Is the art of recording mercantile transactions in a regular and systematic manner.
1. A merchant's books should contain every particular which relates to the affairs of the owner. They should exhibit the state of all the branches of his business, the connection of the different parts, the amount and success of the whole. They should be so full and so well arranged, as to afford a ready information in every point for which they may be consulted.
The matter which the books should contain is comprehended under the three following heads: First, The debts which are owing to the owner, and the debts which he owes to others. Secondly, The goods and other articles of property which belonged to him; the quantity and value sold, or otherwise disposed on; and the quantity and value which still remain in his possession. Thirdly, The amount of his stock, when the books were opened; the profits he has obtained, and the losses he has suffered, since; and the amount of his stock at present.
That method of book-keeping which answers these purposes most clearly and concisely, is the best. The Italian method, by double entry, is generally preferred; at least, it is founded upon the most universal principles, and is the most convenient in extensive and complicated businesses; and the accountant who understands it, will find little difficulty in following, or even in inventing other methods that are better accommodated to any particular purpose.
The Italian method requires three principal books; the Waste-Book, Journal, and Leger.
Sect. I. Of the WASTE-BOOK.
2. The waste-book, or day-book, contains an exact register of all occurrences in business in the same order as they take place. It begins with an inventory of every thing belonging to the owner, a list of the debts due to him, and of the debts he owes to others: It is carried on with a full relation of all the money he receives or pays; of all the goods he buys or sells; and of every other occurrence in his business. Each article should be entered as soon as the transaction takes place, and should be clearly expressed in the plainest language. It should require no supply from the accountant's memory, but should be fully intelligible to any person, however unacquainted with the business: at the same time, it should be written with all convenient brevity; and, therefore, sometimes refers to invoices and other accounts, for particulars. The accountant's first care should be to have nothing defective or ambiguous; his second, to have nothing superfluous.
3. The date is written in text on the top of each page. The articles are separated from each other by a line; and the transactions of one day are separated from those of another by a double line, in the middle of which there is left a blank space for inserting the day of the month. This book must be kept with the greatest care, as it contains the materials from which the other books are composed; and any error or defect will occasion a like one in the others. Besides, it is the book whose authority is trusted to, and which must be exhibited to judges, or arbiters, when an account is disputed. As the journal is filled up from the waste-book, the authority of the former is esteemed more authentic, unless there be an obvious mistake through hurry; and either of these books is depended on rather than the leger, which, from its form, is more liable to error, and may be more easily vitiated by a fraudulent design.
4. As the waste-book contains the whole substance of the business, it may be applied so as to afford any information that can be wanted; but the labour of consulting it would be very great. For instance, if it were required to know how much any person owes us, we must look over the book from the beginning, and mark down every article in which we have dealt with him: or, if it were required to know what quantity of goods we should have on hand, we must look over the whole book, and mark down every article bought or sold. This operation would not only be found very tedious, but much exposed to the risk of omissions. To prevent these inconveniences, another book is used, in which the articles are arranged in a methodical order. This book is called the Leger, and we shall consider it next; because the journal, though it comes before it in the order of writing, cannot be well understood, till the nature of the leger be explained.
Sect. II. Of the LEGER.
5. In the leger, articles of the same kind are collected together; and, for that purpose, it is divided into many accounts, under which the different branches of business are arranged. Each account is introduced by a proper title, to explain the nature of the articles it contains; and articles of opposite kinds, which belong to the same account, are placed on the opposite pages of the same folio: for instance, money received on the one side, and money paid on the other; or goods bought on the one side, and goods sold on the other. The left-hand hand page is called the Debtor or Dr. side of the account, and the right-hand page the Creditor or Cr. side. The difference between the sums of the Dr. and Cr. sides is called the Balance.
Accounts in the ledger are of three kinds, which answer to the three purposes of book-keeping mentioned §1.
6. First, Personal Accounts. It is necessary to open an account for every person or company with whom there are any dealings on credit. At opening the books, if they be indebted to the owner, the debt is entered on the Dr.; but, if he be indebted to them, it is entered on the Cr. During the course of the business, goods sold on trust, money paid, and every thing for which they are accountable to him, is entered on the Dr.; but goods bought on trust, money received, and every thing for which he is accountable to them, is entered on the Cr. The balance shows how much they owe him, when the Dr. side is greatest; and how much he owes them, when the Cr. side is greater.
7. Secondly, Real accounts. By this we understand accounts of property of whatever kind, such as ready money, goods, houses, lands, ships, shares in public companies, and the like.
The account of ready money is intitled Cash. On the Dr. side, the money on hand at opening the books is entered, and afterwards every article of money received. On the Cr. side, there is entered every article of money paid out; and the balance shows how much ought to be on hand. The sum of the Dr. side of this account is always greater than that of the Cr. side.
8. Accounts of goods are generally ruled with inner columns for entering the quantities. When the books are opened, the goods on hand are entered on the Dr. side of the respective accounts; the quantities being placed in the inner, and the values in the outer column. Goods bought are entered in the same manner, and goods sold are entered on the Cr. side; the quantities and values being placed in the proper columns. Charges laid out on goods are entered on the Dr. side; and, when an incidental advantage arises from them, such as public bounty, it is entered on the Cr.
If the sums of the inner columns on the opposite sides be equal, it shows that the goods are all sold, and then the balance of the money column shows the gain or loss. If the Cr. side be greater, it is gain; if the Dr. side be greater, it is loss. If the sum of the inner column be greater on the Dr. side, it shows that part of the goods are on hand; and their value must be added to the sum of the Cr. side, in order to determine the gain or loss.
9. If there be two or more kinds of the same sort of goods, they may be entered in the same account, allowing as many inner columns as there are kinds, and entering the quantities of each kind in the inner column referred to it. This method exhibits the gain or loss on the whole goods; but does not show how much of it arises from each kind.
Or, a separate account may be opened for each kind, distinguishing the titles by the qualities, or by some other mark. Thus, one account may be kept for fine linen, another for coarse linen; one for port-wine crop 1787; another for port-wine crop 1788; one for rum from Jamaica, another for rum from Barbadoes. This method shows the gain or loss on each kind.
When there are more kinds than can be conveniently introduced in the same account, they may be divided into several classes, each class being placed in a separate account; and the particular kinds distinguished in inner columns. Thus the account of fine linen may be divided into several columns, for different kinds, distinguished by the number of threads in the breadth, or by any other convenient character.
10. Accounts of ships contain on the Dr. the value of the ship when the books are opened, and all expenses laid out thereon; on the Cr. all freights received. In like manner, accounts of houses or lands have the value of the subject, and all repairs, or other charges, entered on the Dr. and all rents or other profits received on the Cr. If the subject be sold in whole or in part, the sale is entered on the Cr. And the balance, after valuing the subject (if any) on hand, shows the gain or loss.
Accounts of property in the public funds, or shares in companies, public or private, contain the value, or money paid in, on the Dr. and the dividends received on the Cr. and are balanced as other real accounts.
Some persons open accounts for household furniture, plate, jewels, books, or the like. The entries on these accounts are made in the same manner.
In general, real accounts contain the value of the property, and all charges, on the Dr. and the sales and other returns on the Cr. When the account is to be balanced, if any property remains, the value thereof is placed on the Cr.; and then the balance shows the loss or gain, according as the Dr. or Cr. side is greatest.
11. Thirdly, Accounts of Stock, Profit and Loss, and its subsidiary accounts, which are sometimes called fictitious accounts.
The stock account contains on the Dr. the amount of the debts which the owner owes when the books are opened; and on the Cr. the amount of ready money, goods, debts, and property of every kind belonging to him: therefore the balance shows what his nett stock is; or, in case of bankruptcy, how much his debts exceed his effects. There is nothing further entered on this account till the books are balanced; and then, if the business has yielded profit, the nett gain is entered on the Cr.; if it has been unsuccessful, the nett loss is entered on the Dr.: after which, the balance shows the nett stock at the time the books are closed.
12. The Profit and Loss account contains every article of gain on the Cr. and every article of loss on the Dr. The balance shows the nett gain or loss, and is transferred to the proper side of the stock-account, as mentioned above. This account is partly composed of articles that occur while the books are running. For example, legacies received are entered on the Cr., goods destroyed on the Dr. The rest of the articles are those of gain and loss, arising from the real accounts, which are collected when the books are balanced.
13. It has been found convenient to open several subsidiary accounts, in order to shorten and modify that of profit and loss. These contain certain articles of gain or loss, which may be reduced under distinct heads. They are in effect so many parts of the profit and loss account, and their balances are entered on the proper side of that account when the books are closed. The chief of these accounts are the following. Interest account, Which contains on the Dr. sums paid or incurred for interest; and on the Cr. sums received, or become due for the same.
Commission account, Which contains on the Cr. articles of gain received or owing us for our trouble in transacting business for others. There are seldom any entries on the Dr.
Charges merchandise, Which contains on the Dr. all charges paid or incurred on the business, which do not belong to any particular account, as shop-rent, public burdens for trade, clerks wages, postages, and the like. If any of these should afterwards be charged to some other account, the sum so charged is entered on the Cr.
Proper expenses, Which contains on the Dr. money or anything else, withdrawn from the trade for our private use. There are seldom any entries on the Cr. The amount of this account, as well as the former, is not properly lost; but as it has the same effect in diminishing the stock, it is placed in the same manner to the Dr. of profit and loss.
Loss by bad debts, Which contains on the Dr. such debts as we reckon delapidate; 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. discounts (if any) allowed to us on payments made. It is particularly useful in retail business, where discounts are often given, to show how much they amount to.
Insurance account, Which contains on the Cr. premiums received for making insurances; and, on the Dr. losses sustained on the same. There may be several accounts of this kind, such as insurance against sea-hazard, which is the most common; insurance against fire; insurance of lives; and insurance of debts. The balance shows the gain or loss which arises 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 suit the purposes of the business which the books are kept for.
14. Every simple transaction in business belongs to two accounts, and must be entered on the Dr. of the one and on the Cr. of the other. Thus, when a person 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 cash; if for goods sold, it is entered on the Cr. of the account of goods; if for anything delivered him by another person at our desire, 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 loss. Thus, in whatever way the debt arises, it is entered on the Cr. of some other account, as well as on the Dr. of the person's account who owes it.
In like manner, when we become indebted to any person, the article we owe must be entered on the Cr. of his account. If it be for money received, it is also entered on the Dr. of cash; if for goods bought, it is entered on the Dr. of the account of goods; if for anything delivered to another person at our desire, it is entered on the Dr. of the receiver's account; and if it be in consequence of a losing bargain, it is entered on the Dr. of profit and loss.
Again, when goods are received, the transaction is entered on the Dr. of the account of goods. If they be bought for ready money, it is also entered on the Cr. of cash; if on trust, it is entered on the Cr. of the seller; if they be exchanged for other goods, it is entered on the Cr. of the goods delivered; if they be obtained by some profitable business, without any return, it is entered on the Cr. of profit and loss.
When goods are delivered, the transaction is entered on the Cr. of the account of goods; and, if they be sold for ready money, it is also entered on the Dr. of cash; if on credit, it is entered on the Dr. of the purchaser; if exchanged for other goods, it is entered on the Dr. of the goods received; and, if they be given gratis, or destroyed, it is entered on the Dr. of profit and loss.
Lastly, When any article of loss occurs, the transaction is entered on the Dr. of profit and loss; and as we must either pay it in money or goods, or remain indebted to some person for it, it must be entered on the Cr. of cash, or of goods delivered, or of the person entitled to receive it. And, when an article of gain occurs, it is entered on the Cr. of profit and loss, and also on the Dr. of cash or goods, if money or goods be received; and on the Dr. of the person accountable for it, if not immediately paid.
Thus, every article in any account, whether personal or real, or belonging to profit and loss, corresponds to some other article on the opposite side of a different account. The same sum 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 ledger be added, the amount of the sums of the Dr. will be equal to those of the Cr.
Sect. III. Of the Journal.
15. The journal is a fair record of all the transactions compiled from the waste-book, in the same order as they stand there; but expressed in a technical style, that it may be transferred to the ledger with more ease.
When we are to enter any article in the journal, we must consider which accounts in the ledger 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 sum in the money-column.
Example.
Waste-book.) Sold for ready money, 30 yards linen, at 3s
Journal.) Cash Dr. to Linen. Sold 30 yards, at 3s
Here we consider, that the article must be entered on the Dr. of cash, because money is received; and on the Cr. of linen, because linen is delivered; Therefore we write Cash Dr. to Linen, to which we annex the nature of the transaction. The article thus entered is called a journal-post; Cash is called the Dr.; Linen the Cr.; the words "Cash Dr. to Linen," the Entry, and the following words the Narration.
The purpose of expressing the article in this form,
is to point out the accounts in the leger, to which it will require to be posted, and thereby enable the accountant to write the leger with more ease than he could do if it were filled up immediately from the waite-book.
The learner will be able, from this example, to enter any simple article in the journal, providing he knows the accounts to which it should be posted on the Dr. and Cr. of the leger. This must be collected from the description of the leger accounts already given § 6—13, and the nature and tendency of the article.
16. General Rules for the Journal-entries.
I. Every thing received, or person accountable to us, is Dr.
II. Every thing delivered, or person 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 shall give some particular rules for the most common cases, and a few examples for the illustration and practice of each.
Rule I. The person to whom any thing is delivered is Dr. to the thing delivered, when nothing is received in return.
Therefore when money is paid, the receiver is Dr. to cash.
When goods or other property is sold on credit, the purchaser is Dr. to the thing sold. Thus,
Waite-book.) Paid John Bell in full L.52 — — Journal.) John Bell Dr. to Cash, paid him in full 52 — —
Waite-book.) Sold 50 yards cloth to J. Hill, at 12s 30 — — Journal.) J. Hill Dr. to Cloth, sold him 50 yards, at 12s 30 — —
18. Rule II. A thing received is Dr. to the person from whom it is received, when nothing is delivered in return.
Therefore, when money is received, Cash is Dr. to the payer: when goods are bought, the goods are Dr. to the seller. Thus,
Waite-book.) Received from Thomas Gay in full L.72 — — Journal.) Cash Dr. to Thomas Gay, received in full 72 — —
Waite-book.) Bought from J. Hawley 60 lb. wool, at 9d 2 5 — — Journal.) Wool Dr. to J. Hawley, bought 60 lb. at 9d 2 5 — —
19. Rule III. A thing received is Dr. to the thing given for it.
Therefore goods bought for ready money are Dr. to cash.
When goods are sold for ready money, Cash is Dr. to the goods.
When goods are bartered, the goods received are Dr. to the goods delivered. Thus,
Waite-book.) Bought for ready money 10 hds. wine, at L.15 L.150 — — Journal.) Wine Dr. to Cash, bought 10 hds. at L.15 150 — —
Waite-book.) Sold for ready money 100 gallons rum, at 9s 45 — — Journal.) Cash Dr. to Rum, sold 100 gallons, at 9s 45 — —
Waite-book.) Bartered 3 hds. wine, at L.15; for 100 gallons rum, at 9s 45 — — Journal.) Rum Dr. to Wine, received 100 gallons at 9s in barter for 3 hds. at L.15 45 — —
20. Rule IV. Goods and other real accounts are Dr. for all charges laid out on them. If money be laid out, they are Dr. to Cash; if any thing else be delivered, they are Dr. to the thing delivered; if the charge be taken in trust, they are Dr. to the person to whom it is due. Thus,
Waite-book.) Paid for repairs to ship Traffick L.18 — — Journal.) Ship Traffick Dr. to Cash, paid for repairs 18 — —
Waite-book.) Delivered wood from my timber-yard for repairing the Angel-tavern 15 — — Journal.) Angel-tavern Dr. to Wood, delivered for repairing the same 15 — —
Waite-book.) Due to William Carpenter for repairs to the Angel-tavern 12 — — Journal.) Angel-tavern Dr. to William Carpenter, due him for repairs 12 — —
21. Rule V. When rents of houses or lands, freights of ships, bounties on goods, or any other profits from real accounts are received, Cash is Dr. to the account from which the profit arises: if any thing besides money be received, the article received is Dr.: if they remain unpaid, the person who owes them is Dr. Thus,
Waite-book.) Received freight of the ship Traffick for a voyage to London L.35 — — Journal.) Ship Traffick Dr. to Cash, received freight to London 35 — —
Waite-book.) Received 100 barrels salmon, being the rent of Inver fishery, at 52s 260 — — Journal.) Salmon Dr. to Inver fishery, received the rent, being 100 barrels, at 52s 260 — —
Waite-book.) John Public owes me a year's rent of the Angel-tavern 52 — — Journal.) John Public Dr. to Angel-tavern, for a year's rent due by him 52 — —
22. Rule VI. When an article of loss occurs, Profit and Loss, or some subsidiary account, is Dr. If the loss be paid in ready money, it is Dr. to Cash; if it be paid in any thing else, it is Dr. to the thing delivered. If it remain unpaid, it is Dr. to the person to whom it is owing. Thus,
Waite-book.) Given my daughter at her marriage L.500 — — Journal.) Profit and Loss Dr. to Cash, given my daughter at her marriage 500 — —
Waite-book.) Taken for family use from my granary 3 bolls meal, at 13s 4d 2 — — Journal.) Journal.) Profit and Loss [or Proper expenses] Dr. to Meal, taken for family use, 3 rolls, at 13s 4d
Waite-book.) Due James Rich for a year's interest on L.1000, at 4 percent.
Journal.) Profit and Loss [or Interest account] Dr. to James Rich, due him a year's interest on L.1000 at 4 percent.
23. Rule VII. When an article of gain occurs, that is not immediately connected with any real account, Cash, the article received, or the person accountable for it, is Dr. to Profit and Loss, or to some subsidiary account.
Thus,
Waite-book.) Received in a gift from my father
Journal.) Cash Dr. to Profit and Loss, received from my father
Waite-book.) Received in like manner at opening shop, 100 yards cloth at 12s
Journal.) Cloth Dr. to Profit and Loss, received from my father at opening shop 100 yards, at 12s
Waite-book.) James Barbour owes me a year's interest of L.1000
Journal.) James Barbour Dr. to Profit and Loss [or Interest account] due by him for a year's interest of L.1000.
24. Rule VIII. When one person pays money, or delivers anything else to another on our account, the person who receives it is Dr. to the person who pays it. Thus,
Waite-book.) James Goldsmith has paid the bank of Scotland on my account
Journal.) Bank of Scotland Dr. to James Goldsmith, paid them by him
Waite-book.) Arthur Young has delivered James Baker 100 quarters wheat, for which I am to account to him, at 30s
Journal.) James Baker Dr. to Arthur Young, for 100 quarters wheat delivered him on my account, at 30s
Payments of this kind are often transacted 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 simple transactions that occur in domestic trade. We may observe, that the technical sense of the words Dr. and Cr. has an analogy to their meaning in common language, but is not precisely the same. Thus, in Ex. 1, Rule VIII, the journal-entry is, Bank of Scotland Dr. to James Goldsmith; by which we are not to understand that the bank is indebted to James Goldsmith; for a debt between them has no connection with our business; 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 transactions narrated; and that we become indebted to James Goldsmith by the same.
26. An article which contains more Drs. or more Crs. than one, is called a complex post. The form of these will appear from the following examples.
Ex. 1.] Sold William Drapier, 25 pieces cloth, at L.15 per piece L.375 — — 130 stones wool, at 5s 6d per stone — — 35 15 — — L.410 15 — —
If the two articles sold to William Drapier were entered separately in the waite-book, and transferred to the journal by Rule I, they would stand thus:
William Drapier Dr. to Cloth, fold him 25 pieces, at L.15 — — L.375 — — William Drapier Dr. to Wool, fold him 150 stones, at 5s 6d — — 35 15 — —
And if these were posted to the ledger, there would be two articles placed to the Dr. of William Drapier, one to the Cr. of Cloth, and one to the Cr. of Wool.
But the sales may be entered in the form of one complex journal post, as follows:
William Drapier Dr. to Sundries, To Cloth, for 25 pieces, at L.15 — — L.375 — — To Wool, for 130 stones, at 5s 6d — — 35 15 — — L.410 15 — —
And then there is only one article on the Dr. of William Drapier in the ledger.
Ex. 2.] Sold 10 pieces cloth to W. Drapier, at L.15 L.150 — — 12 ditto to J. Mercer, at do 180 — — — — L.330 — —
This example also falls under Rule I. But whereas there was one Dr. and two Crs. in the former example, there are two Drs. and one Cr. in this: William Drapier and John Mercer, the purchasers, are Drs. for their respective quantities; and cloth, which is the only thing delivered, is Cr. for the whole quantity. The journal post is,
Sundries Drs. to Cloth, W. Drapier, for 10 pieces, at 15l. L.150 — — J. Mercer, for 12 ditto at 15l. 180 — — — — L.330 — —
Ex. 3.] Bought from H. Hood, 5 puncheons rum, at L.42, L.210 — — 3 hds. claret, at 33, 99 — — 2 pipes madeira, at 56, 112 — — — — L.421 — —
This example falls under Rule II. The articles received, rum, claret, and madeira, are Drs.; and the person from whom they are received is the only Cr.
Sundries Dr. to Henry Hood, Rum, for 5 puncheons, at 42l. L.210 — — Claret, for 3 hds., at 33, 99 — — Madeira, for 2 pipes, at 56, 112 — — — — L.421 — —
Ex. 4.] Br. 50 qrs. wheat from J. Tull, at 35s L.87 10 — — 12 from S. Ellis, 36s 21 12 — — — — L.109 2 — — This example also falls under Rule II. There is only one Dr. wheat being the only thing received; and two Crs. because it is received from different persons.
**Wheat Dr. to Sundries.**
To J. Tall, for 50 qrs. at 3s 8½ L.87 10 — To E. Ellis, for 12 qrs. at 3s 2½ 21 12 —
— L.109 2 —
62
In like manner, examples might be given of complex posts under every rule, which contained either several Drs. or several Crs.; but as it is unnecessary to enlarge so far, we shall only add a few examples of cases, in which the different parts of the complex article fall under different rules.
**Ex. 5.** Sold 150 qrs. beans to A. Arnot, at 13s 4d L.100 — 75 ditto to S. Berry, at 13s 4d 50 — 18 ditto for ready money, 13s 2d 11 17 —
243 L.161 17 —
Here beans are delivered, some to different purchasers on trust, and some for ready money. The purchasers are Drs. for the quantities sold to each, by Rule I.; Cash is Cr. for the quantity sold for ready money, by Rule III.; and beans are Cr. for the whole.
**Sundries Dr. to beans.**
A. Arnot for 150 qrs. at 13s 4d L.100 — S. Berry, for 75 13s 4d 50 — Cash, for 18 13s 2d 11 17 —
— L.161 17 —
**Ex. 6.** Bought from David Young 8 cwt. 3 qrs. copper, at L.12 per cwt. Paid in part, L.50 — Balance, 55 — L.105 —
Here the article received, copper, is the only Dr.; but as it is bought partly for ready money, and partly on credit, it is Dr. to Cash for the value of the former, by Rule III. and to the seller for the value of the latter, by Rule II.
**Copper Dr. to Sundries.**
For 8 cwt. 3 qrs. at L.12 per cwt — L.105 —
To Cash in part, L.50 — To D. Young, for balance due him, 55 —
— L.105 —
**Ex. 7.** James Wilson being bankrupt, I have accepted a composition on the debt due by him to me of L.150, and discharged the same. The composition received, at 15s per L. is, L.112 10 — And the balance lost 37 10 —
— L.150 —
Here the whole debt of L.150, due by James Wilson, is cancelled; and he must therefore be stated as Cr. for that sum. Cash is Dr. for the sum received, by Rule II.; and Profit and Loss, or Loss by bad debts, for the rest, by Rule VI.
**Sundries Dr. to James Wilson, Cash, for compt., on L.150,** at 15s. per L. L.112 10 — Profit and Loss, for balance lost 37 10 —
— L.150 —
**Ex. 8.** Shipped for William Smith, per the Bonadventure, Forbes, from Leith to London, 1000 yds linen, at 1s 2d L.58 6 8 600 lb. leather, bought from J. Currier, at 1s 30 — Paid charges at shipping 13 4 —
— 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 1s 2d L.58 6 8 To J. Currier, for 600 lb. leather, at 1s 30 — To Cash, for charges at shipping 13 4 —
Shipped per the Bonadventure, Forbes, from Leith to London. L.89 —
27. The learner may be assisted in understanding these and other complex posts, by resolving them into simple ones. Most of them might have been stated in that manner; and the complex form is only preferred for abridging the ledger. In some articles the different clauses are so connected, that they cannot be separated with propriety.
The narration is sometimes equally diffused through the post, after the Dr. and Cr. as in the five first examples. Sometimes the chief circumstances are narrated before the Drs. or Crs. be specified, as in Ex. 6.; sometimes after the first, as in Ex. 7.; and sometimes at the end, as in Ex. 8.
28. In some articles, there are both more Drs. and more Crs. than one. These may be entered in one journal-post, Sundries Dr. to Sundries, specifying first the Drs. and then the Crs. But, as this method is somewhat confused, we would recommend it as a better way to divide the transaction into two journal-posts; so that the first may contain only one Dr. and the second only one Cr.
**Ex. Bartered with James Fotheringham 100 pieces olmaburgs, at 1s 2s 17 10 —** 100 lb. thread, at 3s 6d — L.77 10 —
For 10 hds lintseed, at 50s L.25 — 500 yds linen, at 1s 6d 37 10 —
And received the balance in money 15 —
— L.77 10 —
JOURNAL. BOOK-KEEPING.
JOURNAL. Sundries to Dr. Sundries. Lintseed, for 10 hds at 50s L.25 — Linens, for 500 yds, at 18 6d 37 10 — Received in barter from J. Fotheringal Cash, for balance 15 — L.77 10 —
To Osnaburgs, for 100 pieces, at 12s L.60 — To Thread, for 100lb. at 3s 6d 17 10 — Delivered him in barter L.77 10 — Or rather, Sundries Dr. to James Fotheringal. Lintseed, for 10 hds at 50s L.25 — Linens, for 500 yds, at 18 6d 37 10 — Received in barter Cash, received balance 15 — L.77 10 —
James Fotheringal Dr. to Sundries. To Osnaburgs, for 100 pieces, at 12s L.60 — To Thread, for 100lb. at 3s 6d 17 10 — Delivered in barter L.77 10 —
29. It is neither practicable nor necessary to enumerate all kinds of complex posts that may occur in business. We shall here only mention the entries which occur at opening the books.
The first journal-post contains the substance of the inventory. The entry is Sundries Drs. to Stock; the particular Drs. are Cash, the different kinds of goods and other property belonging to us, and the persons indebted to us.
The second journal-post contains the debts due by us. The entry is, Stock Dr. to Sundries; the particular Crs. are the persons to whom we are indebted.
The form of these entries is more fully exhibited at the beginning of the following sets.
30. The journal should be written by one person, in a fair hand and at leisure hours. The articles are separated, and the titles and dates marked in the same manner as in the waste-book, § 3. The entries are written in half text, for ornament and distinction. In the inventory, the designation (or the business, station, and place of residence) of every person is mentioned; and the name is done the first time that any name occurs in journal-entry. At other times, it is sufficient to enter the name without the designation, unless we have dealings with two persons of the same name; in which case, it is always necessary to annex the designation, in order to distinguish them. The narration should be complete, without referring to the waste-book; and so clear, that every person, acquainted with the style of the journal, may understand it with ease. When the post is written, we mark a dash / against the article, on the margin of the waste-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 same order that they occur in the journal; or accounts of the same kind may be placed together, the personal accounts on one part of the leger, and the real accounts in another. The accounts of Stock, and Profit and Loss, are generally placed at the beginning. The room which each will require cannot be exactly known, but must be conjectured from the number of transactions 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 necessary. The designations of the personal accounts may be written on half text, or Italian hand; and some 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. Personal accounts are entered by the first letter of the surname; companies, by the first letter of the surname 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 marked on the second leaf, under A; and the other letters on the following leaves, in the same manner; by means of which we can turn at once to any letter required.
33. In posting the leger, proceed by the following directions. First, look for the Dr. of the journal-post 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 short narration of the transaction annexed, and inserting the sum in the money column, and the quantity, if it be an account of goods, in the inner column. Then turn to the account of the Cr. of the journal-post, and enter 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 on the margin the number of the folios to which the article is posted. The figures which point out the reference to the Dr. and Cr. folios should be separated by a line: for example, If the Dr. entry be on the third folio, and the Cr. entry on the fifth, the reference is marked 3/5. These figures show how far the posting is advanced, and are useful in comparing the books.
The figures for dates or references should be written in a lighter hand than the figures in the columns for money or quantity.
35. There is often a reference-column ruled in the leger, for pointing out the other entry, corresponding to any article. In this column, the folio of the Cr. entry is marked against the Dr. article, and the folio of the Dr. entry against the Cr. article. Sometimes the accounts are numbered according to their order in the leger; and the references, both in the journal and leger, point out the number of the account instead of the folio.
36. In complex posts, turn to the several Drs. or Crs. in their order, and enter the articles according to the foregoing directions; placing the sums belonging to each in the money-column, against the respective entries.
37. An article in the leger is generally comprehended in one line. The narration should be as full as can be contained in that bounds. If it cannot be narrated completely, the journal is referred to for further particulars, by writing per Journal, (or p. J.), either after an incomplete narration, or immediately after the Dr. or Cr. when there is no room for a proper narration. In complex posts, there can seldom be any narration annexed to the single Dr. or the single Cr. The entry is generally To Sundries per J., or By Sundries per J. If the sense of the whole article can be narrated, it should be done; but it is improper to narrate the first or any other part of the article, and omit the others.
38. When the space allotted for an account in the leger is filled up, the account must be transported to another folio. For this purpose add the columns on both sides, and write against the sum, Transported to folio, inserting the number of the folio where the new account is opened, in the reference-column, or on the line, if no reference-column be used. Then, after titling the new account, and entering the number of the folio in the index, write on the Dr. To amount, brought from folio, inserting the number of the folio where the old account was; and on the Cr. By amount, brought from folio; and place the sums, and quantities, if any, in the proper columns.
When either side of an account is full, both sides should be transported, and diagonal lines drawn, to fill up the vacant space of the side which requires it.
39. The books should be written up as frequently as can be done conveniently; so that the journal may keep pace nearly with the waste-book, and the leger with the journal. Each book should be carefully revised, and compared with the book from which it is posted. In comparing the leger, observe the following directions:
Begin with the first journal-post, and turn to the folio of the leger where the Dr. is entered, which you are directed to by the marginal reference, and compare the date, entry, and sum. If you find them to correspond, it is well; if not, the leger must be altered till it correspond with the journal. Then place a dot before the reference-figure in the journal, and a mark Δ before the sum in the leger.
Proceed in the same manner to compare the Cr. of the journal-post, and all the following posts in their order. The dots in the journal show how far the comparison is advanced, and the marks in the leger show what articles are compared.
The sums of accounts transported should be left blank till the books be compared; as an error in any article will occasion an alteration in the sum.
40. Some accountants correct all errors in the leger, without erasing any thing, by the following methods: 1st, If the sum be entered too small, they make a second entry for the deficiency. 2d, If it be entered too large, they make an entry on the opposite side for the excess. 3d, If it be entered on the wrong side of the account, they enter it twice on the other; once, to counterbalance the error, and a second time for the true entry. 4th, If it be entered on a wrong account, they charge the wrong account Dr. to, or Cr. by, the right one.
41. We do not much approve of these methods, as they give the books a confused appearance; and would rather recommend the following rules: 1st, If an article be omitted, do not attempt to interline at the place where it should have been; but insert it under the last article when you discover the omission, and mark a cross X against it on the margin, and another at the place where it should have been. 2d, If you discover a mistake immediately when committed, correct it without cancelling anything, as in this example. To Cash, say, To James Speirs received to account. 3d, If you have written a line entirely wrong, or in a wrong place, write the word Error at the end, prefix a cross, and omit or cancel the sum. 4th, Cancel errors, by drawing a line lightly through them, so that the old writing may still be legible; by which it will be evident, that the book has not been vitiated for a fraudulent purpose. The same method should be followed in correcting errors in the journal.
42. When the comparison of the books is finished, glance over the leger, to observe if the mark of comparison be affixed to every article. If not, you must turn to the journal, and observe if the articles be right which had not been marked.
43. Because the whole sum of the Dr. side of the leger should be equal to the whole sum of the Cr. § 14. it is proper to try if they correspond. For this purpose, you may add the Dr. of every account, except such as are already balanced, placing the sums in an inner column, and extending them at the end of one or more folios, as you find most convenient, to the outer column: and, as you go along, add the Cr. in the same manner. If the sum total of both sides be equal, it gives a presumption that the books are right; if they differ, there is certainly some mistake. This is called the Trial-balance. The labour bestowed upon it is not lost, as the sums may be referred for afflicting us to collect the balances; the method of which will be explained afterwards.
44. If the sums of the trial-balance do not correspond, the books must be examined again. For this purpose, begin with the first article on the Dr. side of the first account, and turn to the account where the corresponding entry is, which you will find by the figure in the reference-column. If the articles agree, mark them with a dot. Proceed in like manner with the other articles on the Dr. of the first account; then with the articles on the Cr. of the same; and then with the following accounts in their order, till the error or errors be discovered. In complex entries, observe if the amount of the sums on one side be equal to the sum on the other. When you come to a dotted article, you may pass it by, because it has been examined already.
If the errors be not discovered at the first revival, you must repeat the same operation again, till you bring the books to balance. Marks different from the former ones, ones, or differently placed, may be used, to signify that an article has been examined a second or third time. As the detection of errors is the most tedious and disagreeable part of book-keeping, the accountant will be induced to guard against them with all possible care, when he has once experienced the trouble which they occasion.
45. Before we explain the method of balancing the books, it will be proper to direct the learner how to balance particular accounts. When we settle accounts with any person, and ascertain how much is owing at either hand, it is necessary to balance his account in the ledger, and open a new one, beginning with the sum that was due according to the settlement; and when we clear accounts again, we must go back to that article, and no farther.
If any articles be charged on either side, at the time of settling, they must be immediately entered on the waste-book; from which they will pass in course to the journal and ledger; and a remark must be entered in the waste-book, that the account was settled, and the balance transferred to the proper side of the new account. This remark is transferred in the journal; and the ledger account is balanced, when it occurs, in the course of posting.
If the balance be due to you, write on the Cr. By balance due to him to Dr. new account, and insert the sum due you; after which, the amount of both sides will be equal. Add the account, placing the sums opposite to each other; and, if the sides be unequal, draw a diagonal line through the vacant space of the shorter side, and close the old account by drawing lines under the sums. Then open the new account immediately under the old one, or in a new folio if the old one be full, by writing on the Dr. To balance of former account due by him. If the balance be due by you to him, the entries are made on the opposite sides, with the necessary alterations. When the new account is opened in the same folio, it is unnecessary to repeat the title; but the year and month, as well as the day, are repeated at the date of the first article.
46. Sometimes when an account is balanced, one or more articles are left out on purpose: For example, goods lately bought on credit may be left out, and the settlement may only relate to articles of longer standing. When this is the case, if the articles omitted be on the Dr. of the ledger, we write on the Cr. thus, By articles sold him since 1st January replaced: and when we have balanced the account, and opened a new one, we write on the Dr. To articles replaced at settling, furnished since 1st January: or, if the articles were left out for any other reason, we explain the same in the narration. If the omitted articles be on the Cr. the like entries are made on the opposite sides. It should be noticed in the waste-book and journal when this operation is necessary.
47. When we post any common article from the journal, we enter the sum on the Dr. of one account, and on the Cr. of another: when we balance an account, we place the balance sum on the Dr. of the old account, and on the Cr. of the new one, or contrary-wise: and when we replace an article, as above directed, to the Dr. or Cr. of the old account, we place it after balancing to the Cr. or Dr. of the new one. Thus, in these entries, as well as in common posts, there are like sums entered on the Dr. and Cr. of the ledger, and the general equality of the sides is still preserved.
48. Merchants generally balance their books once a year. The design of this operation is, to collect the various branches of their business, distilled through the books, into a concise abstract; to ascertain their gain or loss since the last balance; and exhibit the present state of their funds. If the business be of such a kind, that most of the branches naturally come to an issue at a certain time of year, that time is the proper one for making the balance. Otherwise the end of the year, or the least busy time, may be chosen.
49. It is proper, before balancing, to settle as many personal accounts as possible; to clear all arrears and small charges; to take an exact inventory of the goods on hand, as far as can be done; and affix a moderate value to each article, according to the current prices at the time; such a value as you would be willing at present to buy for. It is more proper to value the goods on hand in conformity to the current prices, than at prime cost: for the design of affixing any value is to point out the gain or loss, and the gain is in reality obtained so soon as the prices rise, or the loss suffered so soon as they fall; therefore it is impossible to make up a just state of the affairs, unless the present prices be attended to.
50. These things being done, proceed to make the balance as follows: Prepare two sheets of paper, ruled with money-columns, in the form of Dr. and Cr.; write Profit and Loss as the title of the first, and Balance as the title of the second.
Prepare also some paper for computing the balances, and mark down the folios, titles, and sums of each account in the ledger, in a regular order. If a trial-balance was made, the sums may be transcribed from it. Pass by such accounts as are already closed; also the accounts of Stock and Profit and Loss, which are always the last of being balanced. Then subtract the lesser sum from the greater, and enter the difference on either of the sheets that the nature of the article points out, and on the side of that sheet which corresponds to the greater sum of the account. More particularly,
In personal accounts, enter the difference, which is the debt owing to you, or by you, on the proper side of the balance-sheet.
In the cash-account, enter the difference, which is the money in hand, on the Dr. side of the balance-sheet.
In accounts of goods or other property, if there be nothing remaining on hand, enter the difference, which is the gain or loss, on the proper side of the profit and loss sheet.
If the whole be still on hand, enter the present value on the Dr. of the balance-sheet; and, if this be different from the prime cost, charges included, enter the difference in the proper side of the profit and loss sheet.
If part be sold, and part on hand, place the value of the quantity on hand under the sum of the Cr. and add them. The sum is the whole return that will be obtained, if the rest of the goods be sold at the estimated value; and this, being compared with the sum of the Dr. which is the whole expense, shows the gain or loss. Enter the same in the proper side of the profit and loss sheet, and enter the quantity and value on hand on the Dr. of the balance-sheet.
Observe if the quantities in the inner columns be equa equal on both sides; when the goods are all sold; or, if the difference, when only part is sold, be equal to the quantity on hand. If they correspond, you have a just account of the goods. If the Dr. be greater, there is something amiss, which you must enter on the Dr. of the balance-sheet, and mark the cause of the deficiency, as intake, waste, or the like. If the Cr. be greater, there is an excess, which you must enter on the Cr. of the balance-sheet, together with the occasion of it, as difference of measure, or the like.
In accounts subsidiary to profit and loss, enter the difference on the proper side of the profit and loss sheet.
When there is nothing written on one side of an account, enter the sum of the article or articles on that sheet which the kind of the account points out.
51. When you have collected all the balances, sum up both sheets, and add to the profit and loss sheet the sums of the profit and loss account in the ledger; then subtract the lesser sum of each sheet from the greater.
This being done, mark the sums of the stock-account on your computation-paper, and add thereto the balance of the profit and loss sheet on the side which corresponds with the greater sum of that account; then subtract the lesser sum from the greater. The remainder will be equal to the difference of the sides of the balance-sheet, if the books be right, and the balances exactly collected.
52. We shall prove that this equality must always hold, from the nature of the articles collected. The Dr. of the balance-sheet contains every kind of property belonging to you, and every debt owing to you; and the Cr. contains every debt owing by you; therefore the difference of the sides shows what your nett estate amounts to. The profit and loss sheet, when the articles from the ledger are included, contains everything you have gained on the Cr. and everything you have lost on the Dr.; and the difference of the sides is your nett gain or loss. The stock-account contained your effects and debts at the time the books were opened; and therefore, when the gain or loss is added to the proper side, it must show the extent of your nett estate at present. Thus the stock-account and the balance-sheet both point out how much you are worth at present; the one from your former stock, allowance being made for your gains or losses; the other from a view of your present effects and debts; and they will correspond, because both must be agreeable to the truth, if the books be correct.
53. Though the books must balance, if free from error, yet it is sometimes difficult to adjust them exactly, especially when the business is extensive, and the error trifling. If there be still a difference, which we do not think it worth while to make further search for, we may close the books, by making Profit and Loss Dr. or Cr. for the same. This introduces an article on one side of the ledger, which has none corresponding to it on the other, but is balanced by some undiscovered error.
54. The balance being struck, your next work is to close the books. Every article in the ledger should be posted from the journal; therefore, the most regular way of finishing both is by inserting the following articles in the journal, and posting them in the common manner to the ledger.
1st, Profit and Loss Dr. to Sundries, for loss, on the following accounts. The particulars are taken from the Dr. of the Profit and Loss sheet.
2d, Sundries Dr. to Profit and Loss, for gain, on the following accounts. The particulars are taken from the Cr. of the Profit and Loss sheet.
3d, Balance-account Dr. to Sundries, for debts and property belonging to me.
4th, Sundries Dr. to balance-account, for debts due by me. The particulars of this and the former are taken from the respective sides of the balance-sheet.
5th, Profit and Loss Dr. to Stock for nett gain; or Stock Dr. to Profit and Loss, for nett loss.
6th, Balance-account Dr. to Stock, for nett stock.
55. When the four first of these articles are posted in the ledger, all the personal, real, and subsidiary accounts will balance, and you may add them as you go along. In accounts of goods, if there be any deficiency, you must enter it on the Cr. in the inner column; and, if there be any outcome, you must enter it on the Dr. before you add the account. Then the sums of every account and every column on the opposite sides will be equal.
The only accounts that remain open are, Profit and Loss, Stock, and Balance. The fifth post balances the profit and loss account, and the sixth balances the stock-account. It was noticed, § 14, that the whole sums of Dr. and Cr. of the ledger are equal; and therefore, if the sides of every account, except one, be balanced, that one will balance of its own accord. The balance-account alone remains open, and, upon trial, you will find that the sides are equal. This affords an additional proof, or, at least, a different view, of what was demonstrated, with respect to the balance of the books, in § 52.
The lines above and under the sums, at a general balance, may be drawn with red ink; and, at the balancing of particular accounts, with black ink, for distinction.
56. Some choose to insert the particulars of the profit and loss and balance sheets in the respective accounts of the ledger. If this be done, it is unnecessary to enumerate them also in the journal.—Some choose to balance the accounts of goods, whenever the quantity is sold off; and we approve of this method, as it lessens the work at the general balance, which is always sufficiently laborious.
57. Thus is the state of a person's affairs brought together, in a short compass, under his view; and the articles of the balance-sheet supply materials for a new inventory. It is convenient, however, to alter the order, and arrange the real accounts together, and the personal ones together.
58. It is not necessary to begin new books, nor open the accounts anew, unless the old folios be full. The accounts may be continued in the former folios; but it is best to begin a new ledger, if the old one be not likely to hold all the business of the next year. When one comes to have several sets of books, it is common to distinguish them by the letters of the alphabet. The first waste-book, journal, and ledger, are marked A, the second, B; and so on.
In the following specimen, the waste-book and journal are placed on opposite pages, that the learner may easily compare them; and the rules are referred to by their numbers. INVENTORY of ready money, goods, and debts, belonging to James Oswald merchant in Edinburgh.
| Item Description | Amount | |------------------|--------| | Ready money | £75 10 | | 200 bolls meal, at 13s | £130 | | 6 hds Port wine, at L15 90 | — | | 70 reams paper, at 10s 6d | 36 15 | | 120 sp. five hank yarn, at 2s 3d | 13 10 | | A house in Lawn-market Edin. value | 270 5 | | James Bofwell merch. Edin. owes per account | £73 4 | | Thomas Pirie writer Edin. owes per do | 12 3 8 | | Henry Hardy merch. Glasgow per bill | 75 | | David Miller manufacturer Haddington per receipt | 18 | | **Total** | **£29 82 4 2 8** |
LIST of debts by the said James Oswald.
| Description | Amount | |-------------|--------| | To the Royal Bank per account | £230 | | To Tho. Smith merchant London per do | 54 | | To Will. Nisbet carpenter Leith per do | 28 7 3 | | **Total** | **£29 31 2 7 3** |
Bought for ready money 105 yards calicoe, at 3s 2d
Rule III.
Sold James Cuthbert merchant Leith 50 bolls meal, at 13s 3d
Rule I.
Bartered 60 spindles five hank yarn, at 2s 4d, for 80 yards diaper, at 1s 9d
Rule III.
Paid William Nisbet in full
Rule I.
Bought from Will. Bruce merchant Leith, 200 bushels salt, at 1s 8d
320 stone iron, at 3s 4d
Rule II.
Sold 30 rms paper to Ja. Bofwell, at 12s £18
12 to John Henderson stationer Edinburgh, at 12s
5 for ready money, at 11s
Rules I. III.
Sold Will. Hunter merchant Dunbar 150 bush. salt, at 1s 9d, £13 2 6
Received in part
And he owes the balance
Rules I. III.
Sundries Dr. to Stock for articles belonging to James Oswald merchant Edinburgh.
| Description | Amount | |-------------|--------| | Cash on hand | £75 10 | | Meal. For 200 bolls at 13s | £130 | | Port-wine. For 6 hds at L15 90 | — | | Paper. For 70 rms, at 10s 6d | 36 15 | | Yarn. For 120 sp. five hank, at 2s 3d | 13 10 | | House in Lawn-market Edin. value | 270 5 | | Ja. Bofwell merch. Ed. per ac | £73 4 | | Tho. Pirie writer Ed. per do | 12 3 8 | | Henry Hardy merchant Glasgow per bill | 75 | | David Miller manufacturer Haddington, per receipt | 18 | | **Total** | **£178 7 8 82 4 2 8** |
Stock Dr. to Sundries.
| Description | Amount | |-------------|--------| | To Royal Bank per account | £230 | | To Tho. Smith merch. London per acc. | 54 | | To Will. Nisbet carpenter Leith per do | 28 7 5 | | Calicoe Dr. to Cash. Bought 105 yards at 3s 2d | 16 12 6 | | James Cuthbert merchant Leith, Dr to Meal, sold 50 bolls, at 13s 3d | 33 2 6 | | Diaper Dr. to Yarn. Delivered 60 sp. five hank in barter for 80 yards, at 1s 9d | 7 | | William Nisbet Dr. to Cash. Paid him in full | 28 7 3 | | Sundries Drs. to William Bruce merchant Leith. Salt. For 200 bushels, at 1s 8d | £16 13 4 | | Iron. For 320 stones, at 3s 4d | 53 6 8 | | Sundries Drs. to Salt, for 150 bush. at 1s 9d, L13 2 6 | | Cash. Received in part | L10 | | William Hunter merchant Dunbar, for balance due by him | 3 2 6 |
Rules I. III. ### Waste-Book
**Edinburgh, January 22, 1789**
| Description | Amount | |---------------------------------------------------------------------------|--------| | Received from Henry Hardy in payment of his bill | L75 | | And for interest on do | 210 | | Rules II. VII. | | | Paid the Royal Bank | 100 | | Rule I. | | | Bought from Alex. Sharp merch. Dundee 500 sp. four hank yarn, at 1s 1d | L47 18 4 | | Paid him in part | L15 | | And the balance due him is | 32 18 4 | | Rules II. III. | | | Received 150 bolls meal, 13s 2d L98 : 15s, in barter for 6 hds. Port wine, | L16 L96 | | Paid the balance | 215 | | Rule III. | |
**Edinburgh, 2d February 1789**
| Description | Amount | |---------------------------------------------------------------------------|--------| | Sold James Boswell | | | 48 bush. salt, being the rem. at 1s 8½d L4 2 | | | 60 fp. five hank yarn, at 2s 3½d | 6 17 6 | | 100 stone iron, at 3s 4½d | 16 17 6 | | Rule I. | | | Received from James Cuthbert in part | | | Rule II. | | | Bartered 22 reams paper, at 12s L13 4 | | | 30 bolls meal, at 13s 6d | 20 5 | | For 334½ fp. four hank yarn, at 2s | L33 9 | | Rule III. | | | Taken for the use of my shop the remaining ream paper, value | | | Rule VI. | | | Received from William Hunter in full L3 2 6 | | | from James Boswell in part | 70 | | Rule II. | | | Paid the Royal Bank | 100 | | Rule I. | | | Bartered 100 yards calicoes, at 3s 6d L17 : 108 | | | For one hd. Port-wine | L14 10 | | Received the balance | 3 | | Rule III. | |
### Journal
**Edinburgh, January 22, 1789**
| Description | Amount | |---------------------------------------------------------------------------|--------| | Cash Dr. to Sundries. | | | To Henry Hardy. Rec. paym. of his bill L75 | | | To Profit and Loss. Rec. interest on do | 210 | | Rules II. VII. | | | Royal Bank Dr. to Cash. Paid them | 100 | | Yarn Dr. to Sundries, for 500 spindles four hank, at 1s 1d | L47 18 4 | | To Cash. Paid in part | L15 | | To Alex. Sharp merch. Dundee for bal. | 32 18 4 | | Meal Dr. to Sund. for 150 bolls, at 13s 2d L98 : 15s | | | To Port-Wine. For 6 hds. delivered in barter, L16 | L96 | | To Cash. Paid balance | 215 |
**Edinburgh, 2d February 1789**
| Description | Amount | |---------------------------------------------------------------------------|--------| | James Boswell Dr. to Sundries. | | | To Salt, for 48 bush. being the rem. at 1s 8½d | L4 2 | | To Yarn, for 60 fp. five hank, at 2s 3½d | 6 17 6 | | To Iron, for 100 stones, at 3s 4½d | 16 17 6 | | Cash Dr. to James Cuthbert. Received in part | | | Yarn Dr. to Sundries. For 334½ fp. four hank yarn, at 2s | L33 9 | | To Paper. For 22 reams delivered in barter, at 12s | L13 4 | | To Meal. For 30 bolls, at 13s 6d | 20 5 | | Charges Merchandize Dr. to Paper, taken for the use of shop, 1 ream, value | | | Cash Dr. to Sundries. | | | To William Hunter. Received in full L3 2 6 | | | To James Boswell. | 70 | | Royal Bank Dr. to Cash. Paid them | 100 | | Sundries Drs. to Calicoes. For 100 yards delivered in barter, at 3s 6d | L17 : 108 | | Port Wine. Por 1 hd. | L14 10 | | Cash. Received balance | 3 | BOOK-KEEPING.
WASTE-BOOK.
Edinburgh 19th February, 1789.
Sold 30 bolls meal for ready money, at 13s 8d L20 10 45 to Henry Hardy, at 13s 1od 31 2 6 27 to William Hunter, at 13s 1od 18 13 6 52 to Baillie and Bell, Borrow- flowness, at 13s 1od 35 19 4
Rules I. III.
Drawn on the Royal Bank
Rule II.
Paid William Bruce in part L. 50 Alexander Sharp in full 32 18 4 And Tho. Smith's bill on me at sight 35
Rule I.
Edinburgh, 2d March, 1789.
Paid charges and cellar-rent of malt L 1 2 6 Charges and loft rent of meal 3 3
Rule IV.
Received from Thomas Pirie in full L. 12 Discounted him 3 8
Rules II. VI.
Sold James Dalton, Manchester 6c spindles four hank yarn, at 2s ½d L 6 1 3 300 do do at 1s 11½d 29 13 9
Rule I.
Received from Jan Jonkheer Rotterdam 6 bags clover seed, qt. 200 lb. each, amount per invoice f. 312, at 22d per f. L. 28 12 Paid freight and charges 1 5
Rules II. IV.
Bartered with James Bofwell 2 bags clover seed, at L. 6, L 12, for 2 hds. lints, at 558 L 5 10 Received in money 5 And he owes the balance 1 10
Rules III. I.
Paid Tho. Smith in full L. 19 And for interest 1 10
Rules I. IV.
Sold 140 lb. clover-feed to John Scott farmer at Haugh-head, at 7½d L 4 7 6 70 to James Cuthbert, at 7½d 2 3 9 120 for ready money, at 7½d 3 12 6
Rules I. II.
JOURNAL.
Edinburgh, 19th February, 1789.
Sundries Drs. to Meal.
1 Cash For 30 bolls, at 13s 8d L 20 10 2 Henry Hardy For 45 13s 1od 31 2 6 4 William Hunter For 27 13s 1od 18 13 6 4 Baillie and Bell, Borrow- flownesses For 52 13s 1od 35 19 4
154 Rules I. III.
23 Drawn on the Royal Bank
Rule II.
1 Cash Dr. to Royal Bank Drawn on them
Sundries Drs. to Cash.
3 William Bruce Paid him in part L. 50 4 Alex. Sharp Paid him in full 32 18 4 5 Tho. Smith Paid his bill on me at sight 35
Edinburgh, 2d March, 1789.
Sundries Drs. to Cash.
3 Salt Paid charges and cellar-rent L 1 2 6 1 Meal Paid charges and loft-rent 3 3
Sundries Drs. to Thomas Pirie.
1 Cash Received in full L. 12 1 Profit and Loss Discounted him 3 8
James Dalton, Manchester, Dr. to Yarn.
For 60 fp. four hank, at 2s ½d L 6 1 3 And 300 do. at 1s 11½d 29 13 9
Clover seed Dr. to Sundries.
To Jan Jonkheer, for 6 bags, qt. 200 lb. each, is 1200 lb. amount per invoice, f. 312, at 22d L. 28 12 1 Cash Paid freight and charges 1 5
Sundries Drs. to Clover seed.
For 2 bags, at L. 6, L 12 Lint seed, for 2 hds. recd. in bart. 558 5 10 Cash In part 1 10 James Bofwell, for balance 1 10
Sundries Drs. to Cash.
3 Thomas Smith Paid him in full L. 19 1 Profit and Loss Paid him interest 1 10
Sundries Drs. to Clover seed.
John Scott, farmer at Haugh-head, for 140 lb. at 7½d L 4 7 6 James Cuthbert, for 70 7½d 2 3 9 Cash for 120 7½d 3 12 6
Edinburgh, ### WASTE-BOOK.
**Edinburgh, 24th March, 1789.**
| Description | Amount | |---------------------------------------------------------------------------|--------| | James Boswell has paid the Royal Bank on my acct. | £40 | | Rule VIII. | | | Bought from William Ainslie merchant Alloa ½ share of the ship Hazard, for | £150 | | Rule II. | | | Sold Baillie and Bell, | | | 150 stone Iron, at 3s 7d | £26 17 6 | | 1 hd. Port-wine | £15 5 | | Rule I. | |
**Edinburgh, 2d April, 1789.**
| Description | Amount | |---------------------------------------------------------------------------|--------| | Sold for ready money | | | 50 yards diaper, at 1s 11d | £4 15 10 | | 30 bolls meal, at 13s 7d | £20 7 6 | | 1 hd. lint-feed | £3 3 | | 160 lb. clover-feed, at 7½d | £5 3 4 | | 30 stone iron, at 3s 6½d | £5 6 3 | | Rule III. | | | Drawn on the Royal Bank for Rule II. | £60 | | Bought for ready money | | | 30 casks train oil, at 2s | £33 | | 30 bolls meal, at 13s L 19 10 | £40 | | And paid him | £30 | | Rule I. | | | Baillie and Bell have paid Will. Ainslie, at my desire, balance of my share of the ship Hazard | £117 | | Rule VIII. | | | Sold James Boswell 20 casks train-oil, at 27s | £27 | | Rule I. | | | Sold George Gordon mercht. Stirling | | | 10 casks train oil, at 28s | £14 | | 1 hd. lint-feed | £3 5 | | 35 bolls meal, at 13s 8d | £23 18 4 | | Received in part | £35 | | And he owes the balance | £6 3 4 | | Rules I. II. | | | Paid Baillie & Bell’s bill on me to C. Cowan, at sight | £38 18 2 |
### BOOK-KEEPING JOURNAL.
**Edinburgh, 24th March, 1789.**
| Description | Amount | |---------------------------------------------------------------------------|--------| | Royal Bank Dr. to James Boswell. Paid them by lip | £40 | | Share of ship Hazard Dr. to William Ainslie merchant Alloa, bought ½ share for | £150 | | Baillie and Bell Drs. to Sundries. | | | To Iron. For 150 stone, at 3s 7d | £26 17 6 | | To Port wine. For 1 hd. | £15 5 | | Ca/b Dr. to Sundries. | | | To Diaper. For 50 yards, at 1s 11d | £4 15 10 | | To Meal. For 30 bolls, at 13s 7d | £20 7 6 | | To Lint-feed. For 1 hd. | £3 3 | | To Clover-feed. For 160 lb. at 7½d | £5 3 4 | | To Iron. For 30 stone, at 3s 6½d | £5 6 3 | | Ca/b Dr. to Royal Bank. Drawn on them for | £60 | | Sundries Drs. to Ca/b. | | | Train-sil. For 30 casks, at 2s | £33 | | Meal. For 30 bolls, at 13s L 19 10 | £40 | | And 40 at 13s 2 d | £26 6 8 | | William Ainslie Dr. to Sundries. | | | To Diaper. For 30 yards, at 2s | £3 | | To Ca/b. Paid him | £30 | | William Ainslie Dr. to Baillie and Bell. Paid him by them on my account, being balance of share of ship Hazard | £117 | | James Boswell Dr. to Train-oil. Sold him 20 casks at 27s | £27 | | George Gordon Dr. to Sundries. | | | To Train-oil. For 10 casks, at 28s | £14 | | To Lint-feed. For 1 hd. | £3 5 | | To Meal. For 35 bolls, at 13s 8d | £23 18 4 | | Ca/b Dr. to George Gordon. Received in part | £35 | | Baillie and Bell Dr. to Ca/b. Paid their bill on me to C. Cowan, at sight | £38 18 2 |
**Edinburgh,** ### WASTE-BOOK
**Edinburgh, 18th April, 1789.**
Taken for the use of my family, the remaining five yards calicoe, at 3s 2d Rule VI.
The Royal Bank have paid Jan Jonkheer's bill on me, 1 mdt. at my desire Rule VIII.
Received my proportion of profits on a voyage to Rotterdam by the Hazard Rule V.
Paid for small charges on my business since 1st January Personal and family expenses
Due Thomas Sharp, my clerk, for wages Rule VI.
Due the Royal Bank for interest Rule VI.
Previous to the balancing of my books, I have taken an inventory of the goods in my shop and ware-house,
| Item | Quantity | Unit Price | Total | |-----------------------|----------|------------|---------| | 124 bolls meal | | | L83 14 | | 474 lp. four hank yarn| | | 47 8 | | 40 stone iron | | | 6 13 4 | | 300 lb. clover-feed | | | 7 10 |
I value my house at And my share of ship Hazard
| Description | Amount | |--------------------------------------|--------| | Meal | L 9 18 | | Port-wine | 6 15 | | Paper | 4 18 | | Yarn | 2 3 | | Calicoes | 1 13 | | Diaper | 15 10 | | Iron | 2 7 | | Clover-feed | 5 | | Lint-feed | 18 | | Share of ship Hazard | 23 | | Train-oil | 8 |
Bal. Account Dr. to Sun. for articles belonging to me,
| Description | Amount | |--------------------------------------|--------| | To Caff | L 8 3 10 | | To Meal. For 124 bolls, at 13s 6d | 83 14 | | To Yarn. For 474 lp. at 2s | 47 8 | | Amusing ½ spindle | | | To House in Leven market | 300 | | To James Boswell | 37 11 | | To Henry Hardy | 31 2 | | To David Miller | 18 | | To James Gathbert | 5 6 | | To Iron. For 40 stone, at 3s 4d | 6 13 | | To John Henderson | 7 4 | | To William Hunter | 18 13 | | To James Dalton | 35 15 | | To Clover-feed. For 300 lb. at 6d | 7 10 | | Inlake 10 lb. | | | To John Scott | 4 7 | | To Share of ship Hazard | 140 | | To George Gordon | 6 3 |
Edinburgh, ### BOOK-KEEPING
#### JOURNAL
**Edinburgh, 30th April 1789**
| Description | Amount | |--------------------------------------------------|--------| | Sundries Drs. to Balance-account | | | Meal. Outcome 3 bolls | | | Royal Bank | £201 | | William Bruce | 20 | | Thomas Sharp | 8 | | Profit and Loss Dr. to Stock, for nett gain | £161 | | Stock Dr. to Balance-Account, for nett stock | £528 |
The next Journal would begin thus.
| Description | Amount | |--------------------------------------------------|--------| | Sundries Drs. to Stock | | | Cash on hand | £8 | | Meal. For 124 bolls, at 13s £83 | | | Yarn. For 474 sp. 4-hank, at 28 47 | | | Iron. For 40 stone, at 3s 4d 6 13 | | | Clover-feed. For 300 lb. at 6d 7 10 | | | House in Lawn-market Edinburgh, value | £1300 | | Share in Ship Hazard. For one third | £140 | | James Balfour Edinburgh | | | Due by him | £37 | | Henry Hardy Glasgow. Do | £31 | | David Miller Haddington. Do | £18 | | James Guthbert Leith. Do | £5 | | John Henderson Edin. Do | £7 | | William Hunter Dunbar. Do | £18 | | James Dalton Manchester. Do | £35 | | John Scott Haughhead. Do | £4 | | George Gordon Stirling. Do | £6 |
| Description | Amount | |--------------------------------------------------|--------| | Stock Dr. to Sundries | | | To Royal Bank. Due them | £201 | | To William Bruce Leith. Due him | £20 | | Thomas Sharp, my clerk. Do | £8 |
---
*Stocks* ### Stock
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | To Sundries per J. | 312 | 7 | | | To Balance-account, for nett stock | 5528| 9 |
### Profit and Loss
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | To Thomas Pirie, discounted him | 2 | 3 | | | To Cash, paid Tho. Smith interest | 1 | 1 | | | To Royal Bank, for interest due them | 2 | 1 | | | To Sundries, per J. | 47 | 1 | | | To Stock, for nett gain | 16 | 13 |
### Cash
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | To Stock on hand | 75 | 10 | | | To Paper, for 5 reams, at 11 s | 2 | 15 | | | To Salt, in part, per J. | 3 | 10 | | | To Sundries for Hen. Hardy's bill, with int. | 77 | 10 | | Feb. | To James Cuthbert, in part | 30 | 3 | | | To Sundries, per J. | 73 | 2 | | | To Calicoes, for bal. of 100 yards, per J. | 3 | 3 | | | To Meal, for 30 bolls, at 13 s 8 d | 1 | 10 | | | To Royal Bank, drawn on them | 2 | 120 | | Mar. | To Thomas Pirie, in full | 4 | 5 | | | To Clover-feed, in part, for 2 bags | 4 | 12 | | | To Clover-feed, for 120 lb. at 7½ d | 38 | 15 | | | To Sundries, per J. | 2 | 60 | | | To Royal Bank, drawn on them | 5 | 35 | | | To George Gordon, in part | 5 | 33 | | | To Share of ship Hazard for share profits p. J. | 5 | 33 |
### Meal
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | To Stock on hand | 200 | 130 | | | To Sundries, per J. at 13 s 2 d | 150 | 98 | | Mar. | To Cash, paid charges and loft-rent | 1 | 3 | | Apr. | To Cash, per J. | 70 | 1 | | | To Profit and Loss, for gain | 9 | 18 |
### Port-wine
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | To Stock on hand, at L 15 | 6 | 1 | | Feb. | To Calicoes, in barter | 13 | 14 | | Apr. | To Profit and Loss, for gain | 1 | 6 |
### Contra
#### Stock
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | By Sundries, per J. | 824 | 2 | | | By Profit and Loss, for nett gain | 16 | 13 |
#### Profit and Loss
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | By Cash, received int. on Hen. Hardy's bill | 2 | 10 | | | By Sundries, per J. | 65 | 9 |
#### Cash
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | By Calicoes, for 105 yards, at 3 s 2 d | 3 | 16 | | | By William Nibbet, in full | 3 | 28 | | | By Royal Bank, paid them | 2 | 100 | | | By Yarn, in part, for 500 lp. four hank | 2 | 15 | | | By Meal, paid balance of 150 bolls | 1 | 2 | | | By Royal Bank, paid them | 2 | 100 | | | By Sundries, per J. | 117 | 18 | | | By Sundries, per J. | 4 | 5 | | | By Clover-feed, paid freight and charges | 1 | 5 | | | By Sundries, paid Tho. Smith, with int. per J. | 2 | 10 | | | By Sundries, per J. | 78 | 16 | | | By William Ainslie, paid him | 5 | 30 | | | By Baillic and Bell, paid their bill on me ft. | 4 | 38 | | | By Sundries, for charges and expenses per J. | 3 | 7 | | | By Balance-account | 8 | 3 |
#### Meal
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | By James Cuthbert, at 13 s 3 d | 50 | 3 | | | By Yarn in barter, at 13 s 6 d | 30 | 2 | | | By Sundries, per J. | 154 | 100 | | | By Cash, at 13 s 7 d | 39 | 1 | | | By George Gordon, at 13 s 8 d | 35 | 5 | | | By Balance-account | 124 | 5 |
#### Port-wine
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. | By Meal, in barter, at L 16 | 6 | 1 | | Mar. | By Baillie and Bell | 14 | 15 | ### Paper
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock on hand, at 10s 6d | 70 15 | | Apr. | 30 | To Profit and Loss, for gain | 41 13 |
### Yarn
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock on hand, at 2s 3d | 120 1 | | Feb. | 10 | To Sundries, per J. at 1s 11d | 50 0 | | Apr. | 30 | To Profit and Loss, for gain | 83 4 |
### House in Lawn-market
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock, for value | 130 0 |
### Ja. Bofwell merchant Edinburgh
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock due by him, per account | 73 4 | | Feb. | 15 | To Paper, for 30 reams, at 12s | 18 2 | | Mar. | 17 | To Sundries, per J. | 27 1 | | Apr. | 11 | To Train-oil, for 20 casks, at 27s | 27 5 |
### Thomas Pirie writer Edinburgh
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock due by him per account | 12 3 |
### Henry Hardy merchant Glasgow
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock due by him per bill | 75 1 | | Feb. | 19 | To Meal, for 45 bolls, at 1s 10d | 31 2 |
### David Miller manufacturer Haddington
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Stock due by him per receipt | 18 1 |
### Royal Bank of Scotland
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | To Cash, paid them | 100 1 | | Feb. | 16 | To Cash, paid them | 100 1 | | Mar. | 24 | To Ja. Bofwell, paid them by him | 20 1 | | Apr. | 30 | To Balance-account | 20 1 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | By Sundries, per J. | 47 2 | | Feb. | 10 | By Yarn in barter, at 12s | 22 2 | | Apr. | 30 | By Charges Merchandize, for shop-use | 41 13 |
### Spindles
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | By Diaper, at 2s 4d | 60 3 | | Feb. | 2 | By James Bofwell, at 2s 3½d | 60 2 | | Mar. | 5 | By James Dalton, per J. | 36 0 | | Apr. | 30 | By Balance-account, at 2s | 47 4 |
### Attnishing
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | By Balance-account | 53 00 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Feb. | 16 | By Cash in part | 75 1 | | Mar. | 24 | By Royal Bank, paid in by him | 24 2 | | Apr. | 30 | By Balance-account | 37 11 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Mar. | 4 | By Sundries in full, with discount, per J. | 12 3 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 22 | By Cash in full | 75 1 | | Apr. | 30 | By Balance-account | 31 2 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Apr. | 30 | By Balance-account | 18 1 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Jan. | 1789 | By Stock, due them per account | 23 0 | | Feb. | 23 | By Cash, drawn on them | 12 0 | | Apr. | 6 | By Cash, drawn on them | 6 0 | | Apr. | 22 | By J. Jonkheer, for his bill paid them, p. J. | 28 12 | | Apr. | 30 | By Profit and Loss, for interest due them | 21 1 |
### Contra
| Dr. | R. | Contra | Cr. | |-----|----|--------|-----| | Apr. | 44 | 3 2 | ### Tho. Smith merchant London
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Feb. 23 | To Cash, paid his bill on me at sight | 1 | 35 | | Mar. 17 | To Cash, in full | 1 | 19 |
### Will. Niflet carpenter Leith
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. 16 | To Cash, paid him in full | 1 | 28 | | Jan. 3 | By Stock, due him per account | | 7 | | Jan. 3 | By proper Expences taken at 3s 2d | | 3 |
### Calicoes
| Date | Description | Yds | Dr. | Cr. | |------|--------------------------------------------------|-----|-----|-----| | Feb. 16 | To Cash, at 3s 2d | 1 | 105 | | | Feb. 4 | To Profit and Loss, for gain | 1 | 13 | | Feb. 19 | By Sundries, per J. at 3s 6d | | 100 | | Apr. 19 | By proper Expences taken at 3s 2d | | 55 |
### Ja. Cuthbert merchant Leith
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Feb. 3 | To Meal, for 50 bolls, at 13s 3d | 1 | 33 | | Feb. 3 | To Clover-feed, for 70 lb. at 7½ | 1 | 2 | | Feb. 3 | By Cash in part | | 3 | | Feb. 3 | By Balance account | | 5 |
### Diaper
| Date | Description | Yds | Dr. | Cr. | |------|--------------------------------------------------|-----|-----|-----| | Apr. 7 | To Yarn in barter, at 1s 9d | 1 | 80 | | Apr. 7 | To Profit and Loss, for gain | 1 | 80 | | Apr. 7 | By Cash at 1s 11d | | 50 | | Apr. 7 | By William Ainslie, at 2s | | 30 |
### Salt
| Date | Description | Bufl. | Dr. | Cr. | |------|--------------------------------------------------|-------|-----|-----| | Jan. 13 | To William Bruce, at 1s 8d | 1 | 200 | | Jan. 13 | To Cash, paid charges and cellar-rent | 1 | 200 | | Jan. 19 | By Sundries, per J. at 1s 9d | | 150 | | Feb. 2 | By J. Bofwell, for the rem. at 1s 8d½d | | 48 | | Apr. 30 | By Profit and Loss, Inlake | | 200 |
### William Bruce merchant Leith
| Date | Description | Dr. | Cr. | |------|--------------------------------------------------|-----|-----| | Jan. 13 | To Cash in part | | 50 | | Jan. 13 | To Balance-account | | 20 |
### Iron
| Date | Description | Stones | Dr. | Cr. | |------|--------------------------------------------------|--------|-----|-----| | Feb. 2 | To William Bruce, at 3s 4d | 1 | 320 | | Feb. 2 | To Profit and Loss, for gain | 1 | 320 | | Feb. 2 | By James Boswell, at 3s 4½d | | 100 | | Feb. 2 | By Baillic and Bell, at 3s and 7d | | 150 | | Feb. 2 | By Cash, at 3s 6½d | | 30 | | Feb. 2 | By Balance-account, at 3s 4d | | 40 | | Date | Description | Dr. | Amount | Cr. | |--------|-----------------------------------------------------------------------------|-----|--------|-----| | Jan. 14 | To paper, for 12 reams at 12s | | 7 | | | Jan. 19 | William Hunter merchant Dunbar, To Salt, for balance of 150 bushels, per J. | | 3 | | | Feb. 19 | To Meal, for 27 bolls, at 13s 10d | | 1 | | | Feb. 23 | Alexander Sharp merchant Dundee, To Cash, in full | | 32 | | | Feb. 10 | Charges Merchandize, To paper, taken for shop-use, 1 ream | | 10 | | | Apr. 30 | To cash, for small charges since 1st Jan. | | 5 | | | Feb. 19 | To Meal, for 52 bolls, at 3s 10d | | 35 | | | Mar. 28 | To Sundries per J. | | 42 | | | Apr. 16 | To Cash, pd their bill on me to C. Cowan, st. | | 38 | | | Mar. 5 | James Dalton Manchester, To Yarn, for 360 spindles four hank, per J. | | 35 | | | Mar. 12 | Clover-feed, To Sundries per J. for pr. cost and char. | | 29 | | | Apr. 30 | To Profit and Loss, for gain | | 5 | | | Apr. 22 | J. Jonkheer merchant Rotterdam, To Ro. Bank, for his bill on me paid by them| | 28 | | | Mar. 17 | Lint-feed, To Clover-feed, in barter at 55s | | 2 | | | Apr. 30 | To Profit and Loss, for gain | | 6 | |
| Date | Description | Dr. | Amount | Cr. | |--------|-----------------------------------------------------------------------------|-----|--------|-----| | Apr. 30 | By Balance-account | | 30 | | | Feb. 16 | By Cash in full | | 1 | | | Apr. 30 | By Balance-account | | 30 | | | Jan. 20 | By Yarn, for balance of 300 spindles, per J. | | 20 | | | Apr. 30 | By Profit and Loss | | 30 | | | Apr. 8 | By William Ainslie, paid him by them | | 8 | | | Apr. | By Balance-account | | 7 | | | Mar. | By Sundries per J. | | 7 | | | Apr. | By Cash, at 7½d | | 2 | | | Apr. | By Balance-account, Inlake | | 30 | | | Mar. | By Clover-feed, for 6 bags, per J. | | 12 | | | Apr. | By Cash | | 2 | | | Apr. | By George Gordon | | 14 | | | Date | Description | Dr. | Cr. | |------|-----------------------------------------------------------------------------|-----|-----| | 1789 Apr. 30 | John Scott farmer at Haughead, To Clover-feed, for 140 lb. at 7½ d | 4 | 6 | | 1789 Apr. 25 | Share of Ship Hazard, To William Ainslie, bought ½ share for Profit and Loss | 5 | 150 | | 1789 Mar. 25 | William Ainslie merchant Alloa, To Sundries, per J. To Baillie and Bell, for balance paid him by them | 33 | 117 | | 1789 Apr. 14 | Train-oil, To Cash, at 22 s. To Profit and Loss, for gain | 30 | 1 | | 1789 Apr. 14 | George Gordon merchant Stirling, To Sundries, per J. | 4 | 3 | | 1789 Apr. 18 | Proper Expences, To Calicoes, for 5 yards, at 3 s 2 d. To Cash, for charges since 1st January | 3 | 15 | | 1789 Apr. 30 | Thomas Sharp, my clerk, To balance-account | 5 | 8 | | 1789 Apr. 30 | Balance-account, To Sundries, per J. | 757 | 12 |
| Date | Description | Dr. | Cr. | |------|-----------------------------------------------------------------------------|-----|-----| | 1789 Apr. 30 | Contra By Balance-account | 5 | 4 | | 1789 Apr. 25 | Contra By Cash, for share profit of a voyage to Rot. By Balance-account | 33 | 140 | | 1789 Mar. 25 | Contra By Share of Ship Hazard, for ¼ bt. from him | 5 | 150 | | 1789 Apr. 14 | Contra By James Boswell, at 27 s. By George Gordon, at 28 s. | 27 | 105 | | 1789 Apr. 14 | Contra By Cash in part By Balance-account | 35 | 6 | | 1789 Apr. 30 | Contra By Profit and Loss | 32 | 15 | | 1789 Apr. 30 | Contra By Charges Merchandize, due him for wages | 8 | | | 1789 Apr. 30 | Contra By Sundries, per J. By Stock | 229 | 1528|
TRIAL: ## TRIAL-BALANCE
| Dr. | Cr. | |----------------------|-----------| | **1** Stock | L 824 2 8 | | Profit and Loss | 2 10 | | Cash | L 591 12 1| | | L 1418 4 9| | **2** Meal | L 277 14 8| | Port-wine | L 104 10 | | Paper | 36 15 | | Yarn | 94 17 4 | | House in Edinburgh | 300 | | | 813 17 | | | 406 9 8 | | **3** James Boswell | L 247 11 | | Henry Hardie | 31 2 6 | | David Miller | 18 | | Royal Bank | 140 | | | 436 13 6 | | | 551 3 2 | | **4** Calicoes | L 16 12 6 | | James Cuthbert | 35 6 3 | | Diaper | 7 | | Salt | 17 15 10 | | | 76 14 7 | | | 73 6 2 | | **5** Iron | L 53 6 8 | | William Bruce | 50 | | John Henderson | 7 4 | | William Hunter | 18 13 6 | | Charges Merchandise | 13 14 2 | | | 142 18 4 | | | 119 1 3 | | **6** James Dalton | L 35 15 | | Clover-feed | 29 17 | | Flax-feed | 5 10 | | John Scott | 4 7 6 | | Share of Ship Hazard | 150 | | | 225 9 6 | | | 66 15 1 | | **7** Train-oil | L 33 | | George Gordon | 41 3 4 | | Proper Expenses | 32 15 10 | | Thomas Sharp | | | | 106 19 2 | | | 84 | | | L 2719 | | | L 2719 |
COMPU- ### Computations
| Dr. | Cr. | |-----|-----| | Cash | L599 15 11 L591 12 1 | | | 591 12 1 | | | L8 3 10 |
| Dr. | Cr. | |-----|-----| | Salt | L17 15 10 L17 4 6 | | | 17 4 6 | | | Loss L - 11 4 |
| Dr. | Cr. | |-----|-----| | 5 William Bruce | L50 — L70 — | | | 50 — |
| Dr. | Cr. | |-----|-----| | 2 Meal | L277 14 8 L203 18 8 | | Dr. 420 bolls | 83 14 — | | Cr. 299 | L83 14 — | | | L287 12 8 | | | 277 14 8 | | | Profit L9 18 — |
| Dr. | Cr. | |-----|-----| | Iron | L53 6 8 L49 1 3 | | | 6 13 4 | | | L613 4 — | | | L55 14 7 | | | 53 6 8 |
| Dr. | Cr. | |-----|-----| | 3 outcome | Profit L2 7 11 | | Port-wine | L104 10 — L111 5 — | | | 104 10 — | | | J. Henderson | | | W. Hunter | | | Char. Merchan. | | Paper | L36 15 — L41 13 6 | | | 36 15 — | | | 6 Ja. Dalton | | | Clover-seed | | Yarn | L94 17 4 L49 12 6 | | Spindles | 47 8 — | | 834½ 120 | L47 8 — | | 360 120 | L91 — 6 | | | 94 17 4 | | 474½ Amiffing ½ | Profit L2 3 2 | | House in Edinburgh | L300 — |
| Dr. | Cr. | |-----|-----| | 6 Ja. Dalton | L35 15 — | | Clover-seed | L29 17 — L27 7 1 | | 1200 lb. | 7 10 — | | L7 10 — | L34 17 1 | | 29 17 — | 5 19 — | | Profit L5 — 1 | | 10 inlake | L5 10 — L6 8 — | | Lint-seed | 5 19 — |
| Dr. | Cr. | |-----|-----| | 3 Ja. Bofwell | L147 11 — L110 — — | | | 110 — — | | | L27 11 — | | Henry Hardy | L31 2 6 | | David Miller | L18 — — | | Royal Bank | L240 — — L441 3 2 | | | 240 — — | | | L201 3 2 7 Train-oil |
| Dr. | Cr. | |-----|-----| | J. Scott | L4 7 6 | | Share Hazard | L150 — — | | | 140 — — | | L140 — — | L173 — — | | | 150 — — | | Profit L23 — — |
| Dr. | Cr. | |-----|-----| | 4 Calicoes | L16 12 6 L18 5 10 | | | 16 12 6 | | | Profit L1 13 4 | | J. Cuthbert | L35 6 3 | | | 30 — — | | | Proper Ex. | | | Thomas Sharp | | Diaper | L5 6 3 | | | L7 — L7 15 10 | | | 7 — — | | | Profit L — 15 10 |
| Dr. | Cr. | |-----|-----| | George Gordon | L41 3 4 L35 — — | | | 35 — — | | | L6 3 4 | | | L32 15 10 lofs. | | | L8 — — |
| Dr. | Cr. | |-----|-----| | STOCK | L312 7 3 L824 2 8 | | Balance | 528 9 1 prof. 16 13 8 | | | L840 16 4 L840 16 4 |
**Profit** ## BOOK-KEEPING.
### PROFIT AND LOSS SHEET.
| Description | Amount | |------------------------------|--------| | Salt | L 11 4 | | Charges Merchandize | 13 14 2 | | Proper Expences | 32 15 10 | | In Leger | L 47 1 4 | | | 4 4 10 | | | L 51 6 2 | | Nett gain | 16 13 8 | | | L 67 19 10 |
| Description | Amount | |------------------------------|--------| | Meal | L 9 18 - | | Port-wine | 6 15 - | | Paper | 4 18 6 | | Yarn | 2 3 2 | | Calicoes | 1 13 4 | | Diaper | 15 10 | | Iron | 2 7 11 | | Clover-feed | 5 1 | | Lint-feed | 18 | | Share of ship Hazard | 23 | | Train-oil | 8 | | In Leger | L 65 9 10 | | | 2 10 | | | L 67 19 10 |
### BALANCE-SHEET.
| Description | Amount | |------------------------------|--------| | Cash | L 8 3 10 | | Meal, 124 b. at 13s 4d | 83 14 - | | Yarn, 474 lp. at 2s | 47 8 - | | Amifing ½ | 300 - | | House in Edinburgh | 37 11 | | James Boswell | 31 2 6 | | David Miller | 18 - | | J. Cuthbert | 5 6 3 | | Iron, 40 stone, at 3s 4d | 6 13 4 | | J. Henderson | 7 4 | | W. Hunter | 18 13 6 | | James Dalton | 35 15 | | Clover-feed, 300 lb. at 6d | 7 10 | | Inlake 10 lb. | 4 7 6 | | J. Scott | 140 - | | Share of ship Hazard | 6 3 4 | | George Gordon | STOCK | | | 528 9 1 | | | L 757 12 3 |
| Description | Amount | |------------------------------|--------| | | L 757 12 3 | The present article, it is hoped, will appear sufficiently extended for a work of this nature. It contains the general principles of Italian book-keeping; and is sufficient to unfold the nature and design of that art to the speculative inquirer, to direct the accountant in common and easy cases, and prepare him for understanding those that are more complicated. In fact, if he has a clear apprehension of the sense of the transactions, the tendency of the journal-entries, and the import of the balances in the leger, he will seldom be at a loss how to proceed.
Subsidiary Books used by merchants.
Though all merchant-accounts may be kept by the Waste-book, Journal, and Leger, alone; yet men of great business find it convenient, either for abridging these, or for other ends, to use some others, generally called Subsidiary or Subservient Books; the most common of which are these nine following, viz:
1. Cash-book. This book is kept in a folio form, like the leger, and serves to abridge the cash-account there. On the left-hand page, or Dr. side, Cash is charged Dr. for all the sums received; and on the right-hand page, Cash is made Cr. for all the sums paid. Once a-week, or, which is more ordinary, once a month, this book is posted to the leger; or, if you please, first to the journal, by two entries, viz. Cash Dr. to Sundries, for all the receipts, and Sundries Drs. to Cash, for all the payments. By this means the cash-account in the leger will be so far contracted as to consist of 12 lines, viz. one for each month in the year.
2. Book of Charges of Merchandise. This book is only paged, and designed to abbreviate the cash-book. It contains particular charges on goods and voyages; such as carriage, custom, freight,orage, wharfage, &c.; as also other expenses that affect trade in general; such as, warehouse-rent, shop-rent, accountant's wages, postage of letters, and the like. At the end of each month the money-columns of this book are added up, and the sum transferred to the credit-side of the cash-book.
3. Book of House-expenses. This book is also paged, and designed likewise to ease the cash-book. It contains all disbursements for family provisions, servant's wages, house-rent, apparel, utensils, &c. The money-columns of this book are also added up at the end of each month, and the sum transferred to the credit-side of the cash-book.
4. Invoice-book. This book, which is used chiefly by factors, is paged, and contains doubles or copies of the invoices of goods sent to sea, or of goods received from abroad.
5. Sales-book. This book too is chiefly used by factors; and into it is posted, from the waste-book, the particular sales of every consigned cargo; by which means the several articles of a sale, that lie scattered in the waste-book, are brought together, and represented under one view, and that in a manner more full and minute than they are collected in the leger account.
This book exhibits the sales of every consignment separately and by themselves; to which are subjoined the respective charges, such as freight, custom, the factor's commission, as also abatements allowed to buyers, &c., whose sum subtracted from the gross amount of sales gives the neat proceeds. From this book, when a cargo is sold off, an account of sales is drawn out, in order to be transmitted to the employer.
6. Bill-book. The design of this Bill-book, or Month-book, is to furnish a merchant with a ready way of knowing the time when bills or other debts become payable to or by him. It consists of 12 folios, one for each month in the year. The left-hand page contains the debts that fall due to the merchant in the month on the top, and the right-hand page contains the debts payable by him to others in the same month.
7. Receipt-book. In this book a merchant takes receipts of the payments he makes. The receipt should contain the date; the sum received, expressed in words at large, and also in figures in the money-columns; the reason why; and whether in full or in part; and must be signed by the person receiving. But there is no occasion to mention the merchant's name; for the book being his own, sufficiently implies that.
8. Letter-book. It is very imprudent in any person to send away a letter of business, without keeping a double of it to himself; and therefore to prevent the bad consequences of such a careless practice, merchants are provided with a large book in folio, into which is copied verbatim every letter of business before it be sent off. So that this book, together with the letters received (which must also be carefully kept in files or boxes), makes a complete history of all the dealings that pass betwixt a merchant and his correspondents; which may be very useful and necessary on many occasions.
9. Pocket-book. This is a small book, of a portable size, which a merchant carries in his pocket when business calls him abroad to a tavern, a fair, the country, or other places. In this he sets down the bargains he makes, the expenses he incurs, the debts he pays, or sums he receives, with every other part of business he transacts while abroad; as also any occurrence or piece of news he thinks worth while to record. And when he comes home to his counting-house or shop, he transfers the things contained in this book, each to their proper places in the waste-book, or books subsidiary.
Factors of great business sometimes keep another small book, called the Memorandum-book. Into this book is copied, from letters as they come to hand, short notes of the several commissions for buying goods contained in them; and as the commissions are effected, the notes are crossed, or have some mark affixed to them. This is more convenient in doing business, than to be continually running to the letters themselves.
The above are the subsidiary books most in use; but a merchant is not tied down or restricted to them; he may keep some, and neglect others, or invent more as the nature of his business requires, and he finds convenient.