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the middle of the page is used for the names of the persons making payments or to whom payments are made. The specimen pages which are given here will show how the columns should be ruled. Now let the reader make the entries in the manner explained in the preceding pages, and he will have a "Cash Book" in proper shape, and will thus familiarize himself with this important branch of book-keeping.

The specimen on pages 60 and 61 will show a "Cash Book" properly balanced and closed.

The Petty Cash Book.

It is the custom of most book-keepers to use what is called a Petty Cash Book. Any blank book ruled with dollar and cents columns will answer. The Petty Cash Book is used for expenditures only, and its use saves the book-keeper a great deal of time and labor which would be required were all the minor expenses of an establishment entered in the Cash Book and transferred separately to their proper accounts in the Ledger. The book-keeper enters all the small sums paid out day by day in the Petty Cash Book, such as "Sundry Expenses," "Freights," "Interest," money paid to employés who have no fixed pay-day, Telegrams," "Porterage," etc. At the end of the week, or month, as his custom may be, he adds these expenditures in the Petty Cash Book, and enters the aggregate amount on the credit page of the regular Cash Book, from which it is posted to the Ledger, in the ordinary way. Bear in mind that the Petty Cash Book is used for entering minor expenditures only, and never for entering money received.

The Day Book.

The Day Book is used for recording the transactions of each day, except those which are made for cash, and which are entered in the Cash Book. It is frequently called the Sales Book, as all the sales are entered in it. It is also used to record all purchases of goods made by the merchant, and thus takes the place of a separate book, which was formerly used, and which was known as the Purchase Book.

The Day Book is ruled differently from either the Cash Book or the Ledger. On the left of the page is a single column, and on the right are three sets of dollars and cents columns. The date is written, day by day, at the top of the page; the column on the left is for the number of the articles sold; the wide space in the middle is for the names of the purchasers and a description of the goods sold to them; the first set of dollars and cents columns is for the entry of the amounts of the sales; and the third set is for the entry of the aggregate amount of the sales to each person. The second, or middle set of dollars and cents columns, is known as the Cash Column, and in it are entered the aggregates of all bills for which cash is paid when the purchase is made. The use of it greatly simplifies the labor of the book-keeper, and avoids confusion in keep

ing the accounts. Where this column is used, all bills that are paid before the end of the month are entered in the Cash Column; all bills that are not paid before the end of the month, or at the time of the purchase, are entered, as has been said, in the third column. When the sale is reported to the book-keeper, he must be informed as to the manner of payment, in order that he may know in which column to enter the amount. It is the custom where goods are paid for at the time of the purchase, to make a “check" in red ink in the margin after the amount, and also in the margin before the name. This shows that the book-keeper is not to post these entries in the same manner that the sales on credit are to be posted.

For example, let us suppose John Smith, of Camden, N. J., buys a bill of goods from the merchant to the amount of $100. This sale is entered in the Day Book under its proper date, with the articles and the number of them. The price of each article is written in the first set of dollars and cents columns. If the sale is for cash, the aggregate or total amount of the bill is written in the second set of dollars and cents columns, and a "check" in red ink is placed opposite the name of John Smith and another one opposite the aggregate amount. This shows that the sale is for cash. If the sale is on credit-say sixty days time-the aggregate is written in the third set of dollars and cents columns, and the account is posted in the Ledger in the usual way at the end of the month.

Losting the Day Book.

The entries in the Day Book should be posted to the Ledger at the end of every month. The various entries of sales on credit are carried to the Ledger and each written there in its proper account, and the number of the Ledger folio or page to which the account is carried is written in red ink in the lefthand margin of the page of the Day Book, in order that the book-keeper may refer to it promptly. These entries are carried to the debit of the accounts in the Ledger, as they are charges against the persons to whom the sales are made. The book-keeper now takes the Cash Sales entered in the Day Book. Of course, when cash is paid on the spot for goods, the transaction is complete, and there is no necessity for opening an account with the purchaser in the Ledger. To do so would be simply to crowd the Ledger with useless accounts. The book-keeper, therefore, adds the amounts in the second or cash column of the Day Book, and writes the total in the third set of dollars and cents columns. The third column is then added, and the total written at the bottom. This total represents both the cash and the credit sales, and of course shows the total amount of business done during the month. The various entries having beer posted as described to their proper accounts in the Ledger, the total of the third column is entered in the credit side of the Merchandise Account of the

house in the Ledger. "Merchandise" is here treated, like "Cash," as person. It has supplied the goods sold, and is therefore credited with them.

This entry is also a debit against the purchasers for the goods taken out of the house during the month.

Instead of posting the total of the "Cash Column" as a debit from the Day Book to the Ledger, the book-keeper enters it on the debit page of the Cash Book as follows: "Sundry Sales, Day Book Folio -," and makes a check in red ink in the margin on the left of the entry. Cash having been paid into the concern for these sales, "Cash" is properly debited for them in the Cash Book. This total is included in the footing of the debit page of the Cash Book, and is posted from it to the Ledger to the debit of "Cash." Thus the debit to "Cash" balances the credit to "Merchandise" in the Ledger.

The Merchandise Account.

Merchandise, as we have said, is treated as a person. It is debited or charged with all goods received by the house, and credited with all goods sold.

It is the custom to devote, every month, one or more pages of the Day Book, as necessity may require, to a "double entry" headed as follows: "Merchandise Debtor to Sundries"—that is, "Merchandise Debtor to the Following." The book-keeper enters under this heading all bills of goods which the house has purchased during the month, and all other items with which it is necessary to debit or charge "Merchandise" and credit other accounts. Each amount must be written separately in the name of its proper account, and the various entries must be placed one under the other down the page, with the dates written in the margin on the left-hand side of the page. The amounts of the various entries are written in the first set of dollars and cents columns, and the total is written immediately below. In no case must the entry or entries be extended into the second or third sets of dollars and cents columns. Every transaction is complete, and must be confined to the portions of the page indicated. The amounts of the various entries are then posted to the credit of their proper accounts in the Ledger, and the total of all of them is posted to the debit of "Merchandise" in the Ledger.

The reader is earnestly recommended to rule several pages of a blank book in the manner described, and to practise keeping a Day Book according to the instructions herein contained. By this it is not meant that he should simply copy or confine himself to the forms given in these pages. He should, beginning with the Cash and Day Books, open a complete set of books, and keep them as though he were actually engaged in business, extending them as far as possible, and posting them as directed in these instructions. This will give him an amount of practice which will be found very useful, and will enable him to become thoroughly familiar with all the various transactions and requirements of Book-keeping.

The following specimen pages of a Day Book will illustrate the instructions contained in the preceding pages.

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In posting the above page to the Ledger, the sales on credit are debited each to its proper account in the Ledger, the numbers in the left-hand margin indicating the Ledger folios on which the entries are made. The amount, $4,288.50, the total of the cash and credit sales, is entered in the credit side of the Merchandise Account of the Ledger. The amount, $616.50, the total of the cash sales, is entered in the debit page of the Cash Book, as "Sundry Sales, Day Book Folio I." It is posted with the total of the month's transactions in the Cash Book to the debit of the Cash Account in the Ledger.

Specimen Lage of Merchandise Account in the Day Book.

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The book-keeper in posting the above page would enter the above amounts in the Ledger to the credit of the respective parties from whom the purchases were made, and debit "Merchandise" with the whole amount of $1804.

The Ledger.

The Ledger is the book to which all the transactions in the Day Book and Cash Book are transferred, in a clear and simple form, and distributed into certain heads or accounts which tell their own history; and if unbalanced must show a difference in favor of the merchant as an "Asset," or against him as a "Liability." A properly kept Ledger will exhibit at a glance the exact state of every account contained in it, and thus show the condition of the merchant's business from month to month. It contains accounts with all persons to whom goods are sold. All sales recorded in the Day Book must be posted to, or written in the left-hand or debit side of the Ledger, and the amounts written on the left-hand page of the Cash Book must be posted to the credit of these accounts in the Ledger. It must also contain accounts with all persons from whom the merchant purchases his goods. The sums he pays them for such goods must be posted in the Ledger to the debit of these accounts, and the bills rendered for said goods must be posted to the credit of said accounts. The Ledger also contains the Stock or the Merchant's Account, Merchandise, Cash, Expense, and Interest Accounts, and such other accounts as the neces

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