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 mistakes. 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 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 leger 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 entitled 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.
6. 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 for 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 C. 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 methodize 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 desperate; 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 fire-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 any thing 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 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 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. L. 4.10
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 ledger, to which it will require to be posted, and thereby enable the accountant to write the ledger with more ease than he could do if it were filled up immediately from the waste-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 ledger. This must be collected from the description of the ledger 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,
Waste-book.) Paid John Bell in full Journal.) John Bell, Dr. to Cash, paid him in full Waste-book.) Sold 50 yards cloth to J. Hill, at 12s. Journal.) J. Hill Dr. to Cloth, sold him 50 yards, at 12s.
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,
Waste-book.) Received from Thomas Gay in full Journal.) Cash Dr. to Thomas Gay, received in full Waste-book.)
Journal.) Waste-book.) Bought from J. Hawley 60lb. wool, at 9d. L. 2 5 — Journal.) Wool Dr. to J. Hawley, bought 60lb. 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,
Waste-book.) Bought for ready money 10 hds. wine, at 15l. L. 150 — Journal.) Wine Dr. to Cash, bought 10 hds. at 15l. 150 —
Waste-book.) Sold for ready money 100 gallons rum, at 9s. 45 — Journal.) Cash Dr. to Rum, sold 100 gallons, at 9s. 45 —
Waste-book.) Bartered 3 hds. wine, at 15l. for 100 gallons rum at 9s. 45 —
Journal.) Rum Dr. to Wine, received 100 gallons at 9s. in barter for 3hds. at 15l. 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,
Waste-book.) Paid for repairs to ship Traffick L. 18 — Journal.) Ship Traffick Dr. to Cash, paid for repairs 18 —
Waste-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 —
Waste-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,
Waste-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 —
Waste-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 —
Waste-book.) John Public owes me a year's rent of the Angel-tavern Journal.) John Public Dr. to Angel tavern, for a year's rent due by him L. 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,
Waste-book.) Given my daughter at her marriage L. 500 — Journal.) Profit and Loss Dr. to Cash, given my daughter at her marriage 500 —
Waste-book.) Taken for family use from my granary 3 bolls meal, at 13s. 4d. 2 —
Journal.) Profit and Loss [or Proper expenses] Dr. to Meal, taken for family use, 3 bolls, at 13s. 4d. 2 —
Waste-book.) Due James Rich for a year's interest on 1000l. at 4 per cent. 40 —
Journal.) Profit and Loss [or Interest account] Dr. to James Rich, due him a year's interest on 1000l. at 4 per cent. 40 —
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,
Waste-book.) Received in a gift from my father L. 100 — Journal.) Cash Dr. to Profit and Loss, received from my father 100 —
Waste-book.) Received in like manner at opening shop, 100 yards cloth at 12s. 60 —
Journal.) Cloth Dr. to Profit and Loss, received from my father at opening shop 100 yards, at 12s. 60 —
Waste-book.) James Barbour owes me a year's interest of 1000l. 50 —
Journal.) James Barbour Dr. to Profit and Loss [or Interest account] due by him for a year's interest of 1000l. 50 —
24. Rule VIII. When one person pays money, or delivers any thing else to another on our account, the person who receives it is Dr. to the person who pays it. Thus,
Waste-book.) James Goldsmith has paid the bank of Scotland on my account, L. 100 — Journal.) Bank of Scotland Dr. to James Goldsmith, paid them by him 100 —
Waste-book.) Arthur Young has delivered James Baker 100 qrs. wheat for which I am to account to him, at 30s. 150 —
Journal.) James Baker, Dr. to Arthur Young, for 100 qrs. of wheat delivered him on my account, at 30s. 150 —
Payments of this kind are often transacted by bills of exchange.
25. These. 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 £1l. 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 Waste-book, and transferred to the Journal by Rule I., they would stand thus:
William Drapier Dr. to Cloth, sold him 25 pieces, at £1l. L.375 — William Drapier Dr. to Wool, sold him 130 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 £1l. 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 of cloth to W. Drapier, at £1l. 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 £1l. L.150 — J. Mercer, for 12 ditto at £1l. 180 — L.330 —
Ex. 3.] Bought from H. Hood, 5 puncheons rum, at 42l. L.210 — 3 hds. claret, at 33s. 99 — 2 pipes madeira, at 56s. 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 33s. 99 — Madeira, for 2 pipes, at 56s. 112 — L.421 —
Ex. 4.] Bt. 50 qrs. wheat from J. Tull, at 3s. 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. Tull, for 50 qrs. at 3s. L.87 10 — To S. Ellis, for 12 qrs. at 36s. 21 12 — L.109 2 —
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 —
Here beans are delivered, some to different purchasers on trust, and some for ready money. The purchasers are Drs. for the quantity 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 12l. per cwt. L.105 — 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 12l. 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 150l. 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 150l. 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 150l. 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 600lb. 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 600lb. 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 afflicted 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 Fotheringal 100 pieces of snaburgs, at 12s. 100lb. thread, at 3s. 6d, 17 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. Sundries Dr. to Sundries. Lintseed, for 10 hds. at 50s. L.25 — Linen, for 500 yds. at 1s 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 — Linen, for 500 yds. at 1s 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 100 lb. at 3s 6d 17 10 — Delivered in barter L.77 10 —
26. 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 the place of residence) of every person is mentioned; and the same 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 in 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 it 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 in 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 posting you to the folio of the leger where the account is, if and Balance 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 inferring 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 their 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, Transferred 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 posting 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 A 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 anything, 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 make a cross 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 Spiers 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 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 revision, you must repeat the same operation again, till you bring the books to balance. Marks different from the former 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 leger, 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 leger; 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 transcribed in the journal; and the leger 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. Posting and Balancing the Leger.
45. 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 leger, 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.
46. 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 leger, and the general equality of the sides is still preserved.
47. Merchants generally balance their books once a-year. The design of this operation is, to collect the various branches of their business, diffused 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.
48. 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.
49. 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 leger, in a regular order. If a trial-balance was made, the sums may be transferred from it, and posted 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 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 amissling, which you must enter on the Dr. of the balance-sheet, and mark the cause of the deficiency, as inlake, 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.
50. 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 leger; then subtract the lesser sum from 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.
51. We shall prove that this equality must always hold, Posting 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 sheets, when the articles from the leger are included, contain 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 errors 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 leger, 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 leger 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 leger.
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 leger, 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 side 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 leger 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 leger. 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 leger, 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 leger, 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. ### WASTE-BOOK.
**Edinburgh, January 1, 1789.**
**INVENTORY of ready money, goods, and debts, belonging to James Ofwald merchant in Edinburgh.**
| Item Description | Amount | |------------------|--------| | Ready money | L.75 10 | | 200 bolls meal, at 13s | L.130 | | 6 hds Port-wine, at 15l | 90 | | 70 reams paper, at 10s 6d | 36 15 | | 120 lp. five-hank yarn, at 2s 3d | 13 10 | | A house in Lawn-market Edin. value | 270 5 | | James Bofwell merch. Edin. owes per account | L.73 4 | | Thomas Price writer Edin. owes per do. | 12 3 8 | | Henry Hardy merch. Glagow per bill | 75 | | David Miller manufacturer Haddington, per receipt | 18 | | **Total** | **178 7 8** |
§ 29
**LIST of debts by the said James Ofwald.**
| Description | Amount | |-------------|--------| | To the Royal bank per account | L.230 | | To Tho. Smith merchant London per do. | 54 | | To Will. Nifbet carpenter Leith per do. | 28 7 3 | | **Total** | **312 7 3** |
§ 29
Bought for ready money 105 yards calicoe, at 3s 2d
Rule III.
Sold to 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 Nifbet in full
Rule I.
Bought from Will. Bruce merchant Leith, 200 bushels salt, at 1s 8d L.16 13 4
300 stone iron, at 3s 4d 53 6 8
Rule II.
Sold 30 rms paper to Ja. Bofwell, at 12s L.18
12 to John Henderson stationer Edinburgh, at 12s 7 4
5 for ready money, at 1s 2 15
47 Rule I. III.
Sold Will. Hunter merchant Dunbar, 150 bush. salt, at 1s 9d L.13 2 6
Received in part L.10
And he owes the balance 3 2 6
Rules I, III.
### JOURNAL.
**Edinburgh, January 1, 1789.**
**Sundries Dr. to Stock for articles belonging to James Ofwald merchant Edinburgh.**
| Description | Amount | |-------------|--------| | Cash on hand | L.75 10 | | Meat. For 200 bolls at 13s L.130 | | Port-wine. For 6hds at 15l 90 | | Paper. For 70rms at 10s 6d 36 15 | | Yarn. For 120 lp. five-hank, at 2s 3d 13 10 | | House in Lawn-market Edin. value | 270 5 | | Ja. Bofwell merch. Edin., per ac. L.73 4 | | Tho. Pirie writer Edin., per do. 12 3 8 | | Henry Hardie merchant Glagow per bill | 75 | | David Miller manufacturer Haddington, per receipt | 18 | | **Total** | **178 7 8** |
Stock Dr. to Sundries.
| Description | Amount | |-------------|--------| | To Royal Bank per account | L.230 | | To Tho. Smith merch. London per ac. | 54 | | To Will. Nifbet carpenter Leith per do. | 28 7 3 | | Calicoe Dr. to Cash. Bought 100 yards, at 3s 2d | | James Cuthbert merchant Leith, Dr. to Meal, sold 50 bolls, at 13s 3d | | Diaper Dr. to Yarn. Delivered 60 lp. five-hank, in barter of 80 yards, at 1s 9d | | William Nifbet Dr. to Cash. Paid him in full | | Sundries Dr. to William Bruce merchant Leith. Salt. For 200 bushels, at 1s 8d L.16 13 4 | | Iron. For 320 stones, at 3s 4d 53 6 8 | | Sundries Drs. to Paper. Ja. Bofwell for 30 rms, at 12s L.18 | | John Henderson stationer Edinburgh, for 12 12s 7 4 | | Cash, For 5 1s 2 15 | | **Total** | **27 19** |
Sundries Drs. to Salt, for 152 bhs. at 1s 9d L.13 2 6
Cash. Received in part L.10
William Hunter merchant Dunbar, for balance due by him 3 2 6
Edinburgh ### WASTE-BOOK
**Edinburgh, January 22, 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Received from Henry Hardy in payment of his bill | L.75 | | And for interest on do | 2 10 | | **Rules II. VII.** | | | Paid the Royal Bank | 100 | | **Rule I.** | | | Bought from Alex. Sharp. merch. Dundee 500 sp. four-hank yarn, at 1s 11d | L.47 | | Paid him in part | L.15 | | And the balance due him is | 32 18 | | **Rules II. III.** | | | Received 150 bolls meal, at 1s 2d L.98:15s, in barter for 6 hds. Port wine, | L.96 | | Paid the balance | 2 15 | | **Rule III.** | |
**Edinburgh, 2d February 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Sold James Bofwell | | | 48 buth. salt, being the rem. at 1s 8½d | L.4 | | 60 sp. five-hank yarn, at 2s 3½d | 6 17 | | 100 stone iron, at 3s 4½d | 16 17 | | **Rule I.** | | | Received from James Cuthbert in part | | | **Rule II.** | | | Bartered 22 reams paper, at 12s | L.13 | | 30 bolls meal, at 13s 6d | 20 5 | | For 334½ sp. four-hank yarn, at 2s | L.33 | | **Rule III.** | | | Taken for the use of my shop the remaining ream paper, value | | | **Rule VI.** | | | Received from William Hunter in full | L.3 | | from James Bofwell in part | 70 | | **Rule II.** | | | Paid the Royal Bank | 100 | | **Rule I.** | | | Bartered 100 yards calicoes, at 3s 6d | L.17 | | For one hd. Port wine | L.14 | | 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 | L.75 | | To Profit and Loss, Rec. interest on do | 2 10 | | **Rules II. VII.** | | | Royal Bank Dr. to Cash. Paid them | 100 | | Yarn Dr. to Sundries, for 500 spindles four-hank, at 1s 11d | L.47 | | To Cash. Paid in part | L.15 | | To Alex. Sharp. merch. Dundee for bal. | 23 18 | | **Rules II. III.** | | | Meal. Dr. to Sund. for 150 bolls, at 1s 2d L.98:15s | | | To Port-wine. For 6 hds. delivered in barter, L.16 | L.96 | | To Cash. Paid balance | 2 15 | | **Edinburgh, 2d February 1789** | | | James Bofwell Dr. to Sundries | | | To Salt, for 48 buth, being the rem. | | | To Yarn, for 60 sp. five-hank, at 2s 3½d | L.4 | | To Iron, for 100 stones, at 3s 4½d | 16 17 | | Cash Dr. to James Cuthbert. Received in part | | | Yarn Dr. to Sundries. For 334½ sp. four-hank yarn, at 2s | L.33 | | To Paper. For 22 reams delivered in barter, at 12s | L.13 | | To Meal. For 30 bolls, at 13s 6d | 20 5 | | Charges Merchandise Dr. to Paper taken for the use of shop, 1 ream, value | | | Cash Dr. to Sundries. | | | To William Hunter. Received in full | L.3 | | To James Bofwell. | 70 | | Royal Bank Dr. to Cash. Paid them | 100 | | Sundries Dr. to Calicoes. For 100 yards delivered in barter at 3s 6d | L.17 | | Port-wine. For 1 hd. | L.14 | | Cash. Received balance | 3 | ### WASTE-BOOK
**Edinburgh, 19th February, 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Sold 30 bolls meal for ready money, at 3s 8d | L. 20 10 | | 45 to Henry Hardy, 13s 10d | 31 2 6 | | 27 to William Hunter, at 13s 10d | 18 13 6 | | 52 to Bailie and Bell, Borrowstounnels, at 13s 10d | 35 19 5 | | **Total** | 106 5 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.
---
### JOURNAL
**Edinburgh, 19th February, 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Sundries Drs. to Meal. | | | Ca/b. For 30 bolls, at 3s 8d | L. 20 10 | | Henry Hardy. For 45 | 31 2 6 | | William Hunter. For 27 | 18 13 6 | | Bailie and Bell, Borrowstounnels. For 52 | 35 19 5 | | **Total** | 106 5 4 |
Drawn on the Royal Bank
Rule II.
Sundries Drs. to Ca/b.
William Bruce. Paid him in part L. 50 Alex. Sharp. Paid him in full 32 18 4 Tho. Smith. Paid his bill on me at sight 35
Rule I.
---
### Edinburgh, 2nd March, 1789
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Paid charges and cellar-rent of salt L. 1 2 6 | | | Charges and loft-rent of meal | 3 3 | | **Total** | 4 5 6 |
Rule IV.
Received from Thomas Pirie in full L. 12 Discounted him 3 8
Rule II. VI.
Sold James Dalton, Manchester 60 spindles four-hank yarn, at 2s 4d L. 6 1 3 300 do do at 1s 11 1/2 29 13 9
Rule I.
Clover-feed, Drs. to Sundries.
To Jan Jonkheer, for 6 bags, qt. 200 lb. each, is 1200 lb. amount per invoice, f. 312, at 22d To Ca/b. Paid freight and charges 1 5
Rules II. IV.
Bartered with James Bofwell 2 bags clover-feed, at 6l. L. 12 for 2 hds. lintf. at 55s 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 7 1/2d L. 4 7 6 70 to James Cuthbert at 7 1/2d 2 3 9 *120 for ready money, at 7 1/2d 3 12 6
Rules I. II.
---
### Edinburgh, 2nd March, 1789
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Sundries Drs. to Ca/b. | | | Salt. Received in full L. 1 2 6 | | | Meal. Paid charges and loft-rent | 3 3 | | **Total** | 4 5 6 |
Sundries Drs. to Thomas Pirie.
Ca/b. Received in full L. 12 Profit and Loss. Discounted him 3 8
James Dalton, Manchester, Dr. to Yarn.
For 60 fp. four-hank, at 2s 4d L. 6 1 3 And 300 do. at 1s 11 1/2 29 13 9
Rule I.
Clover-feed, Drs. to Sundries.
To Jan Jonkheer, for 6 bags, qt. 200 lb. each, is 1200 lb. amount per invoice, f. 312, at 22d To Ca/b. Paid freight and charges 1 5
Rules II. IV.
Sundries Drs. to Clover-feed.
For 2 bags, at 6l. L. 12 Lint feed, for 2 hds. recd. in bart. 55s 5 10 Ca/b. In part 5 James Bofwell, for balance 1 10
Rules III. I.
Sundries Drs. to Ca/b.
Thomas Smith, Paid him in full L. 19 Profit and Loss. Paid him interest 1 10
Rules I. IV.
Sundries Drs. to Clover-feed.
John Scott, farmer at Haugh-head, for 140 lb. at 7 1/2d L. 4 7 6 James Cuthbert, for 70 7 1/2d 2 3 9 Ca/b. for 120 7 1/2d 3 12 6
Rules I. II. WASTE-BOOK.
Edinburgh, 24th March, 1789.
James Boswell has paid the Royal Bank on my acct. Rule VIII.
Bought from William Ainslie merchant Alloa ½ share of the ship Hazard, for Rule II.
Sold Baillie and Bell, 150 stone Iron, at 3s 7d L. 26 17 6 1 hd. Port-wine 15 5
Rule I.
Edinburgh, 2d April, 1789.
Sold for ready money 50 yards diaper, at 1s 1½d L. 4 15 10 30 bolls meal, at 1s 3½d 20 7 6 1 hd. lint-feed 3 3 0 160 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.
Bought for ready money 30 casks train oil, at 22s L. 33 30 bolls meal, at 1s 3½d L. 19 10 40 do. at 1s 3½d 26 6 8
70 45 16 8
Rule III.
Sold Will. Ainslie 30 yds. diaper, at 2s L. 3 And paid him 30
Rule I.
Baillie and Bell have paid Will. Ainslie, at my desire, balance of my share of the ship Hazard Rule VIII.
Sold James Boswell 20 casks train-oil, at 27s Rule I.
Sold George Gordon merch. Stirling 10 casks train-oil, at 28s L. 14 1 hd. lint-feed 3 5 35 bolls meal, at 1s 3½d 23 18 4
L. 41 3 4
Received in part and he owes the balance L. 35 6 3 4
Rule I. II.
Paid Baillie & Bell's bill on me to C. Cowan, at sight Rule I.
JOURNAL.
Edinburgh, 24th March, 1789.
Royal Bank Dr. to James Boswell. Paid by him
Share of ship Hazard Dr. to William Ainslie merchant Alloa, bought ½ share for
Baillie and Bell Drs. to Sundries. To Iron. For 150 stone, at 3s 7d L. 26 17 6 To Port-wine. For 1 hd. 15 5
Edinburgh, 2d April, 1789.
Cash Dr. to Sundries. To Diaper. For 50 yards, at 1s 1½d L. 4 15 10 To Meal. For 30 bolls, at 1s 3½d 20 7 6 To Lint-feed. For 1 hd. 3 3 0 To Clover-feed. For 160 lb. at 7½d 5 3 4 To Iron. For 30 stone, at 3s 6½d 5 6 3
Sundries Drs. to Cash. Train-oil. For 30 casks, at 22s L. 33 Meal. For 30 bolls, at 1s 3½d L. 19 10 And 40 at 1s 3½d 26 6 8
William Ainslie Dr. to Sundries. To Diaper. For 30 yards, at 2s L. 3 To Cash. Paid him 30
William Ainslie Dr. to Baillie and Bell. Paid him by them on my account, being balance of share of ship Hazard
James Boswell Dr. to Train-oil. Sold him 20 Casks at 27s
George Gordon Dr. to Sundries. To Train-oil. For 10 casks, at 28s L. 14 To Lint-feed. For 1 hd. 3 5 To Meal. For 35 bolls at 1s 3½d 23 18 4
Cash Dr. to George Gordon. Received in part
Baillie and Bell Dr. to Cash. Paid their bill on me to C. Cowan, at sight.
Edinburgh, ### WASTE-BOOK
**Edinburgh, 18th April, 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Taken for the use of my family, the remaining five yards calicoe, at 3s 2d | -15 10 | | Rule VI | | | The Royal Bank have paid Jan Jonkheer's bill on me, 1 mdt. at my desire. | -28 12 | | Rule VIII | | | Received my proportion of profits on a voyage to Rotterdam by the Hazard. | -33 | | Rule V | | | Paid for small charges on my business since first January | L. 5 3 8 | | Personal and family expenses | 32 | | Rule VI | | | Due Thomas Sharp, my clerk, for wages | 8 | | Rule VI | | | Due to the Royal Bank for interest | 2 11 | | Rule VI | |
Previous to the balancing of my books, I have taken an inventory of the goods in my shop and warehouse,
- 124 bolls meal, at 13s 6d. L. 83 14 - 474 fp. four-bank yarn, at 2s 47 8 - 40 stone iron, at 3s 4d 6 13 4 - 300 lb. clover feed, at 6d 7 10
L. 145 5 4
I value my house at 300
And my share of ship Hazard 140
L. 585 5 4
---
### JOURNAL
**Edinburgh, 18th April, 1789**
| Description | Amount | |-----------------------------------------------------------------------------|--------| | Proper expenses Dr. to Calicoes. For 5 yards taken for family use, at 3s 2d | -15 10 | | Jan Jonkheer Dr. to Royal Bank. For his bill on me 1 mdt. paid by them | -28 12 | | Ca/b Dr. to share of Ship Hazard. Received my proportion of profits on a voyage to Rotterdam | -33 | | Sundries Drs. to Ca/b. | | | Charges Merchandise. Paid small charges since Jan. 1. | L. 5 3 8 | | Proper Exp. Paid perf. and family charges | 32 | | Charges of Merchandise Dr. to Thomas Sharp, my clerk. Due him for wages | 8 | | Profit and Loss Dr. to Royal Bank. Due them for int | 2 11 | | Profit and Loss Dr. to Sundries, for articles of loss. | | | To Salt | L. 11 4 | | To Charges Merchandise | 13 14 2 | | To Proper Expences | 32 15 10 | | See § 54 | | | Sundries Drs to Profit and Loss, for articles of gain. | | | Meal | L. 9 18 | | Port-wine | 6 15 | | Paper | 4 18 6 | | Yarn | 2 3 2 | | Calicoes | 1 13 4 | | Diaper | 1 15 10 | | Iron | 2 7 11 | | Clover seed | 5 1 | | Lint seed | 18 | | Share of Ship Hazard | 23 | | Train oil | 8 |
Bal. Account Dr. to Sun. for articles belonging to me.
To Ca/b L. 8 3 10 To Meal. For 124 bolls, at 13s 6d 83 14 To Yarn. For 474 fp. at 2s 47 0 Amidling ½ spindle. To House in Lawnmarket 300 To James Bofwell 37 11 To Henry Hardy 31 2 6 To David Miller 18 To James Cuthbert 5 6 3 To Iron. For 40 stone at 3s 4d 6 13 4 To John Henderson 7 4 To William Hunter 18 13 6 To James Dalton 35 15 To Clover seed. For 300 lb. at 6d 7 10 Inlake 10 lb. To John Scott 4 7 6 To share of Ship Hazard 140 To George Gordon 6 3 4
757 12 3 **BOOK-KEEPING.**
**JOURNAL.**
*Edinburgh, 30th April 1789.*
| Description | Amount | |--------------------------------------------------|--------| | Sundries Drs. to Balance-account. | | | Meal, Outcome 3 bolls | | | Royal Bank | L.201 3 2 | | William Bruce | 20 | | Thomas Sharp | 8 | | | 229 3 2 | | Profit and Loss Dr. to Stock, for nett gain | 1613 | | Stock Dr. to Balance-account, for nett stock | 528 9 1 |
The next JOURNAL would begin thus:
**Sundries Drs. to Stock.**
| Description | Amount | |--------------------------------------------------|--------| | Cash on hand | L.8 3 1c | | Meal, For 124 bolls, at 13s | L.83 14 | | Yarn, For 474 sp. 4 hank, at 25 47 | 8 | | Iron, For 40 stone, at 3s 4d | 6 13 4 | | Clover-feed, For 300lb, at 6d | 7 10 | | | 145 5 4 |
House in Lawn-market Edinburgh, value
Share in Ship Hazard, For one-third
James Bofwell Edinburgh.
Due by him
Henry Hardy Glasgow.
David Miller Haddington.
James Cuthbert Leith.
John Henderson Edinburgh.
William Hunter Dunbar.
James Dalton Manchester.
John Scott Haughhead.
George Gordon Stirling.
Stock Dr. to Sundries.
To Royal Bank, Due them
To William Bruce; Leith. Due him
Thomas Sharp, my clerk.
| Description | Amount | |--------------------------------------------------|--------| | Sundries Drs. to Balance-account. | | | Meal, Outcome 3 bolls | | | Royal Bank | L.201 3 2 | | William Bruce | 20 | | Thomas Sharp | 8 | | | 229 3 2 |
VOL. IV. Part I. ### Dr. 1789
#### Stock
- Jan. 1 To Sundries, per J. - Apr. 30 To Balance-account for nett stock
#### Profit and Loss
- Mar. 4 To Thomas Pirie, discounted him - Apr. 17 To Cash, paid Tho. Smith interest - 30 To Royal Bank, for interest due them - To Sundries, per J. - To stock, for nett gain
#### Cash
- Jan. 1 To Stock on hand - 15 To Paper, for 5 reams, at 11s - 16 To Salt, in part, per J. - 22 To Sundries, for Hen. Hardy’s bill, with int. - Feb. 3 To James Cuthbert, in part - 16 To Sundries, per J. - 19 To Calicoes, for bal. of 100 yards, per J. - To Meal, for 30 bolls, at 13s 8d - 20 To Royal Bank, drawn on them - Mar. 4 To Thomas Pirie, in full - 17 To Clover-feed, in part, for 2 bags - 21 To Clover-feed, 120 lb. at 7½d - Apr. 2 To Sundries, per J. - 6 To Royal Bank, drawn on them - 14 To George Gordon, in part - 25 To Share of ship Hazard, for share profits, p. J.
#### Meal
- Jan. 1 To Stock on hand, at 13s - 30 To Sundries, per J. at 13s 2d - Mar. 2 To Cash, paid charges and loft-rent - Apr. 6 To Cash, per J. - 30 To profit and loss, for gain
#### Port-wine
- Jan. 2 To Stock on hand, at L. 15 - Feb. 19 To Calicoes, in barter - Apr. 30 To Profit and Loss, for gain
### Contra
#### Jan. 1789
- By Sundries, per J. - By Profit and Loss, for nett gain
#### Jan. 1789
- By Cash, received int. on Hen. Hardy’s bill - By Sundries, per J.
#### Jan. 1789
- By Calicoes, fur 106 yards, at 3s 2d - By William Nisbet, in full - By Royal Bank, paid them - By Yarn, in part, for 100 sp. four hank - By Meal, paid balance of 150 bolls - By Royal Bank, paid them - By Sundries, per J. - By Clover-feed, paid freight and charges - By Sundries paid Tho. Smith, with int. per J. - By Sundries, per J. - By William Ainflie, paid him - By Baillie and Bell, paid their bill on me ft. - By Sundries, for charges and expenses per J. - By Balance account
#### Jan. 1789
- By James Cuthbert, at 13s 3d - By Yarn, in barter, at 13s 6d - By Sundries, per J. - By Cash, at 13s 7d - By George Gordon, at 13s 8d - By Balance account at 13s 4d
#### Jan. 1789
- By Meal, in barter, at L.16 - By Baillie and Bell ### Dr. 1789
#### Jan.
- To Stock on hand, at 10s 6d
#### Apr.
- To Profit and Loss, for gain
#### Yarn,
| Spindles | Cr. | |----------|-----| | 4 H | 5 H | | 120 | 13 10 | | 500 | 47 18 | | 334½ | 33 9 | | 100 | 2 3 2 | | 834½ | 97 6 |
#### House in Lawn-Market,
- To Stock, for value
#### James Boswell merchant Edinburgh,
| Cr. | |-----| | 1789 | | 73 4 | | 18 | | 27 17 | | 11 10 | | 27 | | 147 11 |
#### Thomas Price writer Edinburgh,
- To Stock due by him per account
#### Henry Hardy merchant Glasgow,
- To Stock due by him per bill
#### David Miller manufacturer Haddington,
- To Stock due by him per receipt
#### Royal Bank of Scotland,
| Cr. | |-----| | 1789 | | 110c | | 110c | | 2 4c | | 5 20c | | 441 3 2 |
### Contra
#### Cr.
| R. | |----| | 1789 | | 36 15 | | 4 18 | | 6 | | 70 | | 41 13 | | 6 |
#### By Sundries per J.
#### By Yarn in barter, at 12s
#### By Charges Merchandise, for shop use
#### By Diaper, at 2s 4d
#### By James Bofwell, at 2s 3½d
#### By James Dalton, per J.
#### By Balance-account, at 2s
#### By Cash in part
#### By Royal Bank, paid in by him
#### By Balance
#### By Sundries in full, with discount, per J.
#### By Cash in full
#### By Balance-account
#### By Cash, drawn on them
#### By Stock due them per account
#### By Cash, drawn on them
#### By J. Jonkheer, for his bill paid them, p. J.
#### By Profit and Loss, for interest due them ### Thos. Smith merchant London
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Feb. 23 | To Cash, paid his bill on me at sight | | | Apr. 17 | To Cash, in full | |
### William Nifbet carpenter Leith
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. 16 | To Cash, paid him in full | |
### Calicoes
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | To Cash, at 3s 2d | | | Apr. | To Profit and Loss, for gain | |
### Ja. Cuthbert merchant Leith
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | To Meal, for 50 bolls at 13s 3d | | | Mar. | To Clover-feed, for 70lb. at 7½d | |
### Diaper
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | To Yarn in barter, at 1s 9d | | | Apr. | To Profit and Loss, for gain | |
### Salt
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | To William Bruce, at 1s 8d | | | Mar. | To Cash, paid charges and cellar rent | |
### William Bruce merchant Leith
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Feb. | To Cash in part | | | Apr. | To Balance-account | |
### Iron
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | To William Bruce, at 3s 4d | | | Apr. | To Profit and Loss, for gain | |
### Contra
| Date | Description | Amount | |--------|--------------------------------------------------|--------| | Jan. | By Stock, due him per account | | | Feb. | By Sundries, per J. at 3s 6d | | | Apr. | By proper Expences taken at 3s 2d | | | Feb. | By Cash in part | | | Apr. | By balance account | | | Jan. | By Sundries, per J. at 1s 9d | | | Feb. | By J. Boswell, for the rem. at 1s 8½d | | | Apr. | By Profit and Loss, Inlake | | | Jan. | By Sundries, per J. | | | Feb. | By James Boswell, at 4s 4½d | | | Mar. | By Baillie and Bell, at 3s 7d | | | Apr. | By Cash, at 3s 6½d | | | Apr. | By Balance-account, at 3s 4d | | ### Book-keeping
#### Jo. Henderson Stationer Edinburgh
| Dr. | Jan. 14 | To Paper, for 12 reams, at 12s | |-----|---------|--------------------------------| | | | 2 7 4 |
#### William Hunter Merchant Dunbar
| Dr. | Jan. 19 | To Salt, for balance of 150 bushels, per J. | |-----|---------|---------------------------------------------| | | | 3 3 2 6 |
#### Alex. Sharp Merchant Dundee
| Dr. | Feb. 23 | To Cash, in full | |-----|---------|------------------| | | | 1 3 2 8 |
#### Charges Merchandise
| Dr. | Feb. 10 | To Paper taken for shop-use, 1 ream | |-----|---------|------------------------------------| | | | 2 1 0 6 |
#### Baillie and Bell Borrowstounness
| Dr. | Feb. 19 | To Meal, for 52 bolts at 3s rod | |-----|---------|--------------------------------| | | | 1 3 5 19 |
#### James Dalton Manchester
| Dr. | Mar. 5 | To Yarn, for 360 spindles four hank, per J. | |-----|---------|--------------------------------------------| | | | 2 3 5 15 |
#### Clover-feed
| Dr. | Mar. 12 | To Sundries per J. for pr. cost and char. | |-----|---------|------------------------------------------| | | | 1 2 0 0 |
#### J. Jonkheer Merchant Rotterdam
| Dr. | Apr. 22 | To Ro. Bank, for his bill on me paid by them | |-----|---------|---------------------------------------------| | | | 2 2 8 12 |
#### Lint-feed
| Dr. | Mar. 17 | To Clover-feed, in barter, at 5s 3d | |-----|---------|-----------------------------------| | | | 2 4 5 10 |
#### Contra
| Cr. | By Balance-account | |-----|--------------------| | | 5 7 4 |
| Cr. | By Cash in full | |-----|-----------------| | | 1 3 2 6 |
| Cr. | By Balance-account | |-----|-------------------| | | 3 1 8 13 |
| Cr. | By Yarn, for balance of 300 spindles, per J. | |-----|---------------------------------------------| | | 2 3 2 18 |
| Cr. | By Profit and Loss | |-----|-------------------| | | 1 3 1 4 |
| Cr. | By William Ainslie, paid him by them | |-----|-------------------------------------| | | 5 1 1 7 |
| Cr. | By Balance account | |-----|-------------------| | | 5 3 5 15 |
| Cr. | By Sundries, per J. | |-----|---------------------| | | 4 0 0 12 |
| Cr. | By Sundries, per J. | |-----|---------------------| | | 3 3 0 10 |
| Cr. | By Cash, at 7½d | |-----|-----------------| | | 1 6 0 1 |
| Cr. | By Balance-account, at 6d | |-----|---------------------------| | | 3 0 0 5 |
| Cr. | Inlake | |-----|--------| | | 1 C |
| Cr. | By Clover-feed, for 6 bags, per J. | |-----|-----------------------------------| | | 6 2 8 12 |
| Cr. | By Cash | |-----|--------| | | 1 1 3 3 |
| Cr. | By George Gordon | |-----|-----------------| | | 1 5 3 5 |
| Hds. | 1 1 3 3 | |------|--------|
| Hds. | 1 5 3 5 | |------|--------|
| Hds. | 2 6 8 | |------|--------|
| Dr. | 2 | |-----|--------| | Date | Description | Dr. | Cr. | |------|-----------------------------------------------------------------------------|-----|-----| | Mar. 21 | John Scott farmer at Haughhead, To Clover-feed, for 140 lb. at 7½d | | | | Mar. 25 | Share of Ship Hazard, To William Ainflie, bought ¼ share for | | | | Apr. 30 | Profit and Loss | | | | Apr. 6 | William Ainflie merchant Alloa, To Sundries, per J. | | | | | To Baillie and Bell, for balance paid him for them | | | | Apr. 6 | Train oil, To Cash, at 22s | | | | | To Profit and Loss, for gain | | | | Apr. 14 | George Gordon merchant Stirling, To Sundries, per J. | | | | Apr. 18 | Proper expenses, To calicoes, for 5 yards, at 3s 2d | | | | | To Cash, for charges since 1st January | | | | Apr. 30 | Thomas Sharp, my clerk, To balance account | | | | Apr. 30 | Balance account, To Sundries, per J. | | |
| Date | Description | Dr. | Cr. | |------|-----------------------------------------------------------------------------|-----|-----| | Apr. 30 | Contra By Balance-account | | | | Apr. 30 | Contra By Cash, for share profit of a voyage to Rot. | | | | Apr. 25 | Contra By share of Ship Hazard, for ¼ bt. from him | | | | Apr. 11 | Contra By James Boswell, at 27s | | | | | By George Gordon, at 28s | | | | Apr. 14 | Contra By Cash in part | | | | | By Balance-account | | | | Apr. 30 | Contra By Profit and Loss | | | | Apr. 30 | Contra By Charges Merchandise, due him for wages | | | | Apr. 30 | Contra By Sundries, per J. | | | | | By Stock | | |
TRIAL ## TRIAL-BALANCE
| Dr. | Cr. | |----------------------|---------| | **1** Stock | L.312 7 3 | L.824 2 8 | | Profit and Loss | 4 4 10 | 2 10 - | | Cash | 499 15 11| 591 12 1 | | **2** Meal | L.277 14 8 | L.916 8 - | | Port wine | 104 10 | 111 5 - | | Paper | 36 15 | 41 13 6 | | Yarn | 94 17 4 | 49 12 6 | | House in Edinburgh | 300 - | - | | | 813 17 | 456 9 8 | | **3** James Boswell | L.247 11 | L.110 - | | Henry Hardie | 31 2 6 | - | | David Miller | 18 - | - | | Royal Bank | 140 - | 441 3 2 | | | 436 13 6 | 551 3 2 | | **4** Calicoes | L.16 12 6 | L.18 5 10 | | James Cuthbert | 35 6 3 | 30 - | | Diaper | 7 - | 7 15 10 | | Salt | 17 15 10 | 17 4 6 | | | 76 14 7 | 73 6 2 | | **5** Iron | L.53 6 8 | L.49 1 3 | | William Bruce | 50 - | 70 - | | 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 | L. - | | Clover-feed | 29 17 | 27 7 1 | | Flax-feed | 5 10 | 6 8 | | John Scott | 4 7 6 | - | | Share of Ship Hazard | 150 - | 33 - | | | 225 9 6 | 66 15 1 | | **7** Train oil | L.33 - | L.41 - | | George Gordon | 41 3 4 | 35 - | | Proper Expenses | 32 15 10 | 8 - | | Thomas Sharp | - | - | | | 106 19 2 | 84 - | | | L.2719 - | L.2719 - |
COMPU- ## BOOK-KEEPING.
### COMPUTATIONS.
| Dr. | Cr. | |-----|-----| | Cash | L.599 15 11 L.591 12 1 | | 591 12 1 | 4 Salt | | L. 8 3 10 |
| Dr. | Cr. | |-----|-----| | 2 Meal | L.277 14 8 L.203 18 8 | | Dr. 420 bolls | 83 14 | | Cr. 299 | L.83 14 | | 121 | L.287 12 8 | | 124 | 277 14 8 | | Profit | L. 9 18 | | 3 outcome Port wine | 40 | | Paper | L.104 10 — L.111 5 | | Profit | L. 6 15 | | L. 36 15 — L. 41 13 6 | | Yarn | L. 4 18 6 | | Spindles | L. 94 17 4 L. 49 12 6 | | 34½ 120 | 47 8 | | 360 120 | L. 91 — 6 | | 474½ | 94 17 4 | | Amassing ¼ | 10 inlake | | House in Edinburgh | L.300 — | | 3 Ja. Boswell | L.147 11 — L.110 — | | Henry Hardy | L. 27 11 | | David Miller | L. 31 2 6 | | Royal Bank | L. 18 — | | L.240 — L.441 3 2 | | L.201 3 2 | 7 Train-oil | | 4 Calicoes | L. 16 12 6 L. 18 5 10 | | Profit | L. 1 13 4 | | J. Cuthbert | L. 35 6 3 | | Diaper | L. 5 6 3 | | L. 7 — L. 7 15 10 | | Profit | L. — 15 10 |
| Dr. | Cr. | |-----|-----| | 5 William Bruce | L. 50 — L. 70 — | | Iron | L. 20 — | | L. 53 6 8 L.49 1 3 | | 320 stone | L. 6 13 4 | | 280 | L. 55 14 7 | | Profit | L. 2 7 11 | | J. Henderson | L. 7 4 — | | W. Hunter | L. 18 13 6 | | Char. Merchan. | L. 13 14 2 lofs | | 6 Ja. Dalton | L. 35 15 — | | Clover-feed | L. 29 17 — L. 27 7 1 | | 1200 lb. | L. 7 10 | | L. 34 17 — | | 29 17 | Profit L. 5 — | | L. 5 10 — L. 6 8 — | | 5 10 | Profit L. 18 — | | L. 4 7 6 | L.150 — — | | 33 — | L.140 — — | | L.173 — — | | 150 — | Profit L. 23 — | | L. 33 — — L. 41 — | | 33 — | Profit L. 8 — | | L. 41 3 4 L. 35 — — | | 35 — | L. 6 3 4 | | L. 32 15 10 lofs | L. 8 — | | STOCK Balance | L.312 7 3 L.824 2 8 | | 528 9 1 prof.16 13 8 | | L.840 16 4 L.840 16 4 |
**PROFIT** ## PROFIT AND LOSS SHEET.
| Item | Amount | |-------------------------------|--------| | Salt | L. 11 4 | | Charges Merchandise | 13 14 2 | | Proper Expences | 32 15 10 | | | L. 47 1 4 | | In Leger | 4 4 10 | | | L. 51 6 2 | | Nett gain | 16 13 8 | | | L. 67 19 10 |
| Item | 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 | | | L. 65 9 10 | | In Leger | 2 10 | | | L. 67 19 10 |
## BALANCE-SHEET.
| Item | Amount | |-------------------------------|--------| | Cash | L. 8 3 10 | | Meal, 124 b. at 13s 4d | 83 14 | | Yarn, 47 4 fp. at 2s | 47 8 | | Amifling | 8 | | House in Edinburgh | 300 | | James Boswell | 37 11 | | Henry Hardy | 31 2 6 | | David Miller | 18 | | J. Cuthbert | 5 6 3 | | Iron, 40 ftone, 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 | 528 9 1 | | | L. 757 12 3 |
| Item | Amount | |-------------------------------|--------| | Royal Bank | L. 201 3 2 | | William Bruce | 20 | | Thomas Sharp | 8 | | | L. 229 3 2 | | STOCK | 528 9 1 | | | 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 merchants accounts may be kept by the Wafto-book, Journal, and Leger, alone; yet men of great business find it convenient, either for abridging their, or for other ends, to use some others, generally called Subsidiary or Subservient Books; the most common of which are the 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 creditor 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 contrasted 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, craneage, 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 carried to the credit-side of the cash-book.
3. Book of House-expence. This book is also paged, and designed likewise to ease the cash-book. It contains all disbursements for family provisions, servants' 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 are posted, from the wafto-book, the particular sales of every consigned cargo; by which means the several articles of a sale, that lie scattered in the wafto-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 car-
go 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 consequence 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 is at, 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 wafto-book, or book 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.
New Method of Book-keeping by Mr Jones.
A new method of keeping books, entitled the English System of Book-keeping, has been proposed by Mr Edward Thomas Jones of Bristol, for which a patent was granted in January 1796.
Three books are required in the English system of book-keeping, viz. a Day-book or Journal, an Alphabet, and a leger. The day-book must have three columns on each page; one of which to receive the amount of debits A new method of debits and credits; one column to receive the debits only; and one column to receive the credits only; or it may be ruled with only two columns on each page, one of which to receive the amount of the debits, and the other to receive the amount of the credits. On each page of the day-book, there must also be four other columns ruled, two on the left side next the amount of the debits, and two on the right side next the amount of the credits. These columns are intended for receiving the letter or mark of posting, and the page of the ledger to which each amount is to be posted. It is not necessary that the alphabet be ruled, but it must contain the name of every account in the ledger, the letter annexed to it as a mark of posting, and the page of the ledger. The ledger is to be ruled with three, four, five, or seven columns on each page, as may be most agreeable, for receiving the amounts of the transactions which are entered in the day-book. The plan of making up books of accounts, according to this system is the following:
When a person begins trade, either as an individual or in company, he must open an account with himself in the ledger. He must first enter in the day-book, and then to the credit of his account in the ledger, the amount of the property which he has advanced into the trade. His name only may be placed at the head of the account, or it may be called stock-account.
When goods are purchased, give the person credit of whom they are bought; when goods are sold, debit the person to whom they are sold. When you pay money, debit the person to whom it is paid, not only for the amount you pay, but also for any discount or abatement that may be allowed, and give the cashier credit for the neat amount paid. When money is received, credit the person of whom it is received, not only for what he pays, but also for any discount you have allowed, and debit the cashier for the neat sum received. In these entries a plain narrative of the fact should only be introduced. Technical phrases, excepting the terms debit and credit should be avoided. These are the only terms applicable to every transaction, and may be affixed to every entry.
In the hurry of business, entries may be made to the debit instead of the credit of an account in the day-book, and vice versa. To obviate this evil, Mr Jones proposes to have only one column for receiving the amount of every transaction, whether debit or credit, at the time of making the entry; and that the debits may be conveniently separated from the credits, previous to posting, which is necessary to prevent confusion, he has two other columns in the same page; the column on the left side receives the amount of every debit, and the column on the right side receives the amount of every credit. These columns must be cast up once a month. The column of debits and credits of itself forms one amount; the column of debits forms a second amount; and the column of credits a third amount. The second and third amounts, when added together, it is plain, must agree with the first amount, which includes both the debits and credits, otherwise there must be some error, either in making the entry or in the addition.
In this manner the accountant may obtain an accurate statement of the transactions recorded in his books for every month, which will show how much he owes for that month, and how much is owing to him; and by subtracting the amount of the credit from the whole amount of the debits for any given time, with the value of the stock of goods on hand, the profits of the trade for that period will at once appear.
The next part of the operation in this system is that of posting. An account is opened in the ledger with every person to whose debit or credit an entry has been made in the day-book; and to each account a letter is affixed, which is to be used as a mark of posting. The name of the person, his place of abode, and the folio of the ledger, must then be entered in the alphabet, with the same letter prefixed to each name, as is affixed to the account in the ledger. The next step of the process is to affix to each amount in the day-book in the column for that purpose, the page of the ledger on which each account is opened. This will be seen in the alphabet. The date and amount of each debit are then to be posted in the proper columns in the ledger, on the left or debit side of that account to which it relates; taking care to enter as a mark of posting in the day-book, against each amount, the same letter that is affixed to the account in the ledger to which said amount may be posted. The debits of January, February, March, &c., it is to be observed, must be posted into the column for those months in the ledger, and the credits must also be posted in like manner, each account being filled up in the centre, at the expiration of every month, with the whole amount of the month's transactions. Thus may the whole statement of each person's account for the year be included in a small space. The columns to the right and left contain the separate amount of each transaction. The column in the centre exhibits a monthly statement.
Having thrown in what manner the entries are to be made and carried through the different books, according to this system; the next thing is to describe the method of examining them, so as to ascertain with certainty their accuracy; and not only to discover if each transaction has been correctly posted, with regard to its amount, but also that it has been rightly entered to the debit or credit of its proper account. The mode of examination proposed by this system is different from those which have been hitherto practised, both in expedition and accuracy. All that is necessary is to add together the different sums in the debit and credit columns, through the ledger; and the amount of these columns, if right, must agree with the columns in the day-book for the same period. This examination should take place once every month; and if the amounts do not agree, the posting must be called over, and when the time allotted to each column of the ledger, whether it be for one or more months, has expired, the amount of each column should be put at the bottom of the first page, and carried forward to the bottom of the next, and so on to the end of the accounts. The amount in the day-book for each month's transactions, must be brought into one gross amount for the same time.
But this process, although it proves that the ledger contains the whole contents of the day-book, is not to be considered as complete without some mode of ascertaining if each entry be posted to the right account. To discover this the following method is adopted. It is to be admitted as a rule, that a letter, which may be used.
A new method, fixed to each account in the ledger, and the same letter prefixed to the names in the alphabet. These letters are to be used as marks in posting, and affixed to each account in the day-book as it is posted. It is therefore only necessary to compare and see that the letter affixed to each entry in the day-book is the same as that which is prefixed to the same name in the alphabet. If there be no difference, it must be right, otherwise there must be some error.
When the accounts are to be balanced at the end of the year, or at any other time, if the profits of the trade are to be stated in the books, the value of the stock of goods on hand at prime cost, either in one sum, or by specifying the amount of every article, may be entered in the day-book, and an account opened for it in the ledger, to the debit of which it is to be posted. The casting up of the ledger is then to be completed; and when it is found to agree with the day-book, and the amount placed at the bottom of each column, subtract the credits from the debits, and the difference will show the profit of the trade; but if the credits be the greater amount, then a loss has followed. To avoid error in taking off the balances of the ledger, one rule must be observed. First, find out the difference between the whole amounts of the credits and debits on each page for the year, with which the differences of the outstanding balances of the several accounts on each page must exactly agree, otherwise the balances have not been taken right. Proceeding in this way every page will be proved, and the balances of any number of ledgers, according to this plan, cannot be taken off wrong without being observed.