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Intereft account, Which contains on the Dr. fums paid or incurred for intereft; and on the Cr. fums received, or become due for the fame.

Commiffion account, Which contains on the Cr. articles of gain received or owing us for our trouble in tranfacting bufinefs for others. There are feldom any entries on the Dr.

Charges merchandize, Which contains on the Dr. all charges paid or incurred on the bufinefs, which do not belong to any particular account, as fhop-rent, public burdeus for trade, clerks wages, poftages, and the like. If any of these should afterwards be charged to fome other account, the fum fo charged is entered on the Cr.

Proper expences, Which contains on the Dr. money or any thing elfe, withdrawn from the trade for our private ufe. There are seldom any entries on the Cr. The amount of this account, as well as the former, is not properly lofs; but as it has the fame effect in diminifhing the flock, it is placed in the fame manner to the Dr. of profit and lofs.

Lofs by bad debts, Which contains on the Dr. fuch debts as we reckon defperate; and on the Cr. any of these which may happen to be unexpectedly recovered.

Account of abatements, Which contains on the Dr. discounts allowed by us on payments received; on the Cr. difcounts (if any) allowed to us on payments made. It is particularly useful in retail bufinefs, where difcounts are often given, to show how much they amount

to.

Infurance account, Which contains on the Cr. premiums received for making infurances; and, on the Dr. loffes fuftained on the fame. There may be feveral accounts of this kind, fuch as infurance against sea-hazard, which is the most common; infurance against fire; infurance of lives; and infurance of debts. The balance shows the gain or lofs which arifes from being concerned in insurance.

More or fewer of these accounts may be used, according as the articles are frequent; and others may be invented to fuit the purposes of the bufinefs which the books are kept for.

14. Every fimple tranfaction in bufinefs belongs to two accounts, and must be entered on the Dr. of the one and on the Cr. of the other. Thus, when a perfon becomes indebted to us, the article he owes must be entered on the Dr. of his account; and, if it be for money paid him, it is also entered on the Cr. of cath; if for goods fold, it is entered on the Cr. of the account of goods; if for any thing delivered him by another perfon at our defire, it is entered on the Cr. of the deliverer's account; if for any wager or bargain, by which we are gainers, it is entered on the Cr. of profit and lofs. Thus, in whatever way the debt arifes, it is entered on the Cr. of fome other account, as well as on the Dr. of the perfon's account who owes it.

In like manner, when we become indebted to any perfon, the article we owe must be entered on the Cr. of his account. If it be for money received, it is alfo entered on the Dr. of cafh; if for goods bought, it is entered on the Dr. of the account of goods; if for any thing delivered to another perfon at our defire, it is entered on the Dr. of the receiver's account; and if it VOL. III. Part I.

be in confequence of a lofing bargain, it is entered on the Dr. of profit and lofs.

Again, when goods are received, the tranfaction is entered on the Dr. of the account of goods. If they be bought for ready money, it is alfo entered on the Cr. of cath; if on truft, it is entered on the Cr. of the feller; if they be exchanged for other goods, it is entered on the Cr. of the goods delivered; if they be obtained by fome profitable bufinefs, without any return, it is entered on the Cr. of profit and lofs.

When goods are delivered, the tranfaction is entered on the Cr. of the account of goods; and, if they be fold for ready money, it is alfo entered on the Dr. of cafh; if on credit, it is entered on the Dr. of the purchafer; if exchanged for other goods, it is entered on the Dr. of the goods received; and, if they be given gratis, or deftroyed, it is entered on the Dr. of profit and lofs.

Laftly, When any article of lofs occurs, the tranfaction is entered on the Dr. of profit and lofs; and as we must either pay it in money or goods, or remain indebted to fome perfon for it, it must be entered on the Cr. of cash, or of goods delivered, or of the perfon intitled to receive it. And, when an article of gain occurs, it is entered on the Cr. of profit and lofs, and alfo on the Dr. of cash or goods, if money or goods be received; and on the Dr. of the perfon accountable for it, if not immediately paid.

Thus, every article in any account, whether perfonal or real, or belonging to profit and lofs, correfponds to fome other article on the oppolite of a different account. The fame fum is entered on the Dr. of one account and on the Cr. of the other; and it follows from this, that, If all the accounts in the leger be added, the amount of the fums of the Dr. will be equal to thofe of the Cr.

Sect. III. Of the JOURNAL.

15. THE journal is. a fair record of all the tranfactions compiled from the wafte-book, in the fame order as they stand there; but expreffed in a technical style, that it may be transferred to the leger with more ease.

When we are to enter any article in the journal, we muft confider which accounts in the leger it will require to be placed to, both on the Dr. and Cr. and write [the former account] Dr. to [the latter account]; then we annex an explanation of the article, and place the fum in the money-column.

EXAMPLE.

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Wafte-book.) Sold for ready money, 30 yards linen, at 3s L. 4 10Journal.) Cafh Dr. to Linen. Sold 30 yards, at 3 s L.4 10 Here we confider, that the article must be entered on the Dr. of cash, because money is received; and on the Cr. of linen, becaufe linen is delivered: Therefore we write Cafh Dr. to Linen, to which we annex the nature of the tranfaction. The article thus entered is called a journal-peft; Cafh is called the Dr.; Linen the Cr.; the words "Cafh Dr. to Linen," the Entry, and the following words the Narration. The purpofe of expreffing the article in this form, 3 A

is

is to point out the accounts in the leger, to which it will require to be pofted, and thereby enable the accountant to write the leger with more eafe than he could do if it were filled up immediately from the wafte-book.

The learner will be able, from this example, to enter any fimple article in the journal, providing he knows the accounts to which it fhould be posted on the Dr. and Cr. of the leger. This must be collected from the defcription of the leger accounts already given 6-13. and the nature and tendency of the article. 16. GENERAL RULES for the JOURNAL ENTRIES. 1. Every thing received, or perfon accountable to us,

is Dr.

II. Every thing delivered, or perfon to whom we are accountable, is Cr.

17. As the whole art of writing the journal depends on a proper choice of the Drs. and Crs. we fhall give fome particular rules for the moft common cafes, and a few examples for the illuftration and practice of each.

Rule I. The perfon to whom any thing is delivered is Dr. to the thing delivered, when nothing is received in

return.

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Wafte-book.) Sold for ready money
100 gallons rum, at 98
Journal.) Cash Dr. to Rum, fold 100
gallons, at 98

45

45

45

Walte-book.) Bartered 3 hds. wine, at
L. 15, for 100 gallons rum, at 9s
Journal.) Rum Dr. to Wine, received 100
gallons at 9s in barter for 3 hds. at L.15 45

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21. Rule V. When rents of houses or lands, freights of fhips, bounties on goods, or any other profits from real accounts are received, Cafh is Dr. to the account from which the profit arifes: if any thing befides mancy be received, the article received is Dr.: if trey remain unpaid, the perfon who owes them is Dr. Thus, Wafte-book.) Received freight of the

35

260

fhip Traffick for a voyage to London L.35
Journal.) Ship Traffick Dr. to Cafh, re-
ceived freight to London
Wafle-book.) Received 100 barrels fal-
mon, being the rent of Inver fishery,
at 528
Journal.) Salmon Dr. to Inver fishery, re-
ceived the rent, being 100 barrels, at
528
Wafte-book.) John Public owes me a
year's rent of the Angel-tavern
Journal.) John Public Dr. to Angel-ta-
vern, for a year's rent due by him

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22. Rule VI. When an article of lofs occurs, Profit and Lofs, or fome fubfidiary account, is Dr. If the lofs be paid in ready money, it is Dr. to Cash; if it be paid in any thing elfe, it is Dr. to the thing delivered. If it remain unpaid, it is Dr. to the perfon to whom it is owing. Thus,

Wafte-book.) Given my daughter at her
marriage
Journal.) Profit and Lofs Dr. to Cafh,
given my daughter at her marriage
Waste book.) Taken for family use from
my granary 3 bolls meal, at 13s 4d

L. 5.00

500

-2

Journal)

40

Journal.) Profit and Lofs [or Proper expences] Dr. to Meal, taken for family ufe, 3 bolls, at 13s 4d Wafte-book.) Due James Rich for a year's intereft on L.1000, at 4 per cent. Journal.) Profit and Lofs [or Intereft account] Dr. to James Rich, due him a year's intereft on L. 1000 at 4 per cent. 23. Rule VII. When an article of gain occurs, that is not immediately connected with any real account, Cafh, the article received, or the perfon accountable for it, is Dr. to Profit and Lofs, or to fome fubfidiary account. Thus,

Wafte-book). Received in a gift from
my father

Journal.) Cafh Dr. to Profit and Lofs,
received from my father
Wafte-book.) Received in like manner
at opening fhop, 100 yards cloth at Izs
Journal.) Cloth Dr. to Profit and Lofs,
received from my father at opening
fhop 100 yards, at 128
Wafte-book.) James Barbour owes me
a year's intereft of L. 1000
Journal.) James Barbour Dr. to Profit
and Lofs [or Intereft account due by
him for a year's intereft of L. 1000

40

L100

100

60

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24. Rule VIII. When one perfon pays money, or delivers any thing else to another on our account, the perfon who receives it is Dr. to the perfon who pays it. Thus,

Wafte-book.) James Goldfmith has paid

100

the bank of Scotland on my account L 100 Journal.) Bank of Scotland Dr. to James Goldfmith, paid them by him Wafte-book.) Arthur Young has delivered James Baker 100 quarters wheat, for which I am to account to him,' at 308

150

150

Journal.) James Baker Dr. to Arthur Young, for 100 quarters wheat delivered him on my account, at 30s Payments of this kind are often tranfacted by bills of exchange.

25. These examples will make the learner acquainted with the form of the journal, and the rules extend to the greatest part of the fimple transactions that occur in domestic trade. We may obferve, that the technical fenfe of the words Dr. and Cr. has an analogy to their meaning in common language, but is not precisely the fame. Thus, in Ex. 1. Rule VIII. the journal-entry is, Bank of Scotland Dr. to James Goldsmith; by which we are not to underftand that the bank is indebted to James Goldfmith; for a debt between them has no connection with our bufinefs; and therefore ought not to be entered in our books: the meaning of the entry is, that the bank becomes indebted to us by the tranfactions narrated; and that we become indebted to James Goldsmith by the fame.

26. An article which contains more Drs. or more Crs. than one, is called a complex poft. The form of thefe will appear from the following examples.

-L410 15.

And then there is only one article on the Dr. of William Drapier in the leger.

Ex. 2.] Sold to pieces cloth to W. Drapier,

at L. 15 L.150

12 ditto to J.

22

Mercer, at do 180

L330

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-L. 89

Here William Smith is Dr. for the amount of the cargo; he is debtor to Linen for the quantity delivered, as by Rule I. and to J. Currier for the leather delivered by him, by Rule VIII. and to cash for the charges paid by us, by Rule I.

William Smith Dr. to Sundries, To Linen, for 1000 yards, at is 2d

To J. Currier, for 600 lb. leather, at is

To Cash, for charges at shipping

Shipped per the Bonadventure, Forbes, from Leith to London.

L. 58 6 8

30

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L.89

27. The learner may be affifted in understanding thefe and other complex pofts, by refolving them into fimple ones. Most of them might have been stated in that manner; and the complex form is only preferred for abridging the leger. In fome articles the different clauses are fo connected, that they cannot be feparated with propriety.

The narration is fometimes equally diffused through the poft, after the Dr. and Cr. as in the five first exambefore the Drs. or Crs. be fpecified, as in Ex. 6.; fomeples. Sometimes the chief circumftances are narrated times after the first, as in Ex. 7.; and fometimes at the end, as in Ex. 8.

28. In fome articles, there are both more Drs. and more Crs. than one. These may be entered in one journal-poft, Sundries Dr. to Sundries, fpecifying firt the Drs. and then the Crs. But, as this method is fomewhat confufed, we would recommend it as a bet ter way to divide the tranfaction into two journalpofts; fo that the first may contain only one Dr. and the fecond only one Cr.

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indebted to us.

The fecond journal-poft contains the debts due by us. The entry is, Stock Dr. to Sundries; the particular Crs. are the perfons to whom we are indebted.

The form of thefe entries is more fully exhibited at the beginning of the following fets.

30. The journal fhould be written by one perfon, in a fair hand and at leifure hours. The articles are feparated, and the titles and dates marked in the fame manner as in the watte-book, § 3. The entries are written in half text, for ornament and diltinction. In the inventory, the defignation for the bufinefs, ftation, and place of refidence) of every perfon is mentioned; and the fame is done the first time that any name occurs in journal-entry. At other times, it is fufficient to enter the name without the defignation, unlefs we have dealings with two perfons of the fame name; in which cafe, it is always neceffary to annex the defignation, in order to diftinguish them. The narration fhould be complete, without referring to the waftebook; and fo clear, that every perfon, acquainted with the ftyle of the journal, may underftand it with eafe. When the poft is written, we mark a dafh/ against the article, on the margin of the wafte-book, to show how far the writing of the journal is advanced. Sect. IV. Of POSTING and BALANCING the

LEGER.

31. The first thing to be done in the leger, is to allot a proper space for each account. The accounts may be either opened in the fame order that they oc

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cur in the journal; or accounts of the fame kind may be placed together, the perfonal accounts on one part of the leger, and the real accounts in another. The accounts of Stock, and Profit and Lofs, are generally placed at the beginning. The room which each will require cannot be exactly known, but must be conjectured from the number of tranfactions that are likely to follow.

The number of the folio is marked in strong text at each corner of the top-line; and the titles of the accounts are written in fair text through both folios, if neceffary. The defignations of the perfonal accounts. may be written on half text, or Italian hand; and fome write the titles in Saxon hand, for ornament. The word Dr. is prefixed to the title on the left-hand page; and Contra Cr. annexed to it on the right-hand page.

32. Next, An Index must be provided, for pointing out the folios where the accounts are opened. The titles of the accounts are entered alphabetically in the index, and the number of the folio annexed. Perfonal accounts are entered by the first letter of the firname; companies, by the first letter of the firname of the first partner; and all other accounts, by the first letter of the first word. The most convenient kind of index is a long narrow book, of 24 leaves, one for each letter of the alphabet. A is marked on the top of the first leaf, and the paper pared away below it; B is mark

ed on the fecond leaf, under A; and the other let

ters on the following leaves, in the fame manner; by means of which we can turn at once to any letter required.

directions. Firit, look for the Dr. of the journal-poft 33. In pofting the leger, proceed by the following in the index, under the proper letter, and this directs you to the folio of the leger where the account is, if it be already opened: if not, you must allot a space for it, write the title, and enter it in the index. Then enter the article on the left-hand page of the account under the title of the former article, by writing the date on the margin, and the name of the creditor on the line, with the word To prefixed, and a fhort narration of the tranfaction annexed, and inferting the fum in the money column, and the quantity, if it be an acthe account of the Cr. of the journal-poft, and enter count of goods, in the inner column. Then turn to the article in the right-hand page, prefixing the word By to the name of the Dr.

34. This being done, turn to the journal, and mark article is pofted. The figures which point out the reon the margin the number of the folios to which the ference to the Dr. and Cr. folios fhould be separated by a line: for example, If the Dr. entry be on the third folio, and the Cr. entry on the fifth, the refethird folio, and the Cr. entry rence is marked. Thefe figures fhow how far the pofting is advanced, and are ufeful in comparing the

books.

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