$B ET7 b7D >\^^'^ SiWi^i^-iV^k^iiiiiV-; Jk ^ ^ ^ ^ V N> X ^W iililiiiill ,.j>M»:»» :»:»: i^>! ^^ vU.iij!^ m .%... iMiiii ^^1^ ^^r<:r* l» \rr j^^^§^ THE NEW,,' ■•=•■== > ■ ■•■'=' BRYANT AND STRATTON COMMON SCHOOL BOOK-KEEPING; EMBRACING SINGLE AND DOUBLE ENTRY, AND ADAPTED TO INDIVIDUAL AND CUSS INSTRUCTION IN SCHOOLS AND ACADEMIES. By S. S. PACKARD, Proprietor of Packard's New York Business Collegb, AND H. B. BRYANT, Founder of the Bryant & Stratton Chain of Business Colleges, IVISON, BLAKEMAN, TAYLOR & CO. NEW YORK AND CHICAGO, • • • • •• • •• • • • * ' . •• • • •• • • • ••• . , Copyrighted by H. B. BR Yaw x and S. & PACKARD, 1876. iEDUGATlOr*- OKPf^ a^c PREFACE. This little book, almost in its entirety, was prepared and published more than seventeen years ago ; and it is not too much to say for it that during the intervening time it has fairly divided with other works on this subject the growing patronage of public and private schools throughout the country. That it has answered the purposes which called it into existence is evi- dent, not only in the increasing demand for it, but more pointedly in the almost universal testimony of those best qualified to speak, viz. : the teachers who have used and are now using it as a text-book. Before undertaking the revision, its principal author communicated with a large number of this class, asking for criticisms and suggestions, and especially desiring to know if any radical changes as to matter or arrangement were desirable. The uni- form reply has been that no such changes would add to the efficiency of the work, while they might cause more or less derangement and confusion in the large schools and classes now using the book. Of course, the last considera- tion would have little weight by itself, but if the changes, which might easily have been made, and which, under the plea of novelty and freshness, there was great temptation to make, would be likely to result in no real advantage, then the force of the argument must be recognized. But the author — much as he respects and would defer to the judgment of teachers who are, and are to be his patrons — could not afford to act in this matter contrary to his own convictions. A deference to the opinions of others may be a graceful and proper tribute to the wisdom supposed to exist in " a multitude of counsel,' but an author can show no greater respect for this wisdom than to follow strictly the lead of his own well-founded convictions. And it may safely be assumed that the practice and experience of seventeen years' close attention to the study and appliances of the subject covered in this treatise has not left him without these well-founded convictions. And that they have a full expression in the aspect of the revised book as here presented may also b(i assumed. A work of this scope does not require, nor should it have an elaborate philosophical statement of principles at the outset ; nor should the plain, practical lessons which are its substance be environed with fine-spun theories or nicely-shaded definitions, which belong rather to the esthetics of logic than to the sharp enforcement of primal facts. The purpose of this book is to teach the practical lessons of Book-keeping ; and its plan is to accomplish this in the most direct and positive way. To that end, before taking up the science of Accounts as enforced in Double Entry Book-keeping, a proper space is given to the more simple. 544464 PREFACE. because less comprehensive processes of Single Entry ; so that the student may get hold of the instrumentalities of his work — technically, " learn the use of his tools," before he is called to the higher possibilities of their achieve- ment. In Single Entry the form, as well as the use of personal accounts is clearly exhibited, and many of the foundation principles of the science of Book-keeping are illustrated ; and not only the characteristics of the Ledger, but the utility of auxiliary books, and their substitution for the ordinary books of original entry are carefully exhibited. In fact, that part of the book has found particular favor in the eyes of intelligent teachers. The use of the same material for Double Entry and Single Entry — as in the case of Set 3 — has afforded a most satisfactory means of distinguishing between the processes of the two methods. The enforcement of the principles of Double Entry in Part II is made with as much point and conciseness as the author could command. Nothing essential has been omitted, and no redundancy practiced. The classification of accounts differs from the former edition only in its nomenclature, which is thought to be an improvement, simply because it is more clearly the exi)res- sion of the real distinction in accounts. In the regular order of the book, the plan has been to follow each fully- elaborated set with "Practical Exercises," in which the material only is given — in the shape of memorandum transactions — from which the student is required to write up, circumstantially, all the required books of entry after the preceding models. The good results which have followed this plan have suggested to the author the propriety of furnishing similar memoranda for the written sets ; and inasmuch as it is deemed best to preserve the same order of arrangement as to consecutive pages, the desired memoranda, with such other material as the revision seemed to demand, will be found in the Appendix. It will be well if the student is required to use these memoranda strictly, in writing up the regular sets, rather than to copy from the book. The material for short sets given in the Appendix is to meet the expressed and proper demand of teachers who have felt the need of more frequent tests of their pupils' progress. There are decided advantages in reasonably long sets — and as a matter of drill they cannot profitably be omitted ; but mere routine may be carried too far, and the pupil's mind thus diverted from the application of principles which is the main purpose of teaching. But, after all, it is not presumed that any text-book is to supply that part of the work of instruction that belongs to the living teacher. A text-book is, at best, what its name implies, a book of texts, the elaboration, amplification and application of which depends wholly upon the teacher ; and it would be Baying too much for any text-book — as well as too little for the teacher — to assume that it should cover all the requirements of individual instruction, even in its material and suggestions. There is at least no such claim for this book : the best it can hope to do is to serve as a convenient aid to teachers who will supplement its lessons and vary its methods to suit individual demands and answer a good conscience in the honest discharge of duty. INTENTS. "loot. PAGES Abbheviations and Characters, 7 Plan, 8 PART I.— SINGLE ENTRY. Introduction to Part I., . 11 — 17 (UESTIONS FOR REVIEW, 18 fcsET I. — Introductory— Showing the use of the Books. Remarks, 20 Day-Book, 21, 22 Ledger, 23—25 Practical Exercises and Questions, 26 Set II. — BetaU Dry Goods. {Prosperous) Remarks, 28 Day-Book, 29—85 Index to Ledger, 36 Ledger, 87—40 Cash-Book 41—44 Statement, 45 Examples for Practice, 46 Practical Exercises, 47, 48 Questions for Review, 48 Set III. — Wholesale Dry Goods. {Adverse.) Remarks, 50 Day-Book, 51—54 Index to Ledger, 55 Ledger, 56—59 Sales-Book, 00—63 Casli-Book, 64, 65 Bill-Book, 66 Statement, 67 Examples for Practice, 68 Practical Exercises, 69, 70 Set IV. — Furniture and Cabinet Business. {Prosperous.) Remarks, 72, 73 Day-Book, 74—77 Sales-Book, 78—83 Ledger 84—87 Cash-Book, . . 88, 89 Time-Book, 90 Statement, 91 Examples for Practice, 92 Practical Exercises, 93 — 95 Questions for Review, 96 5 COKTENTS. PART II.— DOUBLE ENTRY. PAGES Introduction to Part II., 99—102 The Science of Accounts. Theory of tlie Ledger, 103, 104 Debits and Credits, 105 Principles, 106 Questions for Review, 1C7 Set I. — Produce Business. {Introductory.) Remarks, 110 Day-Book, Ill, 112 Journal, 113—115 Ledger, 116—118 General Statement, 119—121 Examples for Practice, 122, 123 Practical Exercises, 124, 125 Set II. — Grocery Business. {Prosperous.) Remarks, 128 Day-Book 129—132 Journal, 133—135 Ledger, 136—140 Balance Sheet, 141 Closing the Ledger, 142 — 147 Description of Balance Sheet, 147, 148 Examples for Practice, 149 Practical Exercises, 150, 151 Questions for Review, 152 Set 111.— Wholesale Dry Goods. {Adverse.) Remarks, . . . 154 Journal Day-Book, 155 — 161 Ledger, 162—167 Statement, . 168, 169 Examples for Practice and Questions for Review, . 170 Set in .—Gentlemen' s Furnishing Business. {Prosperous.) Remarks, 172 Journal, 173 Cash-Book, 174, 175 Sales-Book, 176, 177 Ledger, . 178—181 Practical Exercises, 181, 182 APPENDIX. Written Sets, etc., 183—195 Material for Short Sets, 196, 197 Practical Hints, 198—202 Business Forms, 203—208 6 ABBREVIATIONS AND CHARACTERS USED IN THIS BOOK. ABBREVIATIONS. Ac't . AmH. . Arts. . Apr. . Ass't'd. Aug. . , Bal.. . B. B. . Ms. . . B. Pay. B. Bee. Blk. . . BoH. . BroH. . B. W., Cap. G.B. Co. . Com. Const. Cr. . Dec. do. . doz. Br. d's. A Account. Amount. Answer. April. Assorted. August. B Balance. Bill Book. Barrels. Bills Payable. Bills Receivable. Black. Bought. Brought. Black Walnut. c Capital. Cash Book. Company. Commission. Consignment. Creditor. D , December. Draft. . The same. . Dozen. , Debtor. . Days. ea. . E. E. Emb'd. Ex. . Exch. fav. Fig'd. Fol. . For'd. FrH. gal. hhd. E Each. Errors Excepted. Embroidered. Example. Exchange. Expenses. F Favor. February. Figured. Folio. Forward. Freight. G Gallon. H Hogshead. I.B.. Ins. . Inst, Int. . Inv. . Inv't. Jan. L.F. I Invoice Book. Insurance. Instant. Interest Invoice. Inventory. J January. L Pounds. Ledger Folio. M Mar March. Mdse, . . . Merchandise. mo Month. Mgy Mahogany. N No Number, iVoo. .... November. o Oct October. O. LB. . . Outward Invoice [Book. P i>. Page. Pay^t . . . Payment P. C.B. . . Petty Cash Book. Pd Paid. Pkg Package. pr Pair. per, .... By. Prem. . . . Premium. Bec'd . B. W. . S.B... Sept. . . Ship't . Sunds. . yds. yr. . R Received. Rosewood. S Sales Book. September. Shipment Sundries. Y Yards. Year. CHARACTERS . . Account. % . . Per Cent % . . Dollars. ^ . . Cents. £ . . Pound Sterling. X . Sign of Multiplication. 8 . . Shilling. = . Sign of Equality. V . . Check Mark. 11 . One and one-fourth. + . . Sign of Addition. p . One and one-half. — . . Sign of Subtraction. 7 V . One and three-fourths. PLAN. The book is divided into two parts; Part I. is devoted tc Single Entry, and Part II. to Double Entry. Each part has eight distinct series of transactions, comprising eight complete sets of books : four of which are written out in full — the other four given in the form of memoranda for the student to arrange after the models given. In Part I., the first written set illustrates only the use of the main books, Day-Book and Ledger; the second set exhibits results; Set III. begins with a capital, representing a general merchandise business, shows the use of auxiliary books, and enforces the theory of loss and gain, by comparing the capital at beginning with that at closing. Set IV. represents a furniture business, introducing principal and auxiliary books. In Part II., the fi,rst set is introductory, used to enforce the leading principles of the science ; Set II. continues the business begun by Set I., enlarging the field and giving a wider scope of transactions — at the same time more fully presenting the theory and processes of Double Entry. This set is given in colors, as affording a better model for the student. Set III. contains the same material as the corresponding set in Part I., and is used principally to show the differences between Single and Double Entry. Set lY. is a practical set, using all the books of original entry as principal books— posting from them to the Ledger, and dispensing with the Journal, except for such entries as cannot properly appear in the other books. This set presents the eco- nomic methods of Double Entry. The intermediate Examples for Practice and Practical Exercises explain themselves. PART I. SINGLE ENTRY, « ) : ' ^ PART I. SINGLE ENTRY, INTRODUCTION. Ik getting at the true basis of a science, it is well, if possible, to follow the line of its history, and become familiar with the order and processes of its development. This is especially true of Book-keeping, for although it is purely a branch of mathematics, and as such entitled to the favor and consideration of scientific men, yet at no period of its history has it ranked in the estimation of scholars, with the more complex and abstract sciences. It is lamentably true that men will grow enthusiastic over the solution of a problem in Euclid, or the efifect of a combination of move- ments upon a chess-board, who are ignorant of the first principles of this the most beautiful and practical of sciences ; and are con- tent to pass through life, receiving and appropriating the reputa- tion belonging to men of science and erudition, while they are consciously unable to decide the simplest question in partnership settlements, or to appreciate the theory of debits and credits which lie at the basis of Book-keeping. It is difficult to account for these facts except upon the ground that Book-keeping is too practical a science, and has too much " the smell of the shop." Whatever the reasons may be, the fact is that not enough interest has been felt in the subject to trace its history, which, therefore, must be inferred rather than compiled. The prime condition of life is want, and the plans and pur- poses of life aim at supplying want. This necessity begets 11 INTRODUCTIOJir. industry and 'frugality, and lays the foundation of progress in arics and civilization^ . ; To, s^ippjj I the necessities of life the earth, through toil, is iiiade fcd yield her abundance, and the yarious channels of enter* prise and skill are laid open. The wants of man are so numerous, and the means of supply^ ing them so various, that a system of mutual dependence and ^reciprocal labor becomes not only economical, but essential ; and thus, from the very beginning of human economy has there existed the necessity of a division and classification of labor and wealth. The farmer, whose products supply hunger ; the manufacturer of fabrics whicii are to clothe the body; the artificer, whose work- manship gratifies the more refined wants ; the man of science, who contributes to the mind ; the spiritual teacher, who ministers to the higher moral faculties, and the common laborer, who does the drudgery of life, are each dependent upon all the others for the sum of material and intellectual comforts which minister to their wants ; and a mutual exchange of these comforts constitutes the foundation principle and impulse of the system of economy which we call Business. To facilitate these exchanges it is found necessary to establish some standard of value by which the relative worth of commodi- ties and services may be adjusted. The standard accepted by most civilized nations is gold and silver, which are coined in con- venient particles and become the medium of exchange. The particular necessity of Book-keeping is to preserve a record of such exchanges as would otherwise be trusted to mem- ory; although its ultimate purpose embraces other important results. Its simpler purposes are here shown. For example, John Smith is a farmer, and Thomas Jones a manufacturer ; John raises as much food on his farm as is necessary to supply his own wants and those of his neighbor, while Thomas makes clothing sufficient for the demands of both. It is now the easiest thing in the world for both John and Thomas to have food and clothing, simply by exchanging with each other their surplus products. An exchange of this kind would need no record ; and were this the extent to which com- 12 INTRODUCTION. merce had been carried, it is not likely that obstinate brains would have been puzzled with the dry formulas of Book-keeping. But suppose, further, that Thomas should happen to be in iinyne- diate want of some of his neighbor's surplus food, without the ability, at the time, to render an equivalent in his own products. He says to John, " I want food, and cannot pay for it now, but if you will trust me, I will return you an equivalent when I have completed work now in progress." The conditions being satis- factory, the food is conveyed from John to Thomas, and the promise from Thomas to John. If John is blessed with a faith- ful memory he may be able to retain the facts connected with this transaction, and thus constantly bear in mind that he owns a cer- tain quantity of clothing, which his neighbor is to bring him at a stated time. But suppose he is not willing to trust to his own memory, nor to that of his neighbor, but desires something tangi- ble which shall at least represent this prospective property — a record which will not fade with the memory, but will stand for the benefit of whom it may concern, even in the absence of those having a personal knowledge of the facts. The person relied upon to fulfill this promise is Thomas Jones, and the most natural form of record would be to write his name in a book kept for that purpose, and state the fact underneath it, thus: THOMAS JONES. Bought of John Smith, a quantity of. food, valued at Ten Dollars, for wliicli lie agrees to pay a quantity of clothing of equal value, on [naming the date of payment.] A record like the above would be intelligible as containing all the facts, and affording to John Smith a tangible evidence of prop- erty which he owns, but which is in the hands of another party; 8 id if this single transaction comprised all of this nature it would scarcely be worth while to attempt a more concise or symmetrical record. But as dealings of this kind may be very frequent, not only with Thomas Jones, but with other parties, it may be well to ascertain if some more satisfactory and less cumbrous method may not be adopted. The simple fact expressed in the foregoing record is that Thomas Jones 02ces John Smith ten dollars worth of clothing. The only 13 INTRODUCTION. events which can vary this fact are, the payment of the debt, or a part of it, overpaying it, or adding to it by subsequent purchase without payment. There are, really, but two conditions, as per- taining to persons with whom we have deaUngs on credit, viz. : that of owing, and being owed. These two conditions are exact counterparts, and so far a« they are equal, will cancel each other. It will therefore be easy to arrange these opposite facts under the names to which they pertain in such way as that not only the facts themselves, but their relative results, may be ascertained at a glance. For example : Dr. Date, Thomas Jones. Dot's. Cts, Date. Wt owe Atnu Doll,. Ofc 1878 Jan. Mar. To 1 Bbl. Flour, . " 10 Bush. Wheat, 50 1878 Jan. Apr. By 4 yds. Cloth, " Cash, , , . This form has been found by experience to be both compre- hensive and practical. It is called an account, and, as will be readily seen, is a statement of dealings with Thomas Jones. On one side are arranged the separate amounts of his indebted- ness to us, and on the other of our indebtedness to him. The difference or result will be a net amount owing either to us from Thomas Jones, or to Thomas Jones from us. In other words, if Thomas Jones owes us more than we owe him, the indebtedness is in our favor, and may be reckoned as a part of our property; while, if we owe him more than he owes us, the indebtedness is in his favor, and should be reckoned among our debts. The facts shown in the account given may be thus analyzed : On the first of January Thomas Jones purchased of us 1 barrel of flour at 110; and on the 15th of January, sold us 4 yards of cloth for enough to cancel the debt. The amounts on the opposite sides of the account will now exactly balance each other, and the result is the same as though the exchange had been made at once. Again, on the first of March he purchased 10 bushels of wheat, for $12.50 ; and on the first of April pays us in cash $5. This leaves a de- ficiency in his account of the difference between $12.50 and $5 ; 14 INTRODUCTIOSr. and we say that Thomas Jones owes us $7.50. We have thus a tangible record of property, which if left to memory might be for- gotten, and we thus become losers. It will then appear that in all cases where exchanges are effected between parties, either of whom is allowed time to per- form his part of the contract, some written record of the facts is necessary. This written record constitutes the germ of Book- KEEPII^G. From the foregoing illustration it appears that an account has two sides, a deUor and a creditor ; that upon the debtor side is shown what is owing to us, and upon the creditor side, what is owing bi/ us ; that when the debtor side is the larger, the difference will express an amount belonging to us, and when the creditor side is the larger, the difference will express an amount which we owe. In the former case the account would represent property or resource ; and in the latter, debt or liability. In the earlier history of Book-keeping, doubtless this form, or something similar, was deemed sufficient for the purposes of trade, it being absolutely necessary to have some written evidence only of such resources and liabilities as do not exist in tangible form, and which it would be unsafe to trust entirely to memory. It is evident, however, that in an extensive credit business, a book of consecutive record, giving a plain and simple account of the busi- ness as it progresses day by day, would be of essential service, and it is, therefore, the almost universal practice, particularly among merchants and tradesmen, to keep a Day-Book of some form, in which are written the transactions as they occur. An example, showing one form of this book, and also that of the Ledger, with the transactions properly transferred, Avill be seen on the following page. 16 IKTRODUCTIOK. DAY-BOOK. J{ew Yorh, January 80, 1878. Jan. Mar. 30 John Smith, Dr. To 5 yds Broadcloth .©$4 00 $20 " 10 do. Cassimere .(^ 1 50 15 " 39 do. Black Silk Dress. .(^ 1 25 37 50 " 25 do. Flannel .(a 50 12 50 " 10 do. Figured Silk .@ 1 50 15 John Smith, Or. By Cash paid on account, 100 75 These entries, carried to the Ledger, which is the Book of Accounts, would appear thus ; Dr. LEDGER John Smith. Cr. Jan. To Merchandise. 100 Mar. By Cash. 75 The advantages of a Day-Book are twofold; first, it affords a regular daily history of the business ; and next, by giving the particulars and details of each transaction in the Day-Book, the amount alone may be carried to the Ledger, requiring thus less space, and preserving a more symmetrical form of the Ledger accounts. The Day-Book and Ledger in Single Entry contain only such transactions as relate to persons. All prudent men, however, will feel the importance of having a strict record kept of the receipts and payments of cash and other people's notes, and of the issue and redemption of their own notes. This is done by means of books specially arranged for such purpose. The following are the most simple of these forms : 16 IKTBODUCTIOI?-. CASH BOOK Received. Ftiid. Jan. 1 Amount on hand, Received of James Monroe, on account, Paid Store Expenses, as per Expense Book, Lent John Thompson for one day, Received ofJacob Schuyler for BiU of Mdse, " Robert M. Hart " " " Paid A. T. Stewart in full of account, Received for petty sales, as per Cash Drawer, .... Balance on hand, ami 150 75 18 110 3sm 75 75 175 500 400 2278 75 3353 75 2 Amount brought down, .... 2278 75 BILL BOOK Bills Receivable. No. When Rec'd. Drawer or Endorser. Drawee or Maker. Date. Time. When Due. Amount. When and How disposed of. 1 2 3 4 1879. Jan. 1 " 5 Feb.l " 15 _ Rob't Mintum, Chas. Hawley, AbramDuryea, W. W. Granger, Jas. Crnikshank, David Woods, Duncan Phyfe, Ivison & Phinney, 1878 Dec. 1 1879 Jan. 5 '' 10 Feb. 15 60 ds. 30 ds. 90 ds. 60 ds. 1879 Feb. 2 Feb. 7 Ap. 13 Ap. 17 500 1000 1500 300 1879 Feb. 2 Feb. 7 Paid. Paid. Bills Payable. Ko. When Issued. Drawer or Endorsei. Drawee or Maker. Date. Time. When Due. Amount. When and How Redeemed. 1 2 3 1879. Jan. 12 Mar. 1 Sam'l Higgins, Peter Cook, John D. Hinde, Ourselves, do do Jan. 12 Mar. 1 11 li 15 da. 90 da. 60 da. Jan.30 June 2 Mays 150 750 300 1879 Jan.30 Paid. These simple and suggestive forms comprise the books com- monly used in Single Entry; and are sufiBcient for the immediate demands of business record. Howeyer, they are but the preface of the multitudinous appliances which may be made useful in the various departments of business activity, and which, in some meas- ure, will appear in the progressive steps of this little book. 17 INTRODUCTION. QUESTIOlSrS FOR REVIEW. 1. How can the true basis of any science be best estimated ? 2. Why is thi<» especially true of Book-keeping ? 3. Why has Book-keeping not usually been ranked with abstract sciences ? 4. What is the chief condition of life ? 5. What does this necessity beget? 6. How are the necessities of life supplied? 1. What system grows out of the numerous wants of man ? 8. Name some of the classes of men who are mutually dependent one upon the other ? 9. What constitutes the founda- tion principle and impulse of business? 10. How are these exchanges facilitated? 11. How is the standard of value represented? 12. What is the particular neces- sity of Book-keeping ? 13. In the case cited between John Smith and Thomas Jones, where the food and clothing are simultaneously exchanged, is there any actual need of a written record ? 14. In the case where the payment of the cloth- ing is deferred, why is a written record necessary? 15. What is the most natural record of the indebtedness of Thomas Jones in the example given? 16. Would this record be inteUigible ? 1 *7. Why is a more symmetrical and concise record necessary? 18. What is the simple fact expressed in the foregoing record? 19. How may this fact be varied? 20. How many conditions are there pertaining to dealings with persons on credit? 21. How are these conditions as compared with each other? 22. How may these opposite facts be best arranged? 23. What is this form caUed? 24. How may it be defined ? 25. What facts are arranged on either side of an account ? 26. What is shown by the difference between the sides of an account? 21. Will you analyze the entries in Thomas Jones' account? 28. In cases where exchanges are effected involving time in their fulfilment, what is necessary? 29, What does this written record constitute? 30. How many sides has an account? 31. What are they called? 32. What is Bhown. h j the debtor side ? 33, What by the creditor side ? 34. If the debtor side be the larger, what will the difference express? 35. What, if the creditor side be the larger? 36. What will the account represent in the former case? 37. What, in the latter? 38. In the earlier history of Book-keeping what form of record was probably used? 89. Why was this form alone sufficient ? 40. What other forms become necessary in an extensive credit business? 41. What book is usually kept by merchants and tradesmen ? 42. What are the advantages of a Day Book ? 43. What class of transactions do the Day Book and Ledger in Single Entry contain ? 44. What otherrecords will aU prudent men keep ? 45. How is this done? 18 ^ET 1. ^INQLE i^NTRY, INTRODUCTORY, DAY-BOOK AND LEDGER. SHOWING THE USE OF THE BOOKS, WITHOUT EXHIBITING A GENERAL RESULT. IV RE MARKS In the brief set whicli follows are given the simplest forms of Book-keeping— the Day-Book and Ledger. The purpose of the set is mainly to exhibit these books and, their uses, in order that they may be fully understood in the uses to which they will here- after be put. The transactions which make up this Day-Book do not com- prise the regular occurrences of a business, but only sufficient thereof to exhibit the form of entry ; — hence no complete results are expected. The Day-Book contains original entries of such sales and pur- chases as involve personal indebtedness, and of payments of cash or personal account. In fact, the Single Entry Day-Book and the Single Entry Ledger are used only to exhibit the facts of personal indebtedness. Any other information concerning the business must be gathered from other sources. The form of the Day-Book is simple and direct, first giving the name of the person to be debited or credited, with the fad of "Dr." or "Or.", and next, the detail of the purchase, sale or payment, with the final extension of the amount in the propel column. The Student will first copy this Day-Book with much care, then post the items to the Ledger — indicating in the margin of the Day-Book the page or number of the Ledger account; — next, construct a Day-Book and Ledger of his own from the material in the Practical Exercises on page 26. 20 Set 1.] Single Entry— Day- Book,« G^^ §^Md, ^^ /; /j^/^ @ /2f ^/ so / 00 .■9 1 2S ,, "t^iuci/fec/ if^j^ui. ,, /2f S 00 n @ sof J^ 00 so ,, ^iu.i/ec/ ,, „ S'f ^ 00 S//c^. ^/o^ed, „ ^SO d'O 00 /o //> df: m. © ■et^-u-^^yiA, ^o //ceice Mihe, /S'OO/^., @ Jf 22 /O/ soo /o/ /o/ rs s^ SETi.j Single Entry— Ledger, v)i^i^4yt ^^^n^Ad't:^'^. / c^ QM*nca*os, S 2 •^. S^^^^ed' q/u-, c% ywof KAatdi^d s -C^^^OyOd ^^. S& QMcn(/u / ^. ^i^J^ie^^^, ^^. 7 so 23 S Single Entry— Ledger. tset i. m. S^n. 11 e^^^ aic/el aft ^ i/! ^ac/aic/, '/a ^«/ %, -n^ed ed. C^^t^Mz^e €.i^. sof /O 00 JOf p 00 S 00 ^ ^ c^^ A.^ ''^. c% /O 'i^c/if. <^lenc^ ^loa(/c-M'/n^ % '^ 00 ^0 00 SO ,, ^Ue ^l ^'^ ^j /-^, :?^<2c^ ^^■C'd'yt SO ^y ^ ad A on %, ci^^*^-f3-^ J^. C/-^€i-yyitzd^ oadn a<)n ^o mi'Uince %, ^aXi^ 35 (f/ SS /s s^ 23 (fO /S SS so Index to Ledger. [Set 2. ct^ei, o/a'metiy ^ a^nA^e/ul Q/a^nei^i/^, ^oc/eJ ft^o., ... / d^eve-fKiy Q^aacy 6 <^^o?nad o5r. '~u., S w 9^ee-U>c^, ^'Uiud, / X Y 36 Set 2.] Single Entry— Ledger. 1 /cf;^ ^^a V ^ c% i^adn^ xyHade,^ ^000 Sa^fmii ^^m^fi^o^^. H. mp mP ^ti. / c^ ty^Ca^e., / /^ SO ^^i^yu^^nd. ^s^rp "^ /^cay / // // 2* JT 55 50 38 Set 2.] Single Entry- -Ledger. - 9 mP M7P ^u. /s c% ,y/l(/}e,, i^ ^/ SO ^/h. so c^ ^«^< ^ so // /J? // // Sy 50 c/ S2 54 50 10 ^. dz4md ^. ^UdA. ^^. mp ^.. // c% ^taMe.^ i' J SO tAtay i7 // // / 37 75 i 11 /J7^ /cf/^ ^/u. // :^ ^'joic/ei, i' ^/ SO ^u. so ^u J^adn, J so // i'^ ci/c .yfcf/je., J? ^/ OS y^lay / // // ^ i35 so 05 12 .#. J^X^ j/ ^S^^^W^^^ J^. ^'^. mp ym ^/u. ^JT c% tAcc/de.^ <^ /o so ^Ca-u S7 t^ i^cA<^, 7 /S" t/Hay i»(^ // // ^ 5 39 ^■t. Single Entry— Ledger. 13 [Set 2. mp ,yfca' c% ,y^CMe, /J so SO ■)adn. JJ SJ 4,. 14 '. ^^ nize^. P C^ xy^lMe. ■ p ^^ // ss // // / ^0 6 9 6 8 40 Set 2.J Single Entry— Cash -Book. ]€id I^eGeived. (Paid / '^'6)'moun/i ended c-^antna dfoie^ t^ece4k^e(/ j/oi /leA'/u da^d '/^Sot^nce on ^ana, 2SS^ ^/ uys JS u:/s ss /J- ^a^nce mouoA/ autton, tya€(/ ea;!/tiedd cnaiaed, SSS6^ c^/ / so ,ya<(/^oi ^od^aae d'/wm/id, KJaic/ caiAen'/ei j/oi -le/iatUna, d'/ole^ Mecet'vec/ j/ol /le'/'/'u dd^ s^^W c/au^ .Jlece€^e(//oL /le^/y dwud '/ntd aay, KAecet^e(/^ol Ae^'/y dai&d ^ntd ctay, Mecet^ec/ j/ol /le^'/u da^ f^ntd e/a'u, Mece<^ec/j/oi /le'^/u da^ i^fyed c4^y <'n /u/co/ "/c , Mecethec/ ju>i dU'Ud ^^w w^ec'^^ uAecetk^ec/ 0/ x^. <>0. c^t'nney ^ tn ^.— Bo't of Henry P. Smith, on %, 10 hhds. Molasses, 1200 gals., @ h^f ; 12 boxes Havana Sugar, 3750 lbs., @ ^f Sold J. C. Hall, on %, 10 gals. Molasses, @ 75^. ; 1 brl. Flour, @ $9 Rec'd Cash for petty sales, $110. J.— Sold Henry P. Smith, on «^ , 5 brls. Flour, @ $9 Rec'd Cash on %, of John Banks, $50 Rec'd Cash for sales this day, $115.75. 6, — Paid Cash for stationery, $5.50 Rec'd Cash for sales this day, $110.75. <§•.— Bo't of C. J. Judd, on ^, 5 brls. Coffee Sugar, 1000 lbs., @ 6^^ ; 6 hhds. Molasses, 4000 gals., @ 50)^ Rec'd Cash for sales this day, $75.50. ^.— Paid Cash for clerk hire, $50 Rec'd for sales this day, $50. /6>.— Rec'd Cash for sales this day, $83.30. //.—Sold John Banks, on % , 10 gals. Molasses, @ 60^ ; 50 lbs. Coffee Sugar, @ 7^ ; 1 brl. Flour, @ $9 Rec'd Cash for sales this day, $88.50. /^.— Paid C. J. Judd, Cash on %, $500 -Rec'd Cash for sales this day, $75. /^.— Rec'd Cash for sales this day, $117.50. /J,— Bo't of Thomas Palmer, on %, 3 brls. Soda Crackers, @ $4 20; 12 boxes Butter Crackers, 360 lbs., @ 6^ ; 40 loaves Bread, @ 10)^ Paid porterage in Cash, $3 ; For cleaning store, $5 Rec'd Cash for sales this day, $123.75. /^. — Paid James Smith, Cash for repairing store, $25 - Sold Rob't Hay ward, on %, 1 brl. Soda Crackers, @ $5 ; 3 boxes Butter Crackers, 90 lbs., @ If Rec'd Cash for sales this day, $97.50. 47 QUESTIOiq^S FOR REVIEW. /7.— Rec'd Cash for sales this day, $125.75. /<$*.— Sold W. F. Norman, on %, 100 lbs. Sugar, @ 7^; 50 gals. Molasses, @ 60^ ; 60 lbs. Sugar, @ If Paid Smith & McDougal for Printing Circulars, $5.50 Rec'd Cash for sales this day, $88.93. 79, — Paid Cash for postage stamps, $3 ; letter paper, $5 Rec'd Cash for sales this day, $98.37. 20, — Rec'd Cash for sales this day, $117.95. ^^.— Rec'd Cash, on % , of John Banks, $50 Sold Robert Hay ward, on %, 30 gals. Molasses, @ 60^ ; 2 h'f chests Tea, @ $25 Rec'd Cash for sales this day, $84.28. ^t^.— Rec'd Cash, on %, of Rob't Hayward, .$30 Rec'd Cash for sales this day, $75. ^4.— Sold J. C. Buttre, on %, 1 hhd. Molasses, 75 gals., at mf Rec'd for sales this day, $65.75. ^J.— Rec'd Cash of Rob't Hayward, in full of %, $49.30 Rec'd Cash for sales this day, $78.25. ^ZT 3. ^INQLE iJNTRY. W^HOLESALE DRY GOODS BUSINESS. (PARTNERSHIPS DAY-BOOK, LEDGER, SALES-BOOK, CASH- BOOK, AND BILL-BOOK. WITH STATEMENT OF AFFAIRS AT BEGINNING, AND FINAL RESULTS. j^cZverse, REMARKS. In" this set we have enlarged the area of our work, first, by enlarging our business, and next by adding to the variety of the transactions. The feature of this set consists principally in the auxiliary books. The form of Cash Book here given differs from that in Set II. in its arrangement of receipts and payments. This form is the one in common use, and is better than the other, mainly on account of its complete separation of these two condi- tions ; the receipts being placed on one page, and the payments on the other. The Bill Book and Sales Book will explain themselves. There are more comprehensive forms for the Bill Book in use, but the one here shown is the common form, and has the merit of sim- plicity and plainness. The Sales Book is an essential auxiliary for a merchant, particularly where any amount of wholesaling or general credit business is done. It is not really necessary that the credit sales should be entered on the Day Book, as they may easily be posted from the Sales Book direct; but as many merchants adopt the plan of posting 07ily from the Day Book, and as there are some very good reasons for adopting this policy, we have here given it the preference. The initials, " D. B.," " C. B.," and " B. B.," in the margin of the Sales Book, (standing for Day Book, Cash Book, and Bill Book), will indicate the books wherein are entered the various resources received for merchandise. The Sales Book is not, properly speaking, a book of results, and is not consulted in making up our list of resources and liabilities. In the former set the result of the business was a gain ; in this a loss has been sustained, which is shared equally by the two partners. In writing up this set let the student observe the order of dates in the various books, and complete the record of each trans- action before proceeding to the next. For example : On the 1st of July, Robert Van Schaick purchased a bill of goods for which he paid cash. This entry is first made in the Sales Book, from which the amount is transferred to the Cash Book, and marked " C. B." in the margin of the Sales Book. The succeeding entries in the Sales Book are, in the same manner, transferred to the appropriate books which are indicated in the margin. 50 SET3.J Single Entry— Day -Book. ^^ ^^ / s . s, .^ S'oi i.'n'ued'^ien^ <.h 'Uud*nedJ^ <^^. : u. ,y^ceicnan(/uiey ad /lei tk^en'/oiy^ fmo J4/eJ, aj/<.l S^^//^oo/, /SCO ^Oifn, ad Ael ^adn ,^ook^ /soo ^^a^nced c/ue on /leldona/^ accoun%d , ^f' : o/o/n ^ Mnn, soo c-o, c^atiuan'Kd^ TSO fS^i^nxo juad'^on^ c;?/^ c^oi. th'V'ed'/ynen%, ad i/^O'UO'tctd ift CAOnton tyaam c% 'uatance j/^av-ol o/ a^. o/&, ^iuan%^ c% 'Ua'^nce j^avol of c/w. t/0. ^iuan%, c% 'Mt-tance /^ai^oi ojf <7^. ^. KAJl-uan%^ 51 sooo sooo ^. pd^s S'OOO soo TSO s^s Single Entry— Day -Book. [sets. ^. ^j 7j P. s. cf; t^u ^ ad A em %^ S (^■ez-m^ed. cy;■a■/^4^d'a4^. if ^u 4n^o(ce t^oo'/j ana Q^oed, / — 'S. c% 'MCto/ ,yfc(/je. /lei o/a^ t^ooiK, /o c% <^ ad A on %y 2S0 ^/JT /^/ ^2 s:^s 2S soo ^s ^/ 52 SET3.J Single Entry— Day -Book. tZTMl^^ x/^^i^ ^-^z 3 //. /> /2 /S //. /S, ad /lei oS (T, //; a?f'Oy S' H I J K ^ M fayn^ CAJet?/. , Q R P /J u w X Y 55 Single Entry— Ledger. [sbts. 4.^U€14^. /JT c% <^adn, 7^ ^ 'j-ed'/''/, \pO7j ^. \ ^ (§Uiu^n. ^^. c% fJ^ccentance /^ /^ tnV'ed'f ^^ S'OOO &?Jl4^ 3 ^^^. f-^. /cf;:^ /^^ .J-u/y / ^a/MMM / ^^^ q/u-^ s <^y ^adn^ 2 no / / 2p // // ^ 2S0 := ^^(^ = soo /4,. i^ie^n^^ /s'7P 7S0 /^ ^ ')4. ^so 56 Set 3.J Single Entry— Ledger. 5 H. srs / '^y ^a //J- m- Stz^nt^d 6 4^. cy^ tyfcc/je.^ ^A/A'^, (^^M^ / ^^. i-tH ^€^e. /^7P so c% ^Cc/de., cTJ^ t^y- cadAy so 58 Set 3.j Single Entry— Ledger. 13 Sa-med' ^^e^l^^-t^^z. SJ c% nyfu/de.^ S^ 14: i^^^^^m^ €ii J. ^. SS c% ^Cc/de., c// SJ 15 ^^uc^n,hn ^a,/., M,, ,, cTOf SS" ^0 /S'S ^0 63 -ad Single Entry— [Set 3. Ileoeipts. /n'x.o ''^ad'^on, <'n ^wuc/^/c, srs cT ,, ^^ "^/alZ/ol y^c/de./^ei ^^ ^ S'2 /O soo /2 ^s so /6 0/ ^oienx-a <:^atL'^anmy on % , ^so /cf 2SS ^OM S'2 ^ ^ 1 U ^ v! i SN *^ ^ ^ ^ s N 5 i 1 8^ 1 1' 1 1 N 4 II •V* 1 1? ^ V \s "^ QSi 1^ ^' V Q^ "=v^ v^ S 1* 51 1 S l«- ^1 1 ?,; i^^ ^' ^' ^^ ,53 ^^ ^1 ^ ^"^ '^)' 5 •!«i hO ^ \ « ■§ ^1 1 ^' ^ 5 ^ 5 4^. i •fc » ^■^ 5! 1 ^■^1 1 ^"^ '1 ^1 ^' V 13^ ee STATEMENT SHOWING THE CONDITION OF BUSINESS AT THE CLOSE OF SET HI, Resources. 1. JFVoTTi Ledger Accounts : Lorenzo Fairbanks, Dr. Cr. Balance. 750 192 23 180 82 132 37 216 182 41 88 24 55 50 40 350 50 30 75 400 192 23 130 52 132 37 216 107 5881 1620 3000 5000 James Johiisou, ..»..••.••• Benjamin Payn, 41 Amos Dean, Victor M. Rice, 88 James Siieldon, 24 William Shepard, 55 50 John Belden, Chas. A. Seeley, 40 2. From Cash Book: Balance of Cash on hand, • . 94 3. From BUI Book : S. S. Packard's Note, due Sept. 13, .... E. H. Bender's '^ " " 5, .... . $1000 . 108 20 . 173 . 339 Calvin S. Sill's " " Oct. 13, .... J. R. Morgan's " " Jan. 25, .... 20 4. From Inventory : Merchandise unsold, Real Estate, Liabilities. From BiU Book : Note favor Claflin, Mellen & Co., . . . . r - 16794 575 12 Present CAHTAii, 16219 12 To ascertain the net loss of the concern, and the present worth of each partner, we have the following facts : H. B. Bryant invested, $9075 " drew out, 75 Net investment, $9000 H. D. Stratton invested, $8000 ** drew out, 75 Net investment, 7925 Total net investment, $16925 Deduct Present Worth, 16219 12 Leaves Net Loss, $705 88 H. B. Bryant's original investment, $9000 Less Yi Net Loss 352 94 Leaves present investment, £647 06 H. D. Stratton's original investment, $7925 Less )4 Net Loss, 352 94 Leaves present investment, 7572 06 Total Present Capital, $16219 12 67 EXAMPLES FOR PRACTICE. From tlie foregoing statement we deduce the following RULES. /.—To ascertain the net loss during business, subtract the net capital at closing from the net capital at commencing » 2. — To ascertain the net capital of each partner at dosing, subtract his NET LOSS from, or add his net gain to his net investment. EXAMPLES FOR PRACTICE. Example I. — A. commenced business with a cash capital of $8750. At the close of the year his resources and liabilities were as follows : Cash on hand, $3700 ; Notes on hand, $7000 ; Merchandise unsold, $2500 ; Amounts owing on Personal Accounts, $2000. — He owes on notes, $5000 ; To various persons, $2500. What has been his loss? What is his net capital at closing? Example II. — E. and F. enter into copartnership on equal terms, each investing at commencement, $10000 ; and each withdrawing during the business, $1500. At the close of a certain period the following exhibit shows the true condition of their affairs : Cash on hand, $500 ; Balance in Bank, $7000 ; Due them on Personal Accounts, $5783.75, of which $875 is worthless ; Due them on Notes, $6750 ; Merchandise on hand, $2700 ; Real Estate, $5000 ; Bank Stock, $3500. — They owe to persons on account, $10000; On Notes, $5600. Have they gained or lost in business, and how muchf What is each 'part- ner's net capital at closing ? Example III. — A. B. and C. are partners. A. puts into the concern, $7500 ; B., $5300; C, $4700. At the close of the year their books exhibit the fv^llowing results ; John Smith, Dr. $1700, Cr. $500 ; John Parker, Dr. $1100, Cr. $975 ; Abram Schenck, Dr. $1750, Cr. $2700 ; Albert Dodge, Dr. $1859.38, Cr. $212.50 ; Cash received, $125386.29 ; Paid out, 122480.23 ; Notes received, $1900 ; Notes disposed of. $1200 ; Merchandise unsold, $2700; Value of Store and Fixtures, $15750; A. has drawn out $2000; B , $1500 ; C, $785.— They have issued Notes to the amount of $30000, of which they have redeemed $25800. Required a written statement which shall exhibit all these facts, as also the amount of gain or loss during the business, and each partner's net capital at closing. 68 PRACTICAL EXERCISES. [To be written up after the manner of Set 3.] Transactions. — Third Series. JTiely /. — S. S. Packard and John R. Penn have engaged in a general mer- chandise business, the gains and losses of which they agree to share equally. S. S. Packard invests Cash, $4000 ; Merchandise, $1750 ; Notes, as follows : one for $500, in favor of S. S. P., signed by H. B. Bryant, and endorsed by W, P. Spencer, dated June 1, @ 60 ds.; and one for $700, an accepted draft, drawn by L. S. Bliss on George Claghorn, May 1, at 90 ds. sight, and accepted May 3, Personal Accounts, as follows ; Henry Fish, $500 ; Robert Fulton, $750 ; David Coleman, $900. John R. Penn invests, Cash, $500 ; Real Estate, $5000. ^.— Sold N. Frederick, on %, 2 doz. Gent's Silk Handkerchiefs, 24, @ 40f ; 6 pes. Amoskeag Sheeting, 130 yds., @ lOf^ ; 4 do. Mixed Cassimeres, 100 yds., @ 50^ Rec'd Cash of Henry Fish, in full of % , $500 Paid Cash for Stationery and Printing, $30. S, — Sold Ira Packard on his acceptance, at 10 days, 1 case Child's Metallic Tip Shoes, 60 prs. , @ 50^ ; 2 do. Child's Heel Gaiters, 96 prs , @ 63/' ; 3 pes. English Tweed, 27 yds., @ $1. 4-. — Sold Wm. T. Bush, on ^, 4 cases Men's Congress Gaiters, 96 prs., @ $1.50 ; 2 do. Gent's Canada Ties, 24 prs., @ $1.75 Sold James Magoon, for Cash, 1 piece Striped Velvet, 10 yds., @ $5 ; 6 do. Paper Cambrics, 72 yds., @ 8f ; 10 do. Lynn Cottons, 300 yds., at 11^. 6, — Paid Cash for petty Expenses, $3.75 Sold Robert Smith, on his note at 60 days, 3 pes. Lancaster Gingham, 125 yds., @ 10/ ; 6 do, Scotch Plaid, 240 yds., @ 13/ Bought of Star, Barnum & Seeley, Invoice of Merchandise, amounting to $5000 ; paid Cash, $2500 ; Note, at 6 months, $2500. ^.— Rec'd Cash on % of David Coleman, $500 Sold Roger Williams, for Cash, 1 case Misses Cork Sole Shoes, 60 prs., @ 75/ ; 1 do. Gent's Paris Gaiters, 24 prs., @ $1.75 Rec'd Cash for petty Sales, $25.50. 7.— Sold John Fitch, on ^, 3 doz. Elastic Hoop Skirts, 36, @ $2.50; 1 doz. "Empress" do., 12, @ $2 ; 3 pes. Check Marseilles, 30 yds., @ 50/ Sold Samuel Nash, for Cash, 3 pes. English Tweed, 27 yds., @ $1 ; 6 do. Corduroy, 250 yds., @ 75/ Rec'd Cash of Wm. T. Bush, on %, $50. ^.— Paid John R. Penn, Cash on private %,$100 Paid Cash fol petty Expenses, $7.50. 69 EXERCISES FOR THE LEARli^-EE. 10, f2.— 13.- U.- 16,- 17^- 20,- 21.- Sold Jolin Anderson, for Cash, 3 cases Ladies' Extra Balmoral Boots, 144 prs., at $2; 2 cases Ladies' "Opera" Gaiters, 48, @ $1.75. Paid S. S. Packard, Cash on private %, $75 Sold Tlios. Hun- ter, on %, 6 pes. Merrimack Prints, 210 yds., @ 9;^; 5 do. " Union" Prints, 150 yds., @ 8/; 7 do. Lancaster Prints, 244 yds., @ S^f; @8i Eec'd Cash for petty 4 do. Orange Prints, 120 yds. Sales, $10.38. -Rec'd Cash of David Coleman, in full of %, $400 Sold John Howard, on %, 3 pes. Lancaster Gingham, 125 yds., @ 10(^ ; 2 do, French Merino, 40 yds., @ 50/- ; 5 do. Bar. Muslin, 90 yds., @ 14^. -Sold Robert Coons, for Cash, 6 pes. Fancy Linens, 36 yds., @ $2 ; 5 do. English Prints, 200 yds., @ 20!^ ; 6 do. Parametta (Maroon), 300 yds., @ 75^ Paid Cash for Repairing Store, $75. -Rec'd Cash of John Fitch, in full of %, $129 Sold Henry Fish, on %, 5 pes. Amoskeag Stripes, 120 yds., (w 12|/ ; 4 do. Pepperell Sheeting, 160 yds., @ 10^ ; 4 do. Auburn Sheeting, 120 yds., @ 15^. -Rec'd Cash in full of Robert Fulton's % , $750 Sold Simon Walker, on his note at 60 days, 4 cases Men's Thick Boots, 48 prs., @ $1.25 ; 2 do. Double-Soled Boots, 24 prs., @ $1.50. -Sold Geo. F. Smith, for Cash, 2 cases Women's Walking Shoes, 120 prs., @ 50^ ; 2 do. Jenny Lind Gaiters, 24 prs., @ $1.15 ; 2 do. " Opera " Gaiters, 24 prs., @ $1.75 Paid Clerk hii-e in Cash. $65. -Rec'd Cash of Henry Fish, in full of %, $49. Statement of Results. The general results of the above transactions properly recorded are shown In the following schedule. The statement to be rendered by the student should be more in detail, taking as an example the statement on page 67. Resources. Personal Accounts Notes?, receivable Cash 315 1457 5286 4500 5000 365 54 18 49 79 Liabilities. Notes, payable S. S. P.'s Net Investment . . J. R. P.'s 2500 9025 5400 Merchandise (per Inv.) . . . Real Estate Net Loss 16925 16925 70 P^T 4. ^INQLE ^NTRY. FURNITURE AND CABINET BUSINESS. (TWO PARTNERS, ADMITTING A THIRD.) DAY-BOOK, SALES-BOOK, LEDGER, CASH' BOOK, AND TIME-BOOK. USING THE SALES-BOOK AS PRINCIPAL BOOK, AND GIVING INSTRUCTIONS AS TO A CHANGE IN BUSINESS. ^rosperoTZS. 71 REMARKS. The capabilities of Single Entry Book-keeping are fairly pre> sented in this set, and it will be found that this form of record has much in it worthy of consideration. At the best, however, Single Entry is an incomplete system, and has no advantages over Double Entry; while, on the other hand. Double Entry, retaining all that is vital in Single Entry, supplements its best achievements by such results, tests, and statistical facts as are essential to a com- plete knowledge of business operations. However, as Single Entry Book-keeping is in vogue, and as it will continue to be, even in some of the most reputable houses, it behooves the accountant to become conversant with its character- istics and its possibilities. The materials from which the transactions in this set. are con- structed, were obtained from an extensive cabinet warehouse in New York, and the routine has the merit, at least, of being busi- ness-like. The forms of the books, and arrangement of the various records, are submitted as the most simple and practical in use. One important feature in the set is the use of the Sales-Book distinct from the Day-Book. In Set III., although a Sales-Book is used, all sales on credit are first transferred to the Day-Book, and from thence posted into the Ledger. Here, however, the credit sales are posted to the personal accounts directly from the Sales Booh. This affords a great saving of time, and is, in all respects, quite as satisfactory. The figures in the margin of the Sales-Book refer to the Ledger page to which the amounts are posted ; the initials " 0. ai." and " B. B." indicate that the result of the sales thus marked, are shown in the Cash Book and Bill Book. The former of these is exhibited at length ; the latter has been omitted, although it is expected that the learner will supply it, after the form given in Set HL 72 REMARKS. The taking in of a new partner forms another important feature of the set, and one which will afford the learner some of the most valuable hints connected with Accounts. It is a settled principle in Book-keeping, or should be, that whenever any change in the business occurs, the existing resources and liabilities of the concern should be made apparent; and, consequently, the proprietors' accounts should represent their net investment at the time of tlie> iJiange, The same rule holds good respecting the landmarks ol business, or the financial eras, such as the close of a fiscal year, or any important event which makes it necessary to exhibit on the main books the exact condition of the business. In the case under consideration, the existing partners, " Lester & Brown," propose to admit a new partner, who shall invest equally with them, and share equally in the gains and losses.. The partners' accounts now show only their original investment ; and it will be evident that, if the new partner invests an equal amount, he will unjustly become a Joint-partner in the gains which have already accrued, but which remain unacknowledged in the business. The original partners, it is plain, are entitled to all the avails of the business previous to admitting the new partner, and if their own proper accounts do not show what this net amount is, they should be made to. Therefore, before deciding how much the new partner should invest to place him on an equal footing with his associates, it becomes necessary to credit the original partners with their respective gains. With this view the state- ment on the third page of the Day-Book is made, and the part- ners thereafter credited, each with his net gain. The partners' accounts in the Ledger are then closed up, and the balances brought down as a new capital, which is an indication of the amount that the new partner must invest. The general statement which follows this set afibrds, perhaps," LS convenient a form for such statements as any in use. The student cannot too carefully study the philosophy of these, nor be too particular in drawing them up, as to their neatness and per- spicuity. An obscure or insufficient statement of a business, how- ever prosperous and satisfactory may be the condition which it aims to show, is like a good story so bunglingly told that its chief points are obscured, and its moral entirely lost sight of. 73 Single Entry— Day -Book. set4.j A/O^MfTl^ QzmU'l /, S^in<'/uie ana ^a-O^tne'/'-taaie, ctnc/el ^^e /i.hn-^'/-^ •/o "/ne J^Hj?i ^ne etj^e^J ana -Ua'tAt^'/ted Oj/ a ^oiTnel 4AUd€nedJ, ana t/Ul. ,^o^cAn tn'ued /f :2 /^ s p — 77 ^.. ^. -^^ H. ^. C/ 4^ ^. ^T/ ^TSJ /2000 ^S ^^ /S/ /cf/ /J7 /^7 /^ /:i^ ^^ /^ Single Entry— Sales -Book. [Set 4. '2b >1^' C:)' c^c/^^ -i-a-afz-tA^'Pt /s 00 eti^d. to %. t #e SJeecda., m. 'i-a Single Entry— Sales -Book. [Set 4. / ^aiae ty^l'Tn Wncuiy /? 0s 00 // 00 /f 00 ^ so S/ ^S so Jr^ecd. Cask. / /i' ^ / ^^ ^^ ^ma^^no^, " ^ ^0 Chgd. to %. /o / Mecu/nha. ^/laU^ ^w/en-/, p^2 SO / ^y/^ ^oo^'^aJe, ^. 7K -^0 00 //tatl <:%o-/^/oo'^, -/ SO Chgd. to %. /S ^^. ^ #..4, / dei^ Gnwrne^t/ ^uint^ule^ p/S 00 / Se^e-a^'/e'/e, ^0 00 / ^Meti^ooc/ Q/o/aj ^0 00 I^ecd. Cash. ^ /cT ifecd. Gash. SO ^ ^€n^ %iadn^ ^ //^ 6 /cf ^ ^«<^^ i' //^ / 3Sa/Ao^Q/.^. / z/^- /-^. ^- SO c% dune/. 07. c>0. / / i'c/^ 2S0 i'c/^ /s/ ty/cay. / //^ //^ //^ 8 c^ c/ ^. 2S o/^ dune/, &/. t^. // // // /SO'^/CaHd,, g/c* v-a/ance^ /20 /OS ^00 xy/tay. S/ ^y 'da^/tce. c^^ — ,yH(Z'U J/ 85 Single Entry— Ledger. [set 4. 9 SO // // / - ■■ // JO 2 SO S^ ty/cay / lO W^' odi^^'t^'^ c^^^^^^i^^. H. mp ' Vm ^^i. / o/h (^ana. Q/, <^. 2 ^ so S7 2 SO S7 <:%<)unc/.^M S = ^/ tAcay ^0 • 11 #^. aS-c^^^ oS^c^^M^. ^^. /^^ /m ■^/h. /s ^o^unc/,if.3S. S ^J SO ^/ti. ss ^ ^^^ 2 ^c/ so 12 ^^^^. ^-^^ f^ C%£ J ^S s ^ ^adn^ ^S 8G Set 4.J SiNGLE EnTRY— LeDGER. 13 4. LPiA<2^ri^/^^ C^-^-Z J^^ /cf;^ ^a .^ ^ ^a^^unc/.^.M S^ 14 li^^iUl ^J^^yi^^^. ^4 s/ c^ 'O.a-uin.ce, ^^/ /cf ^ 4^ dpH /cf ^^/ /cf o/uiie ^ ^^/ /cf 15 ^<^t/i-tz/ (y()€i^A. ^aj-n ac/i /2000 16 e^z^mM G/fUz^-c €^4^. tyfCa z^ SO <:^deina. ^ MS 87 €ldH. Single Entry— [Set 4. IleGeived. mp ^u. L-^iV? V tu'V-ed^ei/, £^o^ei.'^ ^iatcm.^ ^/ ^us so ^^ SJO ^ c^no^iad t^oc^oi^ /lei Q/. oO.^ /s // M. 7^ "^/ai/, o^. %, so / q/o/C^ J^ 3^a/'/<,on, /cei if. ^., /2 / ^eni^ 7^^a^/oi, ,, ,, ^S // i^m '"^c/ue on o/onn QUm/idon 'd no-Ze, soo cf c^c5f "^^uy/ei, /.el ^^ 72 /o Ma^i/^ ^//c^ia//f, M so /2 o/wme^ (ifmi-^-^, JS /J ^/o^a, Wei&^el, ?t(/eidon, C^^, MC/iended, /lei Ga>/ien. 3ooo'K, K^a'Uince on nanc/^ /woo //s /// /s/ /SS' PS' /u //s /p 7S so /^ so so 7^ ss /uso SOS so OS /SSS'S S'2 89 w CO CO «o «o «DO«010»0i0»0»0C0 ):;; o o m o c* ?o o o i^ioeo>aiOia.— Paid Cash for Gas Bill, $14.30 Received Cash of A. W. Betts, in full of %, $ /5.— Paid Workmen, C^ash to date, $275 Sold Geo. A. Crocker, on %, 6 Parlor Chairs, @ $3 ; 12 Dining do., @ $1.50 ; 1 Clock, $5. /e^.— Sold Benj. F. Butler, on %, 8 doz. Camp Stools, 96 @ 50^ each j 1 Portable Secretary, $25 Received Cash on %, of W. D. Packard, $75. /5.— Sold Robert Hall, on %, 6 Gothic Chairs @ $5 each; 1 French Bedstead, $15 ; 2 Washstands, @ $4 each Sold W. J. Cur- 93 EXERCISES FOR THE LEARNER. tiss, for Cash, 1 Book-case, $40 ; 4 Library Chairs, @ $7 each ; 1 large Rocking Chair, $15. /7.— Paid Workmen, Cash to date, $218 Received Cash of Geo. A. Crocker, in full of %,$ Sold J. C. Banks, for Cash, 1 Double Bedstead, $10 ; 1 Single do., $9. /<^.— Paid Clark Dunham, Cash on % , $500 Sold John Banks, on his note @ 30 ds., 1 Bureau, $30 ; 1 Sofa Bedstead, $45. /^.— Sold W. D. Packard, on %, 13 Kitchen Chairs, @ $1 each ; 3 Com- mon Bedsteads, @ $5 each ; 1 Office Desk, $15 Sold W. Te Brooks, on %, 1 Carved Rosewood Center Table, $45. ^6>.— Received Cash of W. D. Packard, in full of %, $ ^/.— Sold Robert Hall, on %, 1 Teacher's Desk, $25; 12 Dining Chairs, @ $1.75; 12 Cane Bottom Settees, @ $8 each. ^^. — Paid Cash, Book-keeper's salary, $75 Received Cash, in full of William Carter's note, now due, $1000. ^^.— Paid Workmen, Cash to date, $193 Sold E. A. Charlton, on %, 50 Double School-Desks, @ $9 each; 100 Chairs for same, @ 50,'^ each. ^J.— So:d Wm. Johnson, for Cash, 1 Mahogany Bedstead, $20; 1 Mar- ble-top Washstand, $17 Received Cash of Robert Hall, on %, $200. JSe.—Sold John S. Williams, on %,Q Parlor Chairs, Brocatelle, @ $5 each ; 1 carved Rosewood Centre Table, $50 ; 1 Piano Stool, $10 Paid Cash, on Drayage %, $50. ^7.— Sold Peter Duff, for Cash, 6 Office Chairs, @ $2.50 each Paid Clark Dunham, Cash in full of %, $ Received Cash of Robert Hall, in full of %, $ ^.9.— Sold William Dallas, on %, 1 Mahogany Sofa, $35; 1 Rosewood Arm Chair, $45, 1 Hall Stand, $7 ; 1 Tete-a-tete, $30. NEW FIRM J'lity /. — Jones and Mason have this day associated with them George F. Smith, who is to invest an equal amount with each of the former partners, and share equally in gains and losses. The value of unsold merchandise is $5500 ; of Tools and Implements, $750 ; the other resources and liabilities can be ascertained by reference to the appropriate books. Mr. Smith invests : Cash,* i-^^^ Bo't of Henry P. Smith, for Cash, a quantity of Pine Lumber amounting to $3500 Paid Workmen, Cash to date, $175. ,5.— Sold John S. Williams, on ^, 2 Bedsteads, 1 @ $6, and 1 @ $10 . 3 Washstands, @ $2.50 each ; 6 Kitchen Chairs, @ $1.50 each ; 1 Lounge, $15 ; 1 Secretary, $25 ; 1 Bureau, $18. ^.— Sold E. A. Trotter, for Cash, 1 Black Walnut Book-case, $60 Sold James Thurber for Cash, 6 School Desks (single), @ $5 each ; 1 Teacher's Desk, $25 ; 2 Office Chairs, @ $7.50 each. ♦ In order to ascertain the amount of Smith's investment, it will be necessary to carry tba gains to the partners' accounts.— A statement should be made similar to that on page 76. 94 EXERCISES FOR THE LEARITER. 6, — Sold Joseph Wadswortli, on his note @ 30 ds., 1 Rosewood Tete-a- tete, $65 ; 2 Ottomans, @ $10 each Received Cash, in full of George Chrysler's note of the 2d ult., $61. <9.— Paid Workmen, Cash to date, $218 Sold James McQrath, for Cash, 12 Dining Chairs, @ $2 each; 1 open Lounge, $17; 1 Bureau, $20. /O, — Received Cash, on % of Wm. Dallas, $50 Sold Steamer Troy, on %, 2 Black Walnut Sofas, @ $45 each ; 3 Tete-a-tetes, @ $50 each ; 24 Chairs, @ $7 each. //.—Received Cash, in full of E. A. Charlton's %, $ Sold W. F. Norman for Cash, 1 Black Walnut Book-case, $60; 1 Bureau, $30 Bo't of Robert Coons for Cash, lot of Mahogany Lumber, amounting to $5700. /eJ.— Paid Workmen, Cash to date, $212. /^.— Sold Henry Harper, for Cash, 50 School Desks, @ $9 each Received Cash of John S. Williams, on %, $90. //.—Sold Robert S. Hay ward, on %, 1 Gothic Book-case, $75 Received Cash of B. F. Butler, in full of %, $ -^6>.— Sold John S. Williams, on %, 12 Parlor Chairs, @ $5 each. ^^.— Paid Workmen. Cash to date, $175. ^J.— Paid Gas Bill in Cash, $15 Sold Peter McGrath for Cash, 1 Sofa Bedstead, $50. ^^.— Paid Workmen, Cash to date, $219 Paid Cash for rent, $100. STATEMENT, SHOWING THE CONDITION OF THE BUSINESS JULY 31. _ Resources. (per Inventory), Mdpe. unsold Cash on hand. Notes " W. T. Brooks, Balance of % , John S. Williams, "" " Wm. Dallas, '' " Steamer Troy, " " Robt. S. Hayward, " " Tools and Implements, at valuation, Liabilities.. Wm. Jones, Thos. Mason, Geo F. Smith, Net Capital, July 1, \ Net Gain, Net Capital, July 1, J Net Gain, Net Capital, July 1, \ Net Gain, 95 $8637 35 228 50 8637 35 228 50 8637 35 228 50 15000 9826 226 95 150 67 408 75 750 8865 05 50 26597 55 55 QUESTIONS FOR REVIEW. Remarks, Page 50. 1. What is the peculiar feature of Set 3 ? S. How does the form of the Cash Book in this set differ from that in the preceding ? 3. Which is prefer- able? 4. Why? 6. For what purpose is the Sales-Book used? 6. Is it essential that the sales should be entered on the Day-Book ? 7. How posted if not so entered ? 8. What do the initials in the margin of the Sales-Book indicate ? 9. Is the Sales-Book used in making up a list of Resources and Liabilities ? Remarks, Page 72. 10. What is the purpose of Set 4 ? 11. What is the important feature m this set ? 12. How does the Sales-Book differ in its use from that in Set 3 ? 13. What is the advantage ? 14^. What do the figures in the margin indi- cate? 15. What other feature than the peculiar use of the Sales-Book is prominent in this set ? 16. How must a change in the business be marked ? 17. At what periods in business is it proper that the resources and liabilities should be shown ? 18, In admitting a new partner with an equal investment, how can the proper amount of the investment be ascertained ? 19. Why not make the new partner's investment equal to the original investment of the former proprietor ? 96 PART II DOUBLE ENTRY. PART II. DOUBLE ENTRY. INTRODUCTION. If the method of keeping accounts by Single Entry may be 3alled a system, that by Double Entry may with equal propriety be called a science ; for, while the former possesses ths means of showing ti a condition of business, the latter not only affords a proof of its owa correctness, but in addition to showing the con- dition of business, gives, with mathematical exactness, the partic- ular channels through which gains and losses come. The real difference between them hinges on this latter qualification, and to the fact that in Double Entry all the results, including resources, liabilities, gains and losses, are shown in the Ledger, while in Single Entry, the partial results are gathered from various auxiliary books, including the Ledger, Cash-Book, Bill- Book, etc. The precise difference may be appreciated by comparing Set 3, in Part IL with the corresponding Set in Part L, the transactions being the same in both cases. The term DouUe Entry, as contradistinctive to Single Entry, has reference to the fact, that for every transaction, two or more entries are made in the Ledger. The condition of these entries is such that each transaction, when properly recorded, will pro- duce on the Ledger equal debits and credits ; that is, the same value which is carried to the debtor side of one or more accounts is also carried to the creditor side of one or more accounts, pro- ducing thus a perpetual equilibrium of debits and credits, and affording a distinct test of the correctness of the work. 99 INTRODUCTION". The theory of " equal debits and credits " is the leading feature of Double Entry ; and although its application is, in all cases, most reasonable and satisfactory to the accountant, it is often adjudged as being complex and mysterious, and calculated more to befog the mind of the uninitiated than to subserve the ends of justice. To those who are troubled with these doubts, it is only neces- sary to say that Double Entry contains every feature of Single Entry; and, that so far as Smgle Entry goes, it differs in none o! its results from Double Entry; the latter being a continuation, or rather, a perfection of the purposes of the former. The main dis- tinction between the two systems is, that while in Single Entry a record is kept of resources and liaUlities only, in Double Entry a similar and additional record is kept of gai7is and losses. This feature of Doable Entry commends it at once to prudent business men ; for while it may properly be regarded as affording a true indication of the comparative ments of the various schemes of profit, it also, in a great measure, guards against errors and omis- sions which might pass undetected in Single Entry. As in Single, so in Double Entry, the main book of . Accounts is the Ledger. The Single Entry Ledger, however, cor.taius only accounts with individuals, while the Double Entry Ledger shows the result of each transaction, both as regards the character of the exchange and the gain or loss thereby effected. Thus accounts are kept, not only with persons whom we may owe, or who may owe us, but with every s]jecies of property in which we deal, and every cause pi'oducing gain or loss. Although it is customary, in connection with Double Entry and Single Entry books alike, to keep a Cash-Book and Bill-Book, yet all the essential facts connected with cash and notes are shown in the proper Ledger accounts. The three main books used in Double Entry are the Day-Book, , Journal, and Ledger. The Day-Bpok and Journal are sometimes combined in one. THE DAT-BOOK is the original book of entry, and contains a consecutive history of the transactions, in the order and date of their occurrence. It should be plain, concise, and unequivocal in its statements ; neither confusing the mind by redundancy of language, nor leaving rooni for doubt from lack of full explanation. 100 INTRODUCTION. THE JOURNAL , ,\\ ] \ \Vy\ ."; J. ,• ,' ,>^ when used separately, is the intermediate book between the f)ay- Book and the Ledger. Its office is to decide upon the proper debits and credits involved in each transaction, preparatory to their going upon the Ledger. The process of thus classifying the trans- actions is caWed journalizing. THE LEDGER, is the book of results, — the final book of entry. Here, under appropriate heads, called accounts, are arranged all the facts neces- sary for a full and satisfactory statement of the business; including not only an exhibition of the present resources and liabilities, but a distinct record of particular gains and losses. The process of transferring to the Ledger is called posting. The following examples of these separate books, showing their characteristic records of the same transaction, will clearly indicate their use : 1.— Day-Book. JVe^f^ Tor A:, J'amiary /, 7879. V Bought of James Monkoe, on account, 500 brls. Flour @ $10 Sold Andrew Jackson, for Cash, 100 brls. Flour ©$10 50 5000 1050 e 2. — Journal. JVew TorA:, J^cmumy f, 7879. Br. Cr. Merchandise, Dr. To James Monroe Cash, Dr. To Merchandise . . Ledger Titles.— 2>r. Ledger Titles.-C/-. 101 5000 1050 5000 1050 INTRODUCTION. Dr. 3. — Ledger. 1 Merchandise. Cr. 1879 Jan. To James Monroe For what debited. 5000 1879 Jan. By Cash For what credited. 1050 Dr. James Monroe. Cr. 1879 Jan. By Merchandise . 5000 Dr. 8 Cash. Cr. 1879 Jan. To Merchandise . 1050 102 THE SCIENCE OF ACCOUNTS. Although the books containing a consecutive history of the business are essential for that purpose, yet the science of Accounts pertains exclusively to the results of the transactions as shown in the Ledger. Particularly is this true in Double Entry, where the Ledger contains all the results necessary for a complete rendering of the condition of the business, at any time. Each Ledger account is, properly, a statement of some financial fact, and shows one of the four following results, viz. : a resource, a liability, a gain, or a loss. These facts or results are ascertained by taking the difference between the sides of the accounts, thus : Br. Cash. Cr, Cash Received. Cash Paid out. 18T9 1879 Jan, 1 To Stock (Inv't) 5000 Jan. 1 By Merchandise 2500 (( 15 " Merchandise 1500 '' 10 U l( 1200 u 30 fllSOO 5000 30 " David Brown " Expense $4500 500 300 Total Cash Received, $11500 " " Paid out, 4500 Balance on hand— Resource, $7000 Dr Merehandi se. Cr . Outlay for Merchandise. Returns from Merchandise. 1879 1879 Jan. 1 10 14 To Cash, " David Brown, fseoo 2500 1200 1500 Jan. 15 30 By Cash, 16500 1500 5000 Total Returns of Merchandise, $6500 " Outlay for '' 5200 Net Returns— Gain, $1300 103 THE SCIEl!q^CE OF ACCOUNTS. Br. David Brown. Cr. Uis indebtedness to vs. Our indebtedness to him. 1879 Jan. 30 To Cash, We owe him He owes us 500 1879 Jan. 14 By Merchandise, 1500 Balance due him— Liabuitt, $1500 500 $1000 Dr. Expense. Cr. Outlay. 1879 Jan. To Cash, 300 Total Outlay for Expenses— Loss, $300 We will suppose the above accounts to comprise all in the Ledger with the exception of the Stock, or Proprietor's account, which should represent the net investment; and that the net investment, as shown by the first entry in Cash account, is 15000. The following statement will sufiBciently enforce the leading prin- ciples of the science. Resource.— Cash on hand, $7000 Liability.— We owe David Brown, . : . . . 1000 JVet Resources., or Present Worth Gain.— On Merchandise, $1300 Loss. — On Expense, 300 Net Gain, $1000 Add oriijinal Investment, .... 5000 Gives Present Worth, $6000 $6000 From the foregoing illustrations we deduce the following gen- eral principles : 1. An Account is a statement of facts pertaining to some per- son, species of property or cause, so arranged as to show some specific result. 104 THE SCIENCE OF ACCOUJ^TS. 2. Every account has two sides, a debtor and a creditor ; each containing the results of separate transactions, and showing, in the difference between the amounts, a general result or fact having an important bearing upon the business. 3. Accounts may be divided into two classes ; one of which is used to designate the resources and Uahilities, and the other^ the gains and losses. 4. The net gain or net loss in business, as evinced by the general result of all the accounts showing gains or losses, is confirmed by a corresponding increase or diminution of wealth, which is shown in the general result of all the accounts showing resources or liabilities. DEBITS AND CREDITS. One of the great difficulties which beset the teacher of Accounts, is in the proper definition and explanation of the terms " Debit and Credit." So well is this fact appreciated, that authors have been induced to found treatises on Book-keeping upon what they regard the discovery of some " infallible rule " for journalizing, which is to revolutionize the labor and processes of instruction, and open up to the world a grand highway of " Bookkeeping-made-easy." The student is assured that the whole matter turns upon some simple fact, such, for instance, as owing and heing owed. " Thus," says the author, '' everj debit owes you, and you owe eyerj credit j" and from these premises is deduced the infallible corollary, '^ Debit what owes you, and credit what you owe." Other authors, again, rush to the opposite extreme, basing the theory of debits and credits upon an utter lack of theory, announc- ing, at the start, that " the items of which debits and credits are composed form a list of incongruous facts having no object in common." And yet these different theorists, widely as they may diverge touching the reasons of things, come at last to the same practical conclusion as to results. The questions as to the best 7net7iods of presenting truth is a professional question, and it is the business of every author and every teacher to use the best reasons he has, and to produce the best results he can in his own way. We believe that every student who will familiarize himself with the principles which follow, need have no difficulty in decidin 105 THE SCIENCE OF ACCOUNTS. apon the debits and credits involved in any business record which he may be called upon to make : PRINCIPLES. /.—Proprietors. The person or persons owning the business should be credited, under some title, for investments when made, and for their share of the gain, at such time as an accounting is made. They should also be debited individually for what they draw from the business — or what the business pays or assumes to pay for them— and for their share of the losses, when such losses are finally determined ^.— Cash. Cash account should be debited for all money received, and credited for all money paid out. 3. — Other People's Written Promises. Bills Keceivable account should be debited for all notes, drafts, or other written obligations for which we are to receive payment, when they become ours, and credited when they are paid, or other- wise disposed of. ^.— Our Written Promises. Bills Payable account should be credited with our written obli- gations when they are issued, and debited when they are paid or redeemed. 6, — Persons. Personal accounts, or accounts with individuals, banks or other institutions competent to sue or be sued, should be debited under their proper titles when they become indebted to us, or we get out of their debt, and credited when we become indebted to them or iliey get out of our debt. 6. — Losses and Gains. Causes producing losses or gains in business should be desig- nated in accounts, bearing significant titles. Such accounts should be debited for all outlays or losses, and credited for all returns or gains.* * This definition covers the purchase and sale of j^oods, the producing power of labor, the incurring of expenses, etc., etc. ; in fact everything that effects an increase or diminution of wealth, or is employed to that end. 106 QUESTIONS FOR REVIEW. Introduction, Page 99. 1, Why lias Double Entry better claims to the distinction of an exact science than Single Entry? 2. In what particulars do the two systems differ? 3. How may the precise difference be seen ? If.. To what has the term Double Entry reference ? 5. What is the condition of every complete entry upon the Ledger ? 6. What is the advantage of the equilibrium produced in the Ledger? 7. What is the main book of accounts in Double Entry? S. How does the Double Entry Ledger differ from the Single ? 9. What beside per- sonal accounts are kept in the Double Entry Ledger? 10. Do the Cash-Book and Bill-Book alone contain all the facts pertaining to notes and cash? — 11. What are the three main books in Double Entry? — 12. Which two of these are sometimes combined in one ? — 13. What does the Day-Book con- tain ? — 14. What should be its character ? — 15. What relation does the Journal sustain to the other books? — 16. What is its office? — 17. What is the process of entering in the Journal called ? — 18. Describe the Ledger. — 19. What does the Ledger contain ? — 20. What is the process of entering in the Ledger called % The Science of Accounts, Page 103. 21. To what does the " Science of Accounts " exclusively pertain ? — 22. Of what is each Ledger account a statement ? — 23. How are these results shown ? — 24. When the Debit side of Cash account is the larger, what does the differ- ence express? — 25. When the Credit side of Merchandise account is the larger, what does the difference express? — 26. When the Credit side of a personal account is the larger, what does the difference express? — 27. When ihe Dehit side of Expense account is the larger, what does the difference express ? — 28. What is an Account 'i—29. What are the characteristics of an Account? — 30. Into how many classes may Accounts be divided, and what are they? — 31. How is the net gain or loss in business, as shown by the special accounts, confirmed? — 32. What is one of the chief difficulties in the way of teaching accounts ? —33. Do intelligent authors and teachers differ in their application of the truths of Double Entry? — 34. When should the pro- prietor of the business be debited, and when credited f — 35. When should Cash account be debited, and when credited? — 36. Merchandise? — 37. Bills Receivable ?— 1050 10750 10750 113 Double Entry— Journal. [set i. ^ew York, January 10, 1878. Dr. Cr. 9 10 Wheat, Brought forward, To Bills Payable, Wheat Dr. PWn.6; Bills Pay'le Cr. Prin. 4 Cash, To Wheat, " Flour, Casli Dr. Prin. 2 ; Wheat Cr. ) „^ . « Flour Cr.f^^*^-^- u Expense, To Cash, Expense Dr. Prin. 6 ; Cash Cr. Prin. 2. 15 Flour, To Cash, Flour Dr. Prin. 6 ; Cash Cr. Prin 2. 17 Cash, To Flour, Cash Dr. Prin. 2 ; Flour Cr. Prin. 6. 18 Oats, To George Davis, Oats Dr. Prin. 6 ; Geo. Davis Cr. Prin. 5. 114 10750 500 800 50 1500 600 750 14950 10750 500 125 675 50 1500 600 750 14950 Set 1. Double Entry— Journal. 3 Kew York, January 20, 1878. Dr. Cb. 5 9 6 3 1 6 1 11 12 1 Brought forward. Bills Keceivable, To Oats, " Wheat, Bills Receivable Dr., Prin. 3 ; Oats and WlieatCr.,Pn7?. 6. 14950 515 2730 8250 6000 14950 400 115 2400 330 8250 6000 Cash, To Flour, " Wheat, Cash Dr., Prin. 2; Flour and Wheat Cr., Prin. 6. Flour, To James Hathaway, Flour Dr., Prin. 6; J. Hathaway Cr., Prin. 5. Jonas Clark, To Flour, 3 5 3 1 9 8 3 Jonas Clark Dr., Prin. 5; Flour Cr., Prin. 6. (liQ 515 3325 100 515 2875 450 100 Cash, To Bills Keceivable, Cash Dr., Prin. 2. ; Bills Receivable Cr., Prin. 3. Cash, To Flour, " Oats, Cash Dr., Prin. 2 ; Flour and Oats Cr., Pnn. 6. Expense, To Cash, Expense Dr., Prin. 6 ; Cash Cr., Prin. 2. 36385 36385 115 Double Entry— Ledger. Dr, Outlay. 1 Flour. [Set 1. Cr, 1878 1878 Jan. I To Smith A Sons, 1 6000 Jan. 2 By Cash, 1 1950 15 Cash, 2 1500 5 P. Cooper, 1 1750 25 J. Hathaway, 15750 Returns, . o 117300 Outlay,. . . 15750 Net returns, $1550 3 8250 7 12 17 22 27 29 Bills Rec'ble, Cash, Jonas Clark, Cash, 17300 1 2 3 3 3 1050 675 600 2400 6000 2875 Dr, Our f^f, against them. Smith. & SOlflS. Their a^^ againa us. Qv. We cue them f6000 1878 Jan. By Flour, 6000 Dr. 3 Cash, Cr. 1878 1878 Jan. 2 To Flour, 1 1950 Jan. 14 By Expense, 2 50 12 Wheat & Fl'r, 2 800 15 Flour, 2 1500 17 Flour, 2 600 80 Expense, 3 100 22 Flour &Wh't, 3 2730 1650 28 Bills Rec'ble, 3 515 29 Flour, 9920 3325 Received, |9920 Paid out, 1650 On hand, |8270 Dr. Our ar^ against him. PetOr COOpeF. His (^ againH us. Cv . 1878 Jan. To Flour & Oats, 1750 lie owes us f 1750 IIG Set l.J Double Entry— Ledger. 5 Dr. Others notes received. Bills Rec'ble . Others' notes disposed of. cv. 1878 1878 Jan. 1 20 To Flour, Oat8 & Wh't, 1565 1 3 1050 515 Jan. 28 By Cash, Notes received, |1565 " disp'd of, 515 3 515 . « on hand, |1050 Dr. Outlay. 6 ^Vheat. Cr. 1878 1878 Jan. 10 To Bills Payable, Returns, . , . $570 OutUy, . . . . 500 Net rtturns, . . $70 2 500 Jan. 12 20 22 By Cash, Bills Rec'ble, Cash, 670 2 3 3 125 115 330 Dr. Our notes redeemed. BlllS Pa.ya.l3le. Ournotes issued. Or. Notes oulstand'g, f 500 1878 Jan. 10 By Wheat, 500 8 k Dr. Outlay. Expense Or 1878 Jan. 14 30 To Cash, it 2 3 50 100 Outlay, 1150 150 117 DOL rBL .E i: .n: rRY- -L iEDGER. [Set 1. 9 Dr, Oialay. Oats. Returns. Cr. 1878 1878 Jan. 18 To Geo. Davis, Returns, . . . $850 Outlay,. . . . 750 2 750 Jan. 20 29 By Bills Rec'ble, Cash, 85C 3 3 400 450 Net returns, . . $100 10 Dr, Our % against him. GeOrgG DaVlS. His % against us. Qv, We owe him, |750 1878 Jan. 18 By Oats, 750 11 D)\ Our % against him. J. Hatha^Way. nis % against us. Qv. : owe him, $8-250 1878 Jan. By Flour, 8250 12 Br, Our % against him. JonaS Clark. His % against Cr. 1878 Jan. 27 To Flour, lie owes us, $6000 118 STATEMENT OF RESULTS. We are enabled now to exhibit the current condition of our business during the month, with the results thus far accomplished. The Ledger accounts present the following facts : — Dr, TRIAL BALANCE.— FACE OF LEDGER. Cr, 15750 9920 1750 1565 500 150 750 0000 36385 Outlay Flour, . . . Eetums Our % ag'st them. Smith & Sons, . Tlieir % agn'st us. jReceived Cash, .... Paid out Our%ag'nsthim. Peter Cooper, His % against us. . Others' notes rec'd. Bills Rec'ble, Others' notes disp. of Outlay Wheat, . . . Eetums Our notes red''m''d. Bills Pay'ble, Our notes issued. . Outlay Expense, Outlay Oats, .... Eetums Our % ag'nst him. George Davis, His % against us. . Our % ag'nsthim. J. Hathaway, . Ms % against us. . Our % ag'nsthim. JONAS Clark, . Bis % against us. . EquUibrium, 17300 6000 1650 515 570 500 850 750 8250 36385 The above statement is called a " Trial Balance " for the reason most apparent ; it is a trial to ascertain if the debits and credits on the Ledger are equal, or halance. It does not, as some suppose, prove the Ledger to be absolutely correct, as there are many cir- cumstances under which the Ledger may balance, and yet be wrong. This form of Trial Balance, however, is so nearly a test that under ordinary circumstancps it may be considered satisfactory. By observing the footings it will be seen that they exactly agree witli those of the Journal, which could rarely be the case, were any of the Journal entries omitted in posting ; and as the footings of the Journal columns also tally with that of the Day Book, it is almost 119 STATEMENT OF KESULTS. conclusiYe that all the original entries have found their way into the Ledger. There will remain but two chances of error in the accounts, viz. : from improper Journal entries, or from posting to the wrong accounts. In order to afford this additional test, we have found it neces- sary to carry into the Trial Balance the total footings of the Ledger. If we desired only to test the halances, this would not be necessary, as will be seen from the following example : TRIAL BALANCE.— DIFFERENCES. Dr. Cr. 1 FlOUB, . . . mt Returns, . . . Gain, . . 2 Smith & Sons, . We owe them, . . Liability, 3 Cash, .... Amount on hand, . Resource, 4 Peter Cooper, He owes vs, . . . Resource, 5 Bills Rec'ble, Amount on hand, . Resource, 6 Wheat, . . . Net Returns, . . . Gain,. . 7 Bills Pay'ble, Our notes outsfg, . Liability, 8 Expense, . . Outlay, loss, . . 9 Oats, .... Net Proceeds, . . . Gain, . . 10 George Davis, We owe him, . . . Liability, 11 J. Hathaway, . We owe him, . . . Liability, 12 Jonas Clark, . Re owes us, . , . Resource, Equilibrium, 8270 1750 1050 150 6000 17220 1550 6000 70 500 100 750 8250 17220 We have here a test of equal debits and credits quite as satis- factory as the other, and much more brief, upon the principle of cancellation; that is, permitting a debit to offset a credit of the same amount, and vice versa. These forms have each its peculiar advantages, and it is often found convenient to combine them in one. Examples, of this latter method will be found in a more advanced portion of the book. In the Trial Balance of ^'Differences" it will be seen that each Ledger account expresses one of the four results previously men- 120 STATEMENT OF RESULTS. tioned, viz.: a resource, a liability, a gain, or a loss. By a careful classification of tliese facts we are enabled to present one of the vital facts of Double Entry, viz.; that the net gain or loss in busi- ness exactly corresponds with the increase or diminution of wealth. The following will more fully illustrate this fact : 1. RESOURCES AND LIABILITIES. Resources.. 3 Cash, .... Amount on hand,. . $8270 00 4 Peter Cooper, He owes us, .... 1750 00 5 Bills Rec'ble, . Notes on hand, . . . 1050 00 12 Jonas Clark, . m owes us, .... 6000 00 iiabilities.. 2 Smith & Sons, , 7 Bills Payable, 10 George Davis, 11 J. Hathaway, We owe them, . . . Our notes outstand''g. We owe him, . . . l( U II Present Worth, 6000 00 500 00 750 00 8250 00 2. GAINS AND LOSSES. 1 Flour, Wheat, 9 Oats, . -Gains.. Net Returns, .Losses. 8 Expense, , . Outlay, 1550 03 70 00 100 00 Net Gain, . . 121 1720 150 1570 EXAMPLES FOB PRACTICE. By comparing the numerals in these statements with those in the Trial Balance, it will be seen that all the Ledger accounts are used, and that the original purpose of each account is fully recog- nized. The statement of Gains and Losses will afford a more prac- tical idea of the advantages of double entry than could be enforced in any other manner. The bare assertion that all gains are the result of an increase, and all losses of a decrease in wealth could nofc be denied ; but the proof of the assertion, drawn from the Ledger itself, as indicated in the above statements, will carry conviction which must be conclusive and abiding. Commencing business without capital, it will be easily under- stood that the present loorth, or net ca2)ital at any time, must exactly correspond with the net gain. From these illustrations we derive the following RULES. /. — To find the net gain ; Subtract the sum of aU the losses from the sum of all the gains ; or, Subtract the capital at commencing from ilie CAPITAL AT CLOSING. ^. — To find the present worth: Subtract the liabilities from the RESOURCES; or, Add the net gain to the net investment. EXAMPLES FOR PRACTICE. Example I. — A. commenced business with the following investment. Cash in hand, $300 ; Bank deposits, $4000 ; Merchandise, $5000 ; Notes, $2500. His losses and gains were as follows : Gain on mdse., $1575 ; Do. on Shipment speculations, $5000. Loss on expense, $300 ; Do. on bad debts, $1200. What was his net gain f What his capital at the dose of business ? Ans.—'Set gain, $50T5. Cap. at closing, $16,875. Example II. — B. commenced business with a cash capital of $3795.83. A1 the end of the year his resources and liabilities were as follows : Resources : Mdsa unsold, $5725 ; Cash on hand, $3875-90 ; Notes, $1500; EXAMPLES FOR PRACTICE. Personal accounts, $8500. Liabilities : Bills payable, $8000 ; Personal accounts, $3500. Wiat is he worth at the end of the year ? How much did he gain f ^n«.— Present worth, $8100.90. Gain, $4305.07. Example III. — C. commenced business without a capital. At the end of the year his Ledger exhibited the following balances : Br. Cf. Cash,- - - - Mdse., - - - John Johnson, Robert Blake, - Silas B a roll, Andrew Smiley, Bills Receivable, Bills Payable, - Expense, - - - 4500 1500 1200 1900 _^75 9275 1575 1875 4725 1100 9275 What has teen his gain ? What is his capital at the close of the year,"* Example IV. — The following Trial Balance shows the full condition of my business at the close of a year. Required a statement showing gains and losses, resources and liabilities. Dr. Cr. Cash, Merchandise, - - Real Estate, - - Andrew Simpson, William Matthews, Expense, - - - Bills Receivable, - Bills Payable.. - - Henry Martin, - - Abram Guilford, - 10397 6792 5000 5620 10000 12000 4000 2500 8000 9750 1200 7000 5000 1500 500 3434 1500 1000 47597 47597 84 16 ~00 ♦ This and the succeeding example should be rendered in the form of the Statement on page 121. 123 PRACTICAL EXERCISES. [ To be written up after the manner of Set 1. ] Transactions.— First Series. Jan. /. — Commencsd Business without Capital. Bo't of S. S. Packard on %, Mdse. amounting to $5750 Sold John R. Penn, for Cash, 10 yds. Broadcloth, @ $5; 3 do. Vest Satin, @ $8 Paid Cash for Stationery and Postage, $10. ^.— Sold J. H. Goldsmith, on %, 1 Vest Pattern, $7.50 ; Trimmings for same, $3 ; 50 yds. Amoskeag Sheeting, @ 12^. S, — Sold J. M. Bradstreet, on his note @ 60 ds., 1 case Boots, 24 pairs, @ $3.50 ; 25 yds. Flannel, @ 50# Sold E. A. Charlton, for Cash, 1 box Hosiery, $10; 75 yds. Lowell Prints, @ lOf. ^.— Paid S. S. Packard, Cash on %, |50. ^. — Sold Robert Baker, invoice of Shirting and Fancy Cloths, for $3700 ; Received in payment, Cash, $3000 ; Balance charged on ^. 9. — Paid store rent in Cash, $100 Received Cash in f uU of J. H. Goldsmith's %, $ . /(9._Sold James S. Packard, on %, 20 yds. Broadcloth, @ $3.75 ; 50 do. Cassimeres, @ $1. /5. — Sold C. J. Dietrich, for Cash, 12 pairs Ladies' Congress Gaiters, @ $2 ; 1 case Misses' Tipped Shoes, 24 pairs, $1.25 ; 3 cases Men's Double sole Boots, 36 pairs, @ $4. /4.— Paid Clerk's Salary in Cash, $50 Sold J. C. Bailey, for Cash, 1 doz. Balmoral Skirts, 12 @ $2 ; 1 piece Mous. de Laine, 75 yds., @ W ; 1 do. Wamsutta Sheeting, 50 yds., @ W. fS, — Bo't of James Dawes, on our note @ 3 mos., invoice of Fancy Broadcloth, amounting to $2500 Sold Rob't C. Spencer, for Cash, 2 pieces Broadcloth, 50 yds., @ $3.50; 1 do, Lowell Prints, 25 yds., @ \2^. /^.— Paid S. S. Packard, Cash on %, $2000 Sold Henry Ivison, on % , 150 yds. Wamsutta Sheeting, @ 15/ ; 50 yds. Broadcloth, @ $4. /<^.— Received Cash of James S. Packard, in full of %, Sold Richmond Kingman, for Cash, 3 doz. Elastic Hoop Skirts, 36 @ $3 ; 4 doz. Balmoral do., 48 @ $2.25. 124 EXERCISES FOR THE LEAR:n:ER. 20, — Sold Henry Blakeman, for Cash, 1 piece Irish Linen, 50 yds., @ 75^ ; 3 do. Lowell Prints, 150 yds., @ \^f ; 5 do. Amoskeag Sheet- ing, 250 yds., @ 14^. 2f, — Sold J. C. Bryant, on %, 2 cases Ladies' Tipped Gaiters, 48 pairs, @ $2 ; 5 do. Boys' Double-sole Boots, 60 pairs, @ $1.50. 22, — Paid Cash for petty expenses, $15.50. ^J.— Rec'd Cash on Robert Baker's %, $350 Paid S. S. Packard, Cash on %, $500 Sold Lorenzo Fairbanks, on ^,50 yds. Broadcloth, @ $4 ; 75 do. Cassimeres, @ $1.25. 27 » — Sold James Smith, for Cash, 3 pieces Cambric Muslin, 60 yds., @ 25^ ; 3 do. Scotch Plaid, 120 yds., @\\f Sold J. McMillan, on his note @ 30 ds., 40 yds. Black Doeskin, @ $1.25; 8 pieces Merri- mack Prints, 250 yds., @ 10/. 30, — Sold Peter McGrath, for Cash, our entire stock of goods, amount- ing, per Inventory, to $3450 Paid S. S. Packard, in full of %, $3200. T RIAL Balance. The following Trial Balance shows the condition of the Ledger accounts after writing up the foregoing transactions. The student should render his statement therefrom after the manner of the statement. Set I. Face of Ledger. Br, Cr. S. S. Packard, - • Merchandise, - ■ Cash, Expense, - - - J. H. Goldsmith, ■ Bills Receivable, - Robert Baker, - • James S. Packard, Bills Payable, - • Henry Ivison, - - J. C. Bryant, - • L. Fairbanks, - < 5750 5750 8250 8971 7747 70 5925 175 50 15 50 15 171 50 700 350 125 125 2500 222 50 186 293 75 23637 45 23637 45 50 50 45 125 ^ET 2.— pOUBLE ^NTRY. (In Colors.) DAY-BOOK, JOURNAL, LEDGER, AND AUXILIARIES. LEDGER CLOSED, AND RESULTS SHOWN IN AN IMPROVED FORM OF BALANCE SHEET, WITH FULL EXPLANATIONS. !ProsveT*ovL8. 127 REMARKS. This set is a continuation of Set 1, although the nature of the business undergoes a change. The merchandise represented in .jthe previous set being all disposed of, we now invest in a more 'miscellaneous stock, comprising a general assortment of groceries and provisions. Instead of keeping a distinct account with each article of traflBc, as in Set 1, we classify all under the title of ^^Merchandise." This is the usual business method, and should always be adopted, except where it is essential to know the gains and losses on each particular kind of property. Having a net capital at commencement, the first entry must pertain to the existing resources and liabilities. Stock, or the proprietor, is credited with the total investment, and debited with the liabilities assumed, according to Principle 1. The term "Sundries" is here, for the first time, used in its technical sense. It means sundry accounts, or sundry items, and is convenient as a Journal expression, and to avoid the necessity of enumerating the items which comprise the totals carried to the Ledger accounts. This convenience will be immediately apparent by comparing the Ledger entries of this set with those of the preceding. The object and method of " closing the Ledger " is also fully illustrated; a point which the student should not pass lightly over. The great difficulty in learning the science of Accounts from a text-book, exists in the tendency to copy the forms and exercises mechanically without a proper understanding of the principles. The business aspect presented by the forms of this set, will at once commend them to the student, as models for his emulation. The red inh entries, in particular, are intended to remove all the obstacles to a full and clear understanding of the instructions given. In short. Set 3 is presented as embracing, in completeness, the essential qualities of Double Entry ; and as such, it is commended to careful attention. 128 SET2.J Double Entry— Day -Book. J^ew York, February 1, 1880. Commenced Business this day with the following Re- sources and Liabilities, taken from previous Ledger : RESOURCES. Cash on hand, Notes and Drafts, Peter Cooper's account, Jonas Clark's " $8270 00 1050 00 1750 00 6000 00 LIABILITIES. Notes outstanding, Smith & Sons' account, George Davis, " James Hathaway's " 1500 00 6000 00 750 00 8250 00 Bought of Comstock & Co., for Cash, 10 hhds. N. O. Mol., 600 gal., 10 " Cuba Sug., 9500 lbs., 17 bags Rio Coffee, 1575 " 20 hf. ch. Ool. Tea, 1080 " 10 tierces Rice, 5000 " @ 40^ $240 00 " 5^ 475 00 " W 252 00 " W 540 00 " 4|)^ 22500 Sold S. S. Randall, on % ., 3 gals. Molasses, 200 lbs. Sutrar, 150 " Coffee, @50^ " 16^ $1 50 12 ool 24 00 1 s Sold James W. Lusk, on his Note @ 30 ds., 2 hhds. Sugar, 2100 lbs., @ 6^ $126 00 10 hf. chests Tea, 540 lbs., " 55)^ 297 00 , Paid Cash to Geo. Davis in full of % 17070 15500 1733 37 423 750 d5512 50 50 129 2 Double Entry— Day - Book. JS^ew York, February 4, 1880. [Set 2. t/ Sold Henry C. Spencer, on %, 2 hhds. Molasses, 120 gals., ■ ' ■ Amount forward, 35512 54 250 67 82 210 18 753 118 50 / Bought of J. A. Tilford, on our Nc 10 tubs Lard, 400 lbs., 20 boxes Soap, 1400 lbs., 5 brls. Pork, 1000 lbs.. te @ 60 ds., @ 13^ 52 00 " 7/' 98 00 " W 100 00 1 V 'Sold Harmer Smith, for Cash, 2 brls. Pork, 400 lbs., 1 tierce Rice, 500 lbs.. @10i^ 42 00 1 " 5f 25 00 1 1/ 6 Sold B. F. Carpenter, on %, 2 tierces Rice, 1000 lbs., 1 bag Rio Coffee, 150 lbs.. @ 5^f 55 00 " 18^ 27 00 / Bought of Clarence Doubleday, f ( 10 brls. Potatoes, 1000 lbs. Eng. Dairy Cheese, 3r Cash, @ $3 00 30 00 18;^ 180 00 / 7 Sold James Reed, for Cash, 10 lbs. Coffee, 3 boxes Soap, 210 lbs., @ 18)^ 1 80 - Sj^ 16 80 60 / 8 Bought of Robert Hanaford, for C 10 hhds. Hav. Sugar, 11000 lbs., 3 " N. 0. " 3700 " ash, @ 5^ 550 00 " 5^f 203 50 50 i / 9 Sold Henry Van Dyck, on %, 2 hhds. Havana Sugar, 1970 lbs.. @ Q^ 20 37065 80 130 Set 2.] DoUBLE EnTRY— DaY - BOOK, :f{ew York, February 10, 1880, / Paid Jambs Hathaway, Cash on %, Amount forward^ 37065 4000 95 29 17 100 37 54 22 44 80 / 12 Sold James Hathaway, on %, 1 brl. Pork, 200 lbs., 1 bag Rio Coffee, 110 lbs., 1 hbd. Hav. Sugar, 900 lbs.. " 18^ $22 00 19 80 54 00 80 / 13 Sold L. Fairbanks, on %, 100 lbs. Eng. Dairy Cheese, 1 brl. Potatoes, @25^ $25 00 4 00 / Sold Henry Van Dyck, on %, 10 lbs. Coffee, 50 " Eng. Dairy Cheese, 50 '* Rice, @18^ " 25;^- $1 80 12 50 2 75 05 / 15 Paid Cash for rent of store. / Sold J. T. Calkins, for Cash, 150 lbs. Eng. Dairy Cheese, (^mf 50 / 17 Rec'd Cash of Henry C. Spencer, in full of %, «/ 18 Sold S. S. Randall, on %, 25 lbs. Tea, 50 " Lard, 20 " Rice, @ 56^ " 15;^ « 5^ $14 00 7 50 1 00 50 / Sold Peter Cooper, on %, 2 brls. Pork, 400 lbs., @ 11^ 41465 65 131 Double Entry— Day - Book. [set 2. Jfew York, February 22, 1880. / Sold E. F. Hill, on %, Amount forward. 41465 65 1 hf. chest Tea, 54 Ihs., @ m 82 40 /7t 0> 'Zo / Received of Jonas Clabk, in full of %, Cash, Note, @ 90 ds.. $3000 00 8000 00 6000 /Co V Paid Smith & Sons, Cash on %, 3000 / Sold George Davis, on %, 2 hhds. N. 0. Molasses, 120 gal ., @44f^ 53 60 (it ft i;t» / Paid Cash for our note, favor of J. ' R. Wheeler, 500 Sold E. C. Bradford, for Cash, V 10 lbs. Rio Coffee, 10 " Tea, @ 19^ $1 90 " 50i^ 5 00 50 " Rice, " "^f 3 50 10 40 2i \ Sold Edwin Morgan, for Cash, «/ 1 tierce Rice, 500 lbs., 2 brls. Potatoes, @ 6^ $30 00 " 3 00 6 00 ^ 86 28 / Paid clerk's salary, in Cash, 100 51198 05 132 Set 2.] ^ DoUBLE EnTRY— JOURNAL. Xew York, February 1, 1880. Dr. Cb. Sundries, Cash, Bills Receivable, Peter Cooper, To Stock, 4 ; Jonas Clark, 1 7 8 9 10 11 6 Stock, To Sundries, " Bills Payable, " Smith & Sons, " George Davis, " J. Hathaway, Merchandise, To Cash, S. S. Randall, To Merchandise, 3 Bills Receivable, To Merchandise, George Davis, To Cash, 4 Henry C. Spencer, To Merchandise, 5 Merchandise, To Bills Payable Cash, To Merchandise, 133 8270 1050 1750 6000 15500 1732 37 423 750 64 250 67 50 50 17070 500 6000 750 8250 1732 87 423 750 54 250 67 50 85883 50 Double Entry— Journal. csbts. 2 J\rew York, February 6, 1880, Db. Cb. 13 6 10 5 10 14 B. F. Carpenter, Amounts forward, To Merchandise, // Merchandise, To Cash, Cash, To Merchandise, 8 Merchandise, To Cash. 9 Henry Van Dyck, To Merchandise, 10 James Hathaway, To Cash, James Hathaway, L- Fairbanks, To Merchandise, IS To Merchandise, 14 13 , Henry Van Dyck, 6 To Mdse., 15 1 5 15 Expense, To Cash, Cash, To Merchandise, 134 210 18 753 118 4000 95 29 17 100 87 41345 50 60 50 20 80 05 50 15 210 18 763 118 4000 95 17 100 37 50 60 50 80 05 50 41345 15 Set 2.] DoUBLE EnTRY— JOURNAL. Kew York, February 17, 1880. Db. Cb. 5 12 11 6 16. 6 15 Cash, Amounts forward, To H. C. Spencer, 18 S. S. Randall, To Merchandise, M Peter Cooper. To Merchandise, OBj F.- Hell, To Merchandise, Sundries, Cash, Bills Receiyable, To Jonas Clark, 25 Smith & Sons. To Cash, George Dayis, To Merchandise, Bills Payable, To Cash, Cash, To Merchandise, Cash, To Merchandise. Expense, To Cash, 135 41345 54 22 44 8000 3000 3000 53 500 10 100 51198 15 50 40 60 40 05 41345 54 22 44 6000 3000 53 500 10 100 51198 15 50 40 60 40 05 Double Entry— Ledger. Dr. 1 Stock. [Set 2. Cr. 1880 Feb. 1 28 To Sundries, Balance^ 1 Ll9 15500 nos 05 1880 Feb. 1 28 By Sundries, Loss & Gain, 1 l5 17070 533 05 17603 05 17603 D5 D r. Bills Receivable. Cr 1880 Feb. 1 3 23 To Stock, Mdse., J. Clark, 1 1 8 1050 423 8000 1880 Feb. 28 By Balance^ 1.19 IMS 4473 4473 3 Dr, Peter Cooper. Cr 1880 Feb. 1 20 To Stock, Mdse., 1 3 1730 44 II1880 Feb. 28 By Balance^ Ll9 mu 1794 1794 Dr. Jonas Clark Cr 1880 Feb. 1 To Stock, 1 6000 1880 Feb. 38 By Sundriee, 3 6000 136 Set 2.] Double Entry— Ledger. Dr, 5 Cash. Cr. 1880 — 1880 — • Feb. 1 1 'o Stocfc, 1 8270 Feb. 1 By Mdse., 1 1732 t( 5 ' Mdse., u 67 " 3 " Geo. Davis, " 750 (( 7 4 4i 3 18 60 u 6 " Mdse., 2 210 (i 15 I u " 37 50 11 8 u u " 753 50 i( 17 ' H. C. Spenceii 8 54 (I 10 " J. Hathaway, u 4000 i( 23 ' Jonas Clark, •" 3000 (( 15 " Expense, " 100 (I 26 ' Mdse., " 10 40 (I 25 " Smith & Sons, 3 8000 (k 27 i it 86 t( 26 28 " Bills Payable, 'i Expense, " Baiance, Ll9 500 100 ShS 11493 SO 11493 60 {.Id (3 ' 11 Dr. 6 Merchandise. Cr. 1880 1880 r" 1 — Feb. 1 To Cash, 1 1732 Feb. 2 By S. S. Randall, 1 37 50 " 5 " Bills Payable, u 250 " 3 " Bills Rec'ble, " 423 •( 6 " Cash, 2 210 (t 4 " H.C.Spencer, " 54 4i 8 tt It " 753 60 " 5 " Cash, " 67 »i 98 '' Low A Gain, Ll8 755 05 " 6 " B. F.Carpent'r 2 82 ■•> J (I 7 9 " Cash, " H.VanDyck, M 18 118 60 20 li 12 13 " J. Hathaway, " L. Fairbanks, " 95 29 80 u 14 " H.VanDyck, " 17 05 \:/ . CO 1-' o to M L. Fol. « 3 § S| 00 i& CO o B s's 8^ ^ S • 8S SS -3 § -3 ti rl . . . gg ? gis S^8 Sg§ S 8 141 ORDER AND PURPOSE OF CLOSING THE LEDGER. Iif the preceding set it was thought best to leave the Ledger in its open or current condition, the results of the business being shown in a separate statement. When the object is to know simply the condition of the business, this method is sufficient; but when it becomes necessary to mark the progress of the business in some enduring manner upon the Ledger, the accounts must be "closed," and the balances exhibited, either under the account itself, or in some other account, of similar import. From the statement in connection with the previous set, the student has learned that the Double Entry Ledger contains two classes of accounts ; one showing the present condition of the business, by representing all its resources and liabilities, and the other showing its progress, by representing its particular gains and losses. For the purpose of distinction, and as a proper designation of their character, we designate the former of these classes, Fi2!^^ancial, and the latter Busij^ess accounts. By Fi]!5"ancial accounts, there- fore, is meant those which show the financial condition; and by Business, those which show the progressive steps and characteris- tics of the business. The student who has acquired the foregoing instructions, will have no difficulty in making this classification. The object of "closing" the Ledger is to put an end to its cur- rent condition by absorbing the Business accounts ; for inasmuch as the proprietor is to be credited with his net investment, when- ever that net investment is increased by gains, his account should get the benefit of it. As it would be impracticable to carry the separate gains and losses to the proprietor's account when they accrue, they are permitted to remain in the accounts producing them, until such periods as may be deemed best to transfer them. This is usually done once a year, and in some establishments every six months, thus making an era in the business, and restoring the Ledger to its proper condition of showing only resources and liabilities. 14$ CLOSIN^G THE LEDGER. PROCESS OF CLOSING. It is supposed that the student has gone through with the labor of journalizing and posting the transactions in Set 2, and that his Ledger accounts present an equilibrium of debits and credits. To test this fact, before proceeding farther, we will take an abstract of the Ledger technically called a Dr. TRIAL BALANCE. Or, Differences. Face of Ledger. Face qf Ledger. Differences. 15500 . . . Stock . . 17070 1570 4473 4473 . . . Bills ReceivabL 3 . . 1794 1794 6000 . . . Peter Cooper . . . Jonas Clark . . . 6000 348 11493 50 . . . Cash . . 11145 50 1766 95 2945 500 3000 50 . . . Merchandise . . . . Bills Payable . . . Smith & Sons . . 1178 750 . . 6000 55 250 3000 53 60 803 60 . . . George Davis 750 4095 80 . . . James Hathawj ly . 8250 4154 20 60 60 54 . . . S. S. Randall . . . Henry C. Spenc er . 54 135 25 135 25 . . . Henry Van Dye k. . 29 29 . . . L, Fairbanks. 200 200 . . . Expense . . . 32 40 • 32 40 . . . E. F. Hill . . 82 82 . . . B. F. Carpenter . . . Equilibrium . 8974 20 51198 05 . . . 51198 05 8974 20 The above is the most comprehensive form of the Trial Balance, and one to be commended for its utility. It will be seen that the footings of the "Face of Ledger^' columns exactly agree with the footings of the Day-Book and Journal ; which aJBfords evidence that all the transactions have found their way to the Ledger. The columns of " Differences," which must also balance, afford a test of the results of each account. Having satisfied ourselves that the transactions have been prop- erly posted, we now proceed to close the Ledger accounts. It must not be forgotten that the object of closing the Ledger is to present, 143 CLOSING THE LEDGER. in a proper manner, both the present condition of our business and its progress. Its present condition can be shown by a list of its resources and liabilities ; and its progress by a list of its gains and losses. By a careful examination of the facts, it will be seen that resources are shown by an excess of the debit side of Financial accounts, and liabilities by an excess of the credit side of Financial accounts ; and that losses are shown by an excess of the debit side of Business accounts, and gains by an excess of the credit side of Business accounts. This will suggest the propriety of opening two accounts for these general results : one to contain the resources and liabilities, and the other the gains and losses. We will now open these accounts under the titles of "Loss and Gain," and "Balance," the former to contain the results of the Business ac- counts, and the latter of the Financial accounts. Before proceed- ing to close the accounts, we must see if they are all in a condition to show the results desired. The Merchandise account, as it now stands, shows an excess of the debit side, and would therefore rep- resent a loss, if the merchandise were all sold. The account itself does not show whether the property is all sold; and the only means of ascertaining the facts in the case, is to take an actual inventory, or a valuation of that which remains unsold. When this value is ascertained, the Merchandise account should be credited with it, and Balance account debited. The Merchandise account will then be competent to show the gain or loss on merchandise. We have estimated the unsold merchandise in this case to be worth $2500, which amount we enter on the credit side of Merchandise account in red inlc,^ and transfer the same immediately to Balance account. The accounts are now in a condition to close ; and we will take them in their order. The first account (after stock, which is the proprietor's own account) is Bills Eeceivable. This account repre- sents a resource consisting of other people's notes on hand ; the debit side showing the notes received, and the credit side those disposed of, if any. We close the account by entering the difference, in red ink, on the credit side, and footing up the sides, drawing double red lines underneath. The red ink entry, or balance, is * An entry in red ink on the Ledger, denotes that the amount thus written is to be trans- ferredy either to some other account, or to another position under the same account. It also shows that the entry is^rs^ made in the Ledger, not having passed through the usual prelim- inary books of entry. Red ink entries are always transferred to the opposite side from where they are first written, for the reason that they indicate an excess of that side. 144 CLOSING THE LEDGER. transferred immediately to the deUt side of Balance account. The next account, Peter Cooper, is closed in the same way. The next, Jonas Clark, already balances, and we close it by simply ruling the double red lines. The next. Cash account, is closed in the same manner as Bills Receivable, the balance being transferred as a resource to Balance account. The Merchandise account shows a gain, and the balance is transferred to the credit side of Loss and Gain account. Bills Payable account shows a UaMlity, and the balance is transferred to the credit side of Balance account. Smith & Son's account also shows a liahility, and the balance is trans- ferred to the credit side of Balance account. George Davis' account shows a resource, and the balance is transferred to the debit side of Balance account. James Hathaway's account shows a liability, and is transferred to the credit of Balance. S. S. Ean- dalFs, Henry Van Dyck's, and L. Fairbank's accounts, all show resources, and are transferred to the debit side of Balance. Expense account shows a loss, and is transferred to the debit side of Loss and Gain. E. F. Hill's and B. F. Carpenter's accounts both show a resource, and are transferred to the debit of Balance. We have now the results of all the accounts exhibited under the heads of Loss and Gain and Balance, and if the balances have been properly transferred, these accounts, together with the (un- closed) Stock account, must be in equilibrium. To test this, we next take a Trial Balance of these three accounts, which we call the SECOND TRIAL BAUNCE. Dr, Cr, Stock - - - Loss and Gain Balance - - - 15500 200 9507 25207 25 25 17070 733 7404 25207 05 20 25 Having thus satisfied ourselves that the balances have been properly transferred, we now proceed to accomplish the grand object of closing the Ledger, by carrying the net gain from the Loss and Gain to the Stock account. The Stock account now con- tains the capital invested increased by the gain, which must, of course, equal the present worth, as shown by the Balance account. Wo now close Stock account into Balance, which must produce 145 CLOSING THE LEDGER. an equilibrium of the Balance account, and complete, in that account, the record of resources and liabilities. The Balance account is used in these sets for its convenience in collecting, under one title, all the resources and liabilities. The same effect may be produced by bringing down the balances under the financial accounts. This latter method is adopted in business, and particularly where the record is continued in the same Ledger. From these remarks and applications we are prepared to submit the following order of closing the Ledger, which the student will do well to observe particularly, and to follow out in practice. ORDER OF CLOSING. ^irsi, — Open an account with "Loss and Gain" (if not already opened), and another with " Balance," the former to con- tain the losses and gains, and the latter the resources and lialilities. Second, — Ascertain from the inventory if any property re- mains unsold; and if so, credit each account for which such prop- erty was originally debited, with the value of that unsold, making the entry in red ink, ^^^j Balance," and transfer the amount directly to the debit side of Balance account, making this entry in hlacTc inh, "To Merchandise," or "To Real Estate," or any other account from which the amount is transferred. .The Ledger accounts will each show, now, one of the four following results, viz. : a Resource, a Liability, a Gain, or a Loss. Third, — Omitting Stock (or the Partners' accounts), com- mence with the first account in the Ledger. First ascertain which of the above results it shows, and make the closing entry accord- ingly. If the difference represent a resource or a liability, enter upon the smaller side, in red ink, " To," or " By Balance," as the case may be, and transfer the amount in hlack ink to the opposite side of the Balance account. If the difference represent a gain or bss, enter on the smaller side in red ink "To" or "By Loss and Gain," and transfer the amount in the same manner to Loss and Gain account. Close all the accounts (except Stock or Partners'), and transfer the balances as directed. The Loss and Gain account will now show on the debit side all the losses, and on the credit side all the gains, the difference being the net loss or net gain. The Balance account will show on the debit side all the resources, and on the credit side all the liabilities, the difference being the real interest or present investment of the proprietor or proprietors, 146 BALANCE SHEETS. jFourtk, — Take a second Trial Balance, or a Trial Balance of the remaining open accounts : Stock (or Partners'), Loss and Gain, and Balance. If the balances have been properly transferred, the debits and credits of these accounts taken together must be equal. ^l/lk, — Close Loss and Gain account into Stock, or, if it be a partnership business, into the partners' accounts, dividing the gain or loss, according to agreement. The Stock or Partners' accounts will now show the original investment increased by the gain, or decreased by the loss ; the difference being the present net investment. Inasmuch as the Balance account shows the same thing, they must, of course, agree. Sixth, — Close Stock (or Partners' accounts) into Balance account, which must equalize that account, it showing now, on one side, the total resources, and on the other side the total liabili- ties, and presenting, in the most condensed form, the exact present condition of the business. BALANCE SHEETS. In commercial usage a "Balance Sheet" signifies the systematic arrangement of facts, for the purpose of exhibiting at a view the condition of business. The forms in use are various, according to the necessities of the occasion or the ingenuity of the accountant. Of these the example given on page 141 comprises the most com- plete and symmetrical of which we have a knowledge. The follow- ing explanation will be found serviceable in preparing this sheet for the entries : /. Take a sheet of paper of proper size, and for a border, if such is desired, rule double red lines around the margin. 2 , Eule the parallel head-lines, leaving proper space for double captions, as in the example. 3 , Ascertain the number of Ledger accounts to be repre- sented; which will embrace all the accounts in the Trial Balance that do not canceL* If the business is that of a single proprietor, usually called " Stock " business, rule in pencil as many lines as * Should there be a large number of persor.al accounts, it will be found difficult to include them all separately in this form. In such case it is customary to employ the two general titles, "Accounts Keceivable," and "Accounts Payable," the one embracing all amounts owing to us on personal account, and the other all amounts owing hy us. This curtailment will enable the facts of any common business to bo shown in this form. 147 BALAN"CE SHEETS. will contain all the accounts and five additional. If it be a part- nership business with two or more partners, rule three additional lines for each partner ; thus, for " Stock " business, five lines more than all the accounts ; for two partners, eight lines more than all the accounts; for three partners, eleven lines more, and so on. 4 . Lay off proper spaces for debit and credit money columns ; first for the footings of Ledger Accounts, second for Gains and Losses, third for Stock, or if partners, for each partner — and fourth for Kesources and Liabilities ; also, for a single money col- umn for Inventories, and for Ledger titles and their Ledger folios. The position of these columns will be seen in the example given. These spaces can best be appropriated by using a pair of dividers, and giving each of the captions its just proportions. 6» After denoting the proper space for each heading, which can best be done with pencil, commencje to rule in red ink at the right hand and bring all the lines of the two captions, " Real Accounts " and " Stock," or one of the partners, down to the lower pencil line. For the other partners drop two lines. For Losses and Gains drop two lines in Stock business, and one additional for each partner. 6, Rule the foot lines as shown, and the schedule will be ready to receive the accounts. The process of showing results is precisely similar in its order, and the results the same as in '* closing the Ledger," which has already been so fully explained. There are many kinds of business statements in use, each pos- sessing some peculiar merit, and all having the same general purpose in view, viz. : that of exhibiting the real and progressive condition of the business represented. The forms hitherto used in this work, and particularly the one on page 121, are both simple and compre- hensive, and would possibly be preferred by one not versed in the processes and technicalities of Book-keeping ; but we know of no form that compasses so much within such limited space, as that described above. The example, on page 141, will sufficiently indi- cate the points of excellence, and give the student a model for his emulation. Let him remember that in no one thing does the pro- ficiency of a practical accountant more plainly manifest itself than ill the matter of neatness in arrangement and execution. The art of ruling tastefully, unimportant as it may seem, is one not easily acquired nor overrated. 148 EXAMPLES FOR PRACTICE. The student is requested to render statements after the fornr on page 141, from the following materials : Example 1. TRIAL BALANCE. Dr. Cr, Stock Bills Receivable John Mason - Cash Merchandise - (Amount unsold, $1200) Peter Smith Robert Pendergast Expense Bills Payable Charles Ryan - 881 5000 1500 1000 300 175 •5794 67 4800 3500 2759 4000 1500 384 375 83 1500 1750 483 17851 50 17851 50 50 Example 2. TRIAL BALANCE. Dr. Cr. Stock - Merchandise - (Amount unsold, $1000) George Hopkins -------- Robert Westcott Abram Woodfall Peter Denyse _ . . - Robert Rantoul - James Jackson E. E. Ellsworth Cash Expense Commission - - BiliS Receivable Bills Payable - - Shipment to Detroit Edward Rice - - - Peter Ren wick Edwin C. Packard Benj. F. Holmes F. R. Perley 149 141 78 3000 5000 3700 1500 953 84 753 900 110 500 732 98 500 75 500 983 9753 20 8748 90 450 183 22 1700 150 1500 5000 4000 4598 700 874 50 900 150 75 500 29340 96 29340 96 PRACTICAL EXERCISES. [ To be written up after the manner of Set 2. ] Transactions. — Second Series. ^ed, /. — Commenced business with the following resources and liabilities, taken from the Balance Sheet of previous Ledger.* Resources : Cash, $1822.20; Bills Receivable, $171.50; Robert Baker's ac- count, $350 ; Henry Ivison's do., $222.50; J. C. Bryant's do,, $186; L. Fairbanks' do. , $293. 75 ; Liabilities : our note favor of James Dawes, for $2500 Bo't of Springer & Whiteman, on % , 20 bags Rio Coffee, 1670 lbs., @ 15^ ; 15 tierces Rice, 7500 lbs., @ 4^; 15 hhds. Cuba Sugar, 14000 lbs., @ 5^. ^.— Bo't of Alex. Cowley, for Cash, 12 hhds. N. O. Molasses, 720 gals., @ 40/ ; 20 boxes Soap, 1450 lbs., @ 8f ; 10 brls. Pork, 2000 lbs., @ 10/'. «?.— Sold Lewis Lyman, on %, 30 lbs. Coffee, @ 18,^^ ; 20 do. Rice, @ 5^/ ; 100 do. Sugar, @ 6/ Received Cash of Robert Baker, in full of %, $ 4^, — Paid Cash for stationery and incidental expenses, $20. J^.— Sold Alonzo Mitchell, on %, 1 bag Rio Coffee, 80 lbs., @ 18j^ •, 20 gals. N. O. Molasses, @ 50/ ; 30 lbs. Rice, @ 5i/ Bo't of Peter Duff, for Cash, 300 lbs. English Dairy Cheese, @ 20/ ; 250 lbs. Butter, @ 18*^ Sold John R. Penn, on his note @ 30 ds., 5 boxes Soap, 350 lbs., @ 10/ ; 6 bags Rio Coffee, 485 lbs., @ 16/. ^.— Bo't of S. S. Packard, on our note @ 10 ds., 40 hf. chests T. H. Tea, 2356 lbs.,@ 35/ Sold Charles Strong, for Cash, 10 hf. chests Tea, 580 lbs., @ 38/ ; 100 lbs. English Dairy Cheese, @ 22/. ^.— Sold Samuel Davis, for Cash, 50 lbs. Butter, @ 20/ ; 50 lbs. Coffee, @ 18/ ; 30 gals. Molasses, @ 50/. /^.— Sold Henry Dwight. for Cash, 30 gals. Molasses, @ 50/ ; 10 lbs. Rice, @ 6/ ; 1 box Soap, 75 lbs., @ 10/. /5. — Paid clerk's salary in Cash, $15 Bo't of James Simpson, on %, 15 brls. Crushed Sugar, 2520 lbs., @ 10/. /J. — Rec'd Cash on % of Henry Ivison, $100 Sold Thomas Hunter, on %, 5 hf. chests Tea, 275 lbs., @ 50/; 50 lbs. English Dairy Cheese, @ 23/ ; 25 lbs. Rice, @ 5/ - - - - Sold Henry l\ason, on %, 20 gals. Molasses, @ 50/ ; 3 boxes Soap, 210 lbs.. @ 10/. /^.— Rec'd Cash in full of J. C. Bryant's %, $ Sold W. H. Joeckel, for Cash, 2 brls. Crushed Sugar, 330 lbs., @ 11/. /7.— Sold Lewis Lyman, on %, 50 lbs. Rio Coffee, @ 20/; 100 lbs. Crushed Sugar, @ 11/. /^.— Paid Cash in full, for our note, favor of S. S. Packard, dated Feb. 6, due this day, $824.60. ♦ See Trial Balance, page 125. 150 EXERCISES FOR THE LEARNER. <5^.— Sold Robert Burns, for Cash, 100 lbs. Crushed Sugar, @ ll)^^ Received Cash of Henry Ivison, in full of %, $153.50. ^^.— Paid James Simpson Cash in full of %, $353 Sold Philip Stone, for Cash, 4 hf. chests Tea, 335 lbs., @ 50;^. -^.?.— Sold Thomas Hunter, on %, 50 lbs. English Dairy Cheese, @ 25f^ ; 75 do. Crushed Sugar, @ 11^; 15 do. Coffee, @, W ; 3 boxes Soap, 140 lbs., @ 10/'. ^d".— Sold Alonzo Mitchell, on %, 3 hhds. Cuba Sugar, 1850 lbs., @ 6^ Received Cash in full for J. M. Bradstreet's note of the 3^ ult., due March 5, $98.50 ; also for J. McMillan's note, due Mar. \, $75. Total, $171.50. .^7.— Paid Cash for store rent, $100. STATEMENT. The student is expected to produce the following results from the foregoing transactions : TRIAL BALANCE. Stock Bills Receivable Cash L. Fairbanks - - Alonzo Mitchell - Merchandise (Amount unsold, $2500) Bills Payable Springer & Whiteman - - - - Lewis Lyman - Expense -------- Thos. Hunter 10 50 75 05 10 60 50 961 3334 1350 95 50 60 3500 384 3343 393 137 3036 834 33 135 188 10674 60 10674 60 3045 171 1930 45 60 50 FINANCIAL STATEMENT. Resources. Lidbilities. Merchandise -------- Bills Receivable ------- Cash L. Fairbanks ■ Alonzo Mitchell ■ Bills Payable ■ Springer & Whiteman . - - - . Lewis Lyman ■ Thos. Hunter - - Stock (Present Worth) 151 3500 113 1331 393 137 33 188 60 90 75 05 50 3500 1350 5tp 30^ 4586 80 4586 80 QUESTIONS FOR REVIEW. Remaeks, Page 128. 1. In what sense is this a continuation of Set 1 ? — S. What different plan is adopted in the keeping of property accounts ? — 3. When is it customary tc keep other than a general Merchandise account? — 4. When the business commences with a capital, what is the first entry? — 6. What account is credited with the investment?— 6. What does Stock account represent? — 7. What is the technical meaning of the term " Sundries ? " — 8. Why is it used in Journal or Ledger entries ? Order and Purpose of Closing the Ledger, Page 142. 9. Li what condition was the Ledger of Set 1 left ? — 10. Under what cir- cumstances is this suflBcient? — 11. When is it necessary to "close" the Ledger accounts? — 12. When an account is closed, how is the balance or difference exhibited ? — 13. How many classes of accounts are there in Double Entry I—I4. What is the distinction 1—15. What are they called 1—16. What is meant by Financial accounts? — 17. What by Business? — 18. What is the object of closing the Ledger ? — 19. Why are the gains and losses in busi- ness permitted to appear in the Business accounts, instead of being carried directly to the proprietor's account ? — 20. How often is it customary to credit the proprietor with his gains ? — 21. To what condition is the Ledger restored when the gains and losses are transferred to the proprietor's account? — 22. What is the first thing necessary after posting all the entries to the Led- ger ? — 23. In what sense is the Trial Balance a test of the correctness of the work ? — 24. What two features are presented by the Trial Balance on page 143 ? — 25. How may the present condition of a business be shown ? — 26. How are resources shown on the Ledger 1—27. How liabilities ? — 28. How losses ? — 29. How gains? — 30. What two accounts may be used to show these results ? — 31. What is contained in the Loss and Gain account ? — 32. What in the Balance account ? — 33. Can you learn from the Merchandise account the value of Merchandise unsold? — 34. How is it ascertained? — 35. "WTien the Merchandise account is credited with the inventory of unsold Merchandise, what will the account represent ? — 36. What is the process of closing an account? — 37. In closing an account, why is the difference placed on the smaller side ? — 38. What test have we for ascertaining if the balances of the accounts are properly transferred ? — 39. What accounts are contained in the *' Second Trial Balance ? " — 40. Why will the difference in the Stock account, after the gain or loss has been transferred, equal the difference in the Balance account when all the resources and liabilities have been entered ? — 4I. Is it necessary in closing the Ledger to open a Balance account ? — 42. How may the same effect be produced? — 43. What is the first step in the order of closing?— 44. Second?—^. Third?— ^5. Fourth?— 47. Fifth?— ^. Sixth? 152 ^ET 3. pOUBJ^E J)nTRY. (Corresponding -with Set 3, Part 1.) DAY-BOOK AND JOURNAL COMBINED. WITH FULL STATEMENTS AND EXPLANATIONS, SHOWING THE DIS- TINCTIONS BETWEEN DOUBLE AND SINGLE ENTRY. (^izsiness ^dr^erse. 153 REMARKS. The transactions of this set are the same as those in Set 3, Part I., and are selected for the purpose of showing the exact difference between Single Entry and Double Entry. A careful study of the two sets in their similar and dissimilar points will open to the mind of the student a clearer distinction between the two methods of accounts than could be effected in any other way. This distinction is most apparent in the Ledger where it will be seen that the additional accounts required by Double Entry relate exclusively to particular speculations, and are useful, mainly, to denote gains and losses. Another decided improvement in this over the preceding set, relates to the form of the original book of entry, which here combines the Day- Book and Journal. There is no doubt as to the preference of this plan over that of separate books. The only objection that can be arrayed against it is the difficulty some- times of combining the historical with the journal expression in a manner to preserve the unity of the entry without destroying the individuality of its parts. A little practice, however, will remove this difficulty, and lead the student into a concise and symmetrical form of expression, at once comprehensive and business-like. It is not deemed necessary to repeat the auxiliary forms of Sales-Book, Cash-Book, and Bill-Book, for the reason that there are no improvements to suggest. Auxiliary books are used for their convenience in classifying the departments of business, and do not pertain necessarily to any particular theory or method of accounts. In Single Entry, however, they are often essential in preserving a sufficient record of resources and liabilities, which in Double Entry are shown independently in the Ledger. The manner of closing the accounts differs from Set 2 only in bringing down the resources and liabilities under the accounts themselves, instead of transferring them to a separate account like "Balance." A few of the accounts, containing only one item, are necessarily closed, and the balances brought down. This plan is sometimes adopted in business, for the purpose of exhibiting the condition of affairs on the Ledger at some certain date. The method of showing general results through a detailed statement is commended to the careful attention of the student. 154 Set 3.J D. EnTRY— EXPLANATORY JOURNAL. Albany, July 1, 1879. Db. Cr. 10 G Sundries, To H. B. Bryant, For investment, as follows: Merchandise, As per inventory, Bills Receivable, " " Bill Book, Cash, " " Cash Book, John R. Penn, Balance of %, L. Fairbanks, " " Alonzo Gaston, " " Sundries, To H. D. Stratton, For investment, as follows : Real Estate, House and lot val. at. Cash,* Am't in Union Bank, Expense, To Cash, Paid for postage stamps, pens, etc, Cash, To Merchandise, Sold Robt. Van Scliaick, per S. B. Cash, To John R. Penn, Received on % . Expense, To Cash, Paid for printing hand-bills. 4750 1500 1200 500 750 375 5000 3000 39 250 10 17379 9075 8000 39 250 10 17379 * Some houses keep a regular bank account In their main books, debiting the bank with deposits, and crediting it with checks drawn ; while others keep the account only m an auxiliary book, and connt the cash in bank the same as that in safe. We have, in this in- stance, adopted the latter plan. 155 D. Entry— Explanatory Journal, lsets. Albany, July S, 1879. Db. Cb. 11 3 10 6 3 12 13 6 14 3 James Johnson, To Merchandise, Per Sales Book. Cash, To Merchandise, Petty sales, per C. B. 4 Bills Eeceivable, To Merchandise, Sold E. H. Bender, per S. B. Expense, To Cash, Paid C. Jones, repairing store. Merchandise, To Sundries, To Claflin, Mellen & Co., Invoice of Boots and Shoes. " A. T. Stewart & Co., Invoice of Dry Goods. " Cash, Paid freioflit on above. E. B. Rice, To Merchandise, Per Sales Book. Cash, • To Alonzo Gaston, Received in full of %. 156 192 17 108 175 1359 42 375 2269 50 20 50 45 65 192 17 108 175 575 757 27 42 375 2269 50 20 50 45 65 Sets.] D. Entry— Explanatory Journal. Albany, July 7, 1879. Db. Cb. 10 6 15 3 13 6 Expense, To Cash, Paid clerk hire. 8 Cash, To Merchandise, Sold W. H. Clark, per S. B. Expense, To Cash, Paid expenses to New York. 10 Benjamin Payn, To Merchandise, Per Sales Book. Cash, To Bills Eeceivable, In full of Robt. Bruce's note. A. T. Stewart & Co., To Cash, Paid them on % . Bills Receivable, To Merchandise, Sold C. S. Sill, per S. B. 157 25 19 15 23 500 300 173 1056 82 75 41 98 25 19 82 15 75 23 41 500 300 173 1056 98 D. Entry— Explanatory Journal, [sets. Albany, July 12, 1879. Db. Cb. 2 16 17 3 12 16 H. D. Stratton, To Bills Payable, Accepted draft favor of P. R. Spencer, per B. B. Cash, To Merchandise, Received for petty sales, per C. B. Amos Dean, To Merchandise, Per Sales Book. 13 Olaflin, Mellen & Co., To Bills Payable, Our note to balance % . i5 H. B. Bryant, To Cash, Paid liim On % . Cash, To L. Fairbanks, Received on %. 18 Cash, To Merchandise, Sold G. H. Doty, per S. B. 158 75 33 180 575 75 350 252 1540 50 50 75 33 180 575 75 350 252 1540 50 50 Set 3.] D. EnTRY— EXPLANATORY JOURNAL. Albany, July 19, 1879. Dr. Cb. 10 6 18 3 6 18 10 6 6 17 10 6 Expense, To Cash, Paid for advertisements in the Evening Journal. 20 Victor M. Rice, To Merchandise, Per Sales Book. Cash, To Victor M. Rice, Received on %. Expense, To Cash, Paid petty expenses per C. B. 21 Cash, To Amos Dean, Received on %. Expense, To Cash, Bill of carpenter work, $175 drayage, $5 ; porterage, $3. 22 Bills Receivable, To Merchandise, Sold J. R. Morgan, per S. B. 159 15 82 30 10 60 183 339 709 88 D. Entry— Explanatory Journal, [set 3. Mhany, July 23, 1879. Dr. Cb. 19 3 6 14 20 3 16 6 10 6 James Sheldon, To Merchandise, Per Sales Book. Cash, To Merchandise, Sold R. Metcalf, per S. B. 24 Cash, To Merchandise, Sold Clias. Heydon, per S. B. Cash, To E. B. Rice, Received in full of %. WiUiam Shepard, To Merchandise, Per Sales Book. Cash, To Merchandise, Sold Robt. Dawes, per S. B. Bills Payable, To Cash, Paid on Accept, favor H. D. S. Expense, To Cash, Paid clerk hire. 132 234 106 42 37 163 75 25 815 24 45 55 20 44 132 234 106 42 37 163 75 25 815 24 45 55 20 44 160 Set 3.] D. EnTRY— EXPLANATORY JOURNAL. Albany, July 26, 1879. Db. Cb. 21 3 John Belden, To Merchandise, Per Sales Book. A. T. Stewart iS; Co., To Cash, Paid them in full of %. Cash, To Merchandise, Sold J. H. Lansley, per S. B. 29 Cash, To Merchandise, Sold W. H. Fiquet, per S. B. // Cash, To John K. Penn, Received in full of %. SO Sundries, To Merchandise, Sold Clias. A. Seeley, per S. B. Cash, Amount received, Chas. A. Seeley, Balance on %, 161 216 457 138 154 250 75 107 1398 50 72 216 50 457 138 72 154 250 182 40 1398 62 Double Entry— Ledger. [Set a Dr. H. B. Bryant. Cr. 1879 July 15 31 To Cash, Loss & Gain, Balance, 4 l23 Ll 75 352 86k7 9075 94 06 00 1879 July 1 By Sundries, By Balance, 1 Ll 9075 9075 Aug. 1 8647 C6 Dr. H. D. Stratton. Cr, 1379 July 12 31 31 To Bills Payable, Loss & Gain, Balance, 4 l6 l2 75 352 7572 94 06 1879 July 1 By Sundries, By Balance, 1 l2 8000 8000 00 8000 Aug. 1 7572 06 Dr. Merchandise. Cr. 1879 1879 July 1 To H. B. Bryant, 1 4750 July 1 By Cash, 1 39 5 Sundries, 2 1359 50 3 4 7 8 10 12 13 18 20 22 23 24 25 26 27 29 30 31 J. Johnson, Cash, Bills Rec^ble, E. B. Rice, Cash, Benj. Payn, Bills Rec'ble, Cash, Amos Dean, Cash, Vict. M. Rice, Bills Rec'ble, Jas. Shelden, Cash, u W. Shepard, Cash, John Belden, Cash, u Sundries, Balance, Loss & Gain, 2 3 4 u 5 6 7 tt u u l8 l23 192 17 108 42 19 23 173 33 180 252 82 339 132 234 106 37 163 216 138 154 182 3000 2h2 50 20 45 82 41 50 88 24 55 20 50 72 40 IS 6109 50 6109 50 Aug. 1 To Balance, l3 3000 162 Set 3.] Double Entry— Ledger. Dr. Bills Receivable. Cr. 1879 July 1 4 12 22 To H. B. Bryant, Mdge., To Balance, 1 2 3 5 l4 1500 108 173 339 20 1879 July 10 31 By CaPh, Balance, 3 l4 500 1620 20 2120 20 2120 20- Aug. 1 1620 20 Dr. 5 John R. Penn. Cr. 1879 July To n. B. Bryant, 500 500 1879 July By Cash, 250 250 500 Dr 6 Cash. Cr. 1879 - 1879 July 1 To H. B. Bryant, H.D.Stratton, Mdse., 1 1200 3000 39 July 1 2 4 By Expense, 1 2 5 10 175 2 J. R. Penn, " 250 5 Mdse., V. 27 50 3 Mdse., 2 17 50 7 Expense, 3 25 7 A. Gaston, " 375 8 " " 15 75 8 Mdse., 3 19 82 10 A.T.Stw.&Co. " 300 10 Bills Rec'ble, " 500 15 H. B. Bryant, 4 75 12 Mdse., 4 33 50 19 Expense, 5 15 16 L. Fairbanks, " 350 20 " " 10 18 Mdse., " 252 21 ♦' » 183 20 V. M. Rice, 5 30 25 Bills Payable, 6 75 21 Amos Dean, " 50 " Expense, " 25 23 Mdse., 6 234 26 A.T.Stw.&Co. 7 457 24 i.i. " 106 31 By Balance, l6 5881 it " E. B. Rice, " 42 45 25 Mdse., " 163 20 27 i> 7 138 72 29 J. R. Penn, 11 154 250 30 Mdse., " 75 1 To Balance, l6 7280 19 7280 19 Aug. 5881 94 163 Dr, Double Entry— Ledger. L. Fairbanks. [Set 3. Cr 1819 July 1 1 To H. B. Bryant, To Balance, 1 l7 750 1879 July 16 31 By Cash, Balance, 4 l7 350 LOO 750 400 ^= 750 Aug. Dr. 8 Alonzo Gaston. Cr. 1879 July 1 To H. B. Bryant, 1 375 1879 July 7 By Cash, 2 375 Dr. 9 Real Estate. Cr. 1879 July Aug. To H.D.Stratton, To Balance, l9 5000 5000 1879 July By Balance, l9 5000 Dr. lO Expense. Cr. 1879 1879 — July 1 2 4 7 8 19 20 21 25 To Cash, 1 2 3 5 G 5 10 175 25 15 15 10 183 25 75 July 31 By Loss & Gain, l23 h6S 75 463 75 463 75 164 Set 3.] Dr, Double Entry— Ledger. 11 James Johnson. Cr. 1879 July 3 To Mdse., To Balance, 2 Lll 192 1879 July 31 By Balance, Lll 192 Aug. 1 192 12 Dr. Clafl in, Mellen <5 >c Co. Cr. 1879 July 15 To Bills Payable, 4 575 1879 July 5 By Mdse., 2 575 Dr. 13 A. T. Stewart & Co. Cr. 1879 July 10 26 To Cash, 3 7 300 457 1879 July 5 By Mdse., 2 757 757 757 Dr. 14: E. B. Rice. Cr. 1879 July 7 To Mdse. 2 42 45 1879 July 24 By Cash, 1 ! 6 4Sl 45 Dr. 15 Benjamin Payn. Cr. 1879 July 10 To Mdse., To Balance, 3 Ll5 23 41 1879 July 31 By Balance, Ll5 S3 hi Aug. 1 23 41 165 Dr. Double Entry— Ledger. 16 Bills Payable. [Set 3. Cr. 20 1879 July 23 31 To Cash, Balance, 6 Ll6 75 575 650 — - 1879 July 12 15 By H.D.Stratton, Claf. M. & Co. By Balance, 4 Ll6 75 575 650 Aug. 1 575 Dr. 17 Amos Dean. Cr. 1879 July 13 1 To Mdse., To Balance, 4 Ll7 180 1879 July 21 31 By Cash, Balance, 5 Ll7 50 ISO 180 180 Ang. 130 Dr. 18 Victor M. Rice. Cr. 1879 July 20 To Mdse., To Balance, 5 Ll8 82 88 1879 July 20 31 By Cash, Balance, 5 Ll8 30 52 82 88 82 88 83 Aug. 1 52 Dr, 19 James Sheldon. Cr. 1879 July 23 1 To Mdse., To Balance, 6 Ll9 132 24 1879 July 31 By Balance, Ll9 m HU Aug. 132 24 Dr. William Shepard. Cr. 1879 July 25 To Mdse., To Balance, 6 l20 37 55 1879 July 31 By Balance, l20 37 55 Aug. 1 37 55 16G Set 3.J Dr, Double Entry— Ledger. 21 John Belden. Dr. 22 Chas. A. Seeley. Cr, 1879 July 36 To Mdse., To Balance, 7 l21 1 216 50 1879 July 31 By Balance, l21 ne 50 Aug. 1 216 50 Cr. 1879 July 30 To Mdse., To "Ralnnce, 7 l22 107 i 40 i 1 1879 July 31 By Balance, l22 107 hO Aug. 1 107 40 Dr. 23 Loss and Gain. Cr. 1879 July To Mdse., Expense, 1879 l3 242 13 July 31 LlO 463 705 75 88 By n. B. Bryant, H.D.Stratton, 352 705 167 STATEMENT. The following detailed statement should be carefully compared with the Single Entry Statement on page 67, that the characteristic features of the two systems may be thoroughly appreciated. We have designated the proper classification of accounts in the Trial Balance and have included all the Ledger accounts, that the general footings may be made to agree with the footings of the Journal. In rendering the Statement, those accounts which cancel or balance, are, of course, omitted. With this form of Trial Balance it would scarcely be necessary to do more than carry the balances of the accounts into the statement columns as in the Statement on page 121 ; but this form gives the philosophy more in detail. TRIAL BALANCE. Total Footings. Balances. H. B. Bryant, Financial - - - Br. Cr. Dr. Cr. 1 75 9075 9000 2 H. D. Stratton, Financial - - - 75 8000 7925 3 Merchandise, Business - - - 6109 50 2867 37 3242 13 4 Bills Receivable, Financial - - - 2120 20 500 1620 20 5 John R. Penn, Financial - - - 500 500 6 Cash, Financial - - - 7280 9 1398 25 5881 94 7 L, Fairbanks, Financial - - - 750 350 400 8 Alonzo Gaston, Financial - - - 375 375 9 Real Estate, Business - - 5000 5000 10 Expense, Business - - - 463 75 463 75 11 James Johnson, Financial - - - 192 192 12 Claf., Mellen & Co., Financial - - - 575 575 13 A. T. Stewart, Financial - - - 757 757 14 E. B. Rice, Financial - - - 42 45 42 45 15 Benjamin Payn, Financial - - - 23 41 23 41 16 Bills Payable, Financial - - - 75 650 575 17 Amos Dean, Financial - - - 180 50 130 18 Victor M. Rice, Financial - - - 82 88 30 52 88 19 James Sheldon, Financial - - - 132 24 132 24 30 William Shepard, Financial - - - 37 55 37 55 21 John Belden, Financial - - - 216 50 216 50 22 Chas. A. Seeley, Financial - - - 107 25170 40 07 107 40 25170 ^ 17500 00 17500 00 Mdse. unsold Real Estate INVENTORY.. 168 $3000 5000 STATEMENT. LOSSES AND GAINS.— BUSINESS ACCOUNTS. Mebchandisb Expense Outlay $6109 50 Returns, . $2867 37 Value unsold, 3000 00 5867 37 Jfet loss . Outlay for Expenses Total Net Loss ff. B. B's \ net loss . $352 M H. D. 8'8 " *' . . 352 94 Losses. 242 463 705 Gains. 705 705 RESOURCES AND LIABILITIES.— FINANCIAL ACCOUNTS. ■ /. — From Inventories of unsold property. Besovrces. LiabUities, 3000 5000 1620 5881 400 192 23 130 52 132 37 216 107 20 94 41 88 24 55 50 40 675 8647 7572 4 2. — From Ledger Accounts. Bills Receivable, . Others'' notes received, " disp. of, " " on hand Cash Amount received . . "• paid out . . $2120 20 500 00 6 $7280 19 1398 25 7 L. Fairbanks . . . Our % against him . Bis *' '' us . . $750 00 350 00 r1 James Johnson . . He owes us 15 Benj. Patn ...""" ....---- 16 Bills Payable . . Our notes issued . . " " redeemed . " " outstanding Amos Dean .... Our % against him . His " " us . $650 00 75 CO 17 $180 00 50 00 18 Victor M. Rice . . Oi/r % against him . His " " us . He owes us .... $32 88 30 00 19 20 21 John Belden ...""" 22 Chas. a. Seelet , " " " ........ 1 2 H. B. Bryant . . . His net investment . . " " loss .... His prksbnt interest H. D. Stratton . . His net investment . . " " loss .... His present interest $9000 00 352 94 $7925 00 352 94 06 06 16794 12 16794 12 169 EXAMPLES FOR PRACTICE. The following examples are to be rendered in the form of the Statement on page 169. Example 1. TRIAL BALANCE. Dr. Cr. Warren P. Spencer, (Partuer) J. C. Bryant, do. Merchandise (Amount unsold, $5000) Cash Bills Receivable- Bills Payable E. G. Folsom E. R. Felton Expense ..-.--- - 700 5724 5024 12000 7594 15752 25 9692 4000 1500 9000 12000 750 123 75 965 175 00 42501 42501 58 58 84 00 Example 3. TRIAL BALANCE. Dr. Cr. James W. Lusk, (Partner) - - H. W. Ellsworth, do. H. C. Spencer, do. Cash . . . Bills Receivable - . - - - Merchandise, (Inventory, $1000) Real Estate, ( do. 5000) Expense Bills Payable Robert Paton .----• Samuel Ogden _ - - - . 398 17594 7500 6794 5000 150 4000 2000 1400 72 28 44837 00 44837 00 4500 5000 4500 15S29 4300 5382 125 5700 50 50 QUESTIONS FOR REVIEW. Remakes, Page 154. 1. What is the purpose of Set 3? — B. With what previous set does it cor- respond? — 3. Where is the distinction between Single and Double Entry most apparent? — 4' ^o what do the additional accounts in Double Entry relate ? — • 6. For what are they useful ? — 6. What improvement has this set over Set 2 ? — 7. What is the objection usually urged against combining the Day-Book jind Journal ? — S. What is the general purpose of auxiliary books ? — 9. For what are they used in Single Entry? — W. In what does the method of closing the accounts in this Ledger differ from the preceding ? — Is it usual to bring down single items in the Ledger ? — IB. When is this proper ? Note.— Let this set be followed by the "Exerciees" on page 69. 170 ^ET 4. pOUBLE i^NTRY. GENTLEMEN'S FURNISHING BUSINESS. (PARTNERSHIP.) JOURNAL, CASH-BOOK, AND SALES-BOOK, USED AS PRINCIPAL BOOKS. (gzLstness ^rosjpeTouLS. in REMARKS. The characteristic feature of this set consists in the peculiar arrangement and use of the original books of entry. Hitherto the transactions, whatever auxiliary books have been used, have all been entered in the Journal, and from thence posted to the Ledger. This plan, although having some advantages, is objectionable upon the ground of too much labor, nearly all the transactions being entered twice or more before being carried to the Ledger. The plan of posting directly from the original books of entry, such as the Oash-Book, Sales-Book, etc., is not only practical and business-like, but serves, in the most striking manner to enforce the theory of the science, and to disarm that class of objection ists who insist that Double Entry requires vastly more writing than Single Entry. The only difficulty in the way of posting directly from the orig- inal books lies in the danger of conflicting the entries, or posting the same amounts Uoice. For instance, the debit side of the Oash- Book comprises in itself a double entry, which is equivalent to the Journal entry " Cash, Dr. To Sundries." In posting from the Oash- Book, the total of the debit side is carried to the Oash account in the Ledger, and the item comprising that amount to the credit side of the various accounts mentioned, among which is Merchandise. It is very evident that if all the Merchandise sold be credited from the Sales-Book, the amount sold for Oash would be credited tiuice ; hence the necessity of an extra column in the Sales-Book for Oash sales which are omitted in posting from the Sales-Book. The special '^Mdse." and "Expense" columns in the Oash-Book are to save the necessity of so many special entries to these accounts in the Ledger. The method of posting from the Oash and Sales- Books is extremely simple. The amounts in the " General " column of the Oash-Book may be posted at any time — the page of the Ledger being indicated in a column provided for that purpose, the "Mdse." and "Expense" columns at the end of the month, or as often as may be best to close the Oash-Book. The sales for Oash are checked off in the Sales-Book, and the amounts extended into the " Oash " column. The other accounts from the Sales-Book may be posted at any time, the page of the Ledger being indicated in the proper column. The sales for notes are marked inside the margin, " B. R." and, of course, posted to Bills Eeceivable account. Instead of indicating the page from which the transactions are posted, the initials of the original book are given in the Ledger. 172 Set 4.] Double Entry— Journal, Chicago, Septerriber 1, 1878. Dk. Cb 2 14 5 8 9 10 11 12 13 13 14 4 11 Merchandise, To John K. Penn, Amount invested, per inventory. John R Penn, To Bills Payable, Assumed for him. Sundries, To J. C. Bryant, Amounts invested. Bills Eeceivable, J. Smith's note, $750 H. Young's " ^ J. T. Calkins, Balance of %. E. R. Felton, J. H. Goldsmith, « Jas. Atwater, " " P. 0. Schuyler, J. C. Bryant, To Sundries, Liabilities assumed. To Chas. Taylor, Balance of %, J. W. Lusk, 15 J. W. Lusk, To Bills Payable, Our note @ 30 ds. to bal. %. 20 Bills Receivable, To P. C. Schuyler, His note @ 60 ds. to bal. %. 173 6750 1750 1500 500 376 1170 1250 1104 900 400 1104 16804 6750 1750 5900 500 400 400 1104 16804 Double Entry— [Set 4. Cash. 25 27 29 S. S. Packard, . . Amount invested, . , Mdse., T. W. W. Sales Book, Mdse., Petty salee. P. C. B., J. T. Calkins, . . On fl^, Mdse., D.V. B. Sales Book, Mdse., Petty sales. P. C. B., Mdse., " " " . Mdse., J. A. Sales Book, . James Atwater, . On <%;, Mdse., Petty sales. P. C. B., Mdse " " " . W. R Sales Book, . On%, Mdse., J. T. Calkins, . . Bills Receivable, Interest, Mdse., Petty sales. P. C. B., J. Smith's note, On same, . . . Mdse., Petty sales. P. C. B., E. R. Felton, . . In full, Mdse., Petty sales. P. C. B., Mdse., " " " . J. H. Goldsmith, On «^, Mdse., Petty sales. P. C. B., James At"water, . On o^, Mdse., R. McG. Sales Book, Mdse., Petty sales. P. C. B., Mdse., " " " . Bills Receivable, 11. Young's note, . . Interest, On same, Mdse., Petty sales. P. C. B., Merchandise, Cr., Cash, Dr., Dr. (S-ener'al. 5000 200 750 150 750 34 1000 376 170 500 750 14 2702 12.397 25 50 27 Mdse. 54 105 737 138' 128 25 94 112 117 156 87 112 175 2702 174 . Cash -Book. Set 4.] Cash. 1878 S«pt. General. Expense, . . Charles Taylo Expense, Expense, Expense, Mdse., Expense, Expense, Bills Payable, Interest, Expense, Expense, Expense, Expense, Expense, Expense, Postage stamps, . . On%, 2 tons Coal, @, $5, . BUI of Stationery, . Hands, for shop-work, Invoice Cloths. J. B., Gas bill, Hands, for shop-work, Our note, favor H. B,, On same, Clerks' Salaries, . . Hands, for shop-work, Rent to September 30, , Porterage and Drayage, Hands, for shop-work, Partners' salaries to date, Cash, Cr., .... Balance on hand Cr. 175 Double Entry— Sales -Book. Chicago, September 1, 1878. [Set 4 Thekon W. Woolson, 4 doz. Shirts, 2d quality, 6 " Union Neckties, 20 " Linen Hdkfs, 3 pes, Cassimere, 15( Disc, qff Mt. Pleasant, la. 48 @ $1 00 $48 00 72 " 38<^ 27 36 240 '' 50$ 120 00 3 yds., " 1 25 187 50 4 V 9 V 10 General. 1 Cash. 650 900 639 363 89 737 1190 1382 86 ', 5%, 19 14 72 Ira Packard, 50 Boys" Overcoats, 50 ♦' B. R. Note @ Peru, Ind. © $5 50 $275 00 " 7 50 375 00 6 mo. D. V. Bell, Chicago. 1 Dress Suit for self, $50 00 1 Overcoat for son, 15 00 1 box Hdkfs., 6 doz. @ $4 00 24 00 O J. H. Goldsmith, 2 pes. Eng. Broadcloth, 50 Military Coats, per o Detroit. 100 yds. @ $4 00 $400 00 rder, " 10 00 500 00 / James Allen, 20 Zouave Uniforms, 1 pc. Striped Satin, 50 Disc, off Sat ■ir) Dubuque. @ $25 00 $500 00 yds., " 5 00 250 00 $750 00 in, @ 5%, 12 50 50 > James Atwater, 1 lot Ready-mafle Clothi 10 Coats, ( 20 " 50 " 8 pair Pants, 25 " 50 Vests, 25 " 1 Overcoat, Madison. ng, viz. : a $3 00 $3000 ' 3 50 70 00 '500 25000 ' 3 00 ^00 ' 4 00 100 00 ' 1 50 75 00 ' 8 00 75 00 15 00 2189 22 1 176 Set 4.] Double Entry— Sales -Book. Chicago, Septemher 15, 1878, 2 William Baker, 5 doz. Cravats, 3 " 9 " Linen Ildkfs., Amounts forward, Springfield. 60 @ 75^; 20yds. Sheeting, @ 10)^ ; 5 yds. Broadcloth, @ $3. Received cash for sales this day, per tickets, $115 25. ^.— Paid for Insurance, i% on $4000, $20 ; for Drayage on Mdse., $5 Received for sales this day, per tickets, $175. «^.— Sold Lauren G. Thomas, on % , 15 yds. Cassimere, @ $1 ; 20 yds. Dress Silk, @ $1.25 Drew out for personal expenses, $15 Paid porter on % of wages, $5 Rec'd cash for sales this day, per tickets, $87.23. 4. — Sold R. B. Finney, on %, 10 yds. Vesting, @ $5; Trimmings, etc., $10 Paid expenses cleaning store, $2.50 ; Paid for 1 box Pens, 88)^ Rec'd cash for sales this day, per tickets, $110.50. 6, — Sold David P. Johnson, on %, 6 yds. Flannel, @ 50/- ; 12 yds. Alpaca, @ $1.50 Sold Isaac Stevens, on % , 12 yds. Dress Silk, @ $1.50 ; 6 yds. Fine Broadcloth, @ $4 Paid for I^etter Press, $7.50 ; for putting light in window, $2.50 Received cash for sales this day, per tickets, $183.25. 6, — Received cash on % of James Campbell, $10 Paid clerk's salary, $15 - - - - Received cash for sales this day, per tickets, $100. ^.— Sold Cyrus Wheelock, on %, 25 yds. 10-4 Sheeting, @ 75;^ ; 6 pairs Ladies' Hose, @ $1 ; 12 yds. Printed Jaconets, (m 15^ Paid cash for 1 doz. balls Twine, $1.20 ; for Carriage Hire, $4 Received for sales this day, per tickets, $215. P.— Paid Drayage, $4 ; Porterage, $3 ; for Show Case, $20 Received for sales this day, per tickets, $76. /^.— Sold Robert Demarest, on %, 25 yds. Black Doeskin, @ $2; 50 yds. Bleached Shirting, @ 15j^ Paid for Safe, $250 ; Book-keeper on %, $10; Small items of expense, $1.28 Received for sales this day, per tickets, $110. //.—Paid rent in full to May 31, $200 ; on Bill of Furniture, $25 Received for sales this day, per tickets, $76.75. /^.—Received from Cyrus Wheelock, cash on %, $15 Sold James Atwater (per wife), on %, 1 doz. Linen Hdkfs. $6; 10 yds. Cotton Damask, @ 25^ ; 14 yds. Black Bombazine, @ $1.50 Received for sales this day, per tickets, $84. /tf . — Received for sales this day, per tickets, $98.75. ^5* — Sold James Campbell (per daughter), on %, 1 pair Lisle Gauntlets, $1 ; 12 yds. French Calico, @ 15,<^ ; 3 doz. Satin Buttons, @ 25/- ; 8 skeins Twist, @4,f Paid cash for Express charges, $1.50 ; for Postage stamps, $1 Paid carpenter for repairing store, $56.83 Received for sales this day, per tickets, $95. 184 APPEKDIX. f6, — Sold James W. Lusk, on ^, 1 yd. Black Satin, $2 ; Trimmings fot Vest, $1,50 Received for sales this day, per tickets, $88.75. /7. — Received from Robert Demarest order on S. S. Packard to balance %, % Received cash for sales this day, per tickets, $126.31. /(S".— Paid cash for Drayage, $4 ; Freight, $7.50 Received for eale^ this day, per tickets, $175. 79. — Sold James Atwater, on % , 20 yds. Linseys, @ 50;^ ; 30 yds. Corset Jeans, @ 30j^ ; 1 doz. Gents. Socks, $3 Received for sales this day, per tickets, $210.50. ^6>.— Sold S. S. Packard, 10 yds. French Broadcloth, @ $4 ; 50 yds. Globe Drills, @ 13f ; 20 yds. Paper Cambrics, @ V^f ; 15 yds. Cotton Damask, @ 25)^ ; 30 yds. Cottonades, @ 33^ ; 6 pairs Kid Gloves, @ 75^ ; Received cash on %, $50 ; Balance due, $ Received for sales this day, $112.81. ^^.— Paid cash for 2 tons Coal, @ $5 ; Paid balance on Furniture, $53 Received for sales this day, per tickets, $103.20. 23, — Received for sales this day, per tickets, $129. 2 A, — Received for sales this day, per tickets, $180.58. ^ J.— Sold John J. Howell, Jr., on «^, 10 yds. Mixed Satinet, @ 75)2^ ; 6 yds. Cotton Drilling, @ 10^ ; 1 yd. Fine Satin, $2 ; 10 skeins Twist, @ ^f Paid Book-keeper on % , $15 Received for sales this day, per tickets, $98. 26. — Received for sales this day, per tickets, $163.75. 27* — Sold Amos Dean, on %, 6 yds. Black Doeskin, @ $2 ; 1 doz. Linen Hdkfs., @ 50^ each ; 6 pairs Gents. Hose, @ 25j^ Paid cash for Drayage, $10 ; Porterage, $6 Received for sales this day, per tickets, $173.81. 29. — Paid Express charges on package from Chicago, $1.50 ; Paid Freight on Mdse., $24.75 - - - - Received for sales this day, per tickets, $74.10. SO. — Received cash on % of James Atwater, $20 ; also of Lauren G. Thomas, in full of %, f Received for sales this day, per tickets, $125 Sold Isaac Stevens, on %, 14 yds. Poplin, @ $1.25 ; 1 pair Kid Gloves, $1. Way /.—Sold James Campbell, on %, 12 yds. Brilliants, @ 35)^^; 35 yds. Blk. Bombazine, @ $1.50 Paid cash for firkin of Butter for family, $10. ^.— SoldR. B. Finney, on %, 10 yds. Blk. Doeskin, @ $1.63; 25 yds. Brown Sheetings, @ \%f ; 20 yds. Check Gingham, @ 20^ Paid cash for Stationery, $1.50. 6. — Paid Roberts, Rhodes & Co., on %, cash (per draft on New York), $2000. ^.— Sold S. S. Packard, on %, 15 yds. Duck Drilling, @ 20)^; 10 yd& Brown do., @ 30j^ ; 6 pairs Pearl Spun Hose, @ 75)^*. 185 APPENDIX. 7.-801(1 David P. Johnson, on %, 8 yds. Broadcloth, @ $4; 10 yds. Doeskin, @ $2 ; 1 yd. Satin, $2 ; Trimmings, $5 Sold Robert Demarest, on % , 14 yds. Dress Silk, @ $2 Paid clerk's Salary, $50 Received for sales this week, $497.84. ^.— Sold Robert C. Spencer, on %, 10 yds. Flannel, @ 50>^ ; 6 Linen Hdkfs., @ 38^ ; 20 yds. Brown Sheeting, @ 12^. /^, — Received of Isaac Stevens, cash on %, $30. /^.— Sold R. B. Finney, on %, 6 pairs Gents. Hose, @ 25^ ; 1 pair Sus- penders, $1 ; 1 pair Kid Gloves, 75^ Paid cash for Invoice of Mdse., Freight, etc., $1575.88 Paid on % of rent, $50; for carriage hire, $15. /4. — Received for sales this week, $553.25. /.5. — Sold James Campbell, on %, 10 yds. Broadcloth, @ $4 ; 6 yds. Doeskin, @ $2 Received cash on % of R. B. Finney, $25. /7.— Paid cash for ton of Hay, $12. ^t?.— Sold John J. Howell, Jr., on %, 4 yds. Beaver Cloth, @ $3j 1 yd. Satin, $4 ; Trimmings for Coat and Vest, $8 Paid Gas Bill, $10.24. ^/, — Received of Cyrus Wheeler, cash in full of %, f Received for sales this week, $723.85. .^^.— Received of R. B. Finney cash to balance %, % 26. — Paid for Postage stamps, $3 ; for Stationery, $5. .^7.— Bo't of John J. Howell, Jr., on %, 3 cords Wood, @ $5 ; 50 lbs. Butter, @1Q^ Sold James W. Lusk, on %. 13 yds. Mous. de Laine, @ 25;^^ ; 14 yds. Figured Silk, @ $1.50 ; Trimmings for Dress, $10. ^<9.— Sold Robert C. Spencer, on %, 12 yds. Broadcloth, @ $4 ; 6 yds. Doeskin, @ $2 - - - - - Received for sales this week, $573.24. ^.— Sold Henry Van Dyck, on %, 2 hhds. Havana Sugar, 1970 lbs., @ 6^. /<9.— Paid James Hathaway, cash on % , $4000. /^.— Sold James Hathaway, on %, 1 brl. Pork, 2001bs.,@llf ; 1 bag Rio Coffee, 110 lbs., @ 18^ ; 1 hhd. Havana Sugar, 900 lbs., @ 6^. /e^.— Sold L. Fairbanks, on %, 100 lbs. English Dairy 'Cheese, @ 25;^^; 1 brl. Potatoes, $1. /4.— Sold Henry Van Dyck, on %, 10 lbs. Coffee, @ ISf ;. 50 lbs. English Dairy Cheese, @ 25)^^ ; 50 lbs. Rice, @ 5|)^. /tJ.— Paid cash for Rent of Store, $100 Sold J. T. Calkins, for cash, 150 lbs. English Dairy Cheese, (^ 25/^. /7- — Received cash of Henry C. Spencer, in full of % , f /6'.— Sold S. S. RandaU, on %, 25 lbs. Tea, @ 5Q^ ; 50 lbs. Lard, @ W j 20 lbs. Rice, @ 5f. JSO.— Sold Peter Cooper, on «^, 2 brls. Pork, 400 lbs., @ llj^. ^^.— Sold E. F. Hill, on %, 1 half-chest Tea, 54 lbs., @ 60^. <^,?.— Received of Jonas Clark, in full of %, cash, $3000 ; Note @ 90 ds.. ^J".— Paid Smith & Sons, cash on %, $3000 Sold Geo. Davis, on %, 2 hhds. N. O. Molasses, 120 gals. , @ 44|/. .^^.— Paid cash for our note, favor of J. R. Wheeler, $500 Sold E. C. Bradford, for cash, 10 lbs. Rio Coffee, @ W ; 10 lbs. Tea, @ 50/ ; 50 lbs. Rice, @ 7^. < ^T'-^Sold Edwin Morgan, for cash, 1 tierce Rice, 500 lbs., @ Qj^ ; 2 brls. Potatoes, @ $3. ^6'.— Paid Clerk's Salary in cash, $100. Inventory : Merchandise unsold, $2500. [Set III SAME AS in Part I.] 193 APPEin)IX. SET IV. Chicago, September f, /879.—^, S. Packard, John R. Penn, and J. C, Bryant are partners. S. S. Packard invests, Cash, $5000 - - . - - J. R. Penn invests Merchandise, amounting as per Inventory to $6750. The firm assumes for him two notes — one favor of J, Mat- tox for $750 ; and one favor of Henry Brown for $1000 J. C. Bryant invests : J. Smith's note for $750 ; H. Young's do. for $750 and personal accounts as follows : J. T, Calkins, $500 ; E. R. Felton, $376 ; J. H. Goldsmith, $1170 ; Jas. Atwater, $1250 ; P. C. Schuyler, $1104. The firm assumes for him personal accounts, viz. : Chas. Taylor, $500 ; J. W. Lusk, $400 Paid cash for Postage stamps, $3 Sold Theron W. Woolson, Mt. Pleasant, la., for cash, 4 doz. Shirts, 3d quality, 48, @ $1 ; 6 doz. Union Neckties, 72, @ 38)^ ; 20 doz. Linen Hdkfs., 240, @ 50^ ; 3 pes. Cassimere, 150 yds., @ $1.33 ; Disc, off, 5 % Sold Ira Packard, Peru, Ind., on his note @ 6 mos., 50 Boys' Overcoats, @ $5.50; 50 do., @ $7.50 Received cash for petty sales, per P. C. B., $54.25. ^.—Received of J. T. Calkins, cash on %, $200 Paid Chas. Taylor, cash on "%, $300. ,?.— Sold D. V. Bell, City, for cash, 1 Dress suit for self, $50 ; 1 Overcoat for son, $15 ; 1 box Hdkfs., 6 doz., @ $4 - Received cash for petty sales, per P. C. B., $28.90. ^, — Paid cash for 2 tons Coal, @ $5. 6. — Received cash for petty sales, per P. C. B., $105 Sold J. H. Goldsmith, Detroit, 2 pes. English Broadcloth, 100 yds., @ $4; 50 Military Coats, per order, @ $10 Received cash for petty sales, per P. C. B., $105. 6, — Paid cash for bill of Stationery, $15 ; Paid hands, for shop work, $150. 7. — Sold James Allen, Dubuque, for cash, 20 Zouave Uniforms, @ $25 ; 1 piece Striped Satin, 50 yds., @ $5 ; Disc, off Satin, 5% Paid cash for Invoice Cloths, per I. B., $3000. /O, — Received cash of Jas. Atwater, on %, $750 Paid cash for Gas bill, $15. /^. — Sold Jas. Atwater, Madison, on %, 1 lot ready-made clothing, viz. : 10 Coats, (S $3 ; 20 do., @ $3.50 ; 50 do., @ $5 : 8 prs. Pants, @ $3 ; 25 do., @ $4; 50 Vests, @ $1.50; 25 do., @$3; 1 Overcoat, $15 Received cash for petty sales, per P. C. B., $58. ' fS. —Paid hands, for shop work, cash, $175. /4. — Received cash for petty sales, per P. C. B., $138. /J.— Gave Jas. W. Lusk our note @ 30 ds. to bal. %, $ Sold Wm. Baker, Springfield, for cash, 5 doz. Cravats, 60, @ 75^ ; 3 doz. do., 36, @ $1 ; 9 doz. Linen Hdkfs., 108, @ 50^ ; Disc, off, 5% Sold J. T. Calkins, North Bend, Ind., on %, 50 Military Coats 194 APPENDIX. (privates), @ $10 ; 5 do. (officers), @ $15 Paid cash for our note favor H. B., and interest. Face of note, $1000. Interest to date, $46.75. /^.—Received cash on % of J. T. Calkins, $150. /T'. — Received cash for J. Smith's note, and interest to date. Face of note, $750. Interest, $34.25. /8. — Sold C. D. Bragdon, Rock Island, on his note @ 6 mos., 50 Coats (ready-made), @ $5 ; 100 prs. Pants, @ $3 ; 50 doz. Collars, @ $1.50; 5 doz. F. Y. Shirts, 60, @ $1.75 Received cash for petty sales, per P. C. B., $94.83 Paid Clerk's Salaries in cash, $112. ^^.— Received of P. C. Schuyler, his note @ 60 ds. to bal. %,$ Sold Geo. E. Harvey, Green Bay, on his note @ 60 ds., 100 Zouave Uniforms, @ $20 ; 50 Military Coats, " Co. H," @ $10 Paid cash to hands, for shop work, $250. 2J3. — Received cash on % of J. H. Goldsmith, $1000 ; for petty sales, per P. C. B., $112.44. ^J.— Sold Jas. W. Lusk, City, 50 Uniforms ("Lincoln Green"), @ $25; 30 do. (Zouaves), @ $15 Received of E. R. Felton, cash in full of %, $ Received for petty sales, per P. C. B., $83.75 , Paid Rent to Sept. 30, in cash, $100. ^(?.— Received of J. H. Goldsmith, cash on %, $170 Received for petty sales, per P. C. B., $58.94 Paid cash for Porterage and Drayage, $35. ^7. — Received of Jas. Atwater on %, cash, $500 Received for petty sales, per P. C. B., $117.50. ^c^.— Sold Robert McGrath, White Pigeon, 20 Boys' Coats (ready-made), @ $5 ; 30 Vests (ready-made), @ $1.50 ; 20 doz. Collars, @ $1 ; Disc. off, 5% Received cash for petty sales, per P. C. B., $87.50 Paid cash to hands, for shop work, $275. ^9, — Received cash in full for H. Young's note. Face of note, $750. Interest accrued to date, $14.50 Received cash for petty sales, per P. C. B., $112.94. ,?(9.— Sold E. R. Felton, Peoria, on %, 75 complete Uniforms, @ $25 Received cash for petty sales, per P. C. B., $175 Partners' salaries for month, paid in cash, $606. [For a continuation of this business, see pa^e 181 (Fourth Series).] 195 APPE2JDIX. MATERIAL FOR SHORT SETS. EITHER IN SINGLE OR DOUBLE ENTRY. The material f urnislied herewith is intended to supplement the regular sets of the main work — or to supplant such of them as may be deemed best. The transactions will be found specially useful for drill exercises, or exam- ination tests. ^ Supplementary Set 1. Carting Business.— Single Proprietorship. /Vefi^ York, July /, /SSO.—Beg&n business with a cash capital of $5000 Bought for cash 4 horses, carts, and equipments^ $800 Paid cash for reut of stable, one month, $35. July 8, — Received cash for cartage during the week, $75 Work done on %, viz.: For W. A. Miller, $10 ; J. L. Hunt, $15 ; Thos. Hunter, $12 Paid workmen's wages, $35.75. July /6, — Paid cash for horse-shoeing, $7 ; For repairing carts and harness $3.75 Received cash for carting during the week, $83.75 . Work done on %, viz. : Thos. Hunter, $10 ; William Taylor, $17 j J. L. Hunt, $3 ; C. E. Cady, $5.75 Paid workmen, $29.50. July 22. — Received cash for dray age during the week, $85 Work done on %, viz.: Thos. Hunter, $15 ; W. A. Miller, $17.50 ; C. Clag- horn, $18 Received cash, viz.:(W. A. Miller, on %, $18: Thos. Hunter, on %, $27 ; J. L. Hunt, in full, $ : ^ ^ ; Horses, carts, and jequipments, valued at cost. Required the condition of the business, dnd the net gain or loss. Supplementary Set 2. Dry Goods Business.— Single Proprietor. Albany, Sept, /, 7879, — Began business with a cash capital of $1000 Paid for repairing store, $75 Bought goods of G. A. Crocker, New York, on % , amounting, per invoice, to $2517. Sept, ^.— Sold Merchandise, viz. : To C S. Sill, Troy, on %, for $175 ; To' McCook, for cash, $210.30 ; To E. G. Folsom, on his note at 30 ds., $412.75. Sept. 72. — Paid one month's rent of store, in cash, $100 Paid em- ployes, for services, $50 Sold merchandise to Joseph Brower, on %, $317.25 (Received from C. S. Sill, Troy, goods, not as ordered, for which we credit him $25.) Sept, «? 6?. -^Settled with Joseph Brower for his indebtedness — ^accepting a compromise of 75% : Cash received, in full of %, $237.94; Lost the balance, $ . . . . - Paid cash for petty expenses, $17.50 4 Paid G. A. Crocker, cash on %, $500 Sold merchandise, for cash, $375. Merchandise on hand, $1584.72. Required a full statement of the business, as to property, condition, etc. 196 J 3 .r^ APPENDIX. Supplementary Set 3. Business of a Teacher.— Single Proprietorship. ^hitadetphla, Oct, /, /879. — Began business with a cash capital of $1500 Paid cash for furniture and implements, $750 ; For olfice-books and stationery, $50 ; For 5 tons of coal, $25. October ^<9.— Received cash for tuition, $1500 Paid janitor, $30. October SO. — Paid cash for teachers' salaries, $120. jYove77iber /O.—P&id cash for 2 months' rent, $300 ; For repairs, $30 Paid teachers' salaries, $90 Paid janitor, $30. S)ecember SO, — The following amounts are due for tuition, etc. ; From W. J. Carter, $53.75 ; From W. L. Hill, $73 ; From S. G. Howe, $89.50 ; From Rednor Wood, $115.30 The following balances are due teachers : To Sallie L. Cook, $25 ; To Alice P. Luick, $57 ; To Geo. S. Bigelow, $100 Paid janitor's wages, $30 Paid for two months' rent, $300. Estimated value of furniture and implements, $750 Unexpired rent, $150. Required a full statement of current and standing condition. Supplementary Set 4. — Continuation of Set 3. Business of Teaching.— Copartnership. [The business represented in the previous set is continued, under a copartnership, the hew proprietor Investing in cash an amount equal to the net capital shown at the close of the previous month. The partners in the new firm are, the previous proprietor (supposed lo be the student, who will fill the blank with his own name) and Thos. M. Pierce, under the title of & Pierce.] ^Philadelphia, January f, /c9(96>.— Thos. M. Pierce invests cnsh, $ Paid Sallie L. Cook, balance of salary due, f *ra?iua?y 4^, — Received cash of Rednor Wood, in full of %, % Received cash for tuition, $18-175 Paid janitor, $15. Jaiiuary f6. — Received cash for tuition, $517 Deposited cash in Union Bank, $3500 Paid cash : To Geo. S. Bigelow, on %, $r>0. JTannary 20. — Rec'd cash for tuition, $325 Paid janitor's wages, $35. JFeb, 6, — Paid for repairs, $15.75 Received cash for tuition, $175 Paid balances due teachers : G. S. B.. $50 ; A. P. L., $57. Jl^arch to. — Rec'd cash for tuition, $225 Paid for office stationery, $15. Ji€a7'c?i SO. — Received cash for tuition, $1525 Paid rent in full to date, $300 Quarterly tuition bills unpaid, viz.: S. G. Howe, $175 ; W. J. Carter, $75 ; W. L. Hill, $100 ; G. W. Brown, $117. Jifarch S/. — Paid teachers' salaries, in full, $575. Value of furniture and fixtures, $700. Bequired the interest of each partner at the dose of business. 197 APPENDIX. PRACTICAL HINTS. In the preparation of this book the author has kept in view the fact that in order to become a good accountant, the student should learn not only to think for himself, but to give his thoughts proper expression ; hence the introduction of "Exercises" and "Examples," intended to throw him upon his own resources, and remedy the evils which attend the practice of copy- ing. This feature must commend itself to the faithful teacher who is satis- fied with no progress which is not real. The three qualities essential to suc- cess in Accountantship are, 1. Accuracy; 2. Neatness; 3. Dispatch; and these can be acquired only through ^;?Yrc^ice. Instead, therefore, of omitting any of the practical Exercises, or passing lightly ov^er them, they should be regarded as indispensable, and even additional exercises should be given by the teacher or self-imposed by the student. The limited space renders it impossible to carry out in detail, all the labor which actual business would require in the way of filling out notes, draft?, checks, etc., or to suggest appropriate forms for such letters and documents as would be necessary in conducting the business represented ; but the student should be required to supply this deficiency, with such aid as the teacher may offer. The following hints are submitted as appropriate. ORDER AND NEATNESS. There is no error more common than that a theoretical knowledge of general principles will prepare a person for the duties of the Counting Room. It is true that without this knowledge, one need never hope to succeed ; and equally true that with no other knowledge the way will be very difficult. Although in enumerating the qualifications of an Accountant we have placed NEATNESS secoiid in the list, it is the first which attracts attention, and is of the utmost importance in the practical work of accountantship. Neatness in book-keeping is the result of good writing and tasteful arrangement. It is a mistaken idea that the ability to form a few wondrous curves in the execu- tion of capital letters or the adornment of a fancy title, constitutes the chief qualification of a business writer. Practical men do not usually appreciate such qualifications, but insist, rather, on the utmost modesty of display and simplicity of arrangement. A professional flourish is as much out of place on a page of business record, as a daub of paint on a marble statue. Uni- formity, legibility, and adaptation to space and purpose should be the charac- teristics of business writing ; and he who fails in these will need something more than a certificate from a professor of pen art to save him. These remarks are not in disparagement of any style or system of penmanship, nor designed to underrate the very useful profession which makes good writers ; but to 198 APPEKDIX. place the practical above tlie fanciful ; and to insist upon a proper recogni- tion of the standard of taste which business men have adopted. Rapidity of execution is an essential element in business writing, but even this should be subordinated to neatness. In the selection of script for the principal forms in Part I. reference has been had to the standard of neatness above indicated; it is not expected that the student will attempt to copy the style of the writing, but it is hoped that he may seek to emulate its legibility and taste in arrange- ment. Particularly should he seek to avoid errors which require erasures. Nothing so destroys the beauty of a page as erasures and interlineations. Even occasional blotting is preferable to occasional scratching. Where it is possible, errors should be corrected by counter entries, thus aflPording an explanation, without destroying the harmony of the page. Finally, let the student practice until he becomes proficient in ruling. In using red ink care should be had to keep it pure ; and to that end, never use a pen that has been dipped in black. Even steel pens are thought to destroy the brilliancy of red ink, and quills are preferred on that account. A steel pen, however, is the best for ruling, and needs only to be kept perfectly clean. PROFICIENCY IN MATHEMATICS. The processes of book-keeping seldom call into practice the higher depart- ments of mathematics ; albeit a thorough mathematician — other things being equal — will make the best accountant. The kind of proficiency most avail- able to a book-keeper is facility and accuracy in addition. The ability to add long columns of figures with speed and certainty is one of the very best claims a young man can present for a position of trust. So highly is this accom- plishment esteemed by business men, that where it is wanting other qualifi- cations sink into comparative insignificance. A clerk who " never makes a mistake" is sure of promotion and remuneration. There are many theories as to the surest and most rapid method of adding, and occasionally some eccentric genius electrifies the world with an exhibition of almost magical power in this direction ; but the only thing that can with safety be relied upon is practice — faithful and continued practice. The student should be required to write down long columns of figures of various numerical values, and test his powers by adding, first in one direction and then in the other ; occasionally trying two and three columns at a time. We give on the next page three simple processes of retaining the figure to be carried — a very important matter with beginners. The first is the usual method of writing the carrying figure small under the unit amount of the column which pro- duced it. The second requires the addition of each separate column to be written down on a waste space commencing with the right hand column and carrying to the next as in the usual method ; these separate amounts placed in their order, one under the other, will present in their unit figures, counting upward, the general result. The third method consists of the proper arrangement of the independent sum of each column, so that, beim* added, the proper result is secured. 199 Mrst Process. 1829 25 743 18 2562 28 145 19 2823 25 7574 28 4291 83 25 64 19994 90 333 SS APPETSTDIX. Examples Second Process. TMrd Process. 1st column, 50 5 2d " 29 2 4 : 3d " 34 3 3 : : 4th ** 39 3 6: : : 5th " 39 3 6:: ; : 6th ** 19 994 90 16::: : : 19 9 9 4 9 The process of adding two or more columns at once is much more simple than is generally supposed ; requiring little, if any, more skill than the com- mon method. The only point of difficulty is the necessity of adding units to units, tens to tens, etc. To give the student an idea of the process, we will take the two cent-columns in the above example, and add them together. Commencing with the lower amount, we proceed : 64 and 3 are 67, and 80 are 147, and 8 are 155, and 20 are 175, and 5 are 180, and 20 are 200, and 9 are 209, and 10 are 219, and 8 are 227, and 20 are 247, and 8 are 255, and 10 are 265, and 5 are 270, and 20 are 290 ; which is the sum of the two columns. It will be seen that we separate each amount into units and tens, adding the units to the units and the tens to the tens of the accumulating result. We will now vary the process by commencing at the top and adding downward ; and also by adding the tens first : 25 and 10 are 35, and 8 are 43, and 20 are 63, and 8 are 71, and 10 are 81, and 9 are 90, and 20 are 110, and 5 are 115, and 20 are 135, and 8 are 143, and 80 are 223, and 3 are 226, and 60 are 286, and 4 are 290 ; the game result as before. By continued practice of this kind the student will soon astonish himself with his own proficiency. Let him practice on two columns, until he becomes thoroughly familiar with the process, and then take three, and four. The necessity of keeping his mind constantly on the alert for fear of adding tens to units, and units to hundreds, will serve to quicken his powers of concentration, and develop the practical resources of his mind. TO DETECT ERRORS IN THE TRIAL BALANCE. Undoubtedly the best method for guarding against the trouble of finding errors in the Trial Balance is not to make them ; but as this advice is much more easily given than followed, and as, in despite of the best efforts, Trial Balances do frequently fail to balance, a few hints as to the best methods of discovering the errors may be kindly received. In the first place let it be remembered that while the Trial Balance is not a sure test of the correctness of the Ledger, no Double Entry Ledger can he correct that does not balance ; hence, the necessity of knowing that the sides are equal. The Trial Balance is simply the summing up of the debit and credit sides of the Ledger to 200 APPENDIX. ascertain if thej are equal. If the trial should prove tnat they are iwt equal, the cause must exist either in entries being omitted, posted to the wrong side, or in wrong amounts. A little observation will enable the accountant to classify the error under one of tlie above heads. If the precaution indi- cated in our first Double Entry sets be taken, viz. : to carry the total amounts posted into the Trial Balance — and either side agrees with the footing of the Journal columns, the difficulty is easily overcome, as the difference between the sides will show not only the error or combination of errors, but the side of the Ledger upon which they occur. For various reasons, however, it is not always convenient to embrace the total Ledger entries in the Trial Balance ; therefore for general purposes, we would suggest the following process for detecting errors: First, make sure that an error exists. It is often the case that an overweening anxiety to have the sides of the Trial Balance equal actually produces a supposed error, by dissipating the mind while engaged in ascertaining the result, and thus persistently, though erroneously realizing its own fears, by errors in addition. If an error seems to exist, before attempting to find it go carefully over the work of addition, proving it in every way. If the test should prove that the sides do not equal, refer to the Ledger accounts, and ascertain that the proper amounts have been transferred to the Trial Balance. Foot up the accounts very carefully, and permit no doubt to exist that the exact condition of the Ledger is shown in the Trial Balance. — Second, If the error still exists, ascertain its exact amount, and then look carefully for the same amount in the Journal, which may have been omitted in posting. If no such an amount should appear, or should not prove to have been omitted, next ascertain if any Journal Entry exists of Jialf the amount, which being posted to the icrong side would produce the difference. Should this test prove unsuccessful, ascertain if the difference be divisible by 9, and if so, look carefully for a transposition of some amount posted.* — Third, Should this process fail, the last resort is to clieck the post- ings. First ascertain that the Journal entries balance and then go carefully over the work, checking in pencil mark, all entries that have been properly posted both on the Journal and the Ledger. The most reliable process of checking is to have one person take the Journal and call off the Ledger titles and amounts, slowly and distinctly — the debits first, and credits next — while another examines the Ledger entries to see if they correspond. Many prac- tical accountants adopt the plan of thus checking before attempting to take a Trial Balance, for the purpose, not only of facilitating the labor but of feeing assured that the Ledger is absolutely correct. We cordially commend the practice, believing that if it is adopted, and faithfully carried out, there will be little need of resorting to any other method to ensure a balance. Above all, let the student hunt up his ovm errors of balance ; for while it is * It is a curious fact that the difference between any given amount composed of two or more figures, and the same figures transposed, is divisible by 9. For example, the difference between 75 and 57 is 18; between 120 and 210, 90; between 195 and 159, 36, etc., all of which differences 18, 90, and 33, are divisible by nine, without a remainder. The illustration may be carried to any extent, with the same results. 201 APPENDIX. true that all such, errors are the result of carelessness, the adoption of means to detect them, will tend, in the greatest degree to perfect his mind in those practical questions and labor necessary to the full development of his powers. It is the duty of the teacher to open up to the pupil's mind the bearings of the various principles of the science he would inculcate, as well as to aid him in the application of those principles ; but practical results should be the student's own work. For these he should be held responsible ; and should never be allowed to fall into the loose habit of making errors that his teacher aiay find them. RESOURCES AND LIABILITIES. The student has been taught that certain Ledger accounts are used to show resources, and certain others to show liabilities, and that the corres- pondence between the resources and liabilities thus shown must agree, in a certain sense, with the accounts showing gains and losses. He must be aware, however, that all resources are not equally valuable ; that, in the course of trade, persons may become indebted to us, both on note and on account, who will never pay ; the resource thus represented being absolutely valueless. In estimating the condition of a concern, therefore, it is well to know whether the books are truthful ; that is, whether the resources ex- hibited on their pages are absolute or fictitious. The importance of this precaution will be apparent when we consider that all gains in business, as shown by business accounts, are predicated upon the integrity of the re- sources. For instance, suppose we sell A. $500 worth of merchandise, and take his note for it. In recording the transaction, we credit Merchandise and debit Bills Receivable. In estimating our gains and losses, we, of course, include among the proceeds of merchandise this amount, which adds $500 to our gains. But suppose the note to be worthless. In this case Merchandise account is made to show a gain which does not exist. The error may be corrected by debiting Merchandise and crediting Bills Receivable, thus disposing of the matter at once. But suppose the real value to remain in doubt. The account may be worth its face, or 50 % of its face, or nothing. In this case — and particularly if there were other accounts of the same character — it would be well to open a " Suspense " account, and credit it with an amount equal to the supposed deficiency, debiting Loss and Gain with the same. This would leave the doubtful accounts standing as resources, but being offset by Suspense as a liability, the question of value would be left to be determined by the final results. In either case, the account showing resource should be credited and Suspense debited. If payments of value are made, they will appear to the debit of some resource account and credited to Loss and Gain. This method will be found preferable to that of closing doubtful accounts into Suspense ; as it is equally effective in guarding against fictitious gains, and leaves the doubtful accounts undisturbed for a more satisfactory adjust- ment. 202 APPENDIX. BUSINESS FORMS BILLS. 1. Produce. Thos. May Peirce, New York, Sept. 1, 1879 Bo't of Halliday & Smith. 100 brls. Flour, "State Superfine" - - - @ $6.8o 630 50 do. do. "St. Louis XX." - - - . « 9.50 475 110 do. do. " Western Extra," ... « 6.*o Rec'd Payment, 704 1809 « Halliday & Smith. 2. Groceries. C. E. Cady, New York, Dec. 13, 1879. Bo't of H. K. Thurber & Co. 60 lbs. Granulated Sugar, @ 10^)^ 100 do. Crushed do. " 12^ 50 boxes Adamantine Candles, 143 lbs., - " 15)^ 5 bags Porto Rico Coffee, 150 lbs., - - - « 16|)^ 12 21 24 64 30 45 75 50 a Dry Goods. J. F. MooAR & Co., Syracuse, June 10, 1879. Bo't of C. P. Meads. 5 pes. N. Y. Mills Sheetings, 72 in., 185 yds., @ 27^/- 3 do. Red Cross Cambrics, 96 1 " " 8^ 10 do. Victoria Ginghams, 143 *' " 28)^ 1 do. Franconia Denims, 36 1 " " \^f 203 50 88 7 72 40 04 5 48 104 12 APPENDIX. RECEIPTS. 1. On Account. ^600, Chicago, May 4, 1879. Received April 30, 1879, Five Hundred Dollars, on account ot Joseph H. Palmer. H. B. Bryant & Co. 2. In Full of all Demands. ^6/>-5, St. Louis, Oct. 24, 1879. Received of E. P. Heald Six Hundred and Forty-five Dollars, in full of all demands. W. M. Carpenter. 3. To Apply on Contract. ^/OOO. New York, Aug. 16, 1879. Received of E. G. Folsom, One Thousand Dollars, the same to apply on contract for building house, dated May 1, 1879. George W. Latimer. 4. To Apply as an Endorsement. ^/60. Philadelphia, Mar. 4, 1879. Received on the within note, One Hundred and Fifty Dollars. J. E. Soul:6. 5. Receipt for Property. Rochester, Apr. 28, 1879. Received of A. W. Randall, the following- enumerated articles to be held in trust for him, and returned on his demand : one Gold Watch (hunting case), two Promissory Notes, each dated June 8, 1878, and signed by L. L. Williams — one for Three Hundred Dollars, due in six months from date, and one for Seven Hundred Dollars, due in one year from date. Thos. H. Shields. NOTES. 1. Individual Note. ^S7S. Utica, Wov. 20, 1879. One month from date, I promise to pay to H. B. McCreary, or order, Three Hundred and Seventy-five Dollars, without defalcation, for value received, at Second National Bank. John R. Carnell. 204 APPElirDIX. 2. Joint Note. ^200, New York, July 1, 1879. Ninety days from date, we promise to pay to the order of L. S. Metcalf, at Ms office, Two Hundred Dollars, value received. D. Appleton. Charles Scribner. 3. Joint and Several Note. ^660. Brooklyn, Aug. 17, 1879. Nine months after date, we, or either of us, promise to pay Henry A. Tidd, or order, Six Hundred and Fifty Dollars, value received. A. S. Gladwin. H. K. Motley. 4. Principal and Surety Note. f^SOO. San Francisco, Feb. 6, 1879. For value received, on or before July 6, 1879, I promise to pay to the order of F. B. Clemmer, Three Hundred Dollars. Alva S. Walker, Principal. James Thompson, Note.— The usual form of a principal and surety note is for the principal to properly sign the note, and the surety to endorse it. 5. Note, Payable to Bearer (with interest). ^^76. Kingston, Pa., Aug. 1, 1879. Sixty days from date, I promise to pay W. L. Dean, or bearer. Four Hundred and Seventy-five Dollars, with interest from date. L. L. Sprague. 6. Non-negotiable Note. ^800, Boston, Jan. 4, 1879. For value received, I promise to pay to Ira Mayhew on demand. Eight Hundred Dollars. D. T. Ames. 7. Chattel Note. ^900. Trenton, June 17, 1879. Thirty days from date, for value received, I promise to pay to Arthur S. Gladwin, or order. Nine Hundred Dollars in " Thurber's Perfection ** Flour, at the then market rate, the same to be delivered at the option of the owner within the limits of the city of Trenton. Joseph Brouwere. 205 APPEiq-DIX. DRAFTS. 1. Sight Draft. ^600. Buffalo, Be'pt 1, 1879. At sight pay to the order of A. H. Hinman Five Hundred Dollars, and charge to account of C. L. Bkyant. To W. P. Gregory. Newark, N. EGORY, ) 2. Time Reckoned from Sight. ^/OO, Easton, Pa., Jan. 2, 1879. At ten days' sight pay to the order of W. Blackman, at Citizen's Bank, One Hundred Dollars, value received. J. L. Knauss. To E. M. HUNTZINGER, Providence, ZINGER, ) B.L \ 3. Reckoned from Date. ^/^S^ Manchester, N. H., April 20, 1879. Ten days from date pay to James H. Lansley or order, One Hun- dred, Seventy five and ^^^^ Dollars, value received. G. A. Gaskell. To H. E. HiBBARD & Co., Boston, Mass. DUE BILLS. 1. For Cash Drawing Interest. ^260. Washington, D. C, June 15, 1879. Due Henry C. Spencer, on demand, Two Hundred and Fifty Dollars, with interest from date. Zalmon Richards. 2. For Merchandise, ^^^ithout Interest ^/OOO, Brooklyn, Avg. 17, 1879. Due R. M. Bartlett or order. One Thousand Dollars, payable in wheat at market price, on the first day of October next. Charles Claghoen. 206 APPENDIX. ORDERS. 1. To Apply on Account. ^4^. Baltimore, Oct. 15, 1879. Messrs. E. Burnett & Co. will please pay to the bearer Forty-five Dollars in merchandise, and charge the same to my account. F. H. Caspabi. 2. In Full of Account. ^60. New York, April 13, 1879. C. E. Cady, Esq. : Please pay to H. C. Wright, or bearer. Fifty Dollars in goods, and this shall be your receipt in full of my account. Wm. Aulen Miller. CHECKS. 1. Payable to Bearer. ^/60. New York, March 18, 1879. Second National Bank. Pay to Jonathan Jones, or bearer, One Hundred and Fifty Dollars. A. W. Randall. 2. Payable to Order. ^200. New York, May 9, 1879. East River National Bank. Pay to- Byron Horton or order. Two Hun- ired Dollars. S. S. Packard. 3. Certificate of Deposit. ^84-6, Philadelphia, Nov. 14, 1879. Keystone National Bank. Thos. M. Peirce has deposited in this Bank, Eight Hundred and Forty-five Dollars, payable to J. E. Soule or order, on return of this certificate. (No. 406.) Alexander H. Small, Teller, 307 SET OF APPEIS^DTX. EXCHANGE. 1, Bxchaiige for £600, New Yokk, July 5, 1879. Ten days after sight of this my first Bill of Exchange (second and third of same tenor and date unpaid), pay to S. S. Packard or order, Five Hundred Pounds sterling, value received, with or without further advice. T. A. Edison. To Brown Brothers & Co., ) Bankers, Liverpool, ) 2. Exchange for £600, New York, July 5, 1879. Ten days after sight of this my second Bill of Exchange (first and third of same tenor and date unpaid), pay to S. S. Packard or order. Five Hundred Pounds sterling, value received, with or without further advice. T. A. Edison. To Brown Brothers & Co., ) Bankers, Liverpool. ) 3. :Excha7ige for £600, New York, July 5, 1879. Ten days after sight of this my third Bill of Exchange (first and second of same tenor and date unpaid), pay to S. S. Packard or order, Five Hundred Pounds sterling, value received, with or without further advice. T. A. Edison. To Brown Brothers & Co., ) Bankers, Liverpool. ) ACCOUNT SALES. Account Sales of 2000 Bush. Canadian Club Wheat, on % and risk of C. P. Meads, Syracuse. 1879 June 18 '.U 20 May 17 June 20 C. L. Stewart on %, 1500 bush. @ $2.35 - - - - $3525 G. C. Cannon, cash, 500 bush. @ $2.40 ... - 1200 CHARGES Freight and Drayage $325 Storage, Ins., etc. 17 26 Government Tax 5 91 Commission 2^% on $4725 - . - - 118 12 C. P. M.'s net proceeds 4725 $4258 71 Byron Horton & Co. Nbw York, June 20^ 1879. 208 RETURN TO nil^^^ USE ^^" ^« booic is due on *e7as7d„e^ ^"®t«"«l/?f^ on die date to which Lf"'?'* ''^'•'w, or 1 YB 30910 UNIVERSITY OF CALIFORNIA LIBRARY