side under the title, "Cash Dr. to Sundries ;" and the credit, under that of "Sundries Drs. to Cash." If goods sold for cash be kept in a separate part of the Day-Book, and taken monthly into the Cash-Book, as recommended in Art. 39, it is obvious that they are not to be journalized from the DayBook.

43. As each transaction in the Day-Book is journalized, mark opposite to it, in the column adjoining those for pounds, shillings, and pence (Art. 40), on the right side of the page, the No. of the page of the Journal to which the entry is transferred. This will prevent the possibility of mistakes; and will at once show how far the journalizing is advanced. In the column on the right side of each page of the Journal, adjoining the money columns, mark the page of the Day-Book from which the entry is transferred. In the first of the two

columns on the left side, the date of each transaction is marked as it is entered; the second is reserved for the No. of the folio in the Ledger, to which the entry is to be afterwards posted.

(6.)-Ledger.

44. The Journal, we have seen, classes the entries of the Cash-Book and Day-Book under general heads. The Ledger perfects this system of arrangement. It contains a separate account for each entry in the Journal, exhibited under the form of Dr. and Cr. on two opposite pages or columns, as already exemplified (Art. 29). The transference of an entry from the Journal to the Ledger, is called posting; and the entering in the Ledger the title of the account, is called opening the account. The two pages or columns thus occupied by an account, are called a folio. On the left side is marked the date of each transaction as posted; on the right, adjoining the money columns, a reference to the page of the Journal from which the entry is posted.

C

A column is sometimes reserved for a reference to that folio of the Ledger which contains the second entry of the same transaction.

45. The Stock account is always opened in the beginning of the Ledger; the other accounts are usually opened in the same order in which they occur in the Journal. In opening each account, such a space is left beneath the title as may be judged sufficient to contain the entries which are likely to be posted into it. When all the space thus allotted for an account is filled up, the account is to be transferred to another folio. The entries in each account should be made in one line, and in few words; since the reference to the Journal, and from it to the Day-Book, will give all particulars.

The Journal entries are posted into the Ledger in the manner already sufficiently explained and illustrated (Arts. 28, 29). The following may be given as a general rule for posting :-Debit the account that is Debtor to the title of that which is Creditor; and credit the account that is Creditor by the title of that which is Debtor. Thus taking the first entry in the Journal "Cash Dr. to Sundries," and leaving a space for the Stock account at the beginning of the Ledger, we open the Cash account, and enter, on the debit side, "January 31st, To Sundries, £849: 13: 10;" thus debiting the Dr. to the Cr. We then open an account for each of the Sundries, and credit each of these Crs. By Cash, which is the Dr. ; prefixing the date to each, and annexing the sum, as before. As each entry is posted, enter in the column of the Journal reserved for that purpose (Art. 43), the folio of the Ledger in which the account is to be found; and, as the No. of each folio is entered in this column, draw a heavy line under it with a pen. This mark at once shows how far the posting is advanced.

On Balancing the Ledger.

46. An account is said to be balanced, when the sum of all the entries on the debit side is made equal to the sum of all those on the credit side. In order to balance an account, the debit and credit sides are added up severally, the posting from the Journal being finished, and their amounts noted— not in the book, but on a separate paper: if the two amounts be equal, the account is said to balance itself; but if they are unequal, the less is subtracted from the greater; and, according as the deficiency is on the debit or credit side, the account is to be debited or credited for the difference with some imaginary account. The two sides are then added up; and the amounts, which will, of course, be equal, are written down in their respective places. The account is then said to be closed.

*

47. Before proceeding to balance the books, accuracy in the posting should be as far as possible ensured. That object may be, in a great measure, attained by comparing the Ledger and Journal; but perhaps the best preparatory test is the Trial Balance. It is made by collecting the amounts of the debit sides of all the accounts into one sum, and the amounts of the credit sides into another; and entering them in separate columns, omitting, for the sake of brevity, all those accounts whose sides are equal; then since by the nature of double entry, each sum appears upon the debit side of one account and the credit of another, the sum of all the amounts of the debit sides ought to be equal to the sum of all the amounts of the credit sides. If the two sums do not agree, an error

* To compare the books, one person takes the Journal, and another the Ledger; the former "calls out," as it is termed, the several Journal entries as they ought to be posted; the latter sees that this has been correctly done in the Ledger, and a small mark or point ( . ), or a dash (✔), is affixed to every entry as it is found correct.

has been committed, which must be detected by comparing the books; but if the two sums are the same, the posting is proved thus far correct, that each amount brought into the Ledger has been entered on the debit side of one account, and the credit of some other.-But the trial balance is not an infallible check. A Journal entry may be twice posted, wholly omitted, or entered in a wrong account, though on the proper side, without affecting the trial balance. An additional security may, however, be obtained by making out a statement, showing the value of the merchant's property, together with the claims upon it. If the balance of this agree with that of the Stock account, it is to be presumed that the posting is correct. For the discovery of all errors, a comparison of the Ledger with the Journal, and of the Journal with the other books is by far the most effectual.

48. Accuracy being, as far as possible, attained by these different methods, the merchant proceeds to balance the books. The object of this is to ascertain the debts due to him or by him, the gain or loss on the several departments of the business; and to exhibit, in connection with these, the amount of goods on hand. The imaginary accounts, with one or more of which an account that is to be balanced is debited or credited, in order to make its two sides equal, are Stock, Profit and Loss, and Balance. When the object is to exhibit the debts, or the amount of any goods on hand, the account is closed with Balance. In this manner the Cash account, Personal accounts, and accounts of all descriptions of Goods when none have been sold, are balanced. When the object is to find what has been the profit or loss upon any transactions, the accounts are closed with Profit and Loss. In this manner are closed all such accounts as House Expenses, Charges, Donation account, and accounts of goods when all are sold. When the merchant wishes to ascertain both the value of what remains on hand, and the profit or loss upon

what has been disposed of, he closes the account with Balance and Profit and Loss. In this manner are closed all accounts of Goods, when part is sold and part unsold, bills, ships, houses, and lands, and all other real accounts, when the present value of the property is to be estimated.

49. The accounts being thus closed, enter in the DayBook, "Balance Dr. to Sundries," and "Sundries Drs. to Balance." Under the former enter all those balances which are upon the credit sides of the accounts; under the latter, all those which are upon the debit sides. In like manner, transfer the profit and loss from the two sides of the different Ledger accounts. If, in either case, there be only one account closed with Balance or Profit and Loss, the name of that account will occupy the place of Sundries. These Day-Book entries, being first journalized, are posted to the respective sides of the Balance and Profit and Loss accounts, which are opened in the Ledger. The Profit and Loss account is then closed with Stock. This balance is the net gain or loss on the business. It is transferred into the Day-Book, thence to the Journal, and is then posted to the Stock account in the Ledger. That account, which represents the merchant's name, or rather the aggregate of the value of his effects, is then debited To Balance for the present net capital; and thus are the different accounts wound up, and the precise state of the merchant's affairs fully exhibited.*

(7).-Warehouse or Stock-Book.

50. The purpose of the Warehouse-Book is to exhibit, in a distinct and separate form, the quantity of goods bought and sold; and, consequently, the quantity on hand. It is made

* Jones' Method of arranging the Journal, and preparing for a General Balance, will be explained and exemplified in the next Set, which is better adapted to exhibit that method than the present Set.