
ft37
<
"
Wheat; ... -
L3
25
M
'
Oats ....
L7
100 /
(4
lk
Proprietor -
Ll
535
j
^==
===
787
50
=
=
71 1 50
52 RECORD OF TRANSACTIONS.
CLOSING- THE LEDGER.
2. To " close " an account, in technical sense, is to put
an end to its current condition. This is usually done when its
purpose is fulfilled, as also when the sides are equal, even if the
account is to be continued.
123. The closing of an account does not change its rela-
tions or its condition. If the sides are equal, the opposing items
cancel each other, and closing it simply emphasizes this fact and
takes the account out of the present reckoning.
124. If the sides are unequal, the excess of the larger
side is not extinguished in the closing, but is perpetuated by
being expressed in a single item, and "brought down" as the-
result, forming the fact of the continued or " new " account.
125. Several objects may be served in closing an account.
(1.) When the purpose of the account is fulfilled, closing it removes
it from present consideration. (2.) In case of the settlement of a
personal account, whether fully liquidated or not, the closing
shows the agreement, and renders unnecessary the going over of
che old items in future settlements. (3.) As in the case of Cash,
the main object of the account the balance on hand can be
shown in a single amount.
126. The object of " closing the Ledger " is to mark an
era in the business, and to show the results of a given period
of time.
127. The effect of closing the Ledger is to restore all the-
accounts to their primal condition of exhibiting the resources and
liabilities of the business.
128. The use of red ink in the Ledger is a matter of con-
venience as well as of significance. The convenience is that thus
entries may be made originally in the Ledger without the neces-
sity of posting them from other books ; and the significance is
that they serve a special purpose that of closing an account.
The law of "equal debits and credits" is as clearly enforced as in
entries posted from the Journal, for the amount that appears
on one side in red ink is transferred or posted to the other side-
in black. Nevertheless, there are clear-headed accountants who
insist upon making all entries first in the Journal, where full
explanation may be given.
MODEL SET O F B O O K S . 53
129. PROCESS OF CLOSING.
1. Before attempting to show all the results upon the Ledger there
should be reasonable certainty that the Ledger is correct. Hence, the first
gtep is the Trial Balance.
2. To further guard against blunders, the next step should be the ren-
dering, in a more or less formal manner, an analytic statement of the
accounts. See example under 115.*
J. As this statement cpntains all the facts which will appear .n the
Closed Ledger, the process of closing with the statement as a basis
becomes well nigh mechanical. This will give the greater opportunity for
precise and effective work.
4. The ruling which is an important feature of the Ledger should be
done with absolute precision and uniformity. The red ink should be of good
quality, and kept pure. A separate red ink pen should always be used.
5. As, in the case of unsold property, the current Ledger does not show
the true state of the business, the first step is to credit the value of the unsold
property to the account or accounts having charge of it. This should be done
in red ink, the amount being brought down on the debit side of the same
account in black ink. \
6. In case, also, of liabilities accumulated during the business and not
shown in the proper account, the amount of such liabilities should be entered
to the debit side of the account or accounts representing them, in red ink,
and brought down on the credit side of the same account in Uack ink. \
7. As the separate losses and gains must be brought together in a single
statement, open an account for that purpose under the title of Loss & Gain.
8. Begin with the first account after the Proprietors'. If it be a
Financial account, enter the difference upon the smaller side in red ink,
* The Analytic Statement gives excellent practice to the student and is mainly valuable
for this purpose. In business, a more compact and comprehensive form of statement is
preferable ; such, for instance, as the Balance Sheet on page 55.
t Inasmuch as the inventory cannot be well "brought down " in the new account until
the old account is " closed," or ruled up, and this event must await the declaration of the
loss or gain as shown by the account after the inventory is credited, it will seem difficult to
follow this instruction literally. To avoid this difficulty in part, it has been customary
with teachers to open a separate account with balances, to which are transferred all the
resources and liabilities to be afterwards retraiisferred to the closed or new accounts. As
this is not a business method, it is deemed best not to adopt it in this book, even to avoid a
seeming difficulty. If the teacher should think it advisable to insist upon making the entry
complete at the time, it can easily be done by calculating the space necessary for ruling up
the account, and making the transfer at once ; or, a new account under the same head may
be opened in another place, and the entry made the p&me as in a Balance account. Practi-
cally there is no difficulty in the matter, for, after the facts are well in the student's mind, it
will not be necessary to follow this exact order ; and accounts containing inventory entries
can be entirely disposed of before proceeding to the other accounts.
t The author of this book was the first, to recognize, in the closing of a Ledger, liabilities
not appearing in the current account. It is not always done in business, but as the fact
exists, it should be clearly presented to the student, and should not be ignored anywhere.
S See account 12, page 51.
54 R E C O R D O F T R A XS A C T I O X .S
ruie up the account, and bring the balance item down on the opposite or
larger side in black ink. If it be a Business account, enter the difference upon
the smaller side in red ink and transfer it in black ink to the opposite side ol
Loss & Gain account.
(>. When all the accounts, except Loss & Gain and Proprietors', are closed,
a second trial balance, including these accounts and the balances brought
down, may be taken to test the correctness of the transfers ; after which,
ascertain the net gain or net loss as shown in the Loss & Gain account ; and
if the business be that of a sole proprietor, and the gains are to increase or
the losses decrease the capital,* close the Loss & Gain account in the usual
way into Proprietors' account. If the business be that of a copartnership, and
the investment is to be increased or decreased by the grain or loss, close Loss
& Gain into the Partners' accounts, giving to each the proportion of gain or
loss to which by the terms of the copartnership he is entitled.
10. Finally, if there is more than one item in Proprietors' account, or in the
separate Partners' accounts,! close it, or them, by the usual process, bringing
the balance down as a statement of the investment for the continued
bus.ii'ess.
11. The Ledger will now stand as at the beginning, the accounts showing,
in single items, the resources and liabilities of the business.
A COMPREHENSIVE BALANCE SHEET.
13O. There are few forms of statement more complete
and comprehensive than the Balance Sheet exhibited on the
following page. All the facts shown in the Ledger are here
distinctly stated, and the entire order of closing the Ledger and
transferring the balances is presented so plainly and compactly
that not a point is lost. The teaching quality of this form is so
great that full instructions as to its preparation and use are given
on the succeeding page.
131. Other forms of statement, and the enlargement of
this form by adding other columns for co-proprietors will be found
in the Appendix.
* The instruction usually given to inevitably "close Loss & Gain account into Stock or
Partners' " is erroneous, from the fact that often the investment is kept at a uniform amount,
and the gain or loss is apportioned to the proprietors in their private capacity.
t Ordinarily, after the gains and losses of the business have been declared, there will
be *' more than one item " in the Proprietary account or accounts, but it is well to recognize
the fact that the investment may remain unchanged, in which case the accounts representing
it should remain unchanged. And it may be well to suggest here that any account holding
but a single item, which is to appear in the continued business, should not be disturbed
in the general " Closing of the Ledger."
g "
I
t s
ig8
2S
i
g
FOL.
? 1
o
a
Q
QD
a !
fe!
H
* #
56 RECORD OF TRANSACTIONS.
132. How TO PREPARE AND USE THE BALANCE
SHEET.
1. The paper should be sufficiently wide to admit in case of a single
proprietor of four double and one single money columns, as also sufficient
space for the account titles and Ledger folios. For each additional proprietor,
an additional double money column.*
2. Aside from the explanatory head lines and rules, there should be faint
lines enough for all the Ledger accounts, f with five additional in case of
single proprietorship, and three more for each additional proprietor.
3. Great care should be taken to lay out the space so as exactly to fit the
requirements. First, lay it out in pencil. At the extreme right begin with
the double money columns for final balances ; next come the double money
columns for each of the proprietors ; next, double money columns for Loss &
Gain ; next, single money columns for unsold property ; next, double money
columns for Face of Ledger ; next, space for Ledger folio ; next, space for
names of accounts.
4. Beginning at the left to rule up with ink, let the columns extending
through " Unsold Goods," come down one line below the last line of Accounts.
In case of a single proprietor, let the rulings of the double columns of Loss
& Gain extend two lines below the previous ruling, and in case of partners,
Irop an additional line for each partner.
5. In case of a sole proprietor, let the rulings of the double columns
of Investment extend two lines below the previous ruling ; and in case of
partners, let the rulings of each partners' double columns drop two additional
lines, the rulings of double columns for Balances coining even with those-
of the last partner.
6. The foot rulings can be made (as per example) at this stage, or after
the amounts are all written in. The closing of accounts and transferring of
balances may now be done in order, following out the explanation given-
under "Process of Closing." Let the closing entries be made in red ink, and
the final transfers in Uack ink.
7. When the transfers are all made the columns of Balances will con-
tain the resources and friabilities at the close of the business, while al! T lie-
facts to be gathered from the Ledger are shown in order under the appro-
priate heads.
S. As the force of this form of Balance Sheet is in its compactness and
Comprehensiveness combined, the greatest care should be exercised in it&
preparation. If not neatly and artistically done its best effect will DC lost.
* See Partnership Balance Sheet in Appendix.
t In case of a large number of personal accounts which would make the s'netfw
unwieldy, if not impracticable it is suggested that two general accounts be used, viz. -
Accounts Receivable and Accounts Payable. And in case this plan is adopted and more
precise knowledge of the separate accounts is desired, a separate sheet or list of persona!
accounts may accompany the Comprehensive Statement.
MODEL SET OF BOOKS.
57'
133. VOUCHERS ACCOMPANYING MODEL
SET.
H. Ely to H B. Bryant.
H. B. Bryant
Cash.
New York, January 1, 18
Of . tt).
100 brls. Flour -----
Rec'd Payment,
H. Ely.
1000
H. B. Bryant to Craig & Co.
Craig $ Co.
casn.
New York, January 10, 18
1. g. l!rpt.
Flour
Rec'd Payment,
H. B. Bryant.
525
Q-. W Brown to H. B Bryant
H. B. Bryant
so a. Bought of <B. W.
New York, January 10, 18
500 bush. Wheat - - - - $1.75 - -
875
-58
RECORD OF TRANSACTIONS.
H. B. Bryant to A. E. Maokey
\. E. Machey
New York, January 10, 18-
rt . g. grptrt.
100 lush. Wheat - - - - $1.90 - -
Rec'd Payment,
E. B. Bryant.
190
S. S. Packard to H. B. Bryant.
H. B. Bryant
imtgfrt of . If.
New York, Jan. 20, 18
1000 bush. Oats - - - - 90? - - - 900
H. B. Bryant to Riley cfc Jones.
Riley fy Jones
New York, Jan. 20, 18
600 bush. Oats
Rec'd Payment,
H. B. Bryant.
500
H. B.
Bryant
to J. E. Sou't&
New York, Jan. 30, 18
J. E.
Soule
Note, 20 ds.
$<m0ht <rf
1* ir
1 \\ \ *
200
lush.
Oats - -
- - $1
200
200
bush.
Wheat -
- - 1.95
390
590
MODEL SET OF BOOKS.
C H Tay'.or to H B Bryant.
H. B. Bryant
New York, February 15, 18-
of (R. f|. latflor.
^
iQ^n
Rec'd Payment,
C. H. Taylor.
H. B. Bryant to J. Jackson.
J. Jackson
Note, 30 d.. lOUflW Of ,
New York, Feb. 20, 18
50 brls. Flour
500
H. B. Bryant to D. R. Lillibridge.
D. R. Lillibridge
New York, Feb. 25, 18
of L .
100
1025
s.
James Sturgis & Go. to H. B. Bryant, for store rent.
$75. New York, Jan. 1, 18
Received of H. B. Bryant Seventy-five Dollars in
full for store rent for January and February.
James Sturgis fy Co.
'60 RE CORD OF TRANSACTIONS.
3. IVOT IBS.
.H". 13. nryant to S. S. Packard.
$900. New York, Jan. 20, 18
Thirty days from date I promise to pay to \
S. S. Packard or order, Nine Hundred Dollars, value
received. H. B. Bryant.
J. Jackson to H. B. Bryant.
$500. New York, Feb. 20, 18
Thirty days from date I promise to pay to
H. B. Bryant or order, Five Hundred Dollars, value
received. J. Jackson.
RAFT.
H. B Bryant on D. R
$500. New York, Feb. 25, 18
At sight /pay to the order of G. W. Brou-n,
Five Hundred Dollars, value received, and charge to
account of H. B. Bryant
To D. R. Lillibridge, Esq.
134. MATERIAL FOR CONTINUATION OF MODEL SET.
TO BE WRITTEN UP BY THE STUDENT.
[The writing up of these transactions after the methods of the " Model S~t " will test
the student's proficiency, and fasten the instruction given. Let the Model be followed in
every particular, using the Journal-Day-Book form, and posting to the same Ledger, con-
tinuing the open accounts, and opening others as they are needed. After the business is
posted, make out Trial Balance and Statement ; then close the Ledger in due form, bringing
balances down where proper, and finally, presenting the results in a Comprehensive Balance
Sheet. When this is completed, write up all the vouchers, as indicated.]
March 1. Continued H. B. Bryant's business, beginning with the
resources and liabilities as shown in Balance Sheet (page 55). - - Bought
of R. C. Spencer, 300 bush. Oats, at 97^, $291 ; gave him in payment our
aight draft on D. R. Lillibridge.
MODEL SET O F B O K S . 01
Mar. 1O. Paid cash for insurance on goods in store (estimate, $2500),
at f per cent., $18.75* - - Sold C. T. Miller for cash, 150 bush. Oats,
at $1.05, $157.50. - - Paid casii for two months' rent of store, $75.}
- Bought of J. D. Odell on account, 20 ds., 200 brls. Flour, i*. $8.75,
-$1750.
Mar. 2O. Sold L. L. Williams for cash, 100 brls. Flour, at $9.50,
- Received from D. R. Lillibridge in full of account, his sigln
draft on J. D. Odell, for $234, which we have remitted to Odell for our
credit.
Mai: 25. Paid cash for services, $25. \ - - Received cash in full for
J. Jackson's note of Feb. 20, $500. - - Sold Folsom & Carhart on their
note at 60 ds., 100 brls. Flour, at $9.56, $956. - Bought of C. E. Cady on
account, 30 ds., 200 brls. Flour, at $8.50, $1700.
April 1. Sold C. P. Meads for cash, 150 brls. Flour, at $8.75, $1312.50.
Paid cash for office expenses, $10.35. Paid cash for cooperage,
$25. - - Settled G. W. Brown's account of $375, by cash payment, $125 ,
note for balance at 30 ds., $ ^ -
Apr. 1O. Paid cash for our note to S. S. Packard of Jan. 20, $900;
and interest on same, 47 ds., $7.05.% - - - - Sold Reckers & Bradford for cash,
75 brls. Flour, at $9.80, $735 ; 100 bush. Oats, at $1.06, $106.
Apt: 2O. Paid cash for services, $45. - - Sold B. Baron on note at
30 ds., 150 bush. Oats, at 93f, $139.50. - - Sold A. H. Hinman for cash,
200 bush. Oats, at 90/, $180.
Apr. 3O. Received cash for B. Baron's note of Apr. 20 ; face of note,
$139.50 ; discount off, 23 ds., $0.58. \ - - Paid cash for our note to G. W.
Brown of Apr. 1, less discount. Face of note, $250 ; discount, 4 ds., $0.17.
- Sold A. A. Luick for cash, 200 bush. Wheat, at $1.50, $300.
Goods remaining unsold, 125 brls. Flour, worth $10.25, $1281.25.
RESULTS. Gain, $62.74. Resources Cash, $4566.49; Flour, $1281.25;
Bills Receivable, $956. Liabilities 3 . D. Odell, $1516 ; C. E. Cady, $1700 ;
Stock, $3587.74.
VOUCHERS. 7 (Mar. 1). Bill of Oats from R. C. Spencer; 2 (Mar. 1). Sight
draft on D. R. Lillibridge ; 3 (Mar. 10). Bill of Oats to C. T. Miller ; 4 (Mar. 10).
Receipt for rent ; 5 (Mar. 10). Bill of Flour from J. D. Odell ; 6 (Mar. 20). Bill
of Flour to L. L. Williams ; 7 (Mar. 20). Sight draft from D. R. Lillibridge,
our favor, on J. D. Odell ; 8 (Mar. 25). Bill of Flour to Folsom & Carhart ;
V (Mar. 25). Bill of Flour from C. E. Cady ; 10 (Apr. 1). Bill of Flour to C. P.
Meads ; 11 (Apr. 1). Our note at 30 ds. for balance of G. W. Brown's account :
12 (Apr. 10). Bill of Flour and Oats to Reckers & Bradford ; 18 (Apr. 20). Bill
of Oats to B. Baron ; 14 (Apr. 20). B. Baron's note at 30 ds., our favor, for bill
of Oats ; 15 (Apr. 20). Bill of Oats to A. H. Hinman ; 16 (Apr. 30). Bill of
Wheat to A. A. Luick.
* Open Insurance account. t Open Rent account.
% Charge Expense. Open Interest account.
| Debit Interest, $0.53.
Q UESTI XS.
QUESTIONS.
[84. What is a business transaction? 85. What is meant by an,
exchange of valuable things? 86. In how many directions does a
transaction affect the business? 87. Are the transactions given in full
in Chapter I. ? What is the principal aim of the exercises in Chapter I. ?
In the present chapter, where both sides of the transaction are given, what
does the complete entry necessitate ? 88. Does a full record ever involve
more than two accounts ? Give the four forms of entry. 93. How many
different kinds of exchange may a transaction involve ? What are they ?
99. What office does journalizing perform ? 100. When the Journal is
used as a separate book, between what books does it come ? 102. Of how
many books is a " Set " composed ? 103. What is the ordinary number
of books in a set, and what are they called? 110. What does a Trial
Balance exhibit? Should the debits and credits in a Ledger be equal, and
why ? 111. Is the Trial Balance a perfect test of the correctness of ih&
Ledger ? Mention the circumstances under which a Ledger may balance and
yet be wrong. 112. Is the Trial Balance ordinarily accepted as a sufficient
test of the correctness of the Ledger ? 118. What facts appear upon the
open Ledger ? What important fact as to the condition of the business can-
not be shown in the current Ledger? 116. What is shown in the Analytic
Statement ? 117. Why may not the value of unsold goods be gathered
from the open Ledger? 118. What is necessary in order to show the
condition of the business in the Ledger? 119. What is this process called?
122. What is the effect of closing an account ? When is it usual to.
close an account ? 123. Does the closing of an account change its rela-
tions or its condition ? In case the sides are equal, what is accomplished by
closing an account? 124. In case the sides are unequal, does the closing
of an account extinguish the inequality? How is the fact of .the account.
perpetuated ? 125. What objects may be served by closing an account ?
126. What is the real purpose of closing the Ledger? 127. What
is the effect of closing the Ledger? 128. What purpose does the red ink
entry serve in closing entries ? May a Ledger be closed through Journal
entries ? Is this ever done ?
CHAPTER III.
BUSINESS SERIES.
134. The aim of this chapter is to give practical point to
the instruction which has preceded it. The work is divided into
" sets," with a view to present in each set some leading idea or
principle. The object is stated at the beginning, and is forcibly
brought out in the record. The sets are intended to be progres-
sive, and are only long enough to fully enforce the lessons.
135. As in all the work of this book, every set is preceded
by a memorandum of transactions, which simply stands in the
place of the transactions, and is not intended to be copied. The
memorandum, in most instances, with the ultimate results, is all
that is given the whole of the work of record being left to the
student.
136. The working of the first series of transactions
through the form of the "Skeleton Ledger" will open up a
pleasant and effective way of getting readily at the main facts.
It is suggested that all the sets in this chapter be first wrought
through this form. The " Skeleton Ledger " is almost indis-
pensable in teaching book-keeping, and no live teacher will seek
to do without it; but the student should not be permitted to use
it to the exclusion of the regular forms. After working the
series through in this practical way, they should be rewritten
after the forms of the " Model Set."
137. This series will he found to contain sufficient variety
of transactions to fully illustrate the principles of Book-keeping ;
but there is no pretense that all the characteristics of the different
kinds of business are given. It would not be possible within this
necessarily limited space to present the ordinary details of any
business. This the student will get in the advanced work which
will supplement these first lessons. It is to be hoped, however,
that whatever "practice" may be required to fix these lessons in
mind, the lessons themselves will be so well mastered that practice
will simply tend to strengthen and solidify them ; for it must ever
be remembered that practice, to be effective, must be founded on a
full knowledge of underlying principles.
BUSINESS SERIS.
Set I. ALAN E. COOPER, SOLE PROPRIETOR.
Characteristics. Buying and selling produce for cash. Business begun with net capital
resulting in a gain, and ending with increased capital. ,
Names of accounts -used, with number of lines required for each account
Proprietor (10); Cash (14) ; Flour (6); Expense (6); Loss & Gain (8).*
Neiv Yorlt, January 1, IS . Investment, cash, $5000.
2. Bought of Merrick & Son for cash, 500 brls. Flour, at $8, $4000.
/>. Sold for cash to E. G. Folsom, 200 brls. Flour, at $9, $1800.
4. Sold for cash to W. H. Clark, 300 brls. Flour, at $9.25, $2775.
*>. Paid cash for rent and office expenses, $125.
RESULTS. Capital at beginning, $5000. Net gain, $450. Capital at closing,
$5450.
Set I. CONTINUED.
[The continuation of the* business of this set under the same headings is an important
step, and if properly emphasized will do much to fix in the student's mind the practical
utility of bringing down balances. It is, besides, the business method. The first item in
the continued memorandum merely states the condition of the old Ledger after the closing
entries are complete ; and hence they do not require record as they would were the accounts
to be opened anew.]
Characteristics. Buying and selling for cash and on credit. Adjusting the item of
unsold goods in closing the Ledger. Beginning with a net cash capital, effecting a net gain,
and ending with an increased capital.
Names of additional accounts, with number of lines required for each James
Carter (4) ; Wheat (7) ; Oats (8) ; H. C. Spencer (4).
New York, January 1O, 18 . The investment, as shown in
the Ledger balances, is cash, $5450*
12. Bought of James Carter on %, 1000 bush. Wheat, at $1.12, $1120.
15. Bought of James JeweU for cash, 1500 bush. Oats, at 60.*, $900.
2O. Sold Ira Mayhew for cash, 300 bush. Oats, at 70^, $210 ; 200 bush.
Wheat, at $1.25, $250 Total, $460.
25. Sold W. N. Yerex for cash, 200 bush. Oats, at 75*, $150. - - Sold
H. C. Spencer on %, 500 bush. Wheat, at $1.20, $600.
3O. Paid cash for current expenses, $75. - - Sold Frank Goodman for
cash, 500 bush. Oats, at 75.0, $375. - - Have remaining unsold, 300 bush.
Wheat, at $1.15, $345 ; 500 bush. Oats, at 65?-, $325.
RESULTS. Capital, beginning, $5450. Net gain $160. Capital, closing, $5610.
* The space allotted to the accounts covers not only the transactions of the set proper,
but gives room also for the closing of the accounts, bringing down the balances, and con-
tinuing the business as suggested in the continued transactions. This having been done to
make an entry of the continued investment.
" K E L E T OX LED G E R .
65
8138. SKELETON LEDGER.
\ Dr. Proprietor. Cr.
Dr. Lo.^s <Sc Gain. Cr.
Balance
5MO
Jan. 1
L. A: 11.
5000
450
Expense
Prop' tor
125
; l0
Flour -
575
5450
5450
575
575
Balance
5010
Balance
L. &G.
5450
160
Expense
Prop'tor
75
160
235
Wheat -
Oats -
75
160
5610
5610
235
Balance
5610
Dr. Cash.. Cr.
Dr. James Carter. Cr.
Jan. 1
3
4
5000
1800
2775
Jan. 2
5
Balance
4000
125
5k50
Jan. 12
1120
9575
9575
Dr.
Wheat, Cr.
Balance
Jan. 20
25
30
5450
460
150
375
Jan. 15
30
Balance
900
75
51SO
Jan. 12
L. & G.
1120
75
Jan. 20
25
Balance
250
600
3U5
6435
6435
1195
1195
Balance
5460
Balance
345
Dr. , Flour. Cr.
Dr. Oats. Cr.
Jan. 2
L. & G.
4000
575
Jan. 3
4
1800
2775
Jan. 15
L. & G.
900
160
Jan. 20
25
30
Balance
210
150
375
325
4575
4575
1060
1060
Dr. Expense. Cr.
Balance
325
Jan. 5
125
L. & G.
135
Dr. H. C. Spenoer. Cr.
Jan. 30
75
L. <fe G.
75
Jan. 25
600
66 BUSINESS SERIES.
Set II. J. J. ANDERSON, SOLE PROPRIETOR.
Characteristics. Buying and selling groceries for cash. Beginning with net capital
producing loss, and closing with decreased capital.
Names of accounts used, with number of lines required for each Proprieto.,
(11) ; Cash (19) ; Merchandise (19) ; Expense (8); Loss & Gain (10).
Brooklyn, January IX, 18 . Investment, cash, $6000.
16. Bought of Acker, Merrall & Co. for cash, 31 hhds. Molasses, 4000 gals.
at 8W, $3200.
17- Sold H. M Gardner for cash, 11 hhds. Molasses, 1335 grals., at 85",
$1134.75.
18. Sold H. W. Beecher for cash, 15 hhds. Molasses, 1995 gals., at 750
$1498.25.
20. Sold R. Harper for cash, 5 hhds. Molasses, 670 gals, at 75^, $502.50.
21. Paid current expenses in cash, $150.
RESULTS. Capital at beginning, $6000. Net loss, $216.50. Capital at closing.
$5783.50.
Set II. CONTINUED.
Characteristics. Continuing the grocery business, under the same accounts, hy adding
new articles. Buying and selling for cash and on credit. Compromising with a creditor.
The business resulting in a loss, which the proprietor makes good hy an equal investment.
Names of additional accounts, with number of lines required for
Acker, Merrall & Co. (4) ; D. T. Ames (4) ; Park & Tilford (4) ; W. II.
Patrick (4) ; Bills Payable (4).
Brooklyn, February 1, IS . Bought of Acker, Merrall & Co.
on 30 ds. credit, 10 hhds. Muscovado Sugar, 15500 Ibs., at 9^, $147^.~>tt ,-
20 chests Young Hyson Tea, 1250 Ibs., at 53/, $662.50 $2135.
1O. Paid cash for store rent in advance, $75. Sold D. T. Ames on
10 ds. credit, 4 chests Tea, 250 Ibs., at 57 f; $142.50.
15. Bought of Park & Tilford on 30 ds. credit, 5 hhds. Porto Rico
Molasses, 653 gals., at 47,*, $306.91. Sold J. M. Frazier for cash, 2 chests
Tea, 130 Ibs., at 59?, $76.70.
2O. Sold W. H. Patrick on 10 ds. credit, 1 hhd. Molasses, 110 gals., at
50^, $55 ; 2 chests Tea, 12J )bs , at 60'-', $77.40 $132.40. Bought of
G. W. Michael for cash. 10 mats Java Coffee, 500 Ibs., at 9^, $45. -
C. X. Crandle for cash, 4 mats Java Coffee, 200 Ibs., at 10^, $21.
Received cash of D. T. Ames, in full of his account, $
B v s i .v ]: s x s E if i E s . 67
?,>. Sold J. W. Swank for cash, 50 Ibs. Coffee, at 12?-, $; 1 hlid.
.Molasses, 125 gals, at 50,?, $<U.5U = $ - Accepted Park & Til-
ford's draft at 20 ds., favor of A. C. Lobeck, for amount of our debt, *
?<V. Paid cash for services, $75. - - W. H. Patrick has settled with
iiis creditors at 50 cents on the dollar ; and in accordance with that arrange-
ments pays us cash for one-half his indebtedness of $133.40. Cash received,
$66.20; loss incurred, ifH;<i..-'<i. - - Sold H. A. Spencer for cash, 5 hhds.
Sugar, 7800 Ibs., at 8^, $643.50. - - Paid Acker, Merrall & Co. cash in
full of their %, $ Have remaining unsold, 5 hhds. Sugar,
7700 Ibs., at 9f, $693; 12 chests Tea, 740 Ibs., at 50/, $370 ; 4 hhds.
Molasses, 540 gals., at 40<*, $216; 5 mats Coffee, 250 Ibs., at 1^, $18.75
Total, g
deceived from proprietor cash, to make good the loss incurred during the
business, $ .*
.RESULTS AT CLOSING. Resources Cash, $4792.66 ; Merchandise, $1297.75.
Liabilities Bills Payable, $306.91 ; Capital, $5783.50.
Set IH. JAMES SANFORD, PROPRIETOR.
Characteristics. Buying and selling Dry Goods for cash and on personal account.
Beginning without capital, realizing a gain, and closing with net resources resulting from
gain, which forms capital for continuing the business. Part of the merchandise remaining
unsold.
JVames of accounts used, with number of lines for each Proprietor (7) ; Mer-
chandise (17) ; Cash (16) ; H. B. Claflin (6) ; C. A. Wai worth (5)
A. T. Stewart (6) ; J. C. Bryant (5) ; Expense (6) ; H. P. Perrin (5) ;
Loss & Gain (9).
Albany, February 1, IS . Bought of H. B. Claflin, New York, on
four months' credit, 5 cases, 8310 yds. Wamsutta Muslin, at 31?,
$2576.10.
2. Sold James Shepard for cash, 1 case, 1710 yds. Wamsutta Muslin, at
34C, $581.40.
3. Sold C. A. Walworth on account, 2 cases, 3250 yds. Wamsutta Muslin,
at 35", $1137.50.
4. Bought of A. T. Stewart & Co., New York, on 3 months' credit, 6 cases
8556 yds. Amoskeag Prints, at 23^, $1967.88.
5. Sold J. C. Bryant on account, 2 cases, 2816 yds. Amoskeag Prints, rt
25^, $704.
7. Sold L. L. Williams for cash, 2 cases, 3350 yds. Wamsutta Muslin, at
30 'S. 3 1122. 25.
* This amount can be supplied by the student after ascertaining the loss. Then the
entry should be made.
68 BUSINESS SERIES.
8. Paid expenses in cash, $175.
9. Sold H. P. Pen-in on account, 2 cases, 2794 yds. Amoskeag Prints, at
26? , $726.44.
Remaining unsold. 2946 yds. Amoskeag Prints, at 23^, $677.58.
RESULTS. Capital at beginning, nothing. Net gain., $230.19. Capital at dos-
ing, $230.19. Resources Cash, $1528.65; Merchandise, $07?. 5S ;
C. A. Walworth, $1137.50; J. C. Bryant, $704; H. P. Perrin,
$726.44. Liabilities ft. B. Claflin, $2576.10; A. T. Stewart,.
$1967.88; Capital, $230.19.
Set III. CONTINUED.
Characteristics. Continuing the Dry Goods business under the same accounts. Liqui-
dating personal accounts and bills, payable and receivable, before due, with interest allow-
ances. Closing out the business. Incurring a loss, thereby decreasing the capital.
Names of additional accounts, with number of lines required for each Bills.
Payable (5) ; Bills Receivable (7) ; Interest (7).
Albany, February 1O, IS . Accepted H. B. Claflin's draft at
3 months, favor of C. C. Curtiss, for $l~>ou. - Bought of A. T. Stewart
& Co. on 30 ds. time, 5 cases, 6800 yds. Am. Fancy Prints, at lOif , $714.
12. Sold A. L. Wyman for cash, 20 pcs., 710 yds. Fancy Prints, at 11^,
$81.05. ..... Sold J. J. Souder, on his note at 30 ds., 1492 yds. Amoskeag
Prints, at 25^, $373.
15. Received of C. A. Walworth in settlement of his account, his note, our
favor, at 30 ds., ? Drew 10 ds. draft on H. P. Perrin, favor of
A. T. Stewart & Co., for amount of Perrin's indebtedness, and remitted the
same to A. T. Stewart & Co. to apply on our account, $ .
2O. Sold W. M. Carpenter for cash, 315 yds. Fancy Prints, at 1U/,
$36.22. Sold T. B. Stowell, on his note at 30 days, our entire stock of
goods, viz.: 1454 yds. Amoskeag Prints, at 21^, $305.34 / 5775 yds. Am. Fancy
Prints, at W, $577.50 = $882.84. Paid cash for current expenses to
date, $75.18.
25. Settled with H. B. Claflin, giving him in full payment T. B.
Stowell's note, $882.84. Cash, $174. 74 ; discount allowed, S 18. r>.2 * = $
Received cash of J. C. Bryant in full of his account, $ -
Received cash in full of Wai worth's note of $1137.5'), less discount on same
for unexpired time, $4.35. f Received cash in full of J. J. Souder's
* This account is paid before it is due by equation, and hence we are entitled to the
discount for the unexpired time, which is assumed to be $18.52. Debit Claflin $1076.10?
Credit Bills Receivable $882.81* ; Cash, $/7A.7A; Interest, $18.5S.
t Debit Cash and Interest ; Credit Bills Receivable.
BUSINESS SERIES. 69
note of $373 ; less discount for 20 ds., $1.24.* Paid cash for our ac-
ceptance of Feb. 10, favor of C. C. Curtiss, $1500 ; less discount for 77 days,
$19.25.\ - - Paid cash to A. T. Stewart & Co. in full account, being
allowed discount for unexpired time, $ Balance of account, $1x55. 44-
Discount allowed, $23.QS.\
RESULTS. Capital at beginning, $230.19. Loss, $37.84. Capital at closing,
$192.35.
Set IV. STUDENT, PROPRIETOR.?
Characteristics. Dealing in Furniture. Buying and selling for cash and on credit.
Beginning with net capital ; incurring a loss in excess of capital, and closing insolvent.
Names of accounts used, with number of lines required for each\ Student (6) ;
Cash (17); Bills Receivable (8); Merchandise (18): Expense (7);
A. W. Smith (8) ; Bills Payable (5) ; De Graaf & Taylor (6) ; Loss &
Gain (11) ; Student (7) ; J. M. Phillips (7) ; Interest (8) ; Str. Queen
of the West (5). _______
Enffalo, March 1. 18 . Proprietor invests in cash, $1500;
promissory note for $2000, signed by Warren P. Spencer, in favor of A. M.
Clapp, dated March 1, inst., to run three months, with interest ; stock of
Furniture, valued at $15000 ; total investment, $18500. He owes on note,
favor J. Brown & Co., dated Jan. 27, last, at 30 ds., and due this day, but
allowed to run on interest, $13000 ; also to Degraaf & Taylor, on account,
$3500 Total liabilities, $15500.
2. Sold Millard Fill more, on his note at 3 months, 1 set Enameled Furni-
ture, $75 ; 1 do. Black Walnut (oiled) $275 ; 1 Carved Rosewood Bureau,
$100 = $450.
,7. Sold James Truman for cash, 1 Mahogany Settee, $45; 6 Parlor
Chairs, at $6, $36 ; 1 Rosewood Tete-a-Tete, $75 ; 1 Black Walnut Library
Bookcase, $80 Total, $236.
4. Paid workmen cash, $175. Sold A. W. Smith on account, 1
Black Walnut French Bedstead, $50 ; 1 Extension Dining Table, $25 ; 1
Enameled Bedroom suit, $85 = $160.
5. Sold J. H. Goldsmith, on his note at 60 ds.. 6 Gothic chairs, at $7, '42 :
1 Black Walnut Dressing Bureau, $55 ; 1 French Mantel Clock. $75 ; 6 Rose-
wood and Brocatelle Parlor Chairs, at $10, $60 Total, $2S2.
* Debit Cash and Interest ; Credit Bills Receivable.
t Debit Bills Payable ; Credit Cash and Interest.
$ Debit A. T. Stewart & Co. ; Credit Cash and Interest.
Use student's name.
\ Including Sets IV and V.
70 B u s i x /<; s s s E i; i E s.
(t. Received cash of A. W. Smith on account, $75. - - Sold Geo. T.
Smythe for cash, 12 Dining Chairs, at $3, $36 ; 1 Black Walnut Child's Crib,
$15 ; 1 Ornamental Etagere, $45 = S9G.
7. Paid cash for rent, $125.
MercJiandise remaining unsold, $10000.
RESULTS. JV& capital at commencing, $3000. Net loss, $4126. Deficient! t
closing, $1126.
V. STUDENT AND J. M. PHILLIPS, PROPRIETORS.
Characteristics. Admitting a partner and continuing the same business. Consideration
of interest and other sources of profit and loss. Interest allowed on net capital and charged
on deficiency. Beginning with net capital (furnished by incoming partner) and closing with
net gain more than sufficient to offset loss in previous set, giving to each partner a net
capital at closing.
Buffalo, April 1, 18 . Student and J. M. Phillips enter into
copartnership, equal in gains and losses, to continue the Furniture business
of Student, as represented in previous set. J. M. Phillips to invest $10000
cash, each partner to be allowed interest on his net investment, or charged
with interest on his net deficiency. Student's resources invested (as per state-
ment*): Cash, $ ; Bills Receivable, $ ; Merchandise, # ;
A. W. Smith's indebtedness, c< Student's liabilities assumed by firm :
Bills Payable, $ ; Degraaf & Taylor, $.
J. M. Phillips invests cash, $10000.
2. Received cash for W. P. Spencer's note of March 1, and interest thereon
to date. Face of note, $2000 ; Interest for 32 ds. at 1%, $12.44.
.?. Sold Steamer Queen of the West on account, 6 Rosewood Tete-a-Tetes,
at $40, $240; 30 do. Arm Chairs, at $10, $300 ; 3 " Sleepy Hollow" Chairs, at
$50, $150 ; 1 Carved Rosewood Centre Table, $75 Total, $765.
-t. Sold Sherwood & Co., Chicago, for cash, 10 Enameled Bed Room Suits,
at $75, $750 ; 12 Parlor do., at $150, $1800 ; 20 Carved Black Walnut Bureaus,
at $45, $900 Total, $3450. Paid Degraaf & Taylor cash in full of account,
>. Sold W. M. Carpenter, St. Louis, for cash, 6 Black Walnut Book Cases,
at $60, $360 ; 10 Rosewood Parlor Suits, at $300, $3000 ; 10 Enameled Bed
Room Suits, at $75, $750 Total, $4110.
(i. Bought of Degraaf &, Taylor, New York, on account, assortment of
Furniture, amounting, per invoice, to $7579. Paid cash for insurance on
building and contents, $175 ; Paid workmen cash, $219 Total. *'
* See Set IV.
BUSINESS SERIES. 71
8. Sold Munroe & Co., Detroit, for cash, 4 Bed Room Suits, at $62.50.
$250 ; 5 Rosewood and Brocatelle Parlor Suits, at $250, $1250 Total, $l5uu.
.9. Sold J. A. Wheeler & Co., Cleveland, on their note at 60 ds., 12 Black
Walnut Parlor Suits, at $175, $2100; 12 Best Curled Hair Mattresses, at $30,
$360 ; 20 Kettle's Patent Spring Beds, at $60, $1200 ; 4 Carved Rosewood
Secretaries, at $125, $500 Total, $4160.
1 0. Received cash in full for Millard Fillmore's note, with interest, of
March 2 ; Face of note, $450; Interest for 39 ds. at 1% , $3.41 Total, ft-
11. Received cash of A. W. Smith, to balance account, $
1H. Paid cash for our note and interest, due March 1; Face of note,
.$12000 ; Interest for 43 ds. at 1%, $100.33 Total, $12100.33, J. M.
Phillips's credit interest on net investment, $10000, for 11 ds., at 7fc, is
2.#9. - Student's debit interest on net deficiency, $1126, for 11 ds., at
1%,, is $2.41.
Merchandise remaining unsold, $8750.
RESULTS. Student's deficiency at commencing, $1126. J. M. Phillips' s capital
at commencing, $10000. Net gain, $4658.54. Student's one-half.
$2329.27. J. M. Phillips's do., $2329.27. Student's net capital at
closing, $1200.86. J. M. Phillips'* do., $12350.66.
Set VI. JAMES HAMLIN AND ROBERT MCGREGOR, PROPRIETORS.
Characteristics. Dealing in Groceries, for cash and on credit. Shipping, to be sold on
shipper's account. Beginning with unequal capital; rfodlizing a gain, which is divided
according to average capital.
^Accounts used, with number of lines for each James Hamlin (6) ; Robert
McGregor (6) ; Cash (10) ; Merchandise (11) ; Store and Fixtures (5) ;
Bills Payable (5) ; Shipment to Columbus, No. 1 (6) ; Shipment to
Columbus, No. 2 (6) ; Carter & Hawley (5) ; Shipm't to Wheeling (5) ;
Sanford & White (6) ; Expense (6) ; Interest (5) ; Bills Receivable (5) ;
Loss & Gain (8).
Cincinnati, January 1,18 . The partners in 'this business are
James Hamlin and Robert McGregor: the style of the firm is J. Hamlin &
Co. Gains and Losses to be divided in proportion to investment.
James Hamlin invests, Cash, $5000 ; Merchandise as follows : 10 hhds.
Sugar, 15250 Ibs., at 12^, $1830; 20 hf. chests Oolong Tea, 979 Ibs., at $l.r,0,
$1272.70 ; 7 brls. Currants, 1972 Ibs., at 17^, $335.24 Total, $3437.94. Total
investment, $8637.94.
Robert McGregor invests, Cash, $10000 ; Store and Fixtures, $8000
Total Investment, $13000.
72 HITS I If ESS SERIES.
2. Bought of Johnson & Co., on our note at 10 ds., 100 boxes Cheese, 2980
Ibs., at 170, $506.6 3; 20 tegs Ohio Butter, 1494 Ibs., at 31.*, $463.14 Total,
3. Shipped Sanford & White, Columbus, O., to be sold on our account and
risk, 7 hhds. Sugar, 11192 Ibs., at 12^, $
4. Sold for cash, 1 brl. Currants, 250 Ibs., at 230, $57.50 ; 30 boxes
Cheese, 889 Ibs., at 20^, $177.80 Total, -5'
;>. Shipped Sanford & White, Columbus, to be sold on our account and
risk, 6 brls. Currants, 1722 Ibs., at 170-, $292.74.
7. Sold Carter & Hawley on account, 5 hf. chests Oolpng Tea, 247 Ibs., at
$1.50, * _.
j[O. Bought of Simpson & Co., 15 brls. Mess Pork, at $19.75, $296.25 ;
25 brls. Western Beef Hams, at $29, $725 Total, $ Gave in pay-
ment our draft at 10 ds. on Carter & Hawley for $J70.oU. Cash for
balance, $
1 1. Shipped Brown & Co., Wheeling, W. Va., to be sold on our account
and risk, 10 brls Mess Pork, valued at $20, $200 ; 20 brls. Western Beef
Hams, at $30, $600 Total, $
15. Received of Sanford & White, an Account Sales of the sugar sent
them on the 3d inst. The net proceeds, which have been entered to our
credit as due on the 12th, amount to $io7o. (Shipm't to Columbus, No. 1.)
IS. Paid cash for sundry items of expense, $75; Paid cash to James
HamHn, on private account, $200 Total, 5'
2O. Paid cash for our note and interest, favor of Johnson & Co., due on
the 15th; Face of note, $969.74; Interest, $0.81 ; Amount paid, $,.
25. Received Account Sales of the Currants shipped Sanford & White,
Columbus, on the 5th inst. (Shipm't to Columbus, No. 2.) Our net proceeds,
due the 19th, amount to $375.
26. Bought of J. D. Hinde & Co., 20 hf. chests Young Hyson Tea, 978
Ibs., at $1.50, $1467. Gave in payment our sight draft on Sanford & White
for $1000 ; Cash for balance, $
27. Sold Seymour & Co., on their note at 30 ds., 10 hf. chests Young
Hyson Tea, 503 Ibs., at $1.75, $
3O. Paid salaries to date in cash, $150.
RESOURCES NOT SHOWN ON LEDGER. Mdse. 3 hhds., 4058 Ibs. Sugar,
at W, $486.96 ; 15 hf. chests Oolong Tea, 732 Ibs., at $1.30, $951.(>0 ; 10 hf.
chests Young Hyson Tea, 475 Ibs., at $1.50, $712.50 ; 70 boxes Cheese,
2091 Ibs., at 170. $355.47 ; 20 kegs Butter, 1494 Ibs., at 810, $463.14 ; 5 brls.
Mess Pork, at $20, $100 ; 5 brls Beef Hams, at $30, $150 Total, S3219.67.
Store and Fixtures, $8000. Shipment to Wheeling, valued at cost, $800.
RESULTS. Total gain, $333.98. James Hamlm's share, S Robert
McGregor's share, ?
BUSINESS SERIES. 73
Set VII. CHARLES SEYMOUR, PROPRIETOR.
C'haracf critics. This and the succeeding set are intended to illustrate the principles
*nd practice of a simple Commission, in connection with a general Merchandise business,
i> also, to some extent, the giving and receiving of notes, drawing and accepting drafts, with
allowance of interest and discount ; keeping a Bank account in the Ledger, drawing and
receiving checks, etc., etc. This set illustrates the business of a single proprietor, closing
with a net loss, and arranging to admit a partner for a continuance of the business, in Set 8.
Ample material will be afforded for the rendering of Accounts Sales, Accounts Current, Bills
of Purchase, etc. The notes, drafts, and checks embraced in the bus'iiess should be care-
fully written out by the student.
Accounts used, with number of lines for each (if kept in connection with the
succeeding set) Charles Seymour (9) ; Cash (23) ; Furniture (6) ;.
Expense (7) ; Rent (9) ; Insurance (9) ; First National Bank (23) ;
Bills Payable (9); Merchandise (13); Thompson & Hayes' Sales,
No. 1 (6) ; J. L. Hunt (6) ; Thompson & Hayes' Sales, No. 2 (6) ;
Bills Receivable (8) ; Charges (11); Commission (11) ; Thompson &
Hayes (10) ; Wheeler's Sales, No. 1 (6) ; Thompson & Hayes' Sales,
No. 3 (6) ; E. G. Folsom (5) ; Wheeler's Sales, No. 2 (6) ; Thompson &
Hayes' Sales, No. 4 (6); Interest (9); Loss & Gain (15); Leonard
Hall (6) ; J. R. Wheeler (6) ; James Doolittle (5) ; Good Will (5).
Ni'tv York, May 1, IS . The proprietor, Charles Seymour,
invests in cash, $5000. Paid cash for office furniture, $350 ; and for
books and stationery, $50 Total, $400.
2. Deposited in First National Bank, $4000.
3. Bought of C. Loutrel & Co., on our acceptance at 10 ds. their favor,.
50 brls. St. Louis Extra Flour, at $13.50, $675 ; 100 do. State Superfine Flour,,
at $8.25, $825 Total, $
4. Paid for three months' rent, in advance,* per check, $375. - - - - ^
Received from Thompson & Hayes, Chicago, to be sold on their account and
risk, 100 brls. Western Extra Flour ; Paid freight and drayage on same, per
check, $213.50.
X. Sold for cash, from Thompson & Haves' Sales, No. 1, 50 brls. Flour, at
$11.40, $ _. - - Sold J. L. Hunt on account, 75 brls. State Superfine
Flour, at $9.00, .y
ft. Took out open policy of insurance on warehouse and contents for
$30000, at \* ; Paid premium per check, $225. Sold for cash, 25 brls.
St. Louis Extra Flour, at $14, $350 ; 25 do. State Superfine Flour, at $9, $225
Total, $575. Deposited in Bank, $1000.
5. Received from Thompson & Hayes, Chicago, their second consignment,
consisting of 100 brls. New Mess Pork; Paid freight and drayage on same,
per check, $347.50. Sold D. B. Ivison, on his note at 30 ds., from Thompson
& Hayes' Sales No. 1, 50 brls. Flour, at $11.50. $575.
if. Rendered Thompson & Hayes' Account Sales of Flour, represented
in " Sales No. 1." Our charges on same are as follows: Storage, insurance,
7-i BUSINESS SERIES.
cooperage, etc., $21.63 ;* Commission %\% on sales, $28.62 ; Thompson &
Hayes' net proceeds, $881.45 Total debit to Sales No. 1, $931. 50. f
10. Sold T. R. Browne from T. & H.'s Sales No. 2, 75 brls. Pork, at $20 ;
$1500 ; Received in payment sight draft on W. H. Crocker & Co. for $800 ;
-Cash, $700.| - - Deposited in Bank, $2000.
11. Accepted Thompson & Hayes' draft on us at 10 ds. sight, favor of
H. B. Bryant, for $500.
12. Received from J. R. Wheeler, Buffalo, to be sold on his account and
risk, 1000 bush. White Genesee Wheat. Paid freight and dray age, per check,
$175.
13. Sold from Wheeler's Sales No. 1, for cash, 500 bush. Wheat, at $3.25,
$1625.
14. Received from Thompson & Hayes, Chicago, their third consign-
ment, consisting of 500 bush. Rye ; 300 do. Oats ; Paid freight and dray age,
per check, $180.
Iff. Sold from T. & H.'s Sales No. 2, to E. G. Folsom, on account, 25 brls.
Pork, at $21, $525.
16. Closed Thompson & Hayes' Sales No. 2, and rendered Account Sales
of same. Oar charges for storage, cooperage, etc., $19.78 ; Commission, %\%
on sales, $50.62 ; Thompson & Haves' net proceeds, $1707.10 Total debit to
Sales No. 2, $1777.50.
17. Received from J. R. Wheeler, Buffalo, his second consignment, con-
sisting of 2000 bush. Canadian Club Wheat ; Paid freight and drayage, per
check, $325.
18. Sold J. L. Hunt on account, from T. & H.'s Sales No. 3, 500 bush.
Rye, at $1.40, $700. - - Bought of J. & A. Manning, on our note at 30 ds.,
400 bush. Timothy Seed, at $3, $
20. Received from Thompson & Hayes, Chicago, their fourth consign-
ment, consisting of 200 brls. Western Extra Flour ; Paid freight and drayage,
per check, $425. - - Deposited in Bank, $1000.
21. Paid our acceptance favor of C. Loutrel & Co., due the 16th, per check ;
Face of acceptance, $1500 ; Interest on same, 5 days, $1.^6 ; Amount paid,
$1501.46. Also, discounted our note favor of J. & A. Manning, for
$1200, due June 20. Discount off, 30 ds., $7. Net amount paid, per chock,
$1193.
* A general "Charges" account is sufficient to represent the returns from all charges
except our commission, which requires a separate account.
t The teacher should explain the nature of this debit, and the object in closing up the
separate " Sales " accounts as soon as the property is disposed of. The " Account Sales ''
should be made out in proper form by the student. See model, page 88.
The only distinction between a sight draft and a check is that the former is drawn
upon an individual, and the latter on a bank. Both being payable upon presentment, are
considered the same as cash. As this draft will be deposited in our bank for collection, we
-ekall reckon it as cash at once.
/; LJ S I .V E S S S E R 1 E S . ?5>
2;$. Received of J. L. Hunt, cash in fall of account, f
24. Paid our acceptance favor of H. B. Bryant, due this day, per check,
$500. - - Deposited in Bank, $1875.
3O. The proprietor admits as a partner in the business, Leonard Hall,
who is to make a cash investment equal to the present net worth, the business
to be continued under the firm name of Seymour & Co. each partner to give
his time to the business, and the losses and gains to be divided equally.
RESOURCES NOT SHOWN ON LEDGER.* Merchandise, 25 brls. St. Louis
Extra Flour, at $13.50, $337.50; 400 bush. Timothy Seed, at $2.75, $1100
Total, $1437.50. Rent, 2 months' paid in advance, $250. Insurance, 11
months' unexpired policy, $206^.S5. Furniture, valued at $350.
Net Loss, $
Set VIII. CHARLES SEYMOUR AND LEONARD HALL, PROPRIETORS.
Characteristics. This is a continuation of the business of Set 7, under a new pro-
prietorship ; the business to be conducted precisely as in the previous set. The new
partner, Leonard Hall, invests cash equal to the net investment of the former proprietor,
which is shown in his account after carrying to it the loss of the previous business. The-
same Ledger accounts, with balances brought down, are used.
N< j w York, Jiuie 1 , 18 .Leonard Hall invests cash, -f
- Deposited in Bank, $4000.
3. Sold James Butler, on his acceptance at 10 ds., from Wheeler's Sales r
No. 1, 500 bush. Wheat, at $3.40, $1700. - - - Closed Wheeler's Sales, No,
1, and rendered him an account of the same. Our charges for storage, insur-
ance, etc., $22.91; Commission, $83.12. J. R. Wheeler's net proceeds,
$3043.97 Total debit to Sales Account, $3150.
4. Bought of Lathrop & Co., 8 hhds. Muscovado Sugar, 13850 Ibs., at 10^,
$1454.%5. Paid them our sight draft on E. G. Folsom, for amount of his
account, f ; Check for balance, $
,5. Paid, per check, Thompson & Hayes' draft on us for $ 1500.
7. Sold J. Timmons, on his note at 30 ds., 4 hhds. Muscovado Sugar,
6930 Ibs., at 11^, $762.30.
8. Sold for cash. 25 brls. St. Louis Extra Flour, at $15, $375. -
Paid cash for postage and revenue stamps, $10.
* Among the open Ledger accounts are Wheeler's Sales, No. 1, Thompson & Hayes'
Sales, No. 3, Wheeler's Sales, No. 2, and Thompson & Hayes' Sales, No. 4 ; the former two
of which show an excess of the credit side, and the latter two an excess of the debit side.
As the business for which these accounts were opened is not concluded, they are treated in
this statement precisely like personal accounts, waiving our immature claims for charge*
and commission.
76 BUSINESS SERIES.
lit. Received cash in full for D. B. Ivison's note of May 8, due this da^
<$ - - Deposited cash, $900.
12. Sold for cash, 400 bush. Timothy Seed, at $3.00, $1400.
15. Sold for cash, from Thompson & Hayes' Sales, No. 3, 300 bush. Oat&
at 65.^, $195. - - Closed T. & H.'s Sales, No. 3, and rendered an account o
the same; our charges for storage, insurance, etc., amount to $13.87 ; oui-
commission, $22.37. Thompson & Hayes' net proceeds, $678.76 Total debh
to Sales Account, $715.
Id. Paid J. R. Wheeler's sight draft on us, favor First National Bank,
per check, $2500.
18. Sold James Doolittle on account, from Wheeler's Sales, No. 2, 1500
bush. Canadian Club Wheat, at $2.35, $3525 ; also from Thompson & Hayes'
Sales, No. 4, 200 brls. Flour, at $11.35, $2270 Total, $5795.
1!). Closed Thompson & Hayes' Sales, No. 4, and rendered account of the
same. Our charges for storage, cooperage, etc., $24-59; our commission, at
%\%, $56.75. Thompson & Hayes' net proceeds, $1763.66. Total debit to
Sales Account, $1845.
20. Sold for cash, from Wheeler's Sales, No. 2, 500 bush. Canadian Club
Wheat, at $2.40, $1200.
21. Closed Wheeler's Sales, No. 2, and rendered account of the same.
Our charges for storage, insurance, etc., $23.17. Commission, 2.V/, $11S.1~.
J. R. Wheeler's net proceeds, $4258.71. Total debit to Sales Account, $4400.
24. Received cash in full for James Butler's acceptance of the 3d inst, ;
Face of acceptance, $1700 ; Interest on same, 8 days, $2.64 ; Amount received.
.$1702.64.
25. Received cash, less discount, for J. Timmons' note of the 7th inst.,
due July 10. Face of note, $762.30 ; Discount, $2.22 ; Net amount received.
.$760.08. - - Deposited in Bank, $4500.
27. Received of Jas. Doolittle, check in full of his account, $
- Deposited in Bank, $6000.
28. We have this day arranged with Lathrop & Moore, for the sale to
them of our entire business, including Furniture, Lease, Good Will, etc.;
possession to be given July 1. Received their note at 3 months, for the fol-
lowing considerations and amount : Four years and ten months' lease of store,
together with one month's prepaid rent, $2000; Ten months' uiiexpired
Policy on $30000, Store and Contents, $187.50 ; Furniture, $300; Good Will,
42000 Total, $4487.50.
29. Accepted J. R. Wheeler's draft at 10 ds., favor of Thos. Shields, for
balance of his account, $ - - Sold for cash, 4 hhds. Muscovado
Sugar, 6920 Ibs., at 12^, $830.40. - - Paid Thompson & Hayes' si^ht draft,
per check, for balance of their account, $
30. Deposited in Bank, $2712.86.
RESULT. Total net gain, $4512.52 ; Seymour's share, $ ; Halls do.,
CHAPTER IV.
TEST EXERCISES AND FORMS.
SYNTHESIS.
Journalize the following transactions :
1. Bought merchandise for $1295.75; Paid cash $795.75, and accepted
thirty days' draft for balance.
2. Sold merchandise to S. R. Eaton for $700 ; on which he paid $300
cash, leaving balance to remain on account.
[Record the above by two methods ; first in one entry, and next in two entries.]
3. Sold F. E. Rogers merchandise for $500, for which he agrees, within
ten days, to give his note with a good endorser.
4. Received the note, instanced in the above transaction.
5. Received $500 cash on loan for six months, giving in exchange our
note for the time with interest added at the rate of 6 per cent per annum.
f>. Had our note for $700 discounted for three months, receiving the pro-
ceeds in cash ; the abatement being the interest on the face of the note for
three months and three days.
7". Stuart & Co., who owe us $1975, have compromised with their credi-
tors at 75 cents on the dollar, and pay us that proportion of our account
in cash.
8. G. A. Gaskell holds our note for $1000, on which has accumulated
$75 interest ; we pay the interest in cash, and give them a new note of the
same amount.
.9. W. E. Drake holds our note for $500, on which is due $37.50 interest ;
we pay the interest and one-half the note in cash.
10. We hold a note of $700 against Stewart & Hammond, due to-day,
"with interest at 6 per rent per annum for 93 days ; they pay the interest and
$300 of the note in cash, issuing a new note for the balance.
11. J. D. Odell owes us $750, which has been due three months; he
pays us cash $100, and gives his note for balance, including three months'
interest on the amount, at 6 per cent, per annum.
78 TEST EXERCISES AXD FORMS.
12. T. B c Stowell sells for us on commission, merchandise for $1200,,
paying us cash, less his commission at 2| per cent on the amount of the sale.
[Record the above in two separate entries ; also in one entry complete, keeping a Com~
mission account. Also make the entry in the two forms, omitting Commission account.]
i:>. C. Barker, against whom we hold a note for $300, with accumulated
'nterest of $17, permits the note to go to protest, we paying the protest fees
;$1.75) in cash.
[The question may arise as to whether the expense of protest should be added to the
note or charged to the maker separately. It may be well to make the entry in different
ways: 1. By increasing Bills Receivable in the amount of the protest ; 2. By charging the
protest fee to personal account ; 3. By tranferring the entire indebtedness to personal
account, thus recognizing a dishonored note as simply a collateral. In view of the trans-
action which follows, these three forms of entry will afford an instructive variety.]
1-t. We have compromised with C. Barker for the above indebtedness,
receiving in full payment of the same $100 cash.
15. Paid cash for insurance on $10000 of merchandise in store, at of
\ per cent.
1<>. The merchandise, insured as above, has been consumed, and we
receive the full amount of insurance in cash.
1^. F. C. Woodbury is charged on our books $750; the account has-
been standing three months. We accept in payment his note for the debt
and interest added for the time, at 6 per cent per annum.
18. In settlement of our account against Isaac Smith at a previous date,
we made an abatement in his favor of $112.50. He now pays us the amount
m cash.
If). In payment of Samuel Parker's account against us of $475, we
draw upon our debtors Jones and Smiley.
2O. Our profits during the past year, as shown in the Loss & Gain
account, amount to $15075, which is to be divided between the partners as
follows : John Robb, i ; Thomas Sims, f .
ANALYSIS.
Write out in due form the transactions which would produce the following*
Journal entries :
Debits. Credits.
Merchandise $300 Cash - - - ... $300
2
Merchandise 750 Bills Payable 750
TEST EXERCISES A N D FORMS.
3
Merchandise 175 A. C. Lobeck 175
4
Merchandise 250 J. N. Kimball - - 100
Cash 150
Cash 110 Merchandise 110
Cash 300 Bills Receivable - - - - 300
Cash 425 Bills Receivable - - - - 400
Interest 25
Cash 473 Bills Payable 500
Interest 27
Cash --- 512.50 Bills Receivable - - - 600
interest 87.50
1O
Cash .--.-.-. 175 James Magoon .... 200
Loss & Gain 25
11
Cash - - 143 Mott&Co. 600
Interest 57
Bills Receivable .... 400
12
Government Bonds - - - 5000 Cash 5317.50
Interest - - 17.50
Premium 300
-13-
Bills Payable 500 Merchandise - - 200
Cash - 297.50
Interest 2.50
Merchandise 2000 Cash 1500
Bank Stock 2000 Bills Payable 2500
15
Cagh - - 1275 Howard's Sales - - - - 1275
80 TEST EXERCISES AND FORMS.
James Parton - - 2150 Shipment to Buffalo - - 2150
17
Shipment to Boston - - - 1405 Merchandise 1275
Cash 130
18
Rowe's Sales 18.75 Cash 18.75
-19 -
Bills Receivable - - - - 1500 Cash 1000
Interest 75 Loss & Gain 575
20
Cash 172.50 T. Horton 185
Interest 12.50
21
Insurance 75 Cash 75
. 22
Cash - 175 Rent 175
23
Howard's Sales .... 1050 Storage 15
Commission 3f
James Howard .... 1005
24
Cash 25 Commission
25
Cash 300 Hertz & Co. 950
Bills Payable 400
Interest 17.50
Loss & Gain .... 232.50
26
Bills Receivable - - - - 500 Bills Payable 500
Personal Expenses - - - 17.50 Cash 17-50
28
Smith (proprietor) - - - 118 Cash 118
29
Loss & Gain 929 Smith (proprietor) - - - 929
T E K T E X E 1! (' I S E S A A\ D FOR M S.
81
"Smith (proprietor) - - -
eV
375 Loss & Gain
v /
- 375
107 K(\ Pa all
mK(\
Bills Receivable ....
300 John Wood -
310
10
Bill Pa ble
^0 P IVfitnlipll
qfsq
*
18
VOUCHERS.
For complete data for the following papers refer to the transactions them-
selves, as indicated in the headings.
1, PAPERS TO ACCOMPANY SET 1, (Page 64.)
1. Receipted bill from Merrlck & Son to Alan E. Cooper, of 500 brls.
Flour, at $8.
2. Receipted bill from Alan E. Cooper to E. G. Folsom, of 200 brls.
Flour, at $9.
3. Receipted bill from Alan E. Cooper to W. H. Clark, of 300 brls.
Flour, at $9.25.
2, PAPERS TO ACCOMPANY SET 1, Continued. (Page 64.)
J. Bill from James Carter to Alan E. Cooper, of 1000 bush. Wheat,
at $1.12. Jan. 12.
2. Bill from James Jewell to Alan E. Cooper, of 1500 bush. Oats, at 600.
Jan. 15.
3. Receipted bill from Alan E. Cooper to Ira Mayhew, of 30 bush. Oats,
at 70? ; 200 bush. Wheat, at $1.25. Jan. 20.
4. Receipted bill from Alan E. Cooper to W. N. Yerex, of 200 bush,
Oats, at 75^. Jan. 25.
ft. Bill from Alan E. Cooper to H. C. Spencer, of 500 bush. Wheat,
at $1.25. Jan. 25.
f>. Receipted bill from Alan E. Cooper to Frank Goodman, of 500 busk
Oats, at 75?-. Jan. 30.
82 TEST EXERCISES AND FORMS.
3. PAPERS TO ACCOMPANY SET 2, (Page 66.)
1. Receipted bill from Acker, Merrall & Co., New York, to J. J. Ander-
son, of 31 hhds. Molasses, 4000 gals., at 80/. Jan. 16.
. Receipted bill from J. J. Anderson, Brooklyn, to H. M. Gardner, of
11 hhds. Molasses, 1335 gals , at 85^. Jan. 17.
3. Receipted bill from J. J. Anderson, Brooklyn, to H. W. Beeclier, of
15 hhds. Molasses, 1995 gals., at 75^'. Jan. 18.
4=. Receipted bill for J. J. Anderson, Brooklyn, to R. Harper, of 5 hhds.
Molasses, 070 gals., at 75^. Jan. 20.
4. PAPERS TO ACCOMPANY SET 2, Continued, (Page 66.)
1. Bill (30 ds. credit) from Acker, Merrall & Co., New York, to J. J.
Anderson, of 10 hhds. Muscovado Sugar, 15500 Ibs., at 9^ ; 20 chests Young-
Hyson Tea, 1250 Ibs., at 53^. Feb. 1.
2. Bill from J. J. Anderson to D. T. Ames (10 ds. credit), of 4 chests Young
Hyson Tea, 250 Ibs, at 57^. Feb. 10.
3. Bill from Park & Tilford, New York, to J. J. Anderson (30 ds. credit),
of 5 hhds. Porto Rico Molasses, 653 gals., at 47<*. Feb. 15.
4=. Receipted bill from J. J. Anderson, Brooklyn, to J. M. Frazier, of
2 chests Tea (Young Hyson), 130 Ibs., at 59^. Feb. 15.
. Bill (10 ds. credit) from J. J. Anderson, Brooklyn, to W. H. Patrick,
of 1 hhd. Molasses, 110 gals., at 50^ ; 2 chests Young Hyson Tea, 129 Ibs.,
at 60^. Feb. 20.
f>. Receipted bill from G. W. Michael, New Orleans, to J. J. Anderson,
of ten mats Java Coffee, 500 Ibs., at 9/. Feb. 20.
7. Receipted bill from J. J. Anderson, Brooklyn, to C. N. Crandle, of
4 mats Java Coffee, 200 Ibs., at 10|^. Feb. 20.
8. Receipt from J. J. Anderson to D. T. Ames, for cash, in full of hia
account. Feb. 20.
.9. Receipted bill from J. J. Anderson, Brooklyn, to J. W. Swank, for
50 Ibs. Coffee, at 12^ ; 1 hhd. Molasses, 125 gals., at W. Feb. 25.
10. Twenty days' draft drawn by Park & Tilford, New York, Feb. 25 ;
on J. J. Anderson, Brooklyn, and accepted by him, favor of A. C. Lobeck.
11. Letter from W. H. Patrick, enclosing his check for $66.20, which
we had agreed to accept as a compromise in the settlement of his account.
The letter should express a proper appreciation of the favor. Feb. 28.
TEST EXERCISES AND FORMS. 83
1?. Receipted bill from J. J. Anderson, Brooklyn, to H. A. Spencer, of
j lilius. Sugar, 7800 Ibs., at 8-^. Feb. 28.
13. Receipt from Acker, Merrall & Co. to J. J. Anderson, for cash, in
full of %. Feb. 28.
5, PAPERS TO ACCOMPANY SET 3, (Page 67.)
1 . Bill from H. B. Claflin, New York, to James Sanf ord at four months'
wedit, of 5 cases, 8310 yds., Wamsutta Muslin, at 31^. Feb. 1.
2. Receipted bill from James Sanford, Albany, to James Shepard, of
1 case,' 1710 yds., Wamsutta Muslin, at 34/i Feb. 2.
3. Bill from James Sanford, Albany, to C. A. Walworth, of 2 cases,
43250 yds., Wamsutta Muslin, at 35f . Feb. 3.
4. Bill from A. T. Stewart & Co., New York, to James Sanford, three
months' credit, of 6 cases, 8556 yds., Amoskeag Prints, at 23^. Feb. 4.
,7. Bill from James Sanford, Albany, to J. C. Bryant, of 2 cases, 2816 yds.,
Amoskeag Prints, at 25^. Feb. 5.
(>. Receipted bill from James Sanford, Albany, to L. L. Williams, of
3350 yds. Wamsutta Muslin, at 33|/. Feb. 7.
7. Bill from James Sanford, Albany, to H. P. Perrin, of 2 cases,
2794 yds., Amoskeag Prints, at 26?. Feb. 9.
6. PAPERS TO ACCOMPANY SET 3, Continued. (Page 68.)
7. H. B. Claflin's draft, at three months dated New York, Feb. 8
on James Sanford, Albany, for $1500, favor of C. C. Curtiss, and accepted by
Sanford, Feb. 10.
2. Bill at 30 ds. from A. T. Stewart & Co., New York, to James San-
ford, of 5 cases, 6800 yds., Am. Fancy Prints, at 10^. Feb. 10.
3. Receipted bill from James Sanford, Albany, to A. L. Wyman, of
30 PCS., 710 yds., Am. Fancy Prints, at 11^. Feb. 12.
4. Bill from James Sanford, Albany, to J. J. Souder, of 1492 yds.
Amoskeag Prints, at 25**. Feb. 12.
;>. Note at 30 ds., made by J. J. Souder in favor of James Sanford for
$373, dated at New York, Feb. 12, and payable at Wall St. Bank.
tf. Note at 30 ds., made by C. A. Walworth in favor of James Sanford
for $1137.50, dated at New York, Feb. 13, and payable at East River Bank.
84 TEST EXERCISES AND FORMS.
7. Draft at 10 ds., drawn by James Santbrd, New York, Feb. 15, orj
H. P. Perrin, Buffalo, favor of A. T. Stewart & Co., for $726.44.
(V. Receipted bill from James Sanford, New York, to W. M. Carpenter^
of 315 yds. Am. Fancy Prints, at 11|^. Feb. 20.
.9. Bill at 30 ds. credit from James Sanford, Albany, to T. B. StowelV
of 1454 yds. Amoskeag Prints, at 21? ; 5775 yds. Am. Fancy Prints, at 10^.
Feb. 20.
10. Note at 30 ds. from T. B. Stowell, dated New York, Feb. 20, in
favor of James Sanford, for $882.84, payable at Importers and Traders'
Bank. Feb. 25.
11. Receipt from James Sanford, Albany, for $704, to J. C. Bryant,
m full of %. Feb. 25.
12. Receipt from A. T. Stewart & Co. to James Sanford, in full of %..
Feb. 25.
7, PAPERS TO ACCOMPANY SET 4, (Page 69.)
1. Note of W. P. Spencer for $2000, dated Buffalo, March 1, at three
months, with interest, in favor of A. M. Clapp, and payable at New York &
Erie Bank.
2. Note of Student, favor of J. Brown & Co., dated Buffalo, Jan. 27, at
30 ds., and payable at Niagara Bank, for $12000.
3. Bill from Student, Buffalo, to Millard Fillmore, of 1 set Enamel od
Furniture, $75 ; 1 do. Black Walnut (oiled) $275 ; 1 Carved Rosewood
Bureau, $100. March 2.
4. Millard Fillmore's note, dated Buffalo, March 2, at 3 mos., favor of
Student, and payable at Student's office, $450.
5. Receipted bill from Student, Buffalo, to James Truman, of 1 Mahog-
any Settee, $45 ; 6 Parlor Chairs, at $6 ; 1 Rosewood Tete a Tete, $75 ;
1 Black Walnut Library Book Case, $80. March 3.
6*. Bill from Student, Buffalo, to A. W. Smith, of 1 Black Walnut
French Bedstead, $50 ; 1 Extension Dining Table, $25 ; 1 Enameled Bedroom
Suit, $85. March 4.
7. Bill from Student, Buffalo, to J. H. Goldsmith (note at 60 ds.), of
6 Gothic Chairs, at $7 ; 1 B. W. Dressing Bureau, $55 ; 1 French Mantel
Clock, $75 ; 6 Rosewood and Brocatelle Parlor Chairs, at $10. March 5.
8 J. H. Goldsmith's note, fulfilling above conditions.
9. Receipt from Student to A. W. Smith, Feb. 6.
TEST EXERCISES AND FORMS. 85
10. Receipted bill from Student, Buffalo, to Geo. T. Smythe, of 12
Dining Chairs, at $3 ; 1 B. W. Child's Crib, $15 ; 1 Orn. Etagere, $45.
March 0.
11. Receipt from J. M. Phillips for rent of Store, No. 159 Main St.,
one month,
8, PAPERS TO ACCOMPANY SET 5, (Page 70.)
1. Bill to fill the conditions of sale of Apr. 3.
2. Bill to fill the conditions of sale of Apr. 4.
3. Receipt for payment to DeGraaf & Taylor of Apr. 4.
4. Bill to fill the conditions of sale of Apr. 5.
5. Bill to fill the conditions of purchase of Apr. 6.
6. Bill to fill the conditions of sale of Apr. 8.
7. Bill and note to fill the conditions of sale of Apr. 9.
&. Receipt to A. W. Smith, as per payment Apr. 11.
9, PAPERS TO ACCOMPANY SET 6, (Page 71.)
1. Bill and note filling the conditions of purchase of Jan. 2.
2. Invoice of shipment of Jan. 3;* also letter addressed to consignee^
covering invoice and making suggestions as to sales.
3. Bill filling conditions of sale of Jan. 4,
4. Invoice of shipment of Jan. 5, with accompanying letter to C3n-
signees.
5. Bill filling conditions of sale of Jan. 7.
f>. Bill filling conditions of purchase of Jan. 10, also draft as prescribed.
7. Invoice of shipment of Jan. 11, with accompanying letter of instruc-
tions to consignees.
8. Account of sales received from Sanford & White, Jan. 15, covering
the following items: Total Sales 11192 Ibs. Sugar, at W, $1678.80;
Cffutrges Freight, $12; Storage and adv., $27.93; Insurance, %, $'2.10;
Cooperage, $19.80; Commission, 2|% on sales, $41.97; Net proceeds,
$1575.*
* Models of Invoice and Account Sales on page 88.
86 TEST EXERCISES AND FORMS.
f). Account of sales received from Sanford & White, Jan. 25, of Ship't
No. 2, covering the following items : Total Sales 1722 Ibs. Currants, at 23<*,
$396.06; Charges Freight, $5.10; Storage, $5.56; Insurance, \%, $0.50;
Commission, 2^fo on sales, $9.90 ; Net proceeds, $375.
1O. Bill filling conditions of purchase of Jan. 26.
21. Sight draft on Sauford & White, as prescribed, Jan. 26.
12. Bill and note filling conditions of sale of Jan. 27.
10. PAPERS TO ACCOMPANY SET 7. (Page 73.)
1. Bill filling conditions of purchase of May 3.
2. Accepted draft as prescribed in connection with above purchase.
3. Invoice of consignment from Thompson & Hayes, Chicago, 100 brls
Western Extra Flour.
4. Receipted bill of 50 brls. Flour, sold May 5, from Thompson & Hayes 1
Sales, to J. L. Carpenter.
5. Bill of Flour sold J. L. Hunt, May 5.
6*. Receipted bill of Flour sold May 6.
7. Invoice of second consignment from Thompson & Hayes of 100 brls
Mess Pork, received May 8, with accompanying letter.
8. Bill filling conditions of sale to D. B. Ivison, May 8. Also note given
by Ivison in connection with said transaction.
9. Account Sales of Flour to Thompson & Hayes, as per items, May 9,
with accompanying letter.
JO. Bill of Flour from Sales No. 2, as per transaction of May 10, with
sight draft on W. H. C. & Co.
11. Thompson & Hayes' dft., as per indication of May 11.
12. Invoice of Wheat from J. R. Wheeler, as per May 12.
13. Bill of Wheat sold May 13.
14:. Invoice of Rye and Oats from Thompson & Hayes, as per May 14.
15. Bill of Pork, sold May 15.
16. Account Sales of Pork, sold for Thompson & Hayes, as per items.
May 16.
TEST EXERCISES AND FORMS. 87
17. Invoice of Wheat from J. R. Wheeler, as per May 17.
18. Bill of Bye, sold J. L. Hunt, May 18.
W. Bill Timothy Seed, bought of J. & A. Manning, May 18. Note
.given in exchange therefor.
20. Invoice of Flour from Thompson & Hayes, May 20.
21. Receipt to J. L. Hunt for cash, paid May 23.
11. PAPERS TO ACCOMPANY SET 8, (Page 75.)
1. Bill of Wheat sold James Butler, June 3.
2. Account of Sales of Wheeler's Sales No. 1, as indicated June 3.
3. Bill of Muscovado Sugar, as per purchase, June 4.
4. Draft on E. G. Folsom, as indicated June 4.
5. Thompson & Hayes' draft, as per June 5.
6*. Bill of Muscovada Sugar sold Timmons, June 7. Timmons's note
for same.
7. Receipted bill for 25 brls. Flour, sold June 8 ; D. H. Cochran, pur-
chaser.
<V. Receipted bill for 400 bush. Timothy Seed, sold June 12 ; D. B. Ivison,
purchaser.
9. Receipted bill for 300 bush. Oats from T. & H.'s Sales, June 15 ;
W. H. Gray, purchaser.
/f>. Account Sales rendered Thompson & Hayes, as per items of
June 15.
11. J. R. Wheeler's sight draft, as per transaction of June 16.
12. Bill of Wheat and Flour, sold James Doolittle, June 18.
13. Account Sales rendered Thompson & Hayes, as per items, June 19.
14. Receipted bill of 500 bush. Wheat from Wheeler's Sales, June 20 ;
. A. Miller, purchaser.
15. Account Sales rendered J. R. Wheeler, as per items of June 21.
1(>. Lathrop & Moore's note, as indicated in transaction of June 28.
17. J. R. Wheeler's draft, as indicated in transaction of June 29.
88
TEST EXERCISES AND FORMS.
INVOICE OF SHIPMENT.
INVOICE of Mdse. skipped SANFORD & WHITE, Columbus, per C. C. & C. R. B.,
to be sold on our % and risk.
Hhde. Sugar,
1681"- 38 b 11469
1636 40 277 d
1642 40
1637 39
1632 38
1651 - 42
1640 40
11192 e Ibs. -
HAMLIN & MCGREGOR.
CINCINNATI, Jan 3, 188k.
Gross weight. b Tare. c Total gross weight. tt Total tare. e Total net weight.
1:343
04
ACCOUNT SALES.
ACCOUNT SALES of 7 Hhds., 11192 Ibs., Sugar, for % and risk of
HAMLIN & MCGREGOR, Cincinnati.
1884
Jan
10
James N. Kimball, 30 ds.
4 hhds., 6389 Ibs. - - 150.
958
,35
"
15
Byron Horton, cash,
3 hhds., 4803 Jbs. - - 15
720
45
1678
80
fit,
5
12
15
27
98
2
10
19
HO
41
ff
i 103
SO
H & McG *s Net Proceeds ....
1575
E. & O. E. SANFORD & WHITE.
COLUMBUS, Jan. 15, 188k.
ACCOUNT CURRENT.
E. M. PACKARD, in Account Current with L. W. GANTZ & Co.
7>r
B
Mdse as per Bill rendered (60 ds )
qoR.
7
00
18
RA
It tl U
/T r
ir>
Cash
KAf\
ne-j)
750
1
r
o-i g
.
1
PHILADELPHIA, J^ft. i, i885.
Jan.
Jan.
[For cotaplete instruction in rendering and equating Accounts Sales and Current, see the-
"PACKARD COMMERCIAL ARITHMETICS."!
CHAPTER V.
BUSINESS CORRESPONDENCE.
138. The ability to write a good letter is one of the chief
requisites of an accountant, as it is a necessary qualification of
the business man. To acquire facility in letter-writing much
practice may be necessary, and to be an efficient correspondent
is to be not only a master of forms but of expression, and par-
ticularly of the subjects embraced in the correspondence. Ta
teach the art of letter-writing is a simpler matter; and to that
purpose this chapter is devoted.
139. The two chief requisites of a letter are (1) that it
shall be in proper form, and (2) that it shall express the exact
thought of the writer.
14O. The form or structure of a letter comprises (1)
Materials, (2) Arrangement, (3) Penmanship.
141. The expression of a letter relates to the proper use-
of words, both as to their meaning and their grammatical
sequence.
STRUCTURE.
143. 1 . Materials. These are, briefly, pen, ink, and
paper, which should be of good quality and appropriate.
The best pen for any writer is that one which will enable him
to do the best work with the greatest ease. Whether it be made
of gold, of steel, or of the " gray goose quill " is immaterial.
The best ink for commercial use is a good quality of fluid
which flows readily, and when dry becomes a permanent black.
Colored inks of whatever tint are out of place in a business
communication.
143. The paper should be of good consistency and color,
with a surface that pleases the writer, and encourages him to do-
good work. The size and shape of the letter sheet is somewhat a
matter of taste ; and yet the ordinary uses of business limit these
to the quarto, or letter sheet, measuring 8 by 10 inches, and the-
octavo, or note sheet, measuring 5 by 8 inches.
-90 BUSINESS CORRESPONDENCE.
144. The two sizes of envelope most in use are known as
Nos. 5 and 6; the former measuring about 3} by 5J inches, and
the latter about 3J by 6 inches. No. 6 is the most convenient
size for general use, in that it accommodates more readily the
folded sheet and, from not fitting so snugly, is more easily opened.
For official communications, manuscripts, legal documents, etc.,
the official envelope usually about 9 inches long is the most
convenient.
145. The best color for paper and envelope is plain white,
.although buff envelopes, in ordinary correspondence, are much
used. It is in good taste to imprint upon the heads of letter
sheets, as also upon the face of the envelope, the style and address
of the business house, or of the individual ; but too much display
should not be made of either. To print an address on the envelope
will secure the prompt return of the letter to the writer, in case
the person to whom it is addressed is not found.
146. 2. Arrangement. The material of a letter should
be properly arranged. This consists of (1) the date, (2) the name
and address of the person to whom the letter is written, (3) the
salutation, (4) the body of the letter, (5) the complimentary close,
and (6) the signature.
147. The following example will indicate the usual
formula :
(FORM L)
"New York, Jan. 10, 1884.
(z) Roberts Brothers,
Buffalo.
( 3 } Gen tlem en : (4) We sen d you
by to-day's express, as per your order of
the 8th, one doz. copies "Fairy Land of
Science," for which please find bill en-
closed.
Yours truly,
. Dillingham.
"
T.
It (.'SIX ESS COR R ESP OXDENCE. 91
148. This formula may be varied, according to circum-
stances, and to suit the taste of the writer, without offending the
rules of propriety. Here are a few variations :
(1) 805 Broadway, New York,
Jan. 10, 1884.
(2) Roberts Brothers,
Buffalo.
(3) Gentlemen :
(i) We send you, etc.,*
(5) v er y sincerely yours,
(6) C. T. Dillingham.
Broadway,
New York, Jan. 10, 1884.
{2) Roberts Brothers, Buffalo.
(3) Gentlemen :
^We send you, etc.,
(5) Yours to command,
(6) C. T. Dillingham.
(REPLY. FORM 2.)
^Buffalo, Jan. 12, 1884.
Sir:
U) We are in receipt of your
favor of the 10th, as also of the books
shipped us on that date. Please accept
our thanks for your promptness.
(5 Sincerely yours,
^Roberts Brothers.
(2) <7. T. Dillingham, Esq.,
New York.
92 BUSINESS CORRESPONDENCE.
149. 3. Penmanship. The beauty and appropriateness
of a letter depends, in no small degree, upon its penmanship,
which should be, above all things, plain and legible. If, at the
same time, it can be easy and graceful, so much the better. A
business letter should appear to have been written " off hand/'
bearing upon its face no evidence of great painstaking.
15O. All flourishing of capitals, and all ornamental strokes
of whatever kind, are out of place, except in the case of a master
of the pen whose grace lines are perfect, not overdone, and made
to fit into tlie harmony of the work so as to seem a part of it.
To the student who lacks this unusual faculty, the safest way is
not to attempt any display. Neither should one practice great
variety in the forms of letters. The student should select a style
of capitals and small letters which he can make most easily and
effectively, and stick to them. He should "settle down" as
soon as possible into a uniform style which he can call his own,
and which shall identify him while it serves his purpose.
151. The superscription of the envelope will admit of a
little more freedom and display ; but even here, strict regard
.should be had to legibility and neatness.
EXPRESSION.
152. A business communication should be clear and posi-
tive in its purpose, and exact and unequivocal in its language ;
-and as its language aims to express its purpose, it is of the utmost
importance that the purpose should exist clearly in the mind of
the writer before he essays to give it word.
.153. While it is true that some persons appear to possess
natural gifts of expression, it is also true that forms of expression
have to be learned whatever the natural gifts. The difference,
then, is that what is easy for some is hard for others ; and so
those who do not have expression by the grace of God, must
attain it by the grace of labor.
154. Thoughts are expressed through the agency of
words ; and to have plenty of words at command, with the
ability to use them according to the best forms, is to be a master
of expression.
BUSINESS CORRESPONDENCE. 93
155, To use words properly and effectively, it is necessary
to know
h How to spell correctly ;
2. How to choose the exact word for the exact thought ;
3. How to build the words into correct sentences ;
4. How to point off the sentences and capitalize the words,
so as to secure proper reading and a just sense of what is written.
The style of written composition depends upon the order of
thought and mental habits of the writer. It can, in a great
degree, be cultivated, and should be varied to suit the occasion
iind the purpose.
156. 1. How to Spell. It is of little consequence to
say that the spelling of English words according to established
usage is arbitrary, illogical, and ridiculous. All this may be true,
and yet it remains that one must perpetuate this absurdity or be
ruled out of good society; for there is no fault in writing moro
sure to be noticed and more certain of condemnation than bai]
spelling. From the success that has attended the efforts of spell-
ing reformers it seems possible that in a few thousand years there
may be such a thing in practice as phonetic spelling; but for the
next century or two, whoever wishes to write the English lan-
guage acceptably will have to spell English words as the " best
usage" demands.
157. Spelling is wholly a matter of the eye ; and to learn
to spell correctly is to observe how words are spelled. There are, it
is true, a number of rules with plenty of exceptions for forming
derivatives, and these rules can be learned and are useful in a
measure ; but the chief difficulty is with the primitive word to
which no rule applies.
To those who are deficient in spelling there is but one course
open and that is to learn to spell. Whether this may take a
long or a short time, or whether the task be easy or hard, is of
small consequence ; the thing must be accomplished.
158. 2. How to use "Words. The difference between
good and bad writing lies greatly in the selection of words.
Any smart and plucky boy can learn to spell ; the rules of
grammar are easily learned and readily applied; what is neces-
sary to know about punctuation can be gathered in a few hours ;
but the ability to choose the words which shall express the shades
94 BUSINESS CORRESPONDENCE.
of thought is a rare accomplishment, and one worthy of all
effort.
159. It is a common fault of young writers to use excep-
tional or "dictionary" words, under the impression that the longer
and more uncommon the words are, the more important will be
the sentence, and the greater the credit due to the composer. If
such persons will carefully read the writings and speeches of the
great masters of diction they will be struck with the simplicity
and directness of their words. These persons write and speak to
be understood.
16O. Another fault lies in the use of too many words, and
especially of descriptive words. Adjectives have great charms for
young writers. They seem to think that the more adjectives they can
hang upon the necks of their nouns, the stronger the nouns become,
while the fact is that a strong noun is only weakened by unneces-
sary embellishments, while a weak noun is not strengthened. The
real strength of a sentence lies in its substantives and verbs, and if
these are properly selected very few trappings will be needed.
161. Above all should a writer use words that are com-
monly understood. The only real object of expression is to
convey our thoughts to others, and that can be done only through
forms of expression that are understood by both parties. Hence
we should use short, plain, expressive words, such as have but
one meaning, and that at once apparent. There are very few
words that can be used interchangeably without varying the sense.
De Quincy says, "All languages tend to clear themselves of
synonyms as intellectual culture advances, the superfluous words
being taken up and appropriated by new shades and combinations
of thought evolved in the progress of society." It is well, how-
ever, to seek variety in expression, as the frequent repetition of
the same word, although it may exactly express the thought,
becomes tiresome and shows a paucity of language. Besides, the
change of a word to prevent repetition may often give a new phase
to the thought, which will add to, rather than detract from the-
force of the sentence.
162. 3. How to Build Sentences. Having selected
the material for our sentences, the next important thing is to put
them properly together. To do this is to know grammar ; and as
grammar is simply the law of language which has grown out of,
and expresses "the usage of the best writers and speakers," to
BUSINESS CORRESPONDENCE. \).>
know grammar is to know what this usage is. Very few people
always write or speak with absolute correctness, and yet the ordi-
nary rules of grammar can be learned, and should be enforced.
A palpable grammatical blunder will disgrace a written page quite
as surely as a badly spelled word. Both are indicative of igno-
rance as well as of indolence.
163. But sentences may be grammatically correct, and yo.t
lack clearness of expression. This comes not only from using too
many words in a single sentence but from using words out of their
best connection. As a rule, sentences should be short, each sen-
tence expressing a single idea, and no more ; but if for rhetorical
reasons it may seem best to expand a sentence or paragraph, care
should be taken to give breathing-places at proper intervals, and
to avoid explanatory or parenthetical clauses not vital to the
meaning.
164. After selecting words which will properly express
the meaning intended to be conveyed, and after enforcing the
rules of practical grammar in the composition, there will yet
remain the necessity of aptness and grace of speech which, in
some cases appears to be a natural gift, and in others can be
acquired only by steady and intelligent practice under the right
guidance. For this purpose nothing is so good as careful reading
of proper books. It is hard to originate a form or style of expres-
sion ; in fact, nobody does it, and to attempt it would be to
fail in the worst way. Our form of expression, to be natural,
must represent our form of thought. We should write as we
speak, making use of the words and phrases which spring up in
the mind as the very conception of the idea. Any deliberate
planning of the form of a sentence will result in a mechanical
structure which will be hard and unnatural. To speak well we
should mingle with those who habitually speak well ; to write
well we should familiarize ourselves with the best forms of literary
composition.
165. 4. How to Punctuate. The rules of punctuation
applicable to the best forms of English composition are equally
applicable to letter- writing ; although very few letter-writers
observe them carefully. A very little study of books and well-
edited papers will enable any one to use the principal points with
accuracy, and it is not deemed necessary to elaborate the rules
here. It is said that no two writers agree as to the proper use
9G BUSINESS CORRESPONDENCE.
of a semicolon ; and it might be further said that no writer abso-
lutely agrees with himself. There can be no valid objection m
using the semicolon in letter- writing, although it is hardly neces-
sary to do so. and in business letters it is rarely done; but the
comma, the period, and the interrogation point can be used
without danger of misplacing them, and without subjecting the
writer to the charge of pedantry or dilettanteism.
166. The use of Capitals is a matter which a few hints
and a little observation will regulate. There can be no inflexible
rules for using capitals in all cases, any more than there can be
for emphasizing words. There are, however, certain limits which
must be observed, and certain rules which have no exceptions.
Capital letters should be used
1. At the beginning of every sentence ;
2. At the beginning of every line of poetry ;
3. At the beginning of every quotation, forming a sentence ;
4. As the initial letter in all words denoting Deity ;
5. For proper names and titles ;
6. For adjectives derived from proper names ;
7. For names of things used as persons ;
8. For names of the months and days of the year ;
9. For the pronoun " I " and the interjection " O."
167. 5. Style. Literary style is so personal a matter,
depending so much upon the temperament and peculiarities of
the writer, that it is difficult to classify it, or to suggest any
methods that would help the student to a style of his own. It is
proper, however, to recognize, in a general way, the difference
between a purely literary style and an epistolary style albeit
some of our best literary productions are in the form of familiar
letters.
168. Some one has said that letter-writing is " talking on
paper " but this applies equally well to other kinds of writing.
As a rule, however, letters are less formal in their style than
other kinds of composition ; just as conversation with a single
individual is less formal than an address to an audience. In
ordinary business correspondence there is little occasion to display
rhetorical accomplishments or erudition. A "flowery" or a
"profound" epistle is generally out of place in the counting-room,
or as between business men. The necessities of business preclude
long letters and unnecessary words. If a letter expresses all the
facts in a clear and proper manner, the shorter it is the better.
B U S / 3" E S S C R It E S P X D E J C E. 97
. There are, however, distinctions to be observed in
Tjusiue.:S letters, depending not only upon the subject-matter of
the communication but upon the relations between the parties.
Letters to superiors in position should be deferential and respect-
ful ; to inferiors, kindly ; and to friends and equals, familiar.
Letters to strangers should be more formal and careful in expres-
sion than those to acquaintances. Letters of condolence should
be tender and thoughtful ; and those of congratulation, bright,
cheerful, and joyous.
17O. Some persons affect an epigrammatic style of expres-
sion as being pointed and forcible; others deem it a virtue
possibly an exhibition of modesty to use the predicate without
the subject, particularly when the subject is of the first person
singular. It is best, as a rule, that written sentences should be
complete ; and the time saved by the writer or the reader in the
omission of words to secure brevity is as nothing when placed
against the '*' jerky " and incomplete sentences which result.
171. Another thing to be avoided is oracular expressions,
either as to the main subject of the communication or as incidental
thereto. While an exhibition of mock modesty is to be depre-
cated, the superior tone of the man who assumes to be the teacher
3f his correspondent is not only silly but offensive.
BRIEFING- LETTERS.
172. All business documents of importance should be
kept and filed away so as to be accessible when called for. There
are various ingenious devices to this end, mostly so arranged as
to preserve the letter or document intact, where it may be had
at any time for reperusal. A better plan for some purposes
notably for Government Departments where documents have to
be referred to frequently for the main points contained is to file
them, neatly and uniformly folded, in packages, writing upon the
outside of each as folded, a "brief" of its contents, so that the
desired facts may be gathered without opening the document, or
even taking it from the package.
To "brief" a document properly requires a clear and perfect
understanding of its contents, and the ability to so state its main
points in the smallest space that a more complete perusal will be
unnecessary in order to its main import.
98 BUSINESS CORRESPONDENCE.
MATERIAL FOR PRACTICE.
ARRANGEMENT. ( 146. )
/. Put in proper form, copying in full, the following: Date Boston,
July 5, 1876. To whom addressed $. S. Packard & Co., 805 Broadway, New
York. Salutation As is best. Body of Letter I ship you by to-day'
express 20 reams Best Calendered Pembroke Mills Book Paper, as per invoice
enclosed ; trusting that you may receive it in time to fill your order as indi-
cated in your letter of yesterday. I shall be glad to know of its prompt and
safe arrival. Signature H. E. Hibbard.
2. Date 24 Post St., San Francisco, Cal., March 10, 1885. Signature
F. C. Woodbury. Body of Letter Send me by return mail 1 copy Ssvinton's
Word Studies, best edition, with bill for same. Party addressed Ivison,
Blakeman, Taylor & Co., 753 Broadway, New York.
3. (Reply to above.) Date 753 Broadway, New York, March 17, 1885.
Signature Ivison, Blakeman, Taylor & Co. Body of Letter Your favor of
the 10th is at hand, and we send you, as per request, Swinton's Word Studies
(Library Binding). Please find bill enclosed. Party addressed F. C. Wood-
bury, 24 Post St., San Francisco.
^. Re-arrange the following, so as to constitute an intelligible and
proper letter : Very sincerely yours 1 have your letter of yesterday, and
beg to say in reply that our present stock of fabrics is very low. We are
expecting our Spring importations by next steamer, due here on the 15th, and
hope to be able to send our new lists early next week. Robert Burns
E. H. Johnson & Co. New York, Feb. 12, 1884. 115 Market Street,
Philadelphia.
SPELLING. (156.)
Copy the following paragraphs, correcting the misspelled words. In the
first four, the misspelled words are italicized ; in the last two, they are left
for the student's keen eye :*
/. DEAR JOHN : I write you reletive to the buisness of which we spoke
when last we met. I understood you to say that you had been offerred much
better terms for the seperate articles than I offerred you for the lot togeatJier.
I would like the privelege of renewing my offer, which I can now do, upon a
* Spelling is so much a matter of sight that it is somewhat dangerous to present mis-
spelled words for correction ; the danger being that the eye becoming familiar with the form
will be apt to reproduce it unconsciously. This process cannot be relied upon for effective
teaching, and is given here only for the purpose of pointing out a few words likely to bt/
misspelled.
XSX CO K It ESP OX D ENCK. 09
better understanding of the case. I should have written before, but I
prefered to wait unt'M I could consistantly carry out the undertakeing.
You will reccollect that I mentioned a plan of proceedure which apeared
to mefeasable and right : and it is upon this plan alone that I should dare to
act, or recomend others to act. It is indispens'ible that this view of the case be
vxcepted by you as a basis of negotiation ; otherwise, my preference will be
to let the whole matter rest indejinately. For, as you know, it would be a
greivious error to conclude a bargin upon an insufictent understanding.
1 will see you toinorow or Weiidesday ', or, at the farthest, on the first of
Febuary, at which latest time 1 expect to be in town. Please acknowlege the
redept of this, and let me know if any time other than the dates specefied for
seeing you will better accomodate you.
Yours affectionitely,
SAMUEL .
2. I am sick, my dear Hortense. I am separated from you, and my
heart is sick as my body. I-percieve that I was not born, my child, for so
much grandure, and I should have been more happy in retirement, surounded
with the objects of my love.
3. I am going to tell you a thing, the most astonishing, the most
surprizing, the most marvellous, the most mirraculous, the most magnifecent,
the most confounding, the most unheered of, the most singuler, the most
cxir ordinary, the most tmrcdable, the most unforseen, the greatest, the leest,
the rawest, the most cornon, the most publick, the most primte, the most
triliant, the most envyaUe thing which has occured during the presant
century.
.. A joaker is near akin to a bufoon, and niether of them is the leetf
related to wit. Whoever is admited or saught for in company upon any other
acount than that of his merrit or matters is never respected thare, but only
made use of. Abject flatery and indiscriminite contradiction and noisey
-debate disgust. But a modest anertion of one's own opinnion and a com"
placent acqnicsence in other people's, perserve dignity.
.5. (Containing six misspelled words ) Monsieur de Stael is in the
deepest poverty, and his wife gives diners and balls. If you still visit her,
would it not be well to pursuade her to make her husband an alowance of
from two to four hundred dollars a monnth ; or have we reached the time
when one can, without giving offence to honorable people, trample under foot
not only morals, but eaven duties more sacred than those which unite
children to parents?
6. (Containing ten misspelled words.) It is cleerly the interest of man-
kind, and especialy of that large class who live by the sail of thier labor, that
"the largest possible pourtion of created wealth should be set asside as capital
for reproductive purposes, so that the groth of capital should do more than
imearly keep pace with the increace of the poppulation.
100 BUSINESS CORRESPONDENCE.
THE CHOICE OF WORDS. (158.)
1, SUBSTITUTING WORDS AND PHEASES.
[The model paragraph contains italicized words and phrases, which are to
be substituted by the pupil for words and phrases of his own, having the
same or a more appropriate meaning, the object being to convey the same
genera] sense, and to use all the words not italicized in their order. After
producing the paragraph in this form, let him reconstruct it entirely, using
his own language without regard to any of the words in the model. There
should be no attempt to supersede a word for the mere purpose of making a
eJiange, the object being simply to express the sense in the pupil's o\vii lan-
guage. Follow the plan laid down in the example.]
MODEL.
Street beggars practice on the sympathies of those who are disposed to be
charitable, and they comprehend the device of presenting themselves to good
people without exciting distrust. They constitute themselves a brother Jtood
bound together by certain considerations of self-interest, and by certain
recognitions which help them to work unitedly.
SUBSTITUTIONS.
Street beggars PLAY ON THE FEELINGS of those who are KINDLY DIS-
POSED, and they UNDERSTAND the ART of APPROACHING good people ON
THE BLIND SIDE. They FORM A FRATERNITY, bound together by certain
TIES of MUTUAL HELPFULNESS IN THEIR BUSINESS, and by certain SIGNS
which ENABLE them to CO-OPERATE.
PARAPHRASE.
Street beggars understand their business, and they make a study of those
whom they would victimize. They are adepts in divining the weak points of
human nature, and know just how to use their knowledge. Although not
banded together in any formal way, they nevertheless have so much in com-
mon that they are quick to learn each other's wants and methods, as also how
to co-operate for their mutual advantage.
EXERCISE 1.
On Sunday, August 22, 1869, I went to see old Mrs. Grant, whom I was
grieved to see sitting in her chair supported by pillows, and her poor feet
raised upon cushions, very much altered in her face, and I fear, dying of
dropsy. On August 26, I saw her again, and gave her a shawl and & pair of
socks.
J1USIXESS CORRESP ONDEXC;fi. 101
EXERCISE 2.
Nobody ought to pretend to write or speak unless he has something of
consequence to my. It occasionally happens that we can speak of something
essentially valuable without a great deal of effort, but usually it is requisite to
exercise ourselves, in order to say anything apt.
EXERCISE 3.
A pile of materials, however excellent the quality, no more makes a com
position than a mass of stone and wood makes a mansion. The constructor
must pick out, jit, and bring together the objects before there can be a struc-
ture. A crowd of men huddled together do not make an army. The lines
must be adjusted and order brought about before they are jit for a battle.
EXERCISE 4.
Great scribblers and orator* have generally been adepts in synonyms.
Robert Hall was particularly nice in his selection of words. John Foster
compiled his thesis on " Decision of Character," with tedious slowness. He
would squander whole days on a few brief sentences, bringing each word
beneath his intense scrutiny, so that everyone, challenged and scrutinized,
took its position in the building like an examined soldier in the ranks.
EXERCISE 5.
In sanguine natures, the tendency to magnify is very general. With
some people everything is magnificent ! splendid! sublime! terrible! They
never come down to use more commonplace or less extravagant terms. They
seem forever on stilts, po ised above ordinary mortals. Occasionally they will
convey this feeling so far as to make use no doubt unthinkingly of contrary
terms, such as potently weak, immensely little, exquisitely homely, etc.
2. SUPPLYING WORDS AND PHRASES.
[The following exercises may be a little more difficult, but they are coi\
respondingly more efficient in the matter of training- Here the pupil cannot
rely upon the dictionary for synonyms, but must cudgel his own brains for the
fit words. He will then develope language and practice the art of composition.
First, let him read carefully in the " Statement " the facts to be embodied ;
then, fill in the outline with the proper words and phrases, using all the
words of the outline in their order, and supplying only the omissions marked
by dashes. And finally, let him write out the letter in full without reference
to the outline, using his own form of expression.]
; I'M;;)' ', ' cB c & &* 7 !ft r " S ,S' ' O A' /' /; H P O .V D E N C E .
STATEMENT.
This is a letter addressed by a merchant to his correspondent, informing
him of a contemplated trip to Europe. He aims simply to put his corres-
pondent at ease in reference to the conduct of the business during his absence,
informing him as to the person who will have charge, and giving him his
foreign address.
OUTLINE.
My : I am - - Europe, four months
or so i Italy, France, Switzerland, Germany, and the low
countries, England and Scotland. My
absence hands of Mr. Charles Seymour all matters.
will suffer from my temporary absence, fully
competent myself. Brown Shipley & Co., London,
addressed.
WORDS AND PHRASES SUPPLIED.
My dear Sir : I am about to sail for Europe, to be absent four months
or so. I expect to visit Italy, France, Switzerland, Germany, and the low
countries, and shall of course not neglect England and Scotland. My business
during my absence wiU be in the hands of Mr. Charles Seymour, who icill act
for me in all matters. I feel sure that nothing will suffer from my temporary
absence, as Mr. Seymour is fully competent to attend to all matters as faith-
fully as I could, myself. My foreign bankers are Brown, Shipley & Co.,
London, to whom all communications designed for me personally should be
addressed.
UNTRAMMELED LETTER.
NEW YORK, April 17, 1S84.
JAMES HASKINS, Esq.,
Chicago.
My dear Sir : I am about to go abroad for a few
months, and shall spend most of my time on the Continent, My business
affairs will be confided to my chief clerk, Mr. Charles Seymour, whom you
know, and who will, I am sure, so well supply my place that my absence will
not be felt by my customers. I shall return about the first of September ;
meanwhile, any letters addressed to me, " Care of Brown, Shipley & Co.,
London," will reach me promptly.
Yours very sincerely,
P. C. SCHUYLER.
EXERCISE 1.
Statement. This letter is dated at New York, Jan. 15, 1884, and intro-
duces the bearer, Mr. Hardcastle, to Mr. John H. Robertson of Buffalo. Mr.
li U SIXfiSS CORRESPO Nl) E X <J E . 1(T>
Hardcastle visits Buffalo with a view to settling there as a lawyer. The
writer of the letter has known him for a number of years, and can speak of
his legal ability and standing in the highest terms. He asks Mr. Robertson,
who is an old friend, to interest himself in the bearer, for which courtesy he
will be ever grateful.
Outline.* Jan. 15, . The bearer, Mr.
is a particular and he visits locate . Mr.
lawyer of good in this and I do not hesi-
tate strongly extended to him will be
by .
EXERCISE 2
Statement. The letter is dated Boston, June 1, 1884, and addressed to
Brown, Black & Co., New York, informing them that owing to the failure of
a principal debtor it will be impossible for the writer to meet an acceptance
of $5000, due on the 15th. He states, however, that if he can be allowed an
-extension of sixty days he has no doubt of his ability to meet the obligation.
I feel confident, however,
T -hill
EXERCISE 3.
Statement, This is a response to the previous letter, acceding to the
request, and expressing sympathy for the temporary embarrassment of the
correspondent.
Outline. Permit us - reply that we
cheerfully - - with reference . We hope
unnecessary anxiety .
EXERCISE 4.
Statement. An acknowledgment of the receipt of the above letter, with
i^arm expressions of appreciation of the courtesy extended.
* The student must study arrangement for himself, and must use all the words neces
-eary to express his meaning. There is no suggestion of sentences or paragraphs in the
outline.
104 BUSINESS CORRESPONDENCE.
GRAMMATICAL CONSTRUCTION. (162.)
[The exercises under this head are intended to cover but a few of the
most common errors in grammar. To attempt to gi^e the rules of grammar
at any length would be to take this book out of its sphere. In the first few
sentences the grammatical exercises are italicized; after that the student
must find them for himself.]
1. COMMON ERRORS- AS TO NUMBER IN NOUNS AND VERBS.
1. The good wishes of the school is hereby expressed.
2. The remains of the feast was gathered in two baskets.
8. Either of the men are worth a million.
4. There is at least two men to one woman.
5. The goods was damaged by the freshet.
6. The man's wages was equal to his work.
7. Neither one nor the other were pleased.
8. At least one-fourth of the crew was drowned.
9. Pride and poverty makes a bad mixture.
10. A man with two boys were already on the spot.
2. AS TO FORMS OF VERBS.
1. A man at the mast-head blowed a whistle.
2. The water we drunk was most excellent.
3. When you come to us yesterday we did not know you,
4. The family was at last forsook.
5. When you have payed us we will retire.
6. The bell was rang at four in the morning.
7. If you Lad not trod on my toes, I should missed you.
8. Before we left no one had spoke.
9. He has simply mistook one for the other.
10. He sprung upon the man and all was over.
3. AS TO THE NOMINATIVE AND OBJECTIVE FORMS,
1. Charles went with James and I.
2. Who are you going to vote for ?
3. If 1 was him I would accept the offer.
4. Father and me are just like two brothers.
5. He included my brother and I in the invitation.
6. Her sister and her were in the same class.
7. It was generally known that him and I were friends.
4. AS TO TBD IMPROPER USE OF ADJECTIVES AND ADVERBS.
1. Of my two brothers John is the oldest.
2. I like him better than anybody.
BUSINESS CORRESPONDENCE. 105-
3. This is much more preferable than the other.
4. I never felt more nicely than I feel to-day.
5. This tree is over eighty foot high.
6. Unless you speak more distinct I cannot understand you.
7. Unless you play fair you cannot play at all.
8. I never felt so awkwardly in my life.
9. I never knew any one to behave so bad
10. That work was done good enough for anybody.
5. AS TO PREPOSITIONS AND CONJUNCTIONS.
1. Either he or you have got to make a concession.
2. James took a great interest into his studies.
3. He is never in want for good advisers.
4. lie sat down onto the sofa.
5. I am to work on my arithmetic lessons.
6. If they had only of come, I should of gone.
7. Neither he or his sister had much to say.
8. I took my feet off of the rug.
9. If I but knew where they were going to I would follow.
10. I walked by a cane with moonlight.
6. MISCELLANEOUS ERRORS.
1. The slothful boy lays a- bed till noon.
2. Would you go there if you was me ?
3. I have been in business this forty years.
4. I cannot see what there is in them dogs.
5. It's just too nice for anything.
6. I think he acted very strange about it.
7. How do you do? Tolerable well, I thank you.
8. Neither the man with the big nose nor the one with the small head
were elected.
9. I could write an essay a great deal easier than I could build a house.
10. That man never went to no college.
11. Who did you get your advice from?
12. I only wish I had have went.
13. Will I help you to some fruit ?
14. If we had only have gone to the opera.
15. If I had not have loaned him the money.
16. The reason of us going there was well known.
17. Don't go there of a Monday if you wish to see the pictures to aw
advantage.
18. That shouldn't make the least bit of difference.
19. Anyway there want no great sight to spare.
20. Loss you and I go if they aint another one.
106 B US I NE S S CO R It E S 1 J O X D E X (' E .
PUNCTUATION AND THE USE OF CAPITALS. (165.)
[The errors here given in punctuation and the use of capitals will be such
as any intelligent student can correct. The most that is sought in the exer-
cise is to give force to the importance of care in these matters. The two
kinds of errors are given promiscuously.]
1 . In what state is situated lake Ontario.
2. Newyork is an american City, and so are Philadelphia and Boston ;
3. the dominion of Canada is on the northern Frontier of the United -
states of america.
4. address your letters to j p jones, New brunswick, N. J.
5. Send me a Copy of pickwick bound in Calf.
6. I expect to go south in february or march.
7. The twenty-second regiment parades on monday.
8. There was a Boy ! Whose name was job Hastings;
9. thursday comes Between Wednesday and friday.
10. A frenchman likes Frogs, but not an american.
11. among the Habits required for the Efficient prosecution of Business of
any Kind the Most important are Those of application observation method
accuracy and Despatch there are Persons who will Sneer at these Virtues as
little Things trifles unworthy of their Notice but it must be Remembered that,
Human Life is made up of Trifles and that as the Pence make the Pounds
and the Minutes the Hours so it is the repetition of Things severally Insigni
ficant that make up Human Character.
12. Is watts the Author of how doth the little Busy Bee improve each
-Shining Hour and gather Honey all the Day from every Opening Flour.
13. An eminent Writer says "talent knows what to do tact knows hvw
-to do it."
14. The mandates of god must be obeyed.
15. o balmy spring o day of dear delights.
16. The ways of providence are concealed from Man.
STYLE. (167.)
[The few examples of faulty style given here are for the student to cor-
rect in his own way. There is no attempt to give prevalent faults, and no
pretense of instruction ; but simply an opportunity afforded for wholesome
practice. The student is requested to reconstruct the sentences to suit him-
elf, but to preserve as well as he can the evident intent of the writer.]
1 . I should admire to go into the country, if I wasn't afeared of snakes.
2. What is a small bottle of beer among two of us.
3. You might argufy that question for a solid month without changing
anybody's notions.
4. Where are you going at ?
B U S I J\' E H S C R R E S P O .\ 1> K .V (.' E . 10 " t
5. She is ruther small like, with a fresh good looking phiz, blue eyes
and brown hair, sorter frizzed, and talks like a locomotive ; but she is n't
a bit pedantic or blue stokin'fied.
6. I come across an awful swell, just too mashy for anything; but his.
close* was dreadful dusty, and he had one squinty eye and a turn up nose,
and a kind of jerky walk.
7. If I was as well posted up in finance as he is, I would take an occa-
sional shy at the stock market.
8. There is no use flying off the handle about a little matter like this.
Better hold your horses, and not go off half-cocked.
9. 'Tisn't worth while making a fuss, till you know how you're coming
out. They're no great shakes, anyhow.
10. Reduce the following letter to its proper limits ; omitting no essential
point and using no unnecessary words :
PROVIDENCE, R. I., September 1, 1884.
To Messrs. GEORGE P. OPDYKE & Co., New York :
Gentlemen Sirs : It is with feelings of profound and all-absorbing, as-
well as of heartfelt and undisguised chagrin, regret, and mortification, that I
now take up my unwilling pen to indite for your candid, and, I trust, friendly
perusal, these few, brief, but portentous lines. I know not how you will re-
ceive what I have to say, or what you will think when you shall have perused
these lines from the beginning to the end ; but I do sincerely hope and trust
that you will not attribute to my actions in the premises anything but the
best and purest motives. I may have erred in judgment, as who of us all does
not, sometimes ? but I can say, with my hand upon my heart, and in full con
sciousness of the responsibility of my words, that I have wished to wrong no
man ; and especially would I desire not to wrong, by either word or deed,
those who have ever been to me such true, honest, and faithful friends as
you have been.
The fact is, and I may as well state it without circumlocution or evasion,
my business affairs are getting into such a shape that I am very fearful,
unless something is done to avert it, that I shall be obliged to suspend before
many months. I wish it were not so ; but I can -see no way out of it at
present. I trust you will look at the matter in as lenient a light as possible,
and let me know what you would do if you were in my place.
Very truly, yours,
JAMES SLOW COACH.
11. Give the proper expansion to the following :
NEW YORK, Oct. 12, 1884.
SAM:
Here all right. Rail to Albany ; boat to New York. Dusty road ;
sleepless night. River better. Found Charley at landing. Put up St. Denis
.Hotel. Get around to-morrow, hope. Big city ; lots of people ; immense-
buildings ; great hubbub. Theatre to-night, expect. Tell you about it
to-morrow. Lots of love,
By, bye,
JOHN..
508 BUSINESS CORRESPONDENCE.
BRIEFING. (173.)
[The following example will indicate the purpose of these exercises.
Beyond this the student should practice briefing his own letters as he files
them.]
7. Letter from Author's Friend to Publisher.
CHICAGO, July 1", As'.v^
Messrs. D. APPLETON & Co.,
New York.
Gentlemen : I write to inquire if you care to exam
ine the MS. of a book on European Travel. It is from the pen of a facile
writer, who is a keen observer, and is never dull. He is also an artist, and
can furnish complete sketches for the engraver. I know that there is no
dearth of books of travel, but I also feel sure that there is a place for this
one more ; and as I am a friend of the author, as also of your house, I take
this means of bringing you together. If you desire to look at the manu-
script I will send it to you at once ; trusting that it may not be necessary for
you to detain it long in case you do not wish to publish it,
I am with respect,
Yours truly,
ROBERT LINCOLN
BRIEF OF ABOVE LETTER.
From Robert Lincoln, Chicago, July 10, offering MS. of Book of
Travel. Sketches by author. Received July 12 ; Ans'd July 15.
2. Reply. From Publisher to Author's Friend.
NEW YORK, July 15, 1884
Dear Sir :
Yours of the 10th at hand. You are right in saying that there is
<io dearth of books of travel ; and you are also right in your inference that
there is always room for a readable book. We shall be glad to look at the
MS and the sketches of your friend, and will give you an answer as soon aft
we can conveniently do so.
With thanks for your courtesy we remain,
Yours sincerely,
D. APPLETON & Co
ROBERT LINCOLN, ESQ. )
[To be briefed by the student.]
B US I A E S S C O Ji' R E ,S /' O A /> E A' ('/;. K >'.)
<?. Letter from Author to Publisher.
CHICAGO, July 20, 1884,
D. APPLETON & Co.J
New York. i
Gentlemen : Mr. Lincoln informs me that 7011 are willing to look al
my MS., and at his suggestion I send it you herewith. I may be wrong in
the estimate I put upon my own work, but I am confident that the leading
idea which I have developed will place the book beyond the contingency of
mere literary excellence. In other words, I feel sure that there is a positive
and remunerative demand for the kind of information which the book will
contain, and in regard to which it will stand quite alone among books of
travel. As you are the judges from your own point of view as to what a
book should be in order to sell, I leave you to discover from the MS. what I
have called my "leading idea." The sketches, with the exception of two
which I offer as a sample of my finished work, are in the rough, and are
with the MS., submitted for your judgment.
Yours sincerely,
H. D. NICHOLS.
4. Letter from Publishers to Author
NEW YORK, August 1, 1884.
H. D. NICHOLS,
Chicago.
Dear Sir : We have done your manuscript the unusual
service of a prompt perusal, and must say that it bears upon its face the
assurance of success. The " leading idea " we have caught, and it is a good
one. Your sketches are graphic and suggestive. We think that, without
doubt, such a book as you propose would "take" possibly it might meet
with an exceptional sale. At all events we are ready to negotiate with you
for its publication. In case we should publish it, however, there are a few
suggestions we would like to submit to you, touching our mutual interest.
How soon could you place in our hands the MS. and sketches complete ;
and what have you to say as to terms ?
Yours truly,
D. APPLETON & Co.
110 UrsiXEriS CO Jt A'i'SP OSDENCE.
ij. Letter from Author to Publisher.
CHICAGO, August 5 S 188 4.
Gentlemen :
I am gratified with your courteous favor of Aug. 1, and hasteni
to reply. I do not underrate the advantages to a comparatively unknown
author of securing for his first real venture such eminent sponsors ; and I am
prepared to accept your terms of publication, feeling assured that they will
be as favorable as I could get elsewhere. I shall be glad to receive any
suggestions from you touching any part of the work. The MS. can be com-
pleted within two weeks, and I will finish the sketches as rapidly as possible.
I do not doubt that I can place all the material in your hands by the first of
October next.
I am, with kind consideration,
Yours very truly,
H. D. NICHOLS.
D. APPLETON & Co., )
New York. )
GENERAL LETTERS.
1. LETTERS OF INTRODUCTION.
[A Letter of Introduction is for the purpose of making two persons, who>
before were strangers, acquainted with each other. The person writing the-
letter is a mutual acquaintance, and in bringing his two friends together he
is presumed to seek their mutual good. A letter of introduction may be a
mere act of courtesy with no purpose beyond, or it may be in the interest of
the one on whose account it is written. In either case it behooves the writer
to be frank and truthful. Such a letter should not be written under mental
protest, covering an unexpressed doubt as to its propriety or its perfect
truthfulness. It should never be written under a pressure, or to get rid of
importunity, although it is not essential that the writer should be a warm
partisan of the person whom he introduces. The most that can be required
of him is that he speak the truth.']
STATEMENT.
Exercise. Your friend, J. C. Sproull, is to start on a pleasure tour to
the Pacific Coast. You have a friend in San Francisco, who is an old-time
resident, and thinking he may be of service to Mr. Sproull you write him in
advance, sending the letter by mail, and stating therein that you propose to
give Mr. S. a letter of introduction to him. Afterwards you write the letter
of introduction, which you hand to Mr. Sproull to present in person.
BUSINESS CORRESPONDENCE. Ill
MODEL 1. (Sent by mail.)
NEW YORK, April 15, 1884.
R. L. SHAINWALD, ESQ.,)
San Francisco. )
My dear Friend :
Mr. J. C. Sproull of this city, whom I
have known for a number of years, will soon leave for San Francisco by t bo-
overland route. I have given him a letter of introduction to you, feeling that
what you can do for him to make his stay in your city pleasant and profitable
you will do. Mr. Sproull is a man of excellent connections, and in certain
directions of excellent attainments. He was graduated from Columbia some
five years ago, and has been giving his attention since to the study of min-
eralogy, in which line he has attained to some distinction here. He thinks
there is a wider field for him on the Pacific Coast, and his friends encourage
him to make the venture. I know how busy you are, and how many interests
claim your attention, but I have thought you might, without much incon-
venience, put our friend in the way of making the right connections at the
start. This would be doing a great service, and I know would not only be
properly appreciated by Mr. Sproull and his friends, but would be availed of
with discretion.
Yours as ever,
JOHN R. PENN.
M OD EL 2 . (Given in person.)
Esc
San Francisco.
R. L. SHAINWALD, ESQ., )
'isco. )
My dear Friend :
The bearer, Mr. J. C. Sproull, visits yonr
city with a view to locating there. He is a graduate of Columbia of the
School of Arts and of the School of Mines, and has attained to some promi-
nence here as a mineralogist. He hopes to put his knowledge to practical
use in California, and goes there with that intent. Any favor which you may
be able to extend to him will be duly appreciated by him, as also by
Your sincere friend,
JOHN
112 BUSINESS CORRESPONDENCE.
Exercise 1. (To be written by the student.) Mr. Shainwald responds to
the first of the above letters on date of April 25, saying that he will be
pleased to see Mr. Sproull and take great pleasure in advancing his interests.
lie also says there are excellent openings for good mineralogists, and that he
knows of a new enterprise among his own personal friends wherein the
services of a scientific man are much needed.
Exercise 2. J. E. Soule of Philadelphia, under date of Jan. 1, 1885,
writes a letter of introduction to R. C. Spencer, Milwaukee, on behalf of
John Miles, a young man whom he knows, and of whom he can speak in the
highest terms as an accountant and a man of business instincts. Mr. Miles
goes to Milwaukee to fill a position as receiving teller in a bank, and the
letter commends him to Mr. Spencer's good graces, and aims to promote a
mutual acquaintanceship.
Exercise 3. The letter is written by S. R. Eaton of Toronto, Canada,
under date of July 12, 1885, and introduces the bearer, Mr. John Gibson, to
Jlr. S. S. Packard of New York. Mr. Gibson is an associate in business of
Mr. Eaton's, and visits New York for the first time with a view to recreation
and business. The object of the letter is to give to the bearer the benefit of
an acquaintance with Mr. Packard, who is kindly requested to extend to him
the proper courtesies.
Exercise 4. The letter is from H. E. Hibbard of Boston, under date of
April 10, 1884, and introduces the bearer Wm. Allen Miller to Mr. Henry
Gillig, manager of the " American Exchange in Europe," 449 Strand, London,
commending the bearer to Mr. Gillig's kind services. Mr. Miller goes abroad
in the interest of a new machine which he has invented for fastening buttons
on clothing, gloves, shoes, etc. He wishes to procure patents in the United
Kingdom and the continental countries, and Mr. Gillig is asked to give him
what advice and aid he can.
Exercise 5. The letter is from E. R. Felton of Cleveland, under date of
June 12, 1886, and introduces Mr. Edward Miles of Cleveland to "whom it
may concern." Mr. Miles has just finished a course of commercial study
under Mr. Felton, and is a proficient in accountantship and general literature.
His special qualifications lie in the direction of correspondence, he being a
proficient in the art of phonography ; but he is, besides, an unusually good
penman, and a thorough English scholar.
2. ORDERING GOODS.
Exercise 6. Letter written by Bigelow & Co., Boston, under date of Apr.
12, 1886, ordering from Earl & Wilson, New York, 1000 dozen assorted
Collars and 300 dozen assorted Cuffs, the same to be sent by rail as freight.
Exercise 7. Letter from H. B. Bryant, Chicago, dated June 10, 1886,
ordering from D. Appleton & Co., New York, 50 copies Bryant & Stratton
Commercial Law, 10 copies B. &. S. Interest Tables, and 6 copies Williams &
BUSINESS CORRESPONDENCE. 113
Packard's Gems of Penmanship, the same to be sent to Ivison, Blakeman,
Taylor & Co., 753 Broadway, to be forwarded by them together with other
books ordered direct.
Exercise 8. Letter from same person and of same date as above, ad-
dressed to Ivison, Blakeman, Taylor & Co., ordering 50 copies Bryant &
Stratton Book-keeping, to be sent in same package with books to be delivered
.them by D. Appleton & Co.
Exercise 9. Letter from Stern Brothers, St. Louis, of date Feb. 10,
1887, to Brown & Wilson, New York, ordering a complete line of English
Tweed goods, as per last order, and requesting them to draw at 30 ds. for
amount of bill.
3. ADVISING OF SHIPMENTS.
Exercise 10. Letter from J. C. Bryant, Buffalo, dated Mar. 10, 1884,
addressed to M. R. Halladay, New York, advising of the shipment of 500 brls.
New Process Flour, as per order of the 1st. State that the delay of a few
days in executing the order was occasioned by a well-founded rumor that
railroad freights were to be reduced. The fact of the reduction, it is hoped,
*vill justify the delay.
Exercise 11. Letter from W. H. Sadler, Baltimore, dated Jan. 10, 1887,
addressed to Williams & Rogers, Rochester, advising of the shipment by
express of 100 copies Sadler's Counting-House Arithmetic. State that owing
to unusual demands, the last edition has been absorbed more quickly than
was anticipated, which must account for the delay in filling the order.
Exercise 12. Letter from C. C. Curtiss, Minneapolis, of Mar. 10, 1885,
to B. Horton, New York, advising of the shipment of 500 brls. Choice Family
Flour to be sold on account of the shipper. The consignee is requested tc
use his own judgment as to sales, but not to hold after April 1, except on the
best assurances of an advance.
4. MISCELLANEOUS.
Exercise 13. Answer the following advertisement :
"DOORKEEPER AND GENERAL MANAGER WANTED. AN ACCOMPLISHED BOOKKEEPER
-L>and practical business man is desired to take charge of the business of a lumber company in Georgia.
He must be a man of experience, must have some knowledge of the lumber business, and undoubted skill M
an accountant. A liberal salary will be paid to the right man, and it will be wholly useless for any perso
to apply who cannot give the best assurances of being the right man. Address, for three days,
We of Adv., Apr. 10, 1884.] J. M. B., kerald Office
Exercise 14, The party to whose advertisement, as above, you responded,
writes you that in the main your testimonials are satisfactory, but that the
parties in interest require surety to the amount of $10000. You are asked if
you can furnish such surety, and if you are prepared to enter upon jour
114 B U S I JV E S S C R A' E S P O X D E X C E .
duties at once. You reply that you do not think you will have any difficulty-
in getting surety, but that your arrangements are such that you cannot enter
upon your duties before the beginning of May. You also stipulate in addi-
tion to the salary offered, the payment of your traveling expenses to the
scene of operations Write both letters.
Exercise 15. You are a clerk in the house of James McGrath & Co.,
importers of Woolens. You are about to enter upon your second year, having
during the past year served, as you think, faithfully, and on a small salary.
Write to the firm, asking, in a respectful way what rate of wages you may
expect for tlie year to come, and what advancements as to position.
Exercise 16. Under date of New York, Sept. 12, 1884, write to James
Bishop of Chicago, who is an old friend of your family and a long-time resi-
dent of Chicago, asking him what, in his best judgment, are the chances in,
that city for a young lawyer (viz. : yourself) who has graduated with the
highest honors, has practiced a year in New York with fair success, and \vho-
is not afraid of hard work.
Exercise 17. Answer the above letter as from James Bishop to yourself,
under date of Sept. 16, saying that Chicago is a city of possibilities in every
line of creditable enterprise ; that there are plenty of merchants and profes-
sional men 'good, bad, and middling, and that those who really deserve success.
achieve it. Say that in no profession is there a better chance to rise than in
that of the law ; but eminence can be reached only by genuine attainments
and unremitting labor. Say also that the writer will be glad to welcome the-
son of his old friend, and will do him all the service within his power.
Exercise 18, You reside in Milwaukee, and Charles Moran & Bro. in
New York. Write a letter as from Moran & Bro., under date of July 12, to
yourself, inquiring as to the financial standing of J. Thorburn of Chicago,
who has referred to you in soliciting a consignment of goods on commission.
*
Exercise 19. Write a letter in your own name, dated Milwaukee, July 15,.
in reply to above. Say that you have known Mr. Thorburn for a good many
years ; have had extensive dealings with him, and have always found him
prompt and efficient in all ways.
Exercise 20. Write a letter, dated at Boston, to your friend J. T. Cog-
geshall at Columbus, Ohio } informing him of your arrival in Boston, and your
first week's experience in your new position. You are engaged as assistant
book-keeper for Jordan, Marsh & Co. You find your employers excellent
men, and your associates in all ways to your liking. Speak of your impres-
sions of Boston as a city, and of anything which strikes you as new and
interesting.
Exercise 21. You reside in Philadelphia. Your friend James Sanford
lives in San Francisco. You think you would like to go to San Francisco, or
to some other California city, for a permanent stay. You are a practical
book-keeper with a cash capital of $10000. Your idea is to find a good, safe
BUSINESS CORRESPONDENCE. 115
investment for your money, and a good clerical position for yourself until you
have a chance to know the country. Write your friend, asking his advice
and requesting from him general information about the country and the
prospects for business.
Exercise 22. Write an answer to the above, as from Mr. Sanford. Say
that matters in California are in a transition state, but that the cities are
holding their own, and that in San Francisco, especially, the improvements
that f.re going forward speak well for the financial condition, and for the
courage of the people. Say that there are always good openings for invest-
ments ; that money is in active demand on good securities, and that expe-
rienced accountants are also in demand. The writer is pleased to know that
you contemplate coming West, and promises to do all in his power to secure
your permanent stay in California.
Exercise 23. You are a member of a firm doing business in New York.
You are not quite satisfied with the relations existing between yourself and
your partners, James Meredith and Robert Smith ; and you write them, saying,
in general terms, that you are convinced that it would be better for all parties
to dissolve the copartnership. Express the high regard you feel for your
associates, and your desire for their prosperity, placing the grounds of your
proposal upon the fact of your declining health and conflicting ideas as to
the policy of conducting the business. Ask them to appoint a time for a
conference.
Exercise 24. Write an answer to the above as from your partners con-
jointly to yourself. Express the sincere regret they feel at your decision, and
;gay that the writers cannot see any necessity for the step. You have been
together as partners for a good many years ; the business has been prosperous
and is growing more so. They recognize the fact of your poor health, which
they attribute to overwork ; and they suggest a leave of absence and rest.
However, tliey will be pleased to meet you in conference, and suggest any
evening of the present week which may suit your convenience.
Exercise 25. You are the manager of a business. One of your clerks,
in whom you had the utmost confidence, has been guilty <rf a misdemeanor.
The knowledge has come to you indirectly but authentically, and you are
satisfied that the act was unpremeditated and that it is the first offence of the
fcind. Address a letter to the young man, informing him of your knowledge
af the facts, and giving him such counsel as the circumstances seem to
require.
Exercise 26. You are a clerk in a city establishment. One of your asso-
ciates seems to have done you a great injury in misstating facts against your
character. Write him, asking an explanation of his conduct and demanding
f him a full reparation of the wrong.
Exercise 27 Write a reply to the above as from your friend to yourself.
Deny in positive terms the allegations made by you, and ask for your
authority.
,116 BUSINESS CORRESPONDENCE.
Exercise 28. A second letter from yourself to your supposed maligner
Give him the name of your informant, who has authorized you to do so, and.
ask for a mutual conference in the matter.
Exercise 29. The mutual conference having been held, and it appearing
that your informant had quite misunderstood the remarks of your associate-.
you will write him a letter, expressing your gratification at the result, and
assuring him of your appreciation of his manly conduct and his friendship.
Exercise 30. You, residing in Buffalo, have drawn a draft for $1000 on
Smith & Sons of Detroit, where you have a large balance to your credit. The
draft comes to you through your bank protested for non-payment. Write to
the drawees, expressing your surprise and asking for an explanation.
Exercise 31. Smith & Sons write you that the blunder above indicated
came through the stupidity of a clerk, who was in charge of matters when
the draft was presented. They express great chagrin at the occurrence, and
have discharged the clerk for his obtuseness. Produce this letter.
Exercise 32. Respond to the following advertisement, offering a choice
of houses of which you have the agency :
"\V ANTED. To purchase or rent, for one year or more, a first-class dwelling-
house, suitable for a family of five adults. Location between 5th and 7th-aves. and
22d and 40th-sts. Neighborhood must be unexceptionable. Price, for purchase, not ro
exceed $40,000 ; for rent, not to exceed $2,500. Address, J. M., Tribune Oflice, for four dnys.
5. CIRCULARS, ADVERTISEMENTS, AND TELEGRAMS.
[A part of the literature of business consists of circulars, advertisements,
and telegrams, all of which require skill in the preparation. The following
exercises will afford a little practice in these directions.]
Exercise 33. You are the proprietor of a Wholesale Cloth House, which
is located at 410 Broadway, New York. You are about to remove to more
commodious quarters at 315 Church Street, where you have erected a new
building exactly suited to your purpose. Prepare a circular to be sent to
your customers, apprising them of the change and your reasons for it, and
invite them to visit you in your new quarters.
Exercise 34, You have been engaged in the Wholesale Dry Goods Busi-
ness, under the firm style of Stuart, Belden & Co. Mr. Belden has retired
from the concern, and in his place you have taken in two clerks, named
Robert Hart and Thomas Hicks ; the style of the new firm to be Stuart, Hart
& Hicks. Prepare a circular to be sent to your customers and correspondents,
notifying them of the change, and soliciting a continuance of favor to the
new firm.
17 SI NESS CORRESPONDENCE. 1]J>
Exercise 35. You have obtained a patent on a very desirable labor-
saving instrument, which you call the " Combined Double-action Mower and
Reaper." Prepare an attractive circular, describing its good qualities, and
its superiority over all other instruments for the same purpose. Add to your
own description and commendation the certificates of three or four reliable
formers who have used your Combined Double-action Mower and Reaper, and
who do not hesitate to say it is in all respects the best machine for the pur-
pose they have ever seen or heard of.
Exercise 36. Owing to adverse circumstances or mismanagement, you.
find, upon a fair investigation of your affairs, that it will be necessary for
you to go into liquidation. Prepare a circular letter to be addressed to your
creditors, stating the facts, asking for leniency, and signifying your desire and
purpose to save alt from loss to the utmost of your ability.
Exercise 37. Having compromised with your creditors some time since
at 50 cents on the dollar, you have, by prudent management and favorable
circumstances, put yourself in condition to pay your legal and moral obli-
gations to the uttermost farthing. Address a circular letter to your creditors,
thanking them for their leniency, and informing them, one and all, that you
are now prepared to pay them in full, principal and interest, upon receipt of
their several statements.
Exercise 38. You are in want of a situation as accountant or general
clerk in a Wholesale Establishment. Prepare an advertisement for the
papers, setting forth your desires.
Exercise 39. You are in want of a book-keeper ; one who has had expe-
rience in business, and who can come well recommended. Prepare an
advertisement for the papers which shall secure you proper responses.
Exercise 40. You are a Real Estate Agent, and have a number of houses
to let and for sale. Write an advertisement for publication which shall set
the matter before the people in the proper light. Describe the property as
specifically as possible.
Exercise 41. You are a pubisher, and you have just brought out a new
book, which you desire to put into the market in the best way. Prepare an
attractive advertisement, with such a display of the contents of the book as
will at once catch the eye and fasten the attention.
Exercise 42. Put the following matter into such shape as will seem ta
you most attractive as an advertisement :
Over lOfo net earnings. All taxes paid. Connecticut Valley Railroad First Mortgage 1%
Bonds, free from all taxes in Connecticut, and free of income tax everywhere. Road finished
and running, and already earning expenses, interest, and over 10$ on its stock. Full paid
stock and a limited mortgage. Price, 95 and interest. We recommend them strongly.
Brown, Jones & Smith, Bankers. 9 Pine St., New York.
118 BUSINESS COKRESP OXDEXCE.
Exercise 43. Make an attractive advertisement in arrangement of the
following matter :
James A. Moore & Co., No. 739 Broadway, offer for sale, at the lowest rates, their well-
inown Paris-made and home-manufactured garments of every style and description. Also,
now ready a superb stock of novelties in real thread lace and Llama points, sacks, and
jackets ; Paris-embroidered Cashmere carriage and house jackets. Novelties in all our
departments now open, for spring and summer wear, in all varieties of fancy dry-goods.
Also, full lines in all the various staple departments. A large assortment of India shawls
just received, embracing 3 cases of striped India long shawls, from $20 to $250 each ; open-
center squares, in all colors, from $75 to $450 each ; black-filled squares, in new designs and
colorings, from $150 to $2500. Also, a full assortment of " Ranpoore Chuddas " in all colors ;
besides hosiery and undergarments for spring and summer wear. Everything new, fresh,
and of the best quality. No charge for showing goods.
Exercise 44. Write a telegraphic despatch, not exceeding ten words, to
be sent to J. H. Goldsmith, Detroit, ordering him to send you by express
3 cases of summer hats, and to draw on you at ten days' sight.
Exercise 45. Write out a telegraphic message containing ten words or
less, instructing your friend at New York to procure for you first-class passage
tickets for Europe, and to notify you when the steamer is to leave port.
Exercise 46. Write out a message as compactly as possible, notifying
your agent at New York that you have sent him by railroad one thousand
barrels flour, and that you have drawn on him at 30 days' sight for $3000.
Exercise 47. You have received the following telegram from your part-
ner, who is traveling in the West. (Write out an appropriate answer.)
ST. Louis, May 10, 1812.
To J. W. MERCHANT, New York :
Just arrived. Find matters better than expected. Remain here four
days ; then to Chicago. Shall I come home directly, or go farther west?
23. Pd. P. H. MOTLEY.
Exercise 48. Put the following message into the fewest words that will
cover all the requirements :
NEW YORK, October 12, 1871.
H. B. BRYANT, Chicago, III.:
Dear Sir : I see by the papers and telegraphic despatches that you have
had an awful conflagration in Chicago. I feel very sorry for you and for all
your suffering people, and will do what I can to relieve you. I have put a
subscription on foot, and hope to be able to send you a quantity of clothing
and some money in a very few days. Meanwhile, please let me know by
letter what is the condition of affairs, and how much and in what manner
you and your family have suffered. Write soon, and believe me to be
Sympathetically yours,
ROBERT HASWELL.
APPENDIX.
THE matter herein contained, although intended mainly to
supplement the work of the book proper, will be found to embody
various features not previously introduced. The' additional busi-
ness sets can be used to advantage in connection with the regular
work, and the forms of books suggested will be found practical
and conforming to present usage; yet every teacher should employ
such forms as best suit his purpose, and the models here presented,
are offered merely as suggestions. The problems in Partnership
Settlements will be a welcome feature, while the Miscellaneous
Examples which follow will afford ample material for final drill
in the theory of accounts.
Set IX. D. T. AMES, L S. METCALF, AND G. W. LATIMER,
PROPRIETORS.
Characteristics. This set is designed to illustrate a clothing and gentlemen's furnishing
business. There are three partners, who invest equally, and the business ends with a net
loss, which is equally divided. Accrued interest on Bills, Receivable and Payable, also dis-
count on paper not matured taken :nto account in showing the condition of the business,
and the final standing of the partners. Copartnership dissolved, one partner retiring from
the firm by drawing out his share of the net capital.
Accounts used in this set (put two on a page) D. T. Ames , L. S. Metcalf ;
G. W. Latimer. Merchandise; Bills Payable ; Interest; Bills Receiv-
able , L. L. Williams , A. W. Smith ; E. R. Felton ; A. C. Lobeck ;
J. J. Souder ; A. S. Parish ; J. F. Mooar ; Cash ; Expense ; Loss &
Gain.
Philadelphia, September I, 1884. D. T. Ames, L. S. Metcalf,
and G. W. Latimer are partners, constituting the firm of Ames, Metcalf & Co.
Investments and division of gains and losses to be equal.
D. T. Ames invests Cash, $5OOO (C. B.) - - L. S. Metcalf invests
Merchandise, per Inventory, $6795. The firm assumes for him two notes
one, favor of Ira May hew, dated July 1, at 3 months, with interest at 6$.
Face of note, $75O, Interest accumulated to date (2 mos.), $7*5O;* and
* The student, when opening the books, should debit Interest account for all resources
-uad credit it for all liabilities of interest. See marginal notes on page 21.
120 APPENDIX.
one, favor of T. R. Browne, dated Jan. 12, at 8 months, with interest a< 6f c *
Face of note, fi/OOO; Interest accrued to date (7i mos.), $8 7. GO ; Net
investment, $5OOO (J.). G. W. Latimer invests : T. W. Hannum's
note, Latirner's favor, '.ated June 14, at 3 months, with interest at 6%. Face
of note, $7 GO; Interest to date (2 mos. 16 ds.), $9.5O; A. H. Hinman's
note, L.'s favor, dated July 26, at 3 months, with interest at 6%. Face of
note, $75O y Interest accrued to date (1 mo. 5 ds.), $..38 ; also personal
accounts as follows ; L. -L. Williams, $5OO; A. W. Smith, $362.12 ;
E. R. Felton, &//7O; A. C. Lobeck, $125O: J. J. Souder, ^//04. The
firm assumes for him personal accounts, viz. A. S. Parish, $oOO ; J. F.
Mooar, $&OO. His Net Investment, $5OOO (J.). - - Paid cash for
postage stamps, $3 (C. B.) - Sold R. C. Spencer, Milwaukee, Wis., for
cash, Q% dis., 4 doz. Shirts, 2d quality, @, $12 ; 6 doz. Union Neckties, $4.56 ;
00 doz. Linen Hdkfs., @ $6 , 3 pcs. Oassimeres, 150 yds., @ $1.25 ; Total,
$ (S. B., C. B.). - - - - Sold H. T. Loomis, Cleveland, O., on his note
at 6 mos., 50 Boys' Overcoats, @ $5.50 ; 50 do., @ $7.50 ; Total, $
(S. B.). - Received cash for petty sales, per P. C. B., $5&.2o (C. B.).
2. Received of L. L. Williams, cash on %, $2OO (C. B.). - - Paid
A. S. Parish, cash on %, $3OO (C. B.).
3. Sold A. J. Rider, Trenton, N. J., for cash, 1 Dress Suit for self, $50 ;.
1 Overcoat for son, $15 ; 1 box Hdkfs., 6 do/.., @ $4 ; Total, $ (S. B.,
0. B .). Received cash for petty sales, per P. C. B., $28.9O (C. B.).
4. Paid cash for 2 tons Coal, @ $5 (C. B.).
5. Sold E. R. Felton, Cleveland, O., on %, 2 pcs. English Broadcloth,.
100 yds., @ $4 ; 50 Military Coats, per order, @ $10 ; Total, # (S. B.).
- Received cash for petty sales, per P. C. B., $fO (C. B.).
6*. Paid cash for bill of Stationery, $/6 ; Paid hands for shop work,
$15O ; Total, ^ (C. B.).
7. Sold C. G. Swensberg, Grand Rapids, Mich., for cash, 20 Zouave Uni-
forms, @ $25 ; 1 pc. Striped Satin, 50 yds., @ $5 ; Disc, off Satin, o f r ; Total,.
$ (S. B., C. B.). - - Paid cash for invoice Cloths, $&8OO (C. B.).
1O. Received cash of A. C. Lobeck, on %, $75O (C. B.) - - Paid
cash for Gas bill, $/5 (C. B.).
12. Sold A. C. Lobeck, New York, on % t 1 lot ready-made clothing,
viz. : 10 Coats, @ $3 ; 20 do., @ $3.50; 50 do., @ $5 ; 8 prs. Pants, (a A:\
25 do., @ $4; 50 Vests, @ $1.50; 25 do., @ $3 ; 1 Overcoat, $15 ; Total,
^ (S. B.). Received cash for petty sales, per P. C. B., $58
(C.B.).
13. Paid hands for shop work, cash, ^/7J (C. B.).
14. Received cash for petty sales, per P. C. B., $138 (C. B.).
15. Accepted J. F. Mooar's draft at 30 ds. without interest, favor W. A.
Miller, to bal. %, $ (J.). - Sold C. C. Curtiss, Minneapolis. Minn.,.
for cash, 5% disc., 5 doz. Cravats, @ $9; 3 doz. do.. <<l $12: 9 doz. Linen
Hdkfs.. @ $6; Total, $ (S. B., C. B.) - - Sold L. L. Williams^
Rochester, N. T., on %, 50 Military Coats (privates), @ $10; 5 do ^officers},.
APPENDIX. HI
@ $15 ; Total, $ (S. B.). - - Paid cash for our note, favor T. R.
Browne, and interest. Face of note, fifOOO; Interest to date (8 inos. 3 ds.),.
$O.5O(V. B.).
16. Received cash on % of L. L. Williams, $75O (C. B.).
17. Received cash for T. W. Hannum's note and interest. Face of note,
$75O ; Interest to date (3 mos. 3 ds.), $ff.63 (C. B.).
IS. Sold Win. Heron, Manchester, N. H., on his note at 6 mos., 50 Coats;
/ready made), @ $5 ; 100 prs. Pants, @ $3 ; 50 doz. Collars, @ $1.50 : 5 doz.
F. Y. Shirts, @ $21 ; Total, $ (S. B.). - Received cash for petty
sales, per P. C. B., $9^.83 (C. B.) - - Paid Clerks' Salaries in cash,
$ff2 (C. B.).
2O. Received of J. J. Souder his note at 60 ds. to bal. %, : * ( T )
- Sold Frank Goodman, Nashville, Tenn., on his acceptance at 60 ds.,
100 Zouave Uniforms, @ $20; 50 Military Coats, "Co. H," @ $10; Total,
$ (S. B.) - - Paid cash to hands for shop- work, $25O (C. B ).
22. Received cash on % of E. R. Felton, $fOOO (C. B.) Received
cash for petty sales, per P. C. B., $f?2.&6. (C. B.).
25. Sold J. F. Mooar, Boston, Mass., on %, 50 Uniforms, " Lincoln.
Green," @ $25 ; 30 do. Zouaves, @ $15 ; Total, $ (S. B.) - - Received
of A. W. Smith, cash in full of %, $ (C. B.) - - Received for petty
sales, per P. C. B., $83. 76 (C. B.). - Paid rent for September in cash,
fiSOO (C. B.).
2(i. Received of E. R. Felton, cash on %, $f7O (C. B.) Received
for petty sales, per P. C. B., $58.9& (C. B.) - - Paid cash for Porterage
and Drayage, $35 (C. B.).
27. Received from A. C. Lobeck,on ^,cash, $5OO (C. B.) - - - Received;
for petty sales, per P. C. B., ^//7. 5O (C. B.).
28. Sold C. P. Meads, Syracuse, N. Y., for cash, 5% disc., 20 Boys' Coats
(ready-made), @ $5 ; 30 Vests (ready-made), @ $1.50 ; 20 doz. Collars, @ $1 ;
Total, $ (S. B., C. B.). - - Received cash for petty sales, per P. C. B.,
$87.5O (C. B.). - - - Paid cash to hands for shop- work, $275 (C. B.).
29. Received cash for petty sales, per P. C. B., $ff2.9& (C. B.).
30. Sold A. W. Smith, Meadville, Pa., on %, 75 Complete Uniforms
@ $25. $ (S. B.). - - - Received cash for Win. Heron's note of Sept
18, less discount. Face of note, $73O ; Discount for unexpired time, Sept
30, 1884, to Mar. 21, 1885 (5 mos. 21 ds.), at %%, $2O.8f ; Net amoun
received, $7O9. 19 (C. B.). - - Received cash for petty sales, per P. C. P
$775 - - Partners' salaries for the month, paid in cash. $6O6.
The firm of " Ames, Metcalf & Co." has been this clay dissolved by m*'*'**
consent, Mr. Metcalf withdrawing ; the business to be continued bv tli*-
remaining partners, under the firm name of " Ames & Latimer." A complete,
statement, showing the condition of the business, is to be prepared, each part-
ner to be credited for his net gain or charged for his net loss, as the case may
be, and after a final settlement has been made with the retiring partner, the,
is to be closed, the balances being brought down for continuation.
122 APPENDIX.
MEMORANDUM OF RESOURCES AND LIABILITIES NOT SHOWN ON LEDGER.*
Resources. Mdse. unsold, $975. 02. Interest Receivable: Accrued interest
on A. H. Hinman's note, from July 26 to date (2 mos. 5 ds.), at 6%,
$8.73 ; Discount for unexpired time (18 ds.) on our acceptance,
favor W. A. Miller, due Oct. 18, at Qf , $f.2O. Total, $9.33.
Liabilities. Interest Payable : Accrued interest on our note, favor Ira May-
hew, from July 1 to date (3 mos.), at 6%, $ff.25; Discount for
unexpired time (5 mos. 4 ds.) on H. T. Loomis's note, $76. 68 ;
do. on J. J. Souder's note (1 mo. 22 ds.), $9.57-> and on Frank
Goodman's acceptance (1 mo. 22 ds.), $27.67. Total, $59. //.
Paid L. S. Metcalf, in full of his Net Capital, our note (signed "Ames &
Latimer"), to run 6 mos., with interest at 1%, for $2OOO ; Cash for Bal-
ance, $2966.68 (J., C. B.).
FORMS OF BOOKS.
THE following pages exhibit the transactions of Set IX, written up m
comprehensive form in the various books of entry. The particular feature of
this set consists in writing the original entries at once in separate books, from
which they are posted directly to the Ledger. This method has many advan-
tages over that of making consecutive entries in the Journal, and is, in one
form or other, adopted by all large establishments.
The only difficulty to be encountered is the danger of posting such entries
as are contained in several books as, for instance, sales for cash, which are
entered in both the Sales-Book and the Cash-Book twice to the Ledger.
Various means of obviating this have been devised, of which the simplest,
and the one generally employed, has been here adopted. This plan permits
nothing that is entered in the Cash-Book to be posted from any other book.
Thus, for example, the amounts of all cash sales are placed in a special
column in the Saies-Book, the items are simply marked "C. B." and posted
from the Cash-Book in the regular order.
The Cash-Book, as will be seen, is also provided with special columns
one on the Dr. side for Merchandise items, and one on the Cr. side for Expense
items. The accountant is thus enabled to post to these accounts at stated
periods usually at the end of each month the total amount for such period,
instead of being required to enter each item separately.
Purchases of merchandise are here entered in the Journal ; however,
where such purchases are numerous, a Purchase or Invoice-Book, conforming
in general arrangement to the Sales-Book here presented, may be employed
to advantage.
* In order to ascertain the exact net gain or loss to date which is particularly desirable
since the net capital to be withdrawn by the retiring partner will be proportionately affected
thereby the items of Interest Receivable and Interest Payable enumerated in this schedule
must be taken into consideration. The manner of entering these data in the Ledger is shown
on page 129. Also see marginal notes on page 21.
APPENDIX.
123
JOURNAL. SET IX.
Philadelphia, September 1, 1884.
A
MERCHANDISE
2
L. S. METCALF -
6795
Amount invested, per Inventory.
7
2
L. S. METCALF To Sundries
1795
5
BILLS PAYABLE, per Bill-Book
1750
G
INTEREST, accrued on notes - -
45
Assumed for him.
g
Sundries To G. W. LATIMER -
5900
7
BILLS RECEIVABLE, per Bill Book - - - -
1500
G
INTEREST, accrued on above notes - - - -
13
88
S
L. L. WILLIAMS, Balance of % - - - -
500
9
A. W. SMITH, " " - - - -
362
12
10
E. R. FELTON, " <--...
1170
11
A. 0. LOBECK, * " "
1250
1 1 f\A.
Amounts invested.
3
G. W. LATIMER - - To Sundries - -
900
13
A. S. PARISH, Balance of % -
500
U
J. F. MOOAR, " " - -
400
Liabilities assumed for him.
400
400
Accepted his draft at 30 ds. to bal. %.
1104
1
T T C!
1104
12
His note at 60 ds. to bal. %.
2000
*
9000
5
Note at 6 mos. for int. in business.
124
APPENDIX.
SALES - BOOK. SET IX.
Philadelphia, September 1, 1884.
C.B.
7
C.B.
10
C.B.
11
R. C. SPENCEK, Milwaukee, Wis.
4 doz. Shirts, 2d quality - @ $12 $48
6 " Union Neckties - 4.56 27.36
20 " Linen Hdkfs. - - 6 120
3 pcs. Cassimere, 150 yds. - 1.25 187.50
GENERAL.
CASH.
650
900
639
363
89
737
72
50
382.86
1
H. T. LOOMIS, Cleveland, 0.
50 Boys' Overcoats - - - @ $5.50 $275
50 " " 7.50 375
B. B. Note at 6 mos.
*>
A. J. RIDER, Trenton, N. J.
1 "DrpRR ^nit for s*lf JtSO
1 box Hdkfs., 6 doz. - - $4 24
or
E. R. FELTON, Cleveland, 0.
2 pcs. Eng. Broadcloth, 100 yds., @ $4 $400
50 Military Coats, per order, 10 500
&
4
C. G. SWENSBERG, Grand Rapids, Mich.
. 20 Zouave Uniforms - - - @$25 $500
1 pc. Striped Satin, 50 yds. 5 250
750
Disct. off Satin, 5% - - 12.50
1
A. C. LOBECK, New York.
1 Lot ready-made Clothing, viz. :
1flPnflt<? (ff. *o *ori
20 " ^ VI 70
Kn " K OK/)
8 prs. Pants - - - - 3 24
25 " " - - - - 4 100
Amounts forward ....
2189
1190
22
APPENDIX.
Philadelphia, September 15, 1884.
125
C.B
8
7
7
14
C.B.
9
4
Amounts forward - - - -
C. C. CURTISS, Minneapolis, Minn,
5 doz. Cravats @. $9 $45
8 " " 12 36
9 " Linen Hdkf*. - - - 6 54
GENEKAL.
CASH.
2189
575
730
2500
1700
1875
1190
128
156
23
25
75
135
Disct.off,5% 6.75
L. L. WILLIAMS, Rochester, N. T.
50 Military Coats (privates), $10 $500
5 " " (officers), 15 75
1 *i
WILLIAM HERON, Manchester, N. H.
50 Ready-made Coats - - - @ $5 $250
50 doz Collar* .... - 1 50 75
5 " F. Y. Shirts - - - - 21 105
B. R. Note at 6 mos.
FRANK GOODMAN, Nashville, Tenn.
100 Zonave Uniforms - - - @ $20 $2000
50 Military Coats, " Co. H." - 10 500
B. R. Acceptance at 60 ds.
J. F. MOOAR, Boston, Mass.
50 Uniforms, " Lincoln Green," @ $25 $1250
30 " Zouaves - - - 15 450
00
C. P. MEADS, Syracuse, N. T.
20 Ready-made Boys' Coats - @ $5 $100
30 " u Vests - - - 1.50 45
165
O/)
A. W. SMITH, Meadvttle, Pa.
75 Complete Uniforms - - @ $25 - - - -
Sales on time, to Cr. of Mdse. - - - -
Sales for Cash, posted from Cash-Book -
Petty Sales, entered only on Cash-Book -
Total Sales for the month - - -
9569
1475
1227
22
05
1475
1
22
12271
27
126 APPENDIX.
i CASH - BOOK.
Cash, September 1, 1884.
1884
Sept.
1
2
3
5
10
12
14
15
16
17
a
18
22
25
M
26
27
28
29
30
D. T. AMES - - - Amount invested - - - -
TiT^qp, -p p a <2alpL; Rnnk
I
8
11
8
7
fi
10
9
10
11
7
U
15
GENERAL.
MDSE.
5000
200
750
150
750
11
1000
;362
170
500
730
2702
12326
63
12
27
02
S63
54
89
28
105
737
58
138
128
94
112
83
58
117
156
87
112
175
2702
72
25
90
50
25
8*-
44
75
94
5C
75
50
94
27
Mnstw - Ppttv snips P P "R
MTI^F -ATP. ^nlps; "Rnnk
MDSB - - - Petty sale 1 * P C B
MDSE ..... u '
MDSE. C. G. S., Sales-Book - - -
MTIQT? u u
\fpjq-p, r\ p p Qolpa Rnnlr
BILLS RECEIVABLE - T. W. Hannum's note - - -
INTEREST- - - - On above,3mos. 3ds.,at6% -
4 W ^TWTTTT - Tn frill nf **L
AP T OTIFPK On **/r -
MIWL- " "
BILLS RECEIVABLE - Wm. Heron's note - - - -
SET IX.
APPENDIX.
Cash, September 1 9 1884.
127
30
EXPENSE
A.
EXPENSE
EXPENSE
MDSE.
EXPENSE - - -
EXPENSE - -
BILLS PAYABLE -
INTEREST - -
EXPENSE - - -
EXPENSE - - -
EXPENSE - - -
EXPENSE - -
EXPENSE - - -
INTEREST - -
EXPENSE
L. S. METCALF
- Postage stamps - -
- On %
- 2 tons Coal, @ $5 - -
- Bill of Stationery -
- Hands, for shop-work -
- Invoice of Cloths
. Gas Bill
- Hands, for shop-work -
- Note favor T. R. Browne
- On above, 8 mos. 8 ds. , at 6 \
- Clerks' salaries - - -
- Hands, for shop-work -
- Rent for Sept. - - -
- Porterage and Drayage
- Hands, for shop-work - -
- Disc, off Heron's note, 5 mo.
[21 ds.
- Partners' salaries -
EXPENSE, Dr.
CASH, Cr. . . . -
- For his Capital (Cash, Cr. p. 15
Balance* -
* This Balance, being already shown in the
Ledger, is not carried into the money column at
the beginning of the new month in the usual man-
ner, but entered at the end, after the proper debit
to Cash has been ascertained. All danger of post-
ing this amount a second time is thus avoided.
IS
GENERAL. Exrtxsjs.
300
4800
1000
40
50
20
7907
2945
1U1B
2326
81
08
02
10
15
150
15
175
112
250
100
35
275
600
1746
128
APPENDIX.
LEDG-ER. SET IX.
(l)
D. T. Ames.
1884
1884
H
Sept.
30
Loss & Gain -
Ll7
54
37
Sept.
1
Cash ....
cl
5000
**
11
Balance - -
!k5
63
5000
5COO
Oct.
1
Balance ...
4945
63
(2)
L. S. MetcaLC
1884
Sent
1
j-J
1795
1884
Sept
j
jl
CITQK
(4
ti
14
30
44
Loss & Gain - -
Bills Payable -
Ll7
Jl
54
2000
37
6795
6795
(3)
Gr. W. Latimer.
1884
1884
Sept.
1
Sundries - -
jl
900
Sept.
1
Sundries -
jl
5900
4
30
Loss & Gain
Ll7
54
37
"
"
Balance - - -
U9U5
63
5900
5900
~0ct7
1
Balance
4945
63
(4)
Merch.and.ise.
1884
1884
Sept.
1
L. S. Metcalf-
Jl
6795
Sept.
30
Sundries ...
s2
9569
u
7
Cash ....
c2
4800
"
"
Cash ....
cl
2702
27
"
SO
Loss & Gain -
Ll7
1651
29
it
11
Inventory ...
975
03
13246
29
18246
29
Oct. 1 1
Inventory ...
975
02
A P P K X D I X .
IB)
Bills Payable.
1884
1884
Sept.
15
Cash --. -
c2
1000
Sept.
1
L. S. Metcalf - -
Jl
1790
"
30
Balance - - -
3150
M
15
J. F. Mooar - -
Jl
400
i
30
L. S. Metcalf- -
Jl
2000
4150
4150
Oct.
1
Balance - - -
4150
(6)
Interest.
1884
1884
i
Sept. 1 ; G. W. Latimer -
Jl
13 ! 88
Sept.
1 j L. S. Metcalf - - i\
45
M
15 ' Cash ----
c2
40
50
"
17 ; Cash - - -
ol 11
63
30
" ....
c2
20
81
"
30
Int. Receivable . |
9
39
"
14
Int. Payable - -
59
17
u
u
L088 & &izi-r< - -
Ll7
68
M
134
36
134
3<i
Oct.
1
Int. Receivable -
9
33
Oct.
1
Int. Payable - -
59
1?
(7)
Bills Receivable.
1884
1884
Sept.
1
G. W. Latimer -
Jl
1500
Sept.
17
Cash T. W. H. -
cl
750
"
"
Mdse. H. T. L. -
si
659
"
30
" W. H. - -
cl
730
"
18
W. H. -
82
730
"
"
Balance - - -
500k
"
20
J. J. Souder - -
Jl
1104
"
14
Mdse. P. G. - -
s2
2500
6484
6484
Oct.
1
Balance - - - -
5004
L. L. Williams.
1884
1884
L
-
Sept.
1
G. W. Latimer -
Jl
500
Sept.
2
Cash - - - -
cl
200
M
15
Mdse. ....
s2
575
(i
16
. . - -
cl
150
u
30
Balance
n$
1075~
1075
Oct.
1
Balance ...
725
130
APPENDIX.
(9) (10)
A. W. Smith.* TC. R. J^elton.
Sept. 1
u 30
362
1875
12
Sept. 25
" 30
362
1875
12 Sept, 1
5
1170
900
Sept. 22
' 26
il 30
1000
170
900
2237
12
2237
12
2070
2070
Oct. 1
. 1875
Oct. 1
900
(ID (12)
A. C. Lotoeek. J. J. Sonder.
9SJ
1250
639
Sept. 10
" 27
" 30
750
500
639
Sept. 1
i 1104
Sept. 20
1104
1889
1889
Oct. 1
639
(13) (14)
A. S. Parish. J. E\ Mlooar.
Sept. 2
* 30
300
200
Sept. 1
500
500
500
=
Oct. 1
200
Sept. 15
" 25
400
1700
Sept. 1 i
l " 30
400
1700
2100
!
2100
Oct. 1
1700
!
(15)
Cash..
1884
1884
|
Sept.
30
Sundries - - -
cl
12326
02
Sept.
30
Sundries - - -
c2
1 7907
31
M
"
L. S. Metcalf - -
c2
I 2945 | 63
M
30
Balance - -
IMS
08
12326
02
12326
02
Oct.
1
Balance - - -
1473
08
(16)
Expense.
1884
Sept.
3C
Cash - -
C2
I
1746
1884
Sept.
30
Loss & Gain - -
Ll7
17A6
(17)
Loss & Grain.
1884
1884
Sept.
30
Interest - - -
L6
G8
40
Sept.
30
Mdse. ---.
iA
1651
ii
"
Expense - - -
Ll6
1746
"
u
D. T. Ames - -
Ll
54
"
u
L. S. Metcalf - -
r2
5A
:
ti
it
G. W. Latimer -
i3
6k
1814
40
1814
.1.
A few of the accounts are given in skeleton form to save space.
M o 5-1 > > a > r to ^ g g p p
^"?r= 3 ^' ffi ^
ill
s|- s
Led-
Page
a
Q
H
>
g
H
Q
fr
Q
131
133
BILL -BOOK.
BILL - BOOK
N'o.
REC'D.
ENDORSER.
MAKER.
IN WHOSE FAVOR.
RECEIVED.
WHEI:E PAYABLE.
1
1884
Sept. 1
G. W. Latimer.
T. W. Hannum.
G. W. Latimer.
Investment.
Keystone Bank.
2
u 4.
u
A. H. Hinman.
"
"
B'k of America^
3
" "
H. T. Loomis.
Ames, M'f&Co.
Mdse.
Maker's office.
4
" 18
Wm. Heron.
"
Mdse.
4.
5
" 20
J. J. Souder.
-
In foil of %.
u 44
6
11 14
Ames, M'f&Co.
F. Goodman.
Mdse.
Fairmount B'k,
BILL - BOOK
No
WHEN
DRAWER OR
DRAWEE OR
FOR WHAT
1
ISSUED.
ENDORSER.
1884
Sept. 1
L. S. Metcalf.
Ira Mayhew.
Ass'd for M'f .
Adelphi Bank.
2
U 44
"
T. R. Browne.
"
Maker's office.
3
" 15
J. F. Mooar.
Ames, M'f&Co. W. A. Miller.
In full of %.
Marine Bank.
4
" 30
Ames & Latimer
L. S. Metcalf.
For Capital.
Maker's office.
THE BILL -BOOK.
The utility of this auxiliary will be apparent, for a complete record of'
negotiable paper and especially of our own outstanding obligations is of
the utmost importance. The form here given is the one in general use, and
no explanation is necessary. Although many authors have attempted to do-
so, this book can not profitably be used as a principal book, from which to=
post. Its chief function is that of a " tickler," reminding us of the maturitjr
of all notes and drafts, both against us and in our favor.
SET IX.
A P l> EXD1X.
RECEIVABLE.
133
DATE.
TIME.
WHEN DUE.
AMOUNT
WHEN AND HOW-
DISPOSED OF.
YEAR.
s
&
1
|
S
3
1-5
1
1
S
q
1884, June 14
3 mos.
1884
ft
750
1884
Sept, 17
Paid.
" July 26
3 mos.
1884
H
750
" Sept. 1
6 naos.
1885
1
650
" 18
6 mos.
1885
if
730
Sept. 30
Disc.
" 20
63 ds.
1884
H
1104
" 20
60 ds.
1884
if
2500
PAYABLE.
DATE.
TIME.
WHEN DUE.
AMOUNT
WHEN AND HOW-
DISPOSED OF.
YEAR.
I
1
1
P.
<1
I
|
>>
3
1-3
si
p
<
!
i
1
1
1884, July 1
3 mos.
1884
i
750
1884
" Jan. 12
8 mos.
1884
tf
1000
Sept. 15
Paid.
11 Sep. 15
30 ds.
1884
H
400
" 30
6 mos.
1885
30
2
2000
THE COLUMNAR JOURNAL.
In addition to the usual debit and credit money columns, this Journal is
prorided with special columns for such accounts as are most frequently affected.
This enables us to post to the accounts thus represented the aggregate for a
certain period usually one month instead of transferring each item sepa-
rately ; thus saving a vast amount of labor in posting and considerable space
in the Ledger.
The following pages exhibit what is known as the " Six-Column Journal."
The special columns here used are Cash and Expense on the debit, and Cash
and Merchandise on the credit side. The transactions are taken from Set IX.
1
1
5
eo
o
H
1
1
1 i I s i ii
fe
*
w
Hi
o
'
^
,
,
. .
..
. .
1 *
*
*
, ,
: :
,
JOURNAL. FROM THE TRAI
PhilartHphifi , September 1, 1
CASH - - ' D. T. AMES - - -
Investment.
- - - - *
MDSE. L. S. METCALP .
Investment, per Inventory.
//
BILLS PAYABLE, per Bill-Book - - - -
INTEREST, accrued on notes
Liabilities assumed for Metcalf.
//
Sundries G. W. LATIMER -
BILLS RECEIVABLE, per Bill-Book.
INTEREST, accrued on above notes.
L. L. WILLIAMS, Balance of %.
A. W. SMITH,
E. R. FELTON, " "
A, C. LOBECK, " "
J. J. SOUDER, " "
Amounts invested.
//
G. W. LATIMER Sundries.
A. S. PARISH, Balance of %
J. F. MOOAR, " "
Liabilities assumed for Latimer.
*/
EXPENSE CASH
Postage stamps.
ti
fe
*.x,3=!3
S
ti
i
5
gg 2
Q
9
D
M
1
I g
O
Q
I
!
i
H
M
134
S
ss
1
1
3
8
1
1
i
I
oo
9 8
' SSSS
, ^ 1 < r ^
' *S JS
1
I
m 10
ff* ec
' 88
i
I s "
, i
.jj * <0 T-l
5
'/.
03
cc
;
i 5' i i .
1
- "
CASH MDSE.
R. C. SPENCER, Mill
4 doz. Shirts, 2d quality -
6 " Union Neckties - -
20 " Linen Hdkfs. - - - .
3 pcs. Cassimere, 150 yds. -
us
BILLS RECEIVABLE - - - - MDSE.
H. T. LOOMIS, Cteve
50 Boys' Overcoats - - -
50 " " - - -
B. R. Note at 6 mos.
it
CASH MDSE.
Petty sales, per P. C.
f
CASH L. L. Wi
Received on .
tt
H
J *
;
; 1
1
od
CASH MDSB.
A. J. RIDER, Trentc
1 Dress Suit for self - - -
1 Overcoat for son -
1 box Hdkfs., 6 doz. - - -
Amounts form
-
1
1
1
P
$
85
i
3
1
i
1
1
H Lr.
s
Column
in model
<3 6
A
o..2
'o
II
is
'
.
I
3
S '
?s
s
1 .s
3 g S
is.
!I
a &
o
2
^S
OS O
s s
N S,
3^-
I
51
So Jiel
I-O r-l
O
.s =
03 .2
APPENDIX. 137'
Set X. D. T. AMES AND G. W. LATIMER, PROPRIETORS.
Characteristics. Continuing the business of the preceding set under the new proprietor-
ship. Capital increased by additional investments. Business prosperous. Net gain divided
equally between the partners after crediting them each with interest on his net investment.
Accounts used in addition to those opened in Set 0. J. N. Curry ; Randall &
Horton ; W. A. Miller ; J. C. Miller ; A. J. Rider.
PhUatlelph'ut, October ./, 1884. D. T. Ames and G. W. Latimer,
forming the firm of " Ames & Latimer," continue the business of " Ames,
Mrtcalf & Co." with the resources and liabilities of the previous business.
Interest, at 6f<?, allowed on net investment. Losses and gains divided equally.
D. T. Ames makes an additional cash investment of $OOO.
B >ught of Randall & Horton, New York, on 60 ds. credit (2% off within 10 ds.),
Invoice of Mdse. amounting to $3OOO. - Sold James N. Kimball,
Brooklyn, N. Y., for net cash, 1 doz. Fancy Neckties, $12 ; 12 doz. prs. Lisle
Thread Stockings, @ $3. Total, $
?. Paid shop-hands, cash, $3OO. - - Received cash for petty sales r
per P. C. B., $f?9.
.'i. Received cash of E. R, Felton, in full of %, $* - - Sold
A. W. Smith, on %, 6 doz. French Yoke Shirts, @ $18 ; 10 doz. Knit Under-
shirts, @ $7 ; 8 doz. prs. Knit Drawers, @ $8. Total., $
4. Paid cash for note assumed by us, favor Ira May hew, due this day,,
with interest. Face of note, $75O ; Interest accrued (3 mos. 3 ds.), at Q%,.
-g * Total, $
5. Sold T. B. Stowell, Providence, R. I., for net cash, 15 Alpaca Coats,
@ $2 ; 20 Cassimere Vests, @ $1.50 ; 6 doz. " Himyah " Collars, @ $2. Total,
$ - Received cash for petty sales, per P. C. B., #/0.
7. Paid cash for Repairing Store, $75O; also for advertisement in
" Philadelphia Times," $26. Total, $ - - Received cash for petty-
sales, per P. C. B., $9^.83.
K. Paid A. S. Parish, in full of %, per sight draft on A. W. Smith,.
$ - Rec'd of L. L. Williams, cash in full of %, $
Sold J. D. Odell, New York, on his note at 60 ds., 50 Complete Uniforms,
@ $20, $ - - Sold Otto Behr, City, for cash, 5% disc., 4 doz. Cotton
Hose, @ $1.80; 6 doz. Mixed do., @ $3.18; 12 doz. Silk do., @ $8. Total,
$ - - Received cash for petty sales, per P. C. B., $/O 6.
9. Sold J. F. Mooar, on % , 24 Ready-made Coats, @ $5 ; 15 prs. Pants,
@ $3.75 ; 30 Vests, @ $2 ; 1 Fine Overcoat, $25. Total, $
Paid hands for shop-work, cash, $253. - - Received cash for petty sales,
per P. C. B., $29 5.
* All calculations of interest in connection with this work, except when otherwise
stated, should be made on the basis of 360 days to the year.
138 APPENDIX.
JO. Sold W. A. Miller, New York, on %, 16 doz. "Himyah" Collars,
@ $1.95 ; 16 doz. "Elite" Collars, @ $2; 20 doz. " Claudent" Scarfs, @ $3 ;
50 doz. prs. " Punjab " Cuffs, @ $3.75 ; 20 doz. prs. " Romeo" Cuffs, @ $3.50.
Total, $ - - - Received cash for petty sales, per P. C. B., $1JO.5O.
11. Received cash for J. J. Souder's note, less disc. Face of note,
$ ; Disc, off for 1 mo. 11 ds., at 6^, $ / Net amount received,
-* Paid Randall & Horton, cash in full of %, less 2% discount.
Face of %, $ ; Discount, $ / Cash paid, $
O. W. Latimer makes a further investment in cash of $fOOO.
12. Bought of W. J. Maxwell & Co., City, on our acceptance at 60 ds.,
Bill of Mdse., amounting to $36OO. - - Sold J. C. Miller, Lancaster, Pa.,
on %, 100 Complete Uniforms, @ $19, $
15. Sold L. H. Packard, New York, for net cash, 5 doz. " Byron " Collars,
@ $2 ; 4 doz. " D'Orsay " Cravats, @ $12. Total, $ - - Received
cash for petty sales, per P. C. B., $150.25.
16. Paid hands for shop- work, cash, $27O. Received cash for
petty sales, per P. C. B., $ 75. 50. - - Received from J. F. Mooar, cash
<on %, $75OO.
18. Sold A. W. Smith, on %, 1 case Overalls, 6 doz. prs., @ $6 per doz. ;
2 cases Summer Frocks, 12 doz., at $18 per doz. Total, -^ -
Received cash for petty sales, per P. C. B., $125. - Paid cash for our
acceptance of Sept. 15, favor W. A. Miller, due this day, $
19. Received of A. W. Smith to apply on %, sight draft on A. B. Rankin
& Co., for $f8OO. Sold J. N. Currey, Lancaster, Pa., on %,10 Military
Coats, @ $15 ; 5 do. (officers'), @ $25. Total, $ - - Received cash
for petty sales, per P. C. B., $125. D. T. Ames draws out cash,
$20O.
21. Sold A. J. Rider, Trenton, N. J., on %, 1 pc. French Cassimere,
-50 yds., @ $3 ; 10 yds. Striped Satin, @ $6. Total, $ Received
cash for petty sales, per P. C. B., $JOf.
23. Paid cash for our acceptance, favor W. J. Maxwell & Co., less disc.
Face, $ ; Disc, off for 1 mo. 21 ds., $*__/ Net amount paid,
$ - Received cash for petty sales, per P. C. B., $5O. - -
Paid hands for shop- work, cash, $35O.
25. Sold A. C. Lobeck, on <fc, 12 Boys' Frocks, @ $2; 36 do., @ $5.
Total, # Sold Oscar Riess, New York, for cash, 5% disc,,
10 doz. "Claudent" Scarfs, @ $2.85; 20 doz. boxes "Linene Reversible"
Collars, @ $1.25 per doz.; 5 doz. prs. Celluloid Cuffs, @ $1. Total, $ ,
27. Received from A. C. Lobeck cash in fuU of %, $
Received cash for petty sales, per P. C. B., $WO.
29. Received cash for A. H. Hinman's note of July 26, due this day.
Face of note, -^ Interest accrued (3 mos. 3 ds.), at 6%, $ }
Amount received, : g
30. Paid cash to hands for shop- work,
A P PENDIX.
31. Paid Gas bill m cash, $/8; Rent for October, $/OO; Partners'
Salaries, $&OO. Total, $ - - Interest due partners on their
suvra^e investment (31 ds.) : D. T. Ames, $35.&9 ; G. W. Latimer,
$28.88. Total, $ --
MEMORANDUM OP RESOURCES AND LIABILITIES NOT SHOWN ON LEDGER,
Resources. Mdse. unsold,
Liabilities. Interest Payable : Accrued interest on our note, favor L. S. Met-
calf (1 ino.), at 7%, $//,67- Also discount on paper not matured,
as follows : on H. T. Loomis's note (4 mos. 4 ds.), at 6%, $/3 .&3 '>
on Frank Goodman's acceptance (22 ds.), at Q%, $9.f7 j on J. D.
Odell's note (1 mo. 10 ds.), at Q%, $6. 67. Total,
Entire Net Gain,
STATEMENT OF RESULTS AT ('LOSING.
W () <2**
<fe4.944. 37
Bills Payable
Interest Payable - -
DT 1 A mps
- $2000
40.94
7364 05
Bills Receivable
A. W. Smith -
JTp \fona T*
- - - 4150
- - - 369
4fi1 9*i
G. W. Latimer - - -
- 6557.44
J. N. Currey -
Cash . ... .
- - 275
- - 3972 11
W. A. Miller
J. C. Miller - -
A. J. Rider - -
- - - 380.70
- - - 1900
- - - 210
15962.43
15962.43
Set XI. S. S. PACKARD AND W. A. MILLER, PROPRIETORS.
Characteristics. In this set is presented the business connected with the publishing of
a periodical. There are two partners, investing equally. The business terminates with a
net gain, which is shared equally between the partners, after crediting them with salary for
their services.
[This set may be written up in the ordinary form of books, or, still better, in books
provided with special columns for the most frequently recurring items, as suggested in the
forms previously presented. Let the teacher select such methods as appear to him best
^dapted to the case in hand.]
Name8 of accounts used. S. S. Packard ; W. A. Miller ; Cash ; Furniture and
Fixtures ; Magazine ; Printing and Manufacturing ; Paper ; National
News Co. ; Western News Co. ; Robert Lowe & Co. ; Subscriptions ;
Rent ; Expense ; Contributions ; Advertising Expenses ; Advertising
Returns ; Moss Engraving Co. ; Bulkley, Dunton & Co. ; Postage ;
Services; N. G. Miller; J. J. Little & Co.; Dominion News Co.;
Loss & Gain.
140 APPENDIX.
New York, June 2, 1884. S. S. Packard and W. A. Mi 1 ler enter
into copartnership under the firm name of " S. S. Packard Co.," for the
purpose of carrying on the publication of The New Era in Education, a
monthly magazine hitherto published by S. S. Packard. Mr. Packard trans
fers to the new firm the resources and liabilities of his former business, and
is to have entire charge of the editorial work, receiving therefor a yearly
salary of $2400. Mr. Miller is to assume the financial management, receiving
a yearly salary of $1800. Each partner is to make a net investment of $5000,
.and the gains and losses are to be divided equally.
S. S. Packard invests : Cash, $&2OO / Furniture and Fixtures, valued
at $8OO j Back numbers of magazine, estimated value, $&5O ;* Do. in
bound volumes, $3OO ; Electrotype Plates, valued at $3OO;\ Paper,
$6OO. Personal accounts : National News Co., $5OO ; Western News
Co., $8OO ; Robt. Lowe & Co., $25O. The firm assumes for him Unex-
pired Subscriptions, estimated at $32OO.\ Net investment, $5OOO.
W. A. Miller invests : Cash, $5OOO.
Paid cash for rent of building for June, $5OO Received cash for
15 yearly subscriptions, as per Subscription Register, (5) $5, $75. -
Cash sales of magazine this day, per P. C. B., amount to $/.&O.\
3. Received cash for rent of upper floors for June, $35O. Paid
cash for contributions to July number as follows: Chas. Tiffany, $7OO ;
S. H. Terry, $5O. Total, $ .... Paid cash for advertising in
daily papers, $&O. - - Received cash for 26 subscriptions, as per Subs.
Reg., $/3O. Cash sales, per P. C. B., #//.
4. Sold Robert Lowe & Co., City, on %, 50 copies June, @ 36/, $
Paid cash for contributions to July number: S. M. Lenox, $75; Louis
Delatour (translation), $2O. Total, $ ~. - - Received cash for
advertisements to be inserted in July issue, $60 / also for sales per P. C. B.,
$8.50.
5. Credit Moss Engraving Co. for Engravings furnished for July number,
as per bill, $36. 5O** - - Bought of Bulkley, Dunton & Co., 30 ds., 200
Rms. Machine Finished Book Paper, 26 x 40 - 50, @ $5, $ ; also
50 Rms. Buff Cover Paper, 21 x 26 50, @ $6.88, $, Total, $
Paid cash for circulars, $/O ; for postage stamps, $9.
f>. Sold Western News Co., Chicago, on %,25 copies April ; 40 do. May ;
-85 do. June Total, 150 copies, @ 30?, $ Received cash for
70 subscriptions, as per Subs. Reg., $35O / also for sales, per P. C. B.
$15.50.
* Debit Magazine account for this and the following item.
t Debit Printing and Manufacturing account.
% Credit Subscriptions account. This amount represents the estimated cost of supplying
the magazine to subscribers for the time paid for, but not yet elapsed, and inasmuch a.s tho
new firm is expected to complete the engagements entered into by the former proprietor, this
item constitutes a liability, and must be treated accordingly.
Credit Subscriptions account.
I Credit Magazine account.
** Debit Printing and Manufacturing account.
APPENDIX. 141
7. Received cash for advertisements, $/5O. Paid salaries in cash,
$75 ; also sundry expenses, per Ex. Bk., $3 .8 5. '
i). Received cash of National News Co., in full of % , $ .
Received for 40 subscriptions, as per Subs. Reg., $2OO ; also for sales per
P. C. B., $25.
10. Sold N. G. Miller, Boston, on '#, 20 copies Jan.; 30 do. Feb.; 20 do.
March ; 30 do. April; 55 do. June. Total, 155 copies, @ 38^, ,* also
5 Bound Volumes, hf. morocco, 1883, @ $6, $ Total bill, $
11. Received from Western News Co. 100 copies March, not disposed of.
for which we credit them @ 30^ per copy, $ , Received cash for
86 subscriptions, as per Subs. Reg., $&3O.
12. Cash sales per P. C. B., $20. Vdd cash for copyright, July
number, $/.*
13. Bought for cash 1 Herring's Safe, No. 3, $&5O. - - - Received
cash for 20 subscriptions, as per Subs. Reg., $1OO.
14. Salaries paid in cash, $8O ; also sundry expenses, per Ex. Bk.,
$?o. 75. Received from our printers, J. J. Little & Co., July edition,
19^00 copies. We credit their account for the following items :
Composition and Electrotyping, Text 154,468 ems, @ $1.10 pr. M. - - - - $202.91
Composition " " Advtsmts. and Cover, 28,460 ems, @, $1.10 pr.M. 31.30
8 Extra Plates, to print 2 sets. @ 600 4.80
Electrotyping Back Strip .(50
62 hours Alterations and Rxtra Time, @ 500 31
3 Boxes for Plates, @ 750 2.25
Presswork, 10,000, 7 forms, 16 plates ea., 40 tokens, @ 500 -. 140
" " 1 form, 8 plates (2 sets) 20 tokens, @ 500 10
" " Covers, 40 tokens, @ 400 16
Binding, *' Copies, @ $8.50 per M. 85
Total $523.86t
16. Shipped Western News Co., on %, 1300 copies July, @ 30^, $
Delivered to National News Co., City, on %, 1000 copies July, @ 30?,
# - Sold N. G. Miller, on %, 100 copies July, @ 38,^, $
Received cash for advertisements, $275 ; also for cash sales,, per
P. C. B., $62.50.
15. Sent to General Post Office, for regular subscribers. 6250 copies July
issrae ; Paid postage on same in cash, 2850 Ibs., @ 2^, $ / also paid
drayage to Post Office in cash, $&.5O. Sold N. G. Miller, on %, 160
copies July, @ 38^, $ ..... Cash sales, per P. C. B., $72.8O.
19. Paid R. H. Stone for contribution to August number, $5O.
Received cash for 22 subscriptions, as per Subs. Reg., $ffO ; also for sales
per P. C. B., $3&.5O.
20. Delivered to National News Co., on %, 300 copies July, @ 30?,
$ Cash sales, per P. C. B., $63. 75.
21. Shipped Dominion News Co., Montreal, on %, 300 copies July,
@ 30^, -* Salaries paid in cash, $8O; also petty expenses..
per Ex. Bk., $9.
* Debit Expense account. t Debit Printing and Manufacturing account*
142
AP P EN DIX.
23. Paid J. J. Little & Co, cash, $523.86. Received cash fot
10 subscriptions, as per Subs. Reg., $5O.
24. Received from J. J. Little & Co., supplementary edition of July issue*
2000 copies, for which we credit them, as per bill :
Prc^s-work, 2000, 7 forms, 16 plates ea., 8 tokens, @, 50^ ... $28
" Iform, 8 " 4 " @ 500 - - - 2
" * Covers, 8 " 400 - - - 3.20
Binding, " copies, @ $8.50 per M. 17
Total $50.20
2(>. Paid cash for advertising, $25. Sent to Post Office, for sulx
scribers, 2000 copies July issue. Paid for postage, 172 Ibs., @ 20, $
28. Paid Moss Engraving Co. cash, in full of % t -* Cash
sales, per P. C. B., $6&. 5O.
3O. Received on % of Western News Co., cash, $7 JO. Credit
partners for salary, 1 mo.: S. S. Packard, $2OO ; W. A. Miller, $f5O.
Total, $ - Paid salaries due employees to date in cash, $84*.
Paid cash for rent of Telephone, $12. 5O ; Gas bill, $ 7. 5O.
Total, $
MEMORANDUM OF RESOURCES AND LIABILITIES NOT SHOWN ON LEDGER.
Resources. Back numbers of Magazine and bound vols., valued at $885.25 ?
Paper, 140 Rms., @ $5, and 26 do., @ $7, $896 ; Electrotype Plates^
valued at $33O; Furniture and Fixtures, $1250.
Liabilities. Unfilled Subscriptions, estimated at $31OO.
After properly entering the above items, the Business Accounts will show
the following balances: Credits, Magazine, $1618.50;* Subscriptions^
$15&5 ; Advertising Returns, $&9O. Debits, Printing and Manufacturing,
$578.56; Paper, $1O&8; Contributions, $295; Services, $669;
Postage, $69.&&; Rent, $15O; Advertising Expenses, $65; Expense,
$95.1O.
Entire Net Gain, $683.&O.
STATEMENT OF RESULTS AT ('LOSING.
Magazine (Back numbers) -
$885.25
QQfi
Subscriptions (Unexpired) -
"Rnlklpv Dnntrvn AT CV>
$3100
1344
Printing and Mfg. (Plates) -
Furniture and Fixtures - -
Cash -
National News Co. - - -
Western News Co. ...
Robt. Lowe Co. ....
N. I*. Miller
Dominion News Co. - - -
330
1250
10795.65
390
435
268
187.70
90
J. J. Little & Co. - - - -
S. S. Packard (Partner)
W. A. Miller (Partner) - -
50. 2O
5541.70
5491.70
15527.60
15527.60
* In order that the Magazine account may be made to show, as nearly as possible, the
actual gain on the publication, it would be well to close into it all those accounts which are
really subsidiary to it. These are Subscriptions, Printing and Mfg., Paper, Contributions,
and Advertising Returns. The Magazine account will then show a gain of $1731,94.
APPENDIX. 143
Set XII. CHARLES PARSONS, W. H. TETLOW, AND EDWARD
PARSONS, PROPRIETORS.
Characteristics. Broker's business. Buying and selling stocks and bonds on specula-
tion, and on account of other parties. Discounting notes, loaning money on bond and
mortgage, etc. Partners investing in equal amounts. Business prosperous. Net Gaia
divided unequally, as per agreement.
[The books generally used in a medium business of this character consist of a Day
Book, or Blotter, in which the transactions are recorded as they occur, and a Cash-Book t'rom
which all the entries are posted directly to the Ledger. As nearly all the transaction*
involve cash, the Journal is usually dispensed with, canceling entries being made in the
Cash-Book for such transactions as do not contain cash.]
Fames of accounts used. Charles Parsons ; W. H. Tetlow ; Edward Parsons ;
Cash ; U. S. Fours ; U. S. Four-and-a-Halfs ; Expense ; Del., Lacka.
& Western R. R. Stock ; H. H. Duncan ; Commission ; U. S. Threes ;
S. S. Packard ; Interest ; Georgia Sixes ; U. S. Currency Sixes ; Bills
Receivable ; Long Island R. R. Bonds ; Mortgages Receivable ;
Metropolitan Elevated R. R. Stock : Western Un. Telegraph Stock ;
Del. & Hudson Canal Stock ; Bills Payable ; Loss & Gain.
York, April 1, 1884. Charles Parsons, W. H. Tetlow, and
Ecward Persons unite in copartnership under the firm name of " Parsons,
Tetlow & Co." The partners are to invest equally, and losses and gains are
to be apponk-aed as follows: Charles Parsons, 40 %.\ W. H. Tetlow, 35% - r
Edward Par&ois, 25 % .
Charles Parsons invests Cash, $25OOO.
W. H. Tetlow invests $10000 U. S. Fours,* 1907, coupon, @ 121|,f
$12150 ;\ Cash, $12850. Total investment, $25OOO.
Edward Parsons invests $5000 U. S. Four-and-a-Halfs, 1891, registered,
@ 111 |, $5581.25; Cash, $194-18.75. Total investment, $25OOO.
Paid cash for books and stationery, $35 j Rent for April, $150.
* Bonds Issued by the Government drawing 4 per cent interest. Interest payable quar-
terly, viz. : January 1, April 1, July 1, and October 1. Coupon and registered.
t At the New York Stock Exchange all securities are quoted " flat" that is to say the
quoted market price is for the bond as it stands at the time, including the accrued interest,
except that after the closing of the transfer books the registered bonds are quoted " ex-
interest," which means that the interest then coming due belongs to the person holding the
bonds at the time the transfer books were closed, and not to any subsequent purchaser. The
transfer bot-ks of U. S. registered bonds are closed for the month preceding the day on which
the interest is paid.
% Some brokers use but a single account, " Securities," to show the gain or loss result-
ing from these dealings ; others make use of a few general heads, such as " Government
Securities," "Railroad Bonds," etc. ; while still others employ a separate account for eact
kind of security dealt in, as is here proposed. Another method when dealing in first elas::
securities is to employ only a "Premium" account, which is debited, when securities aie
purchased, for the amount which they cost in excess of their par value, and credited for what
they bring above their par value, when sold; the securities being counted as cash on haud for
their par value.
$ Government bonds drawi-g 4$ per cent interest, payable March 1, June 1, Sept. 1, and
Dec. 1. Coupon and registered.
144 APPENDIX.
2. Received cash for coupons of $10000 U. S. Fours, 1907, $fOO.*
Bought for cash 100 shares Delaware, Lackawanna & Western R. R. Stock,
<ffil02|, $1O2/2.6O.\
3. Received from H. H. Duncan cash on deposit, as a margin, to cover
purchase of stocks which he has directed us to make for him, $7OOO.\
4. Bought for H. H. Duncan, for cash, 100 shares N. Y. Central R. R
Stock, @ 102 1, $ . Our commission, \%, $/2.6O.^ Bought
for cash $10000 U. S. Threes, |j reg., @ lOOf (ex-int.), $
,7. Received of S. S. Packard on deposit, as margin, cash, $7OOO. - - - -
Bought for S. S. Packard, for cash, 100 shares Chicago, Burlington & Quincy
R. R. Stock, preferred, @ 113^, $ Our commission, \%, $
7. Sold for cash H. H. Duncan's 100 shares N. Y. Central R. R. Stock,
@ 105, $. Our commission, \%, $ Interest on $9262.50 for
3ds. e 6f<7, $ Remitted to H. H. Duncan check for balance due
Mm, $1220.37.
9. Bought for cash $5000 Georgia Sixes,** @ 104, $
Received quarterly dividend of 2 % on 100 shares Del., Lacka. & Western R. R.
Stock in cash, -* ff
11. Sold for cash 50 shares Del., Lacka. & Western R. R. Stock, @ 105,
-* - - Paid cash for advertising, $25.
14. Sold for cash, S. S. Packard's 100 shares Chi., Bur. & Quincy R. R.
Stock, @ 120, $ Our commission, \%, $ Interest on $10337.50
for 9 ds., @ Gfo, $ Balance to his credit, $
16. Bought for cash $5000 U. S. Fours, 1907, coup., @ 120f, $ ;
also $10000 U. S. Currency Sixes, # 1895, reg., @ 123, $
17. Paid S. S. Packard's sight draft for balance of % in cash, *
Discounted for H. D. Nichols his note, our favor, @ 30 ds. ; Face of
note, $5OO; Discount off for 33 ds., @ 6$, $ / Cash paid, $.
* We receive three months' interest. Credit U. S. Fours account.
t Stocks are usually issued in shares having a par value of $100 each, and quotations
are made at so much per cent on the basis of a par value of $100 per share. Thus, in the
above case, 102 means $102 (or $102.1-25) for $100 worth of the par value, or one share of
thr stock.
$ Debit Cash and credit H. H. Dnucan. Stock brokers require from the person for
whom they buy and " carry " stock a deposit to protect them against any loss which might
result from a decline in the value of the stock thus held. This " margin " is usually 10-20
per cent of the par value of the stock to be purchased. The broker furnishes the necessary
additional funds, charging legal rate of interest therefor.
Debit H. H. Duncan for the cost of the stock plus our commission.
J Government bonds, bearing 3 per cent interest, payable Feb. 1, May 1, Aug. 1, and
Nov. 1. Registered only.
** Bonds issued by the State of Georgia, bearing 6 per cent interest.
+t Credit Del., Lacka. & Western R. R. Stock account.
tt Those bonds are so called from the fact that the interest on them, 6 per cent, is pay-
able in currency, and not in coin, as is the case with all other Government bonds now
outstanding. They are payable 30 years from date, and mature at different dates from 1895
to l&K). Interest payable Jan. 1 and July 1. Registered only.
A P P E N D I X .
145
7.9. Bought for cash $5000 Long Island R. R. 5# Bonds, @ 102, $
- Sold for cash $10000 U. S. Fours, 1907. coup., @ 123 J, $
22. Bought for cash $5000 U. S. Currency Sixes, 1899, reg., @ 131,
<$ - - Procured for Byron Horton the discounting of his note,
< 60 ds., for $6OOO ; Received brokerage, %, in cash, *
23. Loaned W. A. Miller, for one year, interest at 6% per annum,
$5OOO, receiving as security his bond and mortgage on Paterson prop-
erty.* - - Sold for B. W. Jones 300 shares Illinois Central R. R. Stock.
Received commission, \%, in cash, $
29. Sold for cash $10000 U. S. Threes, reg., @ 101, $
Bought for cash 100 shares Metropolitan Elevated R, R. Stock, @ 99, &
also of B. White on our acceptance @ 10 ds. (interest @ 6%), 200 shares Dei.
& Hudson Canal Stock, @ 94|-, $ , and 100 shares Western Union Tele-
graph Stock, @ 62f, $ Total, $
30. Sold for cash $5000 Georgia Sixes, @ 101, $ / $5000 Long Isl.
R. R. Bonds, @ 100, $ ; 50 shares Del., Lacka. & Western R. R. Stock,
<a 105|, $ - - Received quarterly dividend of \\% on 100 shares
Western Union Tel. Stock, & Paid current expenses in cash,
MEMORANDUM OF RESOURCES AND LIABILITIES NOT SHOWN ON LEDGER.
JfcaoMraw. $5000 U. S. Fours, coup., @ 121, $ ; $5000 U. S. Four-and-
a-Halfs, reg., @ 112 1, $ y $10000 U. S. Currency Sixes, 1895,
@ 123i, $ ; $5000 U. S. Currency Sixes, 1899, @131f, -*
100 shares Met. Elevated R. R. Stock, @ 98^, $ ; 200 shares Del.
& Hudson Canal Stock, @ 94f , $ / 100 shares Western Union
Tel. Stock, @ 61f , $ Interest Receivable : Accrued interest
on W. A. Miller's mortgage, $5000 (7 ds.), @Q%, $
Liabilities. Interest Payable : Accrued interest on our acceptance, favor of
B. White, $25187.50 (1 day), @ 6 % , $ ; also disc, for unexpired
time (20 ds.) on H. D. Nichols's note, @ 6 % , $ Total, $
Entire Net Gain, $522.89.
STATEMENT OF RESULTS AT CLOSING.
Resources.
U. S. Fours - - - -
U. S. Four and-a-Halfs -
U. S. Currency Sixes
Met. Elevated R. R. Stock
Del. & Hudson Canal Stock
Western Union Tel. Stock
Cash -
Bills Receivable
Mortgages Receivable
Interest Receivable - -
* Debit Mortgages Receivable account.
Receivable account.
- $6050
- 5625
Interest Payable
5.87
- 18918.75
Charles Parsons -
- 25209.16
- 9825
W. H. Tetlow
- 25183.01
- 18950
Edward Parsons - -
- 25130.72
- 6187.50
- 29654.18
- 500
- 5000
5.83
100716.26
100716.26
This account is treated in all respects like Bilta
146
AP P E ^ DIX.
FORMS OF AUXILIARY BOOKS,
Following are given forms of auxiliary books in general use. The latter
form of Cash-Book may be used also as a principal book, a column being pro-
vided for the Ledger pages. Model of Bill-Book will be found on page 132.
CASH-BOOK. TRANSACTIONS OF SET VII.
New York, 3/r/iy, 1884.
1884
May
OKfk
en
-n ^w- an ta . tl0nel j
5
Sold from T. & H.'a Sales, No. 1, 50 brls. Flour - $11.40
5TO
OCA
u
f>25
u
1000
10
Sold from T. & H.'s Sales, No. 2, 75 brls. Pork - 20
1500
2000
lo
90
Sold from Wheeler's Sales, No. 1, 500 bush. Wheat - 3.23
1625
1COO
oq
1375
1875
370
10645
10645
*
370
CASH - BOOK.
New York, May, 1884.
1884
.
_. o T , ,
^000
May
5
T. & H/s SALES, No. 1 - 50 brls. Flour - - - $11.40
570
MDSE - - - 25 u u St L Ex 14
350
225
10
T. & H.'s SALES, No. 2 - 75 " Pork - - 20.
1500
13
WHEELER'S SALES, No. 1 - 500 bush. Wheat - - 3.25
1625
OQ
1375
TOTAL CASH RECEIVED
10645
10645
10645
370
_^.
A P P E N DI X.
14?
SALES -BOOK. TRANSACTIONS OF SET IV.
Buffalo, March 2, 1884.
MILLARD FILLMORE, City. Note at 3 months.
1 Set Enameled Furniture 75
1 ' Black Walnut Furniture (oiled) .... 375
1 Carved Rose-wood Bureau 100 450
JAMES TRUMAN, Rochester, N. Y. Cash.
1 Mahogany Settee 45
6 Parlor Chairs $6.00 | 36
1 Rose-wood TSte-a-Tgte 75
1 B. W. Library Book-case 80
4-
A. W. SMITH, Meadville, Pa. On
1 B. W. French Bedstead 50
1 Extension Dining Table 25
1 Enameled Bedroom Suit T -
J. H. GOLDSMITH, Detroit, Mich. Note at 60 ds.
6 Gothic Chairs $7.00 42
1 B. W. Dressing Bureau 55
1 French Mantel Clock 75
6 R. W. and Brocatelle Parlor Chairs, - $10.00
GEORGE T. SMYTHE, Syracuse, N. Y. Cash.
12 Dining Chairs $3.00
1 B. W. Child's Crib 15 |
1 Ornamental Etage're .---- 45
TOTAL SALES j 1174
TRANSACTIONS OF SET VII.
Neiv York, May, 1884
1884 ~"~
JMay 1 FURNITURE For office
EXPENSE Books and Stationery - - 50
2 FIRST NAT. BANK - - - Deposited 4000
1000
10 " " " - - . " 2000
20 " " " . . - " 1000
24 " " ' . . . ' 1875
TOTAL CASH DISBURSED 10275 10275
Balance - - \ 870
10645
148
A P P EX D IX.
COMMISSION SALES
Thornpsoii & Hayes's
1884
Bush.
Eye.
Bush.
Oats.
May
14
-JK
500
300
Cash. Freight and Drayage
180
10
07
.).)
07
.)](
94-
Thompson & Hayes's Net Proceeds -
678
76
r
=
500
300
=
=
895
=
BANK CHECK -BOOK
PASS-BOOK.
DATE.
DEPOS-
ITS.
CHECJ
1884
May 2
" 6
4000
1000
375
247
847
Dr. FIRST NATIONAL BANK IN
% WITH CBAS. SEYMOUR. Cr.
1884
May 2
" 6
Cash, P. -
" P. -
Balance -
4000
1000
1884
" 7 6
" 8
|
Ck. No. 1 j
" 2!
3
Balance
375
225
247
50
50
5000
5000
4152 50
DEPOSIT SLIP.
Deposted in
gmi Rational fanl*.
BY CHARLES SEYMOUR,
New York, May 2, 188U.
41 52. *0
Bills
Spec
Chec
1774
1200
500
125
400
4000
50
50
I
,
to - -
_
A P P E N D I X .
149
BOOK. SETS VII AND VIII.
Sales, .No. 3.
1884
Bua'i.
Rye.
"WTO
Bush.
Oats.
7Oft
May
OAA
Pish fiJWA
1QK
QQK
500
300
~895~
~~
AND AUXILIARIES. -SET VII.
1.
May 4
S. S. Packard.
So)
^Vo. I . TVeu; Ybr7, jWaz/ ^. 1 8 $4.
-first National Bank.
(Pay tn ft fi (Pa^l-ca-T'-i- r ^ ^>-
5p5
^"hT.66 HundrBcL cm^- t^evpnty-fivp C&ollGuvs
Bent - - -
375
H
$375-4-^. Charles Seymour.
&.
May 6
Star Ins. Co.
f&R
fev
No. 2. JVew York, Jtfcuy 6, 384
first National Bank.
Cpai,/ to, 8t&T InsuTCknoB Go OT or-'i-f'-T
Premium on
Warehouse -
225
1
QTtuo Hundred and twenty-five -(Dollars
$g5-f*fo. Charles Seymour.
3.
May8
/<f
vPd
8
No. 3. JJew York, Jtfay 8, 12*4.
iFirst National jBank.
(Pay t n Erri'pire 'Lin** or nr-l.p-r
Freight - -
247
50
i
c Tu)o Hundred Forty-seven and -f-fo ('^Dollars.
$47 f^Q. Charles Seymour.
|
No. 4. JtewYork, 1??
first National Bank.
(Pay to - or or r.
'-S
... f~/^r>]lnr<*
%
$
^
150 APPENDIX.
PARTNERSHIP SETTLEMENTS.*
2. C, D, and E are partners, each investing 10000, and each to share ^
of the gain or loss. The resources and liabilities at the close of business are
found to be as follows, viz.: Merchandise on hand, per inventory, $8159.50;
cash on hand, $5012.88 ; personal accounts due the firm, $4235 ; notes and
accepted drafts (bills receivable) on hand, $5000 ; real estate, $8000 ; bonds
and stocks, $12000 ; owing by the firm to sundry persons, $5o05 ; firm's notes
outstanding (bills payable), $3000. C has withdrawn during the year
$1247.87; D, $1400; and E, $1489. What is each partner's interest in the
concern at closing ?
V. C, D, and E are partners, sharing the gains and losses equally. C's net
investment was $8752.13; D's, $8600 ; and E's, $8511. During the year the
firm's gains were as follows : Merchandise, $8529 ; stocks arid bonds, $650 ;
interest, $985.25. The cost of conducting the business was $2125. What
was each partner's interest at closing?
3. M and N are partners, M sharing of the gain or loss and N \. M
invested $15000 and N $5000. At the close of the business year, the resources
and liabilities of the concern are as follows : Cash on hand, $2128 ; bills pay-
able, $4000; bills receivable, $3000; the firm owes sundry persons, $8375;
due the firm from sundry persons, $16427; rent paid in advance, >[ 375 ; mort-
gage held by the concern on the property of A. G. Pope, $5000 ; accrued
interest on the same, $150; store fixtures valued at $835; merchandise on
hand, $9410; accrued interest on firm's notes outstanding, $112; accrued in-
terest on notes held by the firm, $75. M has withdrawn $2465 ; and X,
$2273. According to the agreement, each partner is to receive a salary ot
$2500. What are the separate interests at the close of the business ?
4. A and B are partners, A investing f of the capital, and 13 *, ; the gains
or losses to be shared in the same proportion. The following is an exhibit of
the business, excepting the partners' accounts, at the close of a certain period :
Resources, cash, $3775 ; Stone & Co., $150 ; A. R. Mead, $1200; bills receiv-
able, $5500 ; interest on the same, 125 ; merchandise, $5140. Liabilities, L.
Blair, $500; W. H. Rice, $723; Martens & Bultman, $517.64; bills payable,
$3300 ; interest on the same, $169. The net gain during the year was $3174.
What was each partner's original investment ?
5. Upon a close valuation of the personal accounts due the firm in the
preceding example, the partners are convinced that Stone & Co.'s is worth no
more than 50 % of its face ; and A. R. Mead's, 25 % of its face. Upon this
valuation what would be the gain, and what the condition of the partners'
accounts at closing ?
(i. P and Q are partners, each to receive interest on his net investment
at the rate of 6^ per annum, and the net gain or loss to be divided equally,
P invests, Jan. 1, $5000 ; Mar. 1, $4000 ; June 16, $1500 ; and draws out Apr,
16, $2500. Q invests, Jan. 1, $8000 ; Sept. 16, $2000 ; and draws out June 1,
* From the " PACKARD COMMERCIAL ARITHMETIC."
APPENDIX. 151
$1500 ; Nov. 11, $500. At the close of the year, the net gain is found to be
$4475.25, without taking into account the interest on the partners' accounts.
What is the amount due each partner after the gain is adjusted ? (Time by
Compound Subtraction.)
7. A and B have been doing business as partners, A sharing | and B ? of
the gains and losses. A invested $4500, average date, Mar. 25, 1882 ; and
drew out $2700, average date, Sept. 12, 1882. B invested $7200, average date,
June 17 ; and drew out $3750, average date, Oct. 25, 1682. At the time of
their dissolution, Jan. 1, 1883, the debts of the firm were all paid and they
had on hand belonging to the firm $8750 in cash. How shall the money bo
divided, each being allowed interest at Q% on his investment and charged
with interest at the same rate on the amounts drawn ? (Time by exact days.
Interest 360 days to the year.)
8. A and B are partners, A having % and B f interest. A advanced in
business $12000, average date, Jan. 12, 1883; and drew out $1265, average
date, Oct. 20, 1883. B advanced $7500, average date April 5, 1883 ; and drew
out $2560, average date, Nov. 25, 1883. Jan. 1, 1884, A purchases B's interest
in the business, and at that date the assets are as follows : Cash, $5800 ; mer-
chandise, $6250 ; notes on hand, $7300 ; accrued interest on the same, $387.14 ;
personal accounts, $5700. The liabilities are as follows : Notes outstanding,
$4200 ; accrued interest on the same, $227.65 ; personal accounts, $2500. How
much is B entitled to, 5^ of the personal accounts being considered uncol-
lectible, and interest being reckoned on the partners' accounts at % per
annum (3(55 days to the year) ?
.9. Four merchants ship goods on joint account. A puts in $6000, B
$5500, C $4200, and D $4800. What will be each man's share, if the gain is
$9200?
10. Five persons having claims against the Government, placed their
claims in the hands of an agent for collection ; A's claim amounted to $500,
B's to $425, C's to $300, D's to $250, and E's to $175; but, after the agent had
deducted his fees, there remained only $1237.50. How much did each claim-
ant receive?
11. A, B, and C are partners. A puts into the concern $3000, but with-
draws half of it at the end of 6 months ; B puts in $2000, and adds $500 to it
at the end of 4 months ; C puts in $2500 for the whole year. The gain during
the year is $1700. What is each one's share ?
12. Three contractors agree to build a road for $10000. A has 25 men
at work for 16 days and 30 men for 34 days. B has 40 men for 10 days and 45
men for 40 days. C has 48 men for 50 days. C receives $200 extra for super-
intending the work. How much is each contractor entitled to ?
13. J, K, and L are partners, gain or loss to be divided according to
average investment. J invests as follows : Jan. 1, $6000 ; Apr. 1, $4000; K
invests, Jan. 1, $8000; L invests, Jan. 1, $7000; Apr. 16, $2500; and draws
out June 115, $3500. At the end of the year the net gain is found to be
$4135.60. What is each partner's share? (Time by Compound Subtrac
iion.)
152 APPENDIX.
1 4. A and B are partners for one year, the gain or loss to be divided in
^)n>po:tion to their average investments. A invested, Jan. 1, $8000 ; June 16 r
.si 500; Aug. 1, $2500; and drew out, May 1, $1500. B invested, Jan. 1,
^LOOOO ; April 1, $500 ; and withdrew, Aug. 16, $2500. How much should A
Invest Sept. 1 to entitle him to one-half the gain ?
15. A, B, and C form a copartnership under the following conditions :
A is to manage the business, and to receive therefor $2400 per annum, which
amount is to be credited as July 1. He is to receive interest on his salary
and to pay interest on sums withdrawn at the rate of 6^ per annum. B and
C are to furnish the capital, and to receive interest therefor at the rate of 6 %
per annum, The net gain or loss to be divided equally. B invests, Jan. 1,
$10000 ; Apr. 1, $5000. C invests, Jan. 1, $10000 ; July 1, ^5000 ; and draws,
out Sept. 16, $500. A draws out, Feb. 1, $200 ; Mar. 1, $400 ; July 11, $500 ;
Oct. 1, $200 ; Nov. 21, $100. At the end of the year, the gain without
taking into account either the salary to be paid to A or the interest on the
partners' accounts is $8437.16. What will be the balance of each partner's
account, when all the items have been properly entered ?
J.&. A, B, and C are partners, A investing $25000 capital, B $5000, and C
nothing. The proportionate interests are : A 60 % , B 25 % , C 15 % . At the
expiration of the term of copartnership, and after the gains and losses have
been adjusted, A's credit of capital stands intact, B has a credit of only $1000^
while C has overdrawn his account $8534. C being insolvent, how much
must B pay into the concern to adjust his share of the loss?
J7. M, the owner of a mill, employs S, a miller, under the following
conditions : M is to furnish the requisite capital, and S to receive, in lieu of
salary, \ of the profits. M has a store connected with the mill, on the books
of which are entered all time sales of mill products. The grain, etc., for the
mill is furnished by M. At the beginning of the year the value of the grain,,
flour, feed, etc., is $1727. During the year M's purchases for the mill amount
to $19275. S has received for cash sales $16337, of which he has paid over
to M $15550. The sales on account, as shown on M's books, amount to $8^75 :
and the value of the products on hand is $2828. During the year S has pur-
chased goods at M's store to the amount of $837.65. How much is owing to-
S at the expiration of the year ?
18. A, B, and C are partners, A sharing f of the gain or loss, B ?, and
C i. Interest is to be reckoned at the rate of 6% per annum (365 days to the
year) on the partners' accounts, and each partner is to receive a salary of
$1800, to be credited as July 1. A invested, Jan. 1, $16000: and withdrew
during the year $4875, average date, Aug. 21. B invested, Jan. 1, $20000 ;
and withdrew $6224, average date, June 18. C invested, Jan. 1, $5000; and
and withdrew $2625, average date, July 31. Jan. 1, of the following year,
the merchandise account shows a gain of $18437.16 ; the interest account (not
including the interest on the partners' accounts) a gain of $586.38 ; sundry
consignment accounts show a net gain of $1287.14. The expense account
(not including the partners' salaries) shows a loss of $3424. 75. What is each,
partner's interest in the business at closing? How will A be affected if eaclv
partner's salary is increased to $2500 ?
APPENDIX.
If). A, B, and C are partners in business, investing as follows : A, $4000;
B, $6000 ; C, $8000. The partners are to share the profits and losses in pro-
portion to their investments. Each is entitled to compensation for services at
the rate of $1800 per year. At the end of the year B and C purchase the
interest of A, and in the payment therefor, it is desired that the remaining
members shall so invest that their interests shall be equal. It is mutually
agreed that the " good will" of the business shall be valued at $3000 in the-
final settlement. It is also agreed that a discount of 5 % shall be allowed
upon all uncollected accounts as a fund to meet bad debts and costs for col-
lecting. A statement of the business previous to closing shows the following
results : Merchandise, horses, wagon, office fixtures, and cash on hand,
$12410; sundry debtors, $17030; sundry creditors, $4050; expense account
(not including partners' salaries), $2400; profit on merchandise sold, $15332.
A withdrew $1150; B withdrew $2267; C withdrew $2125. How much
must B and C each invest or pay A, and how should the books of the new
firm be opened ?
NOTE. B and C, not desiring to have the new books encumbered with the contingent
accounts of " good will " and " reserve fund," closed these accounts after a settlement was
made with A.
2O. A and B are partners in business. A is to furnish the capital, and to-
receive interest at the rate of \/o per annum. B is to give his entire ener-
gies tr the business, and to receive therefor a yearly salary of $2000, payable
hi monthly installments at the end of each month. The net gain or loss is to
be divided equally. A's investments are as follows : Jan. 1, $7000 ; April 1,
$3000; July 1, $2500 ; Aug. 1, $5000. Jan. 1 the firm assumed a note for him
of $2000, due and payable July 1. The following amounts, at the dates-
named, were drawn out by each of the partners; A April 10, $300>; May 15,
$150; Aug. 20, $500. B Jan. 31, $166.67; Feb. 15, $200 ; May 1, $150;
July 1, $300; Aug. 15, $100 ; Sept. 1, $125 ; Nov. 1, $200. At the end of the
year their books show the following condition of the business:
Resources. Liabilities.
Cash . . .$5175.10 Personal accounts $3150
Merchandise .... 13250.17 Notes 1500-
Personal accounts ... 6750
Notes 5000
With what amount should each partner be credited?
NOTE. B's salary is due in equal monthly amounts, at the end of each month. If the-
actual sums drawn by him at the various dates are not equivalent to this, let the matter b
adjusted on the basis of interest at 6% per annum.
1. C, D, and E engage in a professional business January 1, with a cap-
ital of $6000, which is contributed equally. Each partner keeps an account
of his services, and also of his receipts and expenditures, and the net gain
is to be divided equally at the end of the year. It is also agreed that each
shall pay into the concern interest on all money used, at the rate of 6^ per
annum. At the end of the year the following statements are rendered :
C's services, as recorded, have produced $7500. His collections have-
been as follows: Jan. 15, $150; Feb. 10, $317.25; March 1, $500; April 12^
APPEND TX.
$175; April 20, $600; June 10. $325; July 1, $412.25; Sept. 9, $174.25;
Oct. 1, $250 ; Dec. 15, $412.18 ; Dec. 31, $600. He lias paid expenses tor the
concern as follows: April 10, $125; May 15, $25 ; July 1, $137.50.
D's services have come to $8000. He has received cash as follows :
March 1, $375 ; April 10, $122 ; April 15, $216.25 ; June 10, $159.75 ; July 15,
$417; Oct. 5, $813.75 ; Dec. 10, $400; Dec. 20 $500. He has expended for
the concern, July 1, $230.
E has earned $8750 ; and has collected, Jan. 12, $421 ; Feb. 1, $750 ;
March 20, $318.75; March 31, $127.50; April 19, $613.75; July 30, $1500:
Aug. 12, $129.70; Sept. 19, $329.20; Oct. 15, $459.33; Nov. 19, $517.84;
Dec. 31, $750. He has paid no expenses for the concern.
There remains, earned and uncollected, $11413.25. A careful examina-
tion of the accounts convinces the proprietors that not more than $500 of this
amount is doubtful; and they base their net earnings on the undoubted
resources. How will each partner's account stand when the proper adjust-
.ments have been made and recorded ?
MISCELLANEOUS EXAMPLES.
[These problems are serviceable in testing the student's proficiency in the work passed
-over, and his skill in solving practical questions in accounts. Some of the examples admit
of various solutions. In all such cases it would be well to require the work to be performed
by the several methods, thus bringing out more clearly all the points involved, besides
affording additional proof of the correctness of the work.]
1 . A merchant commenced business with a cash capital of $4000. At the
end of the year, the following facts appear from his records : Amount of Cash
received, $17500; amount paid out, $13750; J. Smith's account is debited
-$1500, and credited $750 ; Robert Brace's, Dr. $900, Cr. $595 ; T. Sloan, Dr.
$915, Cr. $1417 ; Value of Merchandise unsold, $500.
Required, the net capital at dosing ; as, also, the net gain during the year.
2. A commenced business with the following investment : Cash on hand,
$1500 ; Cash in Bank, $5750 ; Notes on hand, $2500 ; Interest due on same,
$150; Robert Smart owes on %, $2000. His losses and gains during the
year are as follows : Gain on Merchandise, $1251.25 ; Do. on Shipments,
$1595 ; Expenses, $375 ; Loss on bad debts, $800.
Required, his net capital at the close.
3. Henry Smith and Win. Jones are partners, each investing $10000 in
the business; gains and losses to be divided equally. During the business
Smith has withdrawn $500, and Jones $700. At the close they ascertain that
there has been a net gain of $1575. The Balance: Sheet exhibits the following
list of property and debts: Property. Bank Stock, $5000; Merchandise,
$750; Notes, $4000; Personal Indebtedness, $2175; Cash, $; . Debts.
Personal accounts, $2500 ; Notes, $2750.
Required, the amount of Cash on hand, and the condition of the partner.?
accounts.
APPENDIX. 155-
4. Commenced business without capital or liability. At the end of the
year my Ledger shows the following balances :
Debits. Credits.
Cash - - - $1700 Bills Payable - - ... $1500
Merchandise 475 Robert Schenck 2150
Bills Receivable .... 500 Peter Misner ...... 300
Expense 175 Commission 175
Interest 25 James Connor 1250
Stuart & Co. 2500
$5375 $5375-
I have Merchandise on hand valued at $1275.
Required, my capital at the close.
.7. The following is an exhibit of my business, at the close of a certain
period :
Resources. Liabilities.
Cash $575 A. Van Wyck $500
Bank - ' 3200 Sanborn & Co. - - - - - 250
Stuart & Co. 150 H. & J. Lewis - ..... 473
Rathbone & Dick 1200 J. McFarland 311)
Government Bonds .... 4000 Bills Payable 3000
Bills Receivable 1500 Interest on same 150>
Interest on Notes .... 125
Mortgages 3750
Merchandise 1390
My net gain, based on the above exhibit, has been $3175.
What was my original investment f
6*. Suppose, in the above example, that Stuart & Co.'s account is worth-
no mo:e than 25 /o of its face, and Rathbone & Dick's but 50% of its face.
Upon this valuation, what has been my net gain f
7. The account showing net investment has been torn from my Ledger,
leaving all the other accounts intact, as follows :
Debits. Credits.
$17310 15 Cash $15976 12
8132 50 - Merchandise - - 3795 50
117 25 Expense
1400 Bills Receivable
12 50 Interest
175 Johnson & Co.
The Merchandise remaining unsold is valued at $5795. There were no>
amounts invested or withdrawn after the opening of the business, and the-
net gain has been $1328.25.
Required, the original investment.
156 APPENDIX.
S. The following is a Trial Balance of my Ledger :
.Debits. Credits
Stock $1284
-.$12150 Cash -.-.-. 11012
7500 - Merchandise - 6125
8000 ....... Real Estate 9150
4000 Bills Receivable - 2000
3000 Bills Payable 5100
129 Interest 212
350 Expense
172 J. Whitcomb
H. Van Renssalaer 418
$35301 $35301
My net gain lias been $1008, and the only property I have on hand, not
exLibited in the Ledger, is unsold Merchandise.
Required, its valuation.
f). My Merchandise cost $15000, and I have sold what has produced
$8531.25. My average gain in the sales has been 30 % on the cost of the
goods sold.
Required, the value of unsold Merchandise, estimated at cost.
10. A, B, and C are partners, equal in interest. Some time ago A drew
out for private use, $500, and C, $400.
How may the matter now be equitably adjusted between them so as to charge
them with eqwd amounts on the books f
11. D and E are equal partners. They have on hand a note for $2000,
which E considers doubtful. D agrees to buy E's share ($1000) for $500.
Required, the entry on the books.
12. F admits G as partner, on condition that the latter shall assume
notes outstanding to the amount of $3000.
What is the required entry f
13. H, the sole proprietor of a business, owes his clerk, J, the sum of
$500, for which his note is given. Afterwards the clerk, J, is taken in as a
partner, having one-third interest in the business. When the note falls
due, J draws the amount from the concern, and delivers the note to H as
canceled.
Has J been paid in full f If not, what entry can be made on the books to
properly adjust the matter ?
14. Suppose, in the above case, that J had put the note into the concern
AS a part of his investment ; and when it matured, the amount was paid over
!>y H to J.
What entry would properly adjust the matter f
APPENDIX. 157
15. Suppose, in the latter case, that H put the money into the concern,
and took up the note.
What would be the proper entry ?
11. K owes L $1000 ; L owes M $1000 ; and M owes K $1000. In pay-
ment of his debt, K gives to L his sight-draft on M for the full amount.
What debit and credit entries in each of the persons' books will this transac-
tion necessitate?
1 T. N, O, and P are equal partners. At the end of a certain period the
following amounts are due them from the business for services: N, $250; O,
$225 ; P, $125.
Required, the proper Journal entry for settling this matter directly between
the partners, permitting no accounts except those of the partners to be used.
18. Q, R, and S are partners equal in gains and losses ; each to receive
interest on his average investment. At the end of the year it is ascertained
that Q is entitled to $56.95 interest ; R to $67.40 ; and S to $16.50.
Required, the proper Journal entry for adjusting this matter directly
between the partners without the intervention of the Interest %.
If). Suppose, in the above case, that the losses and gains are not to be
divided equally, but are to be apportioned as follows: Q, T 6 ^; R, -fa ; S, 3 V
What would then be the required entry f
20. T, U, and V are partners, equal in gains and losses. Each partner
is to receive interest on his average investment, or pay interest on his de-
ficiency. At the close of the year T is entitled to $72.50, and U to $50.75;
while V is charged for $43.25 on his insolvency.
Required, the proper Journal entry which shall adjust the matter without
the aid of any accounts but those of the partners.
21. Suppose, in the foregoing example, the division of losses and gains
Is not to be equal, but is to be made on the following basis : T, 45^ ; U,
Required, the proper Journal entry.
158 APPENDIX.
DETECTION OF ERRORS IN TRIAL BALANCES.
The following hints apply to the detection of errors in trial
balances, or in any operation in which errors are made in addition
or subtraction, or in transferring numbers from one place to
another.
1. Ascertain the exact amount of the error. Much time is sometimes
wasted in looking for errors which do not actually exist.
2. Revise carefully the additions of the Trial Balance before looking for
the error in the Ledger or other books.
3. If the error is in one figure only (as 2000, 100, 50, etc.), it is probably
an error in addition or subtraction.
4. If an amount is entered on the wrong side of an account, or its added
when it should be subtracted or vice versa, the error will be twice the amount.
5. If the digits of any number are written to the right or left one, two, or
three places, and the error be divided by 9, 99, or 999 respectively, the
quotient will be the number.
Thus, if $427 be written $4.27, the error will be $422.73 ; which divided
by 99 (by 9 and 11), the quotient will be $4.27.
The number of 9's by which the number can be exactly divided is equal
to the number of places which the number has been transferred to the right
or to the left.
6. If two consecutive digits of any number are transposed, the error will
be a multiple of nine ; and the quotient obtained by dividing the error by 9
will express the difference between the digits transposed.
Thus, ff 437, be written 473, the error will be 36 ; which divided by 9-
produces 4, the difference between 3 and 7. The same error, 30, will arise if
the figures transposed are and 4, 1 and 5, 2 and 6, 4 and 8, or 5 and 9.
7. If the error contains a number of figures, it is probable that some
account or item has been omitted.
8. Look for the error systematically, and not in certain portions of" the
work selected at random.
9. Errors are frequently the result of a neglect to write figures legibly, or
a failure to arrange them in true vertical columns, so that units will stand
under units, tens under tens, etc.
14 DAY USE
RETURN TO DESK FROM WHICH BORROWED
LOAN DEPT.
This book is due on the last date stamped below, or
on the date to which renewed.
Renewed books are subject to immediate recall.
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THE UNIVERSITY OF CALIFORNIA LIBRARY