£77: 11: 6. This sum, therefore, is to be added to the aggregate of the value of our effects, or to the CAPITAL STOCK ACCOUNT; hence we make the entry as above : Profit and Loss Dr. to Stock. Nett gain May 9 77 11 6 and then debit the Profit and Loss Account To Stock; and if our Stock Account were opened, we should carry this sum to its credit. But it is unnecessary to give this account or that of Balance, which would be debited To Sundries, and credited By R. Simpson; nor with the limited transactions here given, is it necessary to explain farther the method of closing the Books; it will be fully explained in the proper place. The entries in italics on several of the accounts are those which are called Closing Entries. We have seen above how they are obtained. 30. Another method of keeping a Set of Books is employed when, from the nature of the business, it becomes important to diminish the number of entries, and so save time and labour. For this purpose the principle is kept out of view, that every Dr. must have a Cr., and every Cr. a Dr., and the first record of a transaction is made with a Dr. only, or a Cr. only, according to the Definitions, Arts. 18 and 19. Thus, when we buy goods from Robert Hall the entry is, Cr. R. Hall; and when afterwards we pay him the amount of his account, we enter, Dr. R. Hall. Instead, therefore, of having such a Ledger as that above exemplified, which contains an account for both a Dr. and a Cr. in every transaction, the Ledger by this method will contain an account for a Dr. only, or a Cr. only, according to the nature of the particular transaction recorded; so that each transaction will appear only once in the Ledger, namely, either on a debit side, or on a credit side; and hence this method of keeping books is called Single Entry. It is of course with a view to the formation of such a Ledger, that the first record of a transaction is made. The method is only fitted for a retail business where a great variety of articles is dealt in, and there are a great many sales to a small amount each. It answers many purposes sufficiently well; but it wants altogether the self-correcting principle of the Double Entry method, and it fails in one important result, an exhibition of the gain or loss upon the whole of the transactions. II.-The Books of a Set. 31. The Books of which a Set consists will vary very much with the nature of the business, or the transactions in which a person is engaged. A lawyer, physician, farmer, or private gentleman will require a very different Set from that which would be essential for keeping in a proper state of distinctness and classification the varied transactions of a mercantile establishment. Some Houses, from the nature of their business, will require a much greater number than others. A Cash-Book and Ledger, at least, ought to be kept by every one who wishes to have a clear view of the state of his own affairs, and the means of ascertaining at any moment how he stands as to income and expenditure, gain or loss. The merchant, trader, and farmer will require at least one book preparatory to the Ledger, for recording other than cash. transactions, according to the general rules relating to Dr. and Cr-that is, a Day-Book or Journal. In most kinds of business both a Day-Book and Journal will be required. We have thus for the essential books a Cash-Book, a DayBook, and a Ledger, with which, in most kinds of extensive business, a Journal will be combined for the purpose of a more thorough classification of transactions before passing them into the Ledger. The other principal books necessary in most kinds of business are a Bill-Book, Invoice-Book, and Warehouse or Stock-Book. Several other subsidiary books may be employed, varying greatly with the nature of the business; but they are of minor importance, and will be easily understood upon inspection. (1.)-Bill-Book. 32. In the Bill-Book are recorded the parties to each bill, its date, term, and other particulars concerning it, in so many distinct columns; as will be seen by inspection. (2.)-Invoice-Book. 33. The Invoice-Book is simply a copy of all invoices received or forwarded. Some persons dispense with this book, and reckon it sufficient to preserve the invoices themselves, and refer to them for all particulars; but this method is attended with less security. When copies of both kinds of invoices are kept, two books are used; one called the Invoice-Book Inward, for invoices received; the other called the Invoice-Book Outward, for all invoices forwarded. In the case of such a business as that exemplified in our first Set, when each article is received, a number is attached to it; the numbers running from unity upwards. These numbers are entered in a column on the left side of the page. There is no difference, except in this particular, between the Invoice-Book and the Invoice. (3.)-Cash-Book. 34. In the Cash-Book, all money received, and all money paid, is entered, in opposite pages or columns, in the manner of a Dr. and Cr. account in the Ledger. All sums received are entered on the left side or Dr. side (Art. 27); and all sums paid are entered on the right side, or Cr. side: the entries on each side being made by the general rules. Thus, the receipt of the sum of £41:3:10 from S. Moore for goods, is expressed in the Cash-Book by the entry, "CASH Dr. To S. MOORE," and is entered on the left side; and the payment of the sum of £1: 18s. for carriage of goods, is expressed by the entry, "CASH Cr. BY GOODS," that is "GOODS Dr. To CASH," and is entered on the right side. 35. At the end of every week, or other convenient period, each side of the Cash-Book is added up, and the difference taken; and, since the credit side can never be the greater, the difference of the two sides, if there be any, is the excess of cash received above cash paid, which will agree with the cash on hand, if the books have been correctly kept. This difference is called the balance. The balance is the first entry, on the debit side, for the next week or period. 36. Money borrowed or lent, and drawn from or lodged in the Bank, may be entered in inner columns of the CashBook, to keep it separate. This mode of keeping a bank account will be found convenient in many kinds of business. A Petty Cash-Book is generally kept for entering small sums. Their amount is transferred to the general CashBook before each balance. (4.)—Day-Book. 37. The Day-Book contains all transactions not entered in the Cash-Book. These transactions are recorded in the order of time, and so that one person or thing is expressed as Dr. to another, according to the general rules. 38. To avoid a multiplicity of entries, it is recommended that goods bought be not entered in the Day-Book till the end of each month, when they can be transferred from the Invoice-Book, under the title, GOODS Dr. TO SUNDRIES, to each seller for the amount of his invoice. Sometimes the goods bought and goods sold are kept in separate books. 39. It will also be found convenient, in such a set as follows, to enter goods sold for cash in a separate part of the Day-Book, headed "Cash Sales," whence their amount can be transferred to the Cash-Book, immediately before each balance. 40. In the column on the left side of each page are inserted the Nos. referred to in Art. 33; the column on the right side, adjoining the money columns, is reserved for noting the page of the Journal to which the transaction will afterwards be transferred. Each transaction is separated from that above it by a line drawn in ink, in the middle of which a break is left for the date of the lower transaction. (5.)-Journal. 41. The entries in the preceding books are arranged in the order of time. They are not classed under any general heads, so as to make them of easy reference: this is, however, in part effected by the Journal. All transactions of the same kind are classed in the Journal under the same head or title; the Dr. and Cr. being stated as in the Day-Book. This transference of an entry is called journalizing. The books are commonly journalized once a month. 42. The Day-Book is journalized by collecting together all the entries during the month, in which the same person or thing is Dr., under the title, "That person or thing Dr. to Sundries ;" and all entries in which the same person or thing is Cr., under the title, "Sundries Drs. to that person or thing;" specifying, afterwards, the names of each of the Sundries, and taking care not to journalize the same transaction twice. It is obvious that if, instead of Sundries, there be the name of only one person or thing, that name will occupy the place of Sundries. In the Cash-Book, all the transactions being already collected, it is only necessary to transfer the debit |