55. In the language of Book-keeping, a person is said to be Dr. when he becomes accountable to me, or when I cease to be accountable to him; and Cr. when I become accountable to him, or when he ceases to be accountable to me.— Thus, when I sell goods to J. Nesbett, or pay him an account, I express it by the entry, "J. Nesbett Dr. ;" and when I buy goods from him, or receive payment of an account, it is expressed by the entry, "J. Nesbett Cr."

56. In like manner, a thing is said to be Dr. when it comes into my possession, or when any charge attends it; and Cr. when it goes out of my possession, or when it brings me in anything. Thus, the receipt of Cash is expressed by the entry, "Cash Dr. ;" and the payment of it, by that of "Cash Cr."

57. The Day-Book contains all transactions which occur in the business, arranged in the order of time; the nature of each transaction being expressed by making some person or thing Dr. or Cr. according to the above definitions; after which, particulars are specified. A reference to the folio of the Ledger is entered in a column adjoining the money columns.

58. The Ledger contains a separate account for each Dr. and Cr. in the Day-Book. Each account has two sides-a debit and a credit-placed on two opposite pages or columns. In the Day-Book, it was sufficient to express a person as simply Dr. or Cr.: but in the Ledger, for the sake of greater distinctness, he is expressed as Dr. to the thing for which he becomes accountable to me, or for which I cease to be accountable to him; and Cr. by the thing for which I become accountable to him, or for which he ceases to be accountable to me. Thus, the first entry in the Day-Book is "J. Nesbett Dr." Open J. Nesbett's account by writing on the left page or column, "Dr. J. Nesbett;" and on the right, "Contra, Cr.:" then, since the article sold him is

Goods, enter on the debit side, "To Goods," prefixing the date and annexing the sum. Again, on 7th January, we find A. Heazleton Cr. for Cash received from him. Open his account, and enter on its credit side, "By Cash," with the date and sum as before; and, in the same manner, every entry in the Day-Book is taken into the Ledger. In a column next those for pounds, shillings, and pence, there is entered a reference to the page of the Day-Book. In the "Statement of Affairs" prefixed to the Set, the balances due to and by the Concern, are set down; and with these the Ledger accounts of the persons are opened; such a Set does not contain an account of "Goods" and "Bills."

An account is said to be balanced, when the sum of the entries on the debit side is made equal to the sum of those on the credit. To balance an account, add up its two sides: if the amounts are equal, it is said to balance itself; but if they are not equal, take the less from the greater, and place the difference on the less side, with the title To or By Balance, as the case may be; then add up the two sides, and the account is said to be closed. When this has been done, open an account of Balance, on the debit side of which place all the balances that are on the credit sides of the accounts; and on its credit side, all those that are on the debit sides. The balance of this account will then shew the

net capital at the time of closing the accounts.

59. The Cash-Book, exactly like a Ledger account, has a debit and a credit side. All sums received are entered on the left or debit side; and all sums paid, on the right or credit side: Cash being made Dr. to the person or thing on whose account it is received, and Cr. by the person or thing on whose account it is paid. The Cash-Book is made by taking the receipts and payments from the Day-Book. In the following Set, however, for the sake of avoiding a multiplicity of entries, the proceeds of ready-money sales, and cash

received or paid for bills, have been entered at once in the Cash-Book, without passing through the Day-Book. The Cash-Book is balanced, in the same way as a Ledger account, at the end of every week, or other convenient period. This balance is the first entry on the debit side for the next period. The Cash-Book is opened with the balance from the "Statement of Affairs."

60. In the Bill-Book are recorded the parties to each bill, its date, term, and other particulars concerning it, in so many distinct columns. For a printed form see the Bill-Book of Set I. or Set II.