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Full text of "Bookkeeping; complete course"

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BOOKKEEPING 

COMPLETE COURSE 



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GEORGE W. MINER. 



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L H'5 BOOKKEKPING. Sheet 1 

INTRODUCTORY TO IJUSI :riCE.(?accb 

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MOORE AND MINER SERIES 



BOOKKEEPING 



COMPLETE COURSE 



BY 

GEORGE W. MINER 



GINN AND COMPANY 

BOSTON • NEW YORK • CHICAGO • LONDON 






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fVti.-i 



COPYRIGHT, 1902, BY 
JOHN H. MOORE and GEORGE W. MINER 



COPYRIGHT, 1912, BY 
GEORGE W. MINER 



ALL RIGHTS RESERVED 
913.10 

EDUCATION DEWc 



<C6e fltftcngnm greg< 

GINN AND COMPANY • PRO- 
PRIETORS • BOSTON • U.S.A. 



PEE FACE 



The plan of this work on Bookkeeping is simple yet comprehensive, 
and the work is graded and developed with a view to interesting the 
student and imparting to him a knowledge of the subject that will have 
both an educational and a practical value. 

Nearly all entries in bookkeeping are simple in character, and this 
fact is emphasized in the exercises and sets herein given. To cultivate 
self-reliance many reviews are included. These reviews are so arranged 
that the student does the work without assistance. The chief object is 
to enable him to master the principles of bookkeeping, and then the 
application of these principles to the various problems that may arise in 
business is not difficult. 

Business forms are provided for a number of practice sets. This por- 
tion of the work is of an elastic character and may be used according to 
the time allotted to the study of bookkeeping, the requirements of the 
course of study, or the inclination of the instructor. 

The author acknowledges his profound obligations to his friend, part- 
ner, and coworker, the late John H. Moore. 

The following persons read either the manuscript or the proof sheets, 
and the helpful criticisms and suggestions they made have contributed 
greatly to the value of the work : Henry R. Hatfield, Professor of Ac- 
counting, University of California; Stephen W. Oilman, Professor of 
Business Administration, University of Wisconsin ; William M. Cole, 
Assistant Professor of Accounting, Harvard University ; Joseph F. John- 
son, Dean of the School of Commerce, Accounts, and Finance, New York 
University ; Charles C. Jones, Principal of the Commercial Department, 
High School, Dunkirk, New York ; Albert G. Belding, First Assistant, 
Far Rockaway High School, New York City ; Myron F. Palmer, Prin- 
cipal Bay Path Institute, Springfield, Massachusetts ; Elizabeth F. 
Atwood, Commercial Department, High School, Westfield, Massa- 
chusetts; Elizabeth Campbell, Commercial Department, High School, 
Somerville, Massachusetts., 

Business men, bookkeepers, and accountants have also been consulted 
freely regarding many features of this text, and their practical sugges- 
tions have, added to the working value of the book. A part of this text 
is developed from "Accounting and Business Practice." 

541972 



CONTENTS 

PART I. INTRODUCTORY COURSE 

PAGE 

INTRODUCTION 1 

.SCRIPT FORMS AND MODELS 6 

,^ FUNDAMENTAL PRINCIPLES 7 

% FORMS OF STATEMENTS 39 

SET I. RETAIL FUEL AND FEED BUSINESS 41 

SET 11. WHOLESALE CARPET BUSINESS 61 

LABOR-SAVING DEVICES 58 

INTRODUCTION TO BUSINESS PRACTICE 67 

SET III. GRAIN AND SEED BUSINESS. MARCH 80 

INDORSEMENTS 89 

SET III. GRAIN AND SEED BUSINESS. APRIL 91 

SET IV. GENERAL HARDWARE BUSINESS. MAY 99 

SET IV. GENERAL HARDWARE BUSINESS. JUNE 107 

/commercial drafts 116 

^ SUGGESTIONS FOR BUSINESS CORRESPONDENCE 125 

PART II. INTERMEDIATE COURSE 

COMMERCIAL DRAFTS 127 

SET V. JOBBING FURNITURE BUSINESS 140 

BILLS OF LADING 159 

PARTNERSHIP 181 

SET VI. WHOLESALE GROCERY BUSINESS 201 

PART III. ADVANCED COURSE 

SET VII. DRY-GOODS BUSINESS .^T^TT" " 249 

DEPRECIATION 293 

CORPORATIONS AND KINDRED ORGANIZATIONS 297 

SET VIII. MANUFACTURING BUSINESS • 313 

APPENDIX A. SINGLE ENTRY i 

APPENDIX B. DEFINITIONS AND EXPLANATIONS xi 

APPENDIX C. LOOSE-LEAF METHODS AND FILING DEVICES . xiv 

APPENDIX D. COMMERCIAL TERMS DEFINED xvi 

APPENDIX E. ABBREVIATIONS AND GENERAL TERMS , xix 

APPENDIX F. FORMS AND LEGAL DOCUMENTS xxi 

INDEX , . . , , . . t X3:ix 



LIST OF EXERCISES 



PAGES 

Model Script Set 2-5 

Exercise 1. Business Transactions Explained 7 

Exercises 2-5. Elementary Journalizing 8-10 

Exercise 6. Terms Explained 11 

Exercise 7. Classifying Debits and Credits . , 11-12 

Exercise 8. Suggestions for Ruling 13 

Exercise 9. Set A (Model Set). General Merchandise 13-14 

Exercise 10. Analysis of the Model Journal 15 

Exercise 11. Summary of Principles 15-16 

Exercise 12. Copying the Model Journal 16 

Exercise 13. Directions for Posting 16-17 

Exercise 14. Analysis of the Model Ledger 18 

Exercise 15. Trial Balance of the Model Ledger 18 

Exercise 16. Posting the Model Journal; Rechecking ." . 19 

Exercises 17-20. Journalizing 20-21 

Exercise 21. Set B. Furniture 21-22 

Exercise 22. Set C. Grain and Seed 22-24 

Exercises 23-24. Classification of Accounts 24-26 

Exercise 25. Terms Defined and Explained 27 

Exercise 26. Trial Balances for Statements 28 

Exercise 27. Making Statements 29 

Exercise 28. Rulings for closing the Ledger 30 

Exercises 29-32. Closing the Ledger 30-36 

Exercise 33. Set D. Hardware 37-38 

Exercise 34. Correction of Errors 38-39 

Exercise 35. A Written Review 45-49 

Exercise 36. A Written Revieav 54-58 

Exercise 37. Set E (Model Set). Flour and Grain 58-61 

Exercise 38. Set F. Coal and Wood 61-62 

Model Script Set 63-67 

Exercise 39. Transactions with a Bank 74 

Exercise 40. Business Forms 74-78 

Exercise 41. The Trial Balance 79 

Exercise 42. A Written Review 89 

Exercise 43. A Written Review 95-96 

Exercise 44. Interest and Discount 96-97 

Exercise 45. Interest and Discount Entries 97 



LIST OF EXERCISES 

PAGES 

Exercise 46. Compound Entries 98 

Exercise 47. A Written Review 106 

Exercise 48. A Written Review 112 

Exercise 49. Set G. Grain 112-114 

Exercise 50. Consignments 114-116 

Exercise 51. Writing Drafts 120-122 

Exercise 52. Bank Drafts, Oral Work 125 

Exercise 53. A Written Review of Sight Drafts 127 

Exercise 54. For Written Work, Drafts 133 

Exercise 55. For Oral Work, Drafts 134 

Exercise 56. A Written Review, Drafts 135 

Exercise 57. Opening Double-Entry Books 136 

Exercise 58. A Written Review 179 

Exercise 59. A Written Review 197 

Exercise 60. A Written Review 230 

Exercise 61. A Written Review 246 

Exercise 62. Set H. Carpets 246 

Exercise 63. A Written Review . 276 

Exercise 64. A Written Review 295 

Exercises 65-66. Opening Entries in Cokpouation Bookkeeping .... 301, 307 



BOOKKEEPII^G 

PART I. INTRODUCTOKY WORK 

INTRODUCTION 

1. It is of first importance that the student should begin his work in 
accounts at some point where knowledge of his own is readily associated 
with that systematic arrangement of the record of business transactions 
termed Bookkeeping. The unknown must come into definite contact with 
the known if the mmd of the learner is to be led step by step to larger 
understanding. Students who know nothing of accounts are often very 
familiar with the buying of household articles, and understand that they 
get one value by giving some other value in return. The starting point 
in this text treats of the giving and the receiving of values, and this 
feature is developed by a series of graded exercises. 

2. The ability to apply a principle is always of positive value ; for 
this reason, in the body of the text, terms are described and applied 
rather than defined. However, for the accommodation of those instruc- 
tors who wish formal definitions, an appendix is given in which terms 
are defined. 

3. A script model set is given, worked out in all details, using the 
journal and the ledger, and the results and the condition of the business 
are fully shown. Later, when the cashbook, the purchase book, and the 
sales book are introduced, another script set is given for the student's 
direction. 

4. The oral exercises include a large number of entries which cover an 
extensive variety of transactions. They afford material for study, for 
class discussion, and for instruction in the principles of bookkeeping. 

5. At the close of each set, reviews are given which provide differ- 
ent kinds of work. In these reviews, the text gives the student no aid, 
but he has an opportunity to test independently the knowledge he has 
gained. Some of these review exercises have sufficient data for a com- 
plete set. 

6. The first exercise in the student's work is found on page 7. 

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THE SCRIPT FORMS AND MODELS 

In connection with the student's prehminary work he is directed to 
write some of the script forms given on preceding pages. These forms 
represent the highest excellence in penmanship and may serve as models 
in writing for the student. The plan, statement, and arrangement of 
these models may be a guide to the student in all his work throughout 
the book. The method of placing matter on the page and the complete- 
ness of explanations are parts of high-grade bookkeeping. 

While writing these models the student is learning how to place busi- 
ness transactions on the written page in the most approved manner. Busi- 
ness records are not only valuable when made, but may be of especial 
importance years hence ; therefore it is necessary that the statements be 
clear not only to the writer but to any person who may have occasion 
to examine them at any future time. If books are introduced into court 
as evidence, the explanatory part of the records is often the most impor- 
tant. It is the experience of attorneys that very few books of record 
that are brought into court have any value as evidence, because of the 
incompleteness of the explanatory matter. If explanations are not made 
clearly, a cbrrect entry is of little value as conclusive evidence. 

Erasures are not to be tolerated, as they not only spoil the neatness of 
the page, but often make entries look suspicious. 



FUNDAMENTAL PRINCIPLES 

EXERCISE 1 

For Oral Work 

*^ 

A Business Transaction is an exchange of values ; that is, the giving of 
one value in return for another. 

A bought of B 20 T. coal at |5 per ton, and paid the money for it. 
Name the two values in this transaction. Which value did A receive ? 
Which value did he give ? 

A sold to C 2 T. coal at |6 per ton, and received the money for it. 
Name the two values in this transaction. Which value did A receive ? 
Which value did he give ? 

Each of the above transactions is an exchange of values. In the first, A receives 
value, 20 T. coal, and gives value, $100 in money. In the second, A receives value, $12 
in money, and gives value, 2 T. coal. 

A merchant sold a pair of shoes for $4 ; the value received by him 
was $4^ and the value given was a pair of shoes. 

A man sold a horse for $100 ; the value received by him was $100^ 
and the value given was the horse. 

A doctor occupied a suite of rooms which belonged to another man, 
for the use of which he paid the owner at the end of one month $50 ; 
the value received by the doctor was the use of the rooms, and the value 
given was ^dO. 

A grocer sold John Bell a barrel of flour for |6, which was to be paid 
for in 10 da., a sale on credit or on account; the value received by the 
grocer was the expressed or implied promise of the customer to pay the 
bill in 10 da., and the value given was the barrel of flour. 

A manufacturer paid B $2 for shoveling snow off his sidewalks ; the 
value received by the manufacturer was the services of B, and the value 
given was #^. 

C borrowed $100 of D, and at the end of 6 mo. paid $3 for the use 
of the money to date ; the value received by C was the use of $100 for 
6 mo., and the value given was $3. 

Henry Brown bought a suit of clothes of his tailor for which he paid 
$40 ; the value received by Brown was the suit of clothes, and the value 
given was $40. 

These represent business transactions, for they show that for every value received 
a value was given. 

7 



8 BOOKKEEPING 

EXERCISE 2 

EoR Oral Work 

These items represent the transactions of a merchant, Edward M. 
Brown, for several days. Name the value received and the value parted 
with in each transaction. 

Feh 1, Bought of A. R. Dean for cash, 500 bu. wheat at |1. 
2, Sold Fred S. Lay for cash, 100 bu. wheat at ^1.15. 

5. Bought of John Barr for cash, 50 bu. beans at $3. 
4. Sold Bell Bros, for cash, 30 bu. beans at |3.50. 

6. Bought of H. A. Leary for cash, a set of ofi&ce books for |15. 

This item is called Expense because the supplies were bought to be consumed, 
not to be sold, — an expenditure to carry on the business. 

6. Bought of Thos. M. Day for cash, 200 bu. millet at |1. 
6. Sold S. A. Allen for cash, 100 bu. millet at |1.30. 

8. Paid John Race, a carpenter, cash for repair work, $6. 

9. Bought a delivery wagon of A. R. Meek for cash, |55. 

10. Bought a horse of James Crow for cash, |75. 

11. Sold J. H. Morse for cash, 200 bu. wheat at |1.15. 

12. Bought of Arthur Way 60 bu. beans at |3, and agreed to pay 
for them in 10 da. 

In this transaction the value received is the 60 bu. beans, and the value parted 
with is the stated or implied promise to pay for them in 10 da. 

13. Sold Isaac Mason 40 bu. beans at $3.50, and he agreed to pay for 
them in 15 da. 

15. Gave John Weeks, a clerk, cash, $10, 

EXERCISE 3 

PoR Written Work 

Take a sheet of paper and draw a line through the middle of the 
page from the top to the bottom. On the left side of this line write the 
technical name of the value received, and on the right side of the line 
write the teclmical name of the value parted with, for each transaction 
in Exercise 2. 

The technical term applied to goods bought to be sold is Merchandise ; 
to any expenditure to carry on the business. Expense; to all forms of 
money, and business papers which pass as money, Cash. 

Cash includes gold, silver, paper money, checks, bank drafts, money ordeis, etc. 



FUNDAMENTAL PRINCIPLES 9 

Expense may include rent, fuel, lighting, clerk hire, postage, stationery, adver- 
tising, and the like. 

AVhen there is an expenditure to carry on the business, such as the payment of 
money for rent, the value received is entered under the name Expense. 

Items of Feb. 1, 2, 8, and 12 will appear as follows, in the order named: 



Mdse. 
Cash 
Expense 
Mdse. 



$500 


Cash 


115 


Mdse. 


6 


Cash 


180 


Arthur Way 


EXERCISE 4 


Written Work 



1500 

115 

6 

180 



This exercise is to be worked out in the same form as the preceding 
one; that is, the names and the amounts of the values received and 
parted with are to be placed respectively on the left and right sides of 
a perpendicular line. As a review, the exercise may be used first orally. 

These items represent the transactions of a merchant, Richard S. Rowe, 
for several days. 

March 1. Bought of J. N. Osborn for cash, 60 yd. velvet carpet at |1. 

2, Sold Allan Dale for cash, 25 yd. velvet carpet at |1.20. 

3. Paid Henry A. Milton cash, for rent of the store for 1 mo., |28. 

A receipt similar to the one illustrated herewith would be received by Rowe from 
Milton. 



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4. Bought of Wm. Jackson for cash, 100 yd. Brussels carpet at f 1.25. 
d. Sold John Welton for cash, 40 yd. Brussels carpet at $1.50. 
6. Bought of John Lane, on account, 20 Smyrna rugs at |3.75. 

On the right side of the line write John Lane, because the promise was given to him. 
In this transaction, on account means that the goods bought are to be paid for at 
some future time. 



10 BOOKKEEPING 

March 6, Sold John Drew, on account, 10 Smyrna rugs at $4.75. 

On the left side of the line write John Drew, because the promise was received 
from him. 

8. Sold Ira Hicks for cash, 5 Smyrna rugs at $5. 

9. Bought of D. K. Pearson for cash, 100 yd. ingrain carpet at 70^. 

10. Paid John Lane cash, to apply on account, |50. 

On the left side of the line write John Lane, because the promise given was redeemed. 
In this transaction, to apply on account means that only a part of what was owed 
was paid. 

11. Sold A. L. Derby for cash, 50 yd. ingrain carpet at 85^. 

12. Received of John Drew cash, to apply on account, $25. 

On the right side of the line write John Drew, because he redeemed his promise. 

13. Bought of Harry Lucas for cash, office books and stationery, $12. 
13. Bought of A. F. Service for cash, 200 yd. matting at 45^. 

15. Sold Harvey Oilman for cash, 100 yd. matting at 60^. 

16. Bought of Harvey Pease for cash, 3 T. coal for office use at $6. 

17. Sold John L. Smith for cash, 50 yd. matting at 58(^. 

18. Sold Albert Owen, on account, 40 yd. matting at 63^. 

19. Bought of Amos Oibson, on account, 100 yd. velvet carpet at $1. 

20. Sold Lester Ford for cash, 25 yd. velvet carpet at $1.40. 

22. Paid Amos Oibson cash, to apply on account, $75. 

23. Received of Albert Owen cash, in full of account, $25.20. 

In full of account means that all that was owed on a given account was paid. 



EXERCISE 5 

For Written Work 

In this exercise use the same form as in Exercises 2 and 4. As a 
review, the exercise may be used first orally. 

These items represent the transactions of a merchant, James A. 
Murphy, for several days. 

April 1. Bought of Ball & Son for cash, 200 bbl. flour at $5. 

2. Sold Henry Allen for cash, 100 bbl. flour at $6.50. 

3. Paid John Weeks cash, for rent of the store for 1 mo., $50. 

4. Bought of Hunt & Co., at 10 da., 500 bu. wheat at 95^. 
At 10 da. means on account, to be paid in 10 da. 

6. Sold Powell & Co., at 10 da., 300 bu. wheat at $1.10. 
6. Sold Lane & Son for cash, 50 bbl. flour at $6.50. 



FUNDAMENTAL PRINCIPLES 11 

April 6. Bought of Harper & Co. for cash, 5 T. coal for office use 
at *6. 

8. Sold Lee & Sampson for cash, 100 bu. wheat at |1.08. 

9, Bought of Field & Co. for cash, 1 office safe for |65. 

Transactions for April 9 and 10 may be treated as Expense items. 

10. Bought of Derby Desk Co. for cash, 1 office desk for |35. 

11, Bought of Wright Bros, for cash, 600 bu. corn at 50<f. 
m Sold Elder & Co. for cash, 50 bu. wheat at $1.05. 

15. Paid Hunt & Co. cash, for the amount of the bill of April 4. 

Id. Received of Powell & Co. cash, for the amount of the bill of 
April 5. 

16, Paid John Atlin, a clerk, cash, |10. 



EXERCISE 6 

TERMS EXPLAINED 

All items at the left of the perpendicular line, in the preceding exer- 
cises, are debits, and all items at the right are credits ; hence 

Debits represent values received, and Credits values parted with. 

A systematic classification of debits and credits in business trans- 
actions is called Journalizing. 

A person who owes a debt is called a Debtor; a person to whom a 
debt is owed, a Creditor. 

A Debit is an amount due the business, or the amount of a thing or 
a service received ; a Credit is an amount owed by the business, or the 
amount of a thing or a service given. 

By universal custom, the left-hand side of an account is the Debit side, 
and the right-hand side the Credit side. 

As an oral exercise, go over all the transactions in Exercises 2, 4, 
and 5, and classify the values received and parted with as debits and 
credits. 

EXERCISE 7 

For Written Work 

These items represent the transactions of a merchant, Wm. L. Martin, 
for several days. Classify the values as debits and credits. 

May 1. Bought of Brown Bros., on account, 1000 bu. wheat at Jl. 

2. Bought of Taylor & Co., at 10 da., 1000 bu. com at 45^. 

3. Sold Henry Smith, at 15 da., 200 bu. wheat at $1.20. 



12 BOOKKEEPING 

The technical term for my written promise to pay money to another 
is, on my books, Bills Payable ; for his written promise to pay me. Bills 
Receivable. 

Some instructors prefer to use the terms Notes Payable and Notes Receivable. 
There is no objection to the use of these terms. 

The following Promissory Note would be classified as Bills Payable by Henry W. 
Sherman, and as Bills Receivable by Morgan, Taylor & Co. 



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Value received 



May 4. Gave Brown Bros, a note at 5 da., for $500. 

Who received value in this transaction ? What is the name of the value parted 
with? 

5. Received of Henry Smith his note at 5 da., for |240. 
What value was received in this transaction ? To whom was value given ? 

6. Sold James W. Hills for cash, 400 bu. corn at 55(^. 

6. Paid H. S. Crane cash, for rent of the store for 1 mo., |50. 

8. Bought of James B. Williams, on account, 1000 bu. oats at 40(^. 

9. Paid Brown Bros, cash, for a note due to-day, $500. 

The name of the value given in the transaction of May 4 is here the name 
of the value redeemed. 

10. Received of Henry Smith cash, for his note due to-day, $240. 

The name of the value received in the transaction of May 5 is here the namB 
of the value parted with. 

11. Sold Wm. Jones, on account, 500 bu. oats at 50(^. 

12. Bought of Lacey & Son for cash, 2 T. coal, to be used for heating 
the store, at $5. 

IS. Received of Wm. Jones cash, to apply on account, $100. 

13. Paid James B. Williams cash, to apply on account, $250. 
15. Paid Mary A. Brown, a clerk, cash, $20. 



FUNDAMENTAL PRINCIPLES 13 

EXERCISE 8 

SUGGESTIONS FOR RULING 

Good mechanical work is essential in bookkeeping. If good results 
are to be secured, the pen, the ruler, and the blotter must be used in 
the right way. 

Use red ink for all ruling ; always have a blotter at hand ; use a 
medium pen, not too fine; dip the pen in the ink lightly; avoid getting 
ink on the ruler. 

Use ordinary writing paper, ruled; sit facing the desk squarely; place 
the paper directly in front of you. 

Place the beveled edge of the ruler just below the first ruled line on 
the page ; keep the point of the pen away from the ruler. Draw a line 
across the page, keeping the pen on the ruled line, as follows : 

Do not lift the pen until the line is finished. Continue this ruling 
until you have ruled a red line on every blue line of the page. 

Now rule lines between the ruled lines of the page just finished. 

Use a second sheet of paper for ruling double lines. Draw a single red 
line on the blue line ; without moving the ruler draw a second red line 
just underneath the first. You now have parallel lines across the page. 

Parallel lines : ' 

In ruling parallel lines the position of the ruler is not changed, but 
the hand is pressed slightly forward. 

Repeat the parallel ruling until both sides of the sheet have been 
ruled, then rule parallel lines between the lines already ruled. 

This exercise in ruling should be repeated from day to day until good 
results are secured. 



EXERCISE 9 

SET A (MODEL SET). GENERAL MERCHANDISE 

On pages 2 to 5 is a model set, in script, complete in every detail. 
This set was written from the following memoranda of transactions. 
Study each transaction in connection with the entry for it in the model 
journal, both the debit and the credit, also the explanatory portion. Note 
the name given to each column in the journal. The paragraph in script 
at the beginning of the journal is the memorandum, setting forth the 
conditions under which business was begun. The figures in the middle 
of the script journal page are the dates. 



14 BOOKKEEPING 

When a man begins business he usually makes an investment, so that 
he may be able to carry on his business. In these practice sets cash 
investments will be used. 

In this set the proprietor, James Wilson, makes a cash investment of 
12000. 

Memoranda of Transactions 

Jan. 1. James Wilson began business, investing cash, |2000. 
2. Paid James A. Bird cash, for rent of the store for 1 mo., $50. 
S. Bought of M. C. Brown for cash : 

190 bbl. Flour at #5 

4. Sold H. King for cash : 

45 bbl. Flour at $6 

5. Bought of L. C. Horton for cash : 

24 bbl. Flour at |5 120 bbl. Salt at |1 

6. Sold D. Simons on account: 

30 bbl. Flour at $6 40 bbl. Salt at |1.60 

8. Sold A. Mead for cash : 

20 bbl. Flour at |5.50 10 bbl. Salt at |1.50 

9, Bought of O. Lane on account : 

60 bbl. Flour at $5.24 61 bbl. Salt at $1 

10, Received of D. Simons cash, to apply on account, |144. 

11. Paid O. Lane cash, to apply on account, 1175.40. 

Inventory, January 31, 19 — 
Merchandise : 

179 bbl. Flour at |5 $895 

131 bbl. Salt at $1 131 $1026 



just for convenience. The use of the inventory will be djl^ssed in Exercise 23. 

The fundamentals of bookkeeping are recognized by all bookkeepers, but the forms of 
record vary. One of the simplest forms of recording business transactions is to write the 
dates, the debit and the credit titles, a complete history of the transactions, and the money 
values of the same in a book called the Journal, including the daybook record or explana- 
tions, and to collect and classify these entries in a book of accounts called the Ledger. 

This method is set forth in the introductory work. 



[ 



k 



FUNDAMENTAL PRINCIPLES 15 

EXERCISE 10 
ANALYSIS OF THE MODEL JOURNAL 

The following is an analysis of each entry in the model journal. Similar 
analyses should be used in connection with all journalizing. 

Entry 1. Cash is debited because value was received by the business under the title 
Cash. 
James Wilson is credited for the amount he invested in the business. 
Entry 2. Expense is debited because value was received by the business under the 
title Expense. 
Cash is credited because value was parted with by the business under the 
title Cash. 
Entry 3. Merchandise is debited because value was received by the business under 
the title Merchandise. 
For the credit, refer to the second part of Entry 2. 
Entry 4. For the debit, refer to the first part of Entry 1. 

Merchandise is credited because value was parted with by the business 
under the title Merchandise. 
Entry 5. For the debit, refer to the first part of Entry 3. 

For the credit, refer to the second part of Entry 2. 
Entry 6. D. Simons is debited because he became indebted to the business. 

For the credit, refer to the second part of Entry 4. 
Entry 7. Refer to Entry 4. 
Entry 8. For the debit, refer to the first part of Entry 3. 

O. Lane is credited because the business became indebted to him. 
Entry 9. For the debit, refer to the first part of Entry 1. 

D. Simons is credited because he got out of debt to the business. 
Entry 10. O. Lane is debited because the business got out of his debt. 
For the credit, refer to the second part of Entry 2. 



EXERCISE 11 

SUMMARY OF PRINCIPLES 

In the study of the preceding exercises it has been seen that we 

DEBIT AND CREDIT 

1. That which is bought 2. That which is sold 

3. That which costs value 4. That which produces value 

5. All moneys received 6. All moneys paid out 

7. Persons who owe the busi- 8. Persons whom the busi- 
ness ness owes 

9. Other persons' notes re- 10. Other persons' notes when 
ceived paid by them 

11. Our notes received (paid) 12, Our notes given (issued) 



16 BOOKKEEPING 

The foregoing principles may be summarized as One General Principle 
for Journalizing, as follows : 

Debit, under their appropriate names, all values that are received by the 
business. (See Debit, Appendix B.) 

Credit, under their appropriate names, all values that are given by the 
business. (See Credit, Appendix B.) 

These principles are not to be memorized, but should be referred to frequently 
until their meaning and application are well understood. 

By the skillful application of this principle the debits and the credits 
of every business transaction may be determined. 

EXERCISE 12 

!FoR Written Work 

Make an exact copy of the model journal, page 2, on a half sheet 
of loose journal paper. If journal paper is not available, rule a sheet 
of ordinary writmg paper for a journal. This copy must be exact in 
every detail. 

In making this copy omit the figure 1 in the page column of the model journal. 

In the money columns at the right, when writing an even number of 
dollars, put a dash in the cents column. This shows that an omission 
has not occurred. 

Keep this copy for a subsequent exercise. 



EXERCISE 13 

DIRECTIONS FOR POSTING 

An Account is a collection of debits and credits under one heading. 

An account may contain but one debit or one credit. 

A number of accounts may be seen in the model ledger, page 3. 

The Ledger is a book containing the accounts of the business. 
Posting is a process of transferring debit and credit items to their re- 
spective accounts in the ledger. 

At present, all posting is from the journal. 

The posting of the model journal is on page 3. This page is the 
model ledger. 

Each different name that appears in the model journal requires an 
account or a heading of the same name in the ledger ; therefore there are 



FUNDAMENTAL PRINCIPLES 17 

«ir accounts in the model ledger. The Proprietor's account is usually 
the first in the ledger. 

To Open an Account, write in the ledger, as a heading, the name to 
which items are to be posted. 

Note that in the model journal the debits and the credits of merchandise are dis- 
tributed over the entire page. Then note that in the model ledger the debits and 
the credits of merchandise appear under the heading of Merchandise in one section 
of the page, entirely apart from other items on the page. Posting brings about this 
classification of debits and credits under appropriate headings. 

The left and the right side of the ledger have the same ruling; the 
left is the debit side, and the right is the credit side. 

Now examine the posting from the model journal to the model 
ledger. 

By referring to the script set, the student has an opportunity to study 
posting in just the form in which it will appear in his own work. 

In the model journal, in each entry, the name that is debited appears first, and 
the credit appears second. The^rs^ money column records the amount of the debit, 
and the second money column records the amount of the credit. All items in the 
first money column will be posted to the left (debit) side of the ledger ; all items in 
the second money column will be posted to the right {credit) side of the ledger. 

Now trace the posting of each debit item in the model journal to the 
model ledger. 

The first item in the journal is Cash. Turn to the Cash account in the ledger, 
debit side, and note the amount^ the page of the journal from which the item was 
posted, and the date. Above the date the year is written. The page of the ledger is 
placed at the left of Cash in the journal. The placing of these page numbers in 
both ledger and journal checks the posting ; that is, shows that the posting has been 
completed. 

The next debit item is Expense. Turn to the Expense account in the ledger and 
trace the amount, the page, and the date. Note that the ledger page is placed at the 
left of Expense in the journal. 

In this manner trace the posting of each debit item in the journal. 

The first credit item in the journal is James Wilson. Turn to his account in the 
ledger, credit side, and note the amount, the page, and the date. Above the date 
the year is written. The page of the ledger is placed at the left of James Wilson's 
name in the journal. 

The next credit item is Cash. Turn to the Cash account in the ledger, credit side, 
and note the amount, the page, and the date. Remember to place the page of the 
ledger at the left of Cash in the journal. 

In this manner trace the posting of each credit item in the journal. 
Review until all is clearly understood. 



18 BOOKKEEPIKG 



EXERCISE 14 
ANALYSIS OF THE MODEL LEDGER 

The posting of the model journal has been completed. The following 
is a full explanation of each account in the model ledger. 

Each account having more than one item has been footed. (The minute figures in 
the accounts show this footing.) These footings should always be written in pencil. 
(See model ledger, page 3.) 
James Wilson's account : 

The credit shows that he invested $2000 in the business. 

The debit shows that he has withdrawn nothing from the business. 
Cash account : 

The debit shows that the business has received $2539. 

The credit shows that the business has paid out $1415.40. 
Expense account : 

The debit shows that value was received, — the use of the store, which cost $50. 
Merchandise account : 

The debit shows that the business has bought merchandise to the amount 
of $1565.40. 

The credit shows that the business has sold merchandise to the amount of $639. 
D. Simons's account : 

The debit shows that he became indebted to the business to the amount of $244. 

The credit shows that he paid $144 on his indebtedness. 
O. Lane's account : 

The credit shows that the business became indebted to him to the amount 
of $375.40. 

The debit shows that the business has paid $175.40 on such indebtedness. 

Similar analyses of ledger accounts should be made frequently. 

The ledger is the book of accounts in business and is referred to very 
frequently for information that is wanted immediately ; therefore one 
should be able to understand an ordinary account almost at a glance. 
For this reason, strong emphasis has been placed on the analysis of ledger 
accounts in the very earliest stages of the student's work in bookkeeping. 



EXERCISE 15 

TRIAL BALANCE OF THE MODEL LEDGER 

The script trial balance, page 4, is a trial balance of the model ledger. 

The trial balance is simply a list of the names and the totals of each 
open ledger account and shows that the debits and the credits are equal. 

Study this trial balance carefully, and then take a trial balance of the 
model ledger and compare it with the script trial balance. 



FUNDAMENTAL PRINCIPLES 



19 



EXERCISE 16 
For Written Work 

Each student has made a copy of the model journal on a sheet of 
journal paper. 

Post this exercise, using a half sheet of loose ledger paper. Allow 
ten lines for each account. Write the accounts in the same order as 
in the model ledger. Post the model journal a second time. 

In posting, write the name of the month and the year at the head of each 
account only once, and do not use ditto marks. 

Post all the debit items first, and then all the credit items. 

After the journal items have been transferred to the ledger, the post- 
ing may be rechecked. This checking is usually done to locate an error. 

Determine whether the first debit item in the journal has been posted correctly 
to the ledger. If it has, place a small check ( \/ ) in pencil at the left of the first 
money column in the journal, and at the left of the folio column in the ledger. Use 
a pencil for checking, and make very small check marks. These marks should not 
be erased. 

The following script illustrations will show how this checking should be done. 



C^L^^24.^^ C, /f- 






3 / ^ 



Z^ 



3/^ 



ZS 



/3 



J/^ 



ZJ 



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Take trial balances of the ledgers just posted. 
Keep this work for a subsequent exercise. 



\ 



20 BOOKKEEPING 

EXERCISE 17 

For Written Work 

Journalize Exercise 2, page 8, in the same form as the model journal. 
The names and the amounts are different from those in the model. 

Under Feb. 1 the proprietor, Edward M. Brown, makes a cash invest- 
ment of llOOO. (An additional item.) 

Make the memorandum and the entry for this investment, and then journalize 
the other business transactions. 

When goods are bought, an invoice is received by the buyer and placed on file ; 
for this reason the items of the invoice need not be recorded in the explanatory 
portion of the journal. 

When goods are sold, an invoice is sent by the seller, and a copy of it is not 
always kept on file ; for this reason the items of the invoice should be recorded in 
the explanatory portion of the journal. 

These explanatory portions of the journal are held to be of great value in courts 
of law. 

Use loose half sheets of journal paper and ledger paper. In the ledger 
allow ten lines for each account. 

Recheck the posting. Take a trial balance. 
Pass all work to the instructor. 

EXERCISE 18 

For Written Work 

Journalize Exercise 4, page 9. 

Under March 1 the proprietor, Richard S. Rowe, makes a cash invest- 
ment of 11200. (An additional item.) 

Post to the ledger and then recheck the posting. 

Take a trial balance. 

Pass all work to the instructor. 

EXERCISE 19 

For Written Work 

Journalize Exercise 5, page 10. 

Under April 1 the proprietor, James A. Murphy, makes a cash invest- 
ment of ^1100. (An additional item.) 

Post to the ledger and then recheck the posting. 

Take a trial balance. 

Pass all work to the instructor. 



FUNDAMENTAL PRINCIPLES 21 

EXERCISE 20 

For Written Work 

Journalize Exercise 7, page 11. 

Under May 1 the proprietor, Wm. L. Martin, makes a cash invest- 
ment of J1250. (An additional item.) 

Post to the ledger and then recheck the posting. 

Take a trial balance. 

Pass all work to the instructor. 

EXERCISE 21 
SET B. FURNITURE 

Journalize the transactions in this set, as in the model journal, on a 
half sheet of journal paper. 

As a class exercise, each transaction may be journalized orally. Give the reason 
for each debit and each credit named. 

Memoranda of Transactions 

Feb. 1, Wm. A. Morton began the Furniture business and invested 
cash, 11800. 

2, Paid E. R. Law cash, for rent of the store for 1 mo., $35. 
4. Bought of Henry Burke for cash : 

16 Library Tables at $25 

6, Sold Case & Co. for cash : 

8 Library Tables at $30 

8. Bought of Henry Ellis on account : 

12 Library Tables at $22.50 

10. Sold John E. Smith on account : 

10 Library Tables at $27.50 

13. The proprietor withdrew cash for personal use, $50. 

When the proprietor makes an investment the business receives money from him, 
and when he withdraws money for his own use the business gives money to him ; 
therefore the entry is just the same as for any other person to whom money is paid. 

Id. Bought of John Hastings for cash : 

20 Library Tables at $25 



22 BOOKKEEPING 

Feb. 19. Sold E. W. Harris for cash: 

15 Library Tables at ^30 

23. Paid Henry Ellis cash, to apply on account, tl50. 

25. Received of John E. Smith cash, to apply on account, J175. 

27. Paid Howard Green, a clerk, cash for his salary, J 20. 

Inventory, February 28, 19 — 

iVTpt*p nfiTiri isf^ * 

15 Library Tables at |24.50 $367.50 

Note. The use of the inventory will be discussed in Exercise 23. 

Post to the ledger ; allow ten lines for each account. 

Take a trial balance. 

Keep all this work for a subsequent exercise. 

EXERCISE 22 

^ SET C. GRAIN AND SEED 

Journalize the transactions in this set in the same form as the model 
journal, on a half sheet of loose journal paper. 

As a class exercise, each transaction may be journalized orally. Give the reason 
for each debit and each credit named. 

Memoranda of Transactions 

March 1. Student begins the Grain and Seed business and invests 
cash, 11500. 

2. Pay Harold Brown cash, for rent of the store for 1 mo., $40. 

3. Buy of H. H. Morley for cash : 

400 bu. Corn at 48^ 350 bu. Oats at 35^ 

4. Sell Smith Bros, for cash : 

200 bu. Corn at 60^ 100 bu. Oats at 42^ 

6. Buy of Grace & Co. for cash, office books and stationery, |14.50. 
What is the name of the account that is debited ? 

8. Buy of Wm. A. Cannon, on account : 

250 bu. Wheat at $1 15 bu. Clover Seed at |6 

10. Sell James A. Butler, on account : 

150 bu. Corn at 61^ 200 bu. Oats at 43^ 



FUNDAMENTAL PRINCIPLES 23 

March 13. Pay Wm. A. Cannon cash, to apply on account, J 200. 

15. Buy of the Larkin Coal Co. for cash, 2 T. coal, for office use, 
at t5.50. 

17. Receive of James A. Butler his note at 10 da., to apply on 
account, |100. 

What name is given to Ms note ? 

20. Sell A. R. Burton for cash : 

8 bu. Clover Seed at $7.50 

22. Give Wm. A. Cannon your note at 30 da., to apply on account, 
JIOO. 

What name is given to your note ? . ~" 

23. Sell Henry A. Barker, on account : 

120 bu. Wheat at $1.20 

24. Receive of James A. Butler cash, to balance his account, $77.50. 

25. Withdraw from the business cash, for personal use, $75. 

26. Receive of Henry A. Barker cash, to apply on account, $100. 

27. Receive of James A. Butler cash, for his note due to-day, $100. 

What is the debit in this transaction ? the credit ? 

29. Buy of Johnson & Co. for cash : 

100 bu. Corn at 500 100 bu. Oats at 350 

30. Sell Harding & Co. for cash: 

50 bu. Corn at 620 50 bu. Oats at 440 

31. Pay James A. Norton, a clerk, cash, for his salary, $22.50. 



Inventories, March 31, 19- 



Merchandise : 

100 bu. Corn at 500 
100 bu. Oats at 350 
130 bu. Wheat at $1 
7 bu. Qlover Seed at $6 


$50. 

35. 
130. 

42. 


Expense : 

Office Books 
1 T. Coal 


$10. 
5.50 



$257. 



$15.50 



Note. The use of the inventory will be discussed in Exercise 23. 



24 



BOOKKEEPING 



Post to the ledger ; allow fifteen lines for the Cash account, and ten 
lines for all other accounts. 

Before taking a trial balance rule the accounts in the ledger that 
balance. The script illustrations herewith show how to rule them. Rule 
the accounts of James A. Butler and Bills Receivable. 




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6 




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y 




3 


/OO 


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/z 




^ 


/ 


/^ 




ZO 




4^ 


z6o 


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2J 




J- 


^6 


S(P 




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'7- 


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iz 


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Take a trial balance. 

Keep all this work for a subsequent exercise. 



EXERCISE 23 

For Oral axd Written Work 
IKYENTORIES AND THE CLASSIFICATION OF ACCOUNTS 

The student may verify the inventory given in Set A, as follows : 

How many barrels of flour were bought ? How many barrels were 
sold ? How many barrels should be on hand ? 

How many barrels of salt were bought? How many barrels were 
sold ? How many barrels should be on hand ? 

An Inventory is an itemized statement of the value of the goods on hand. 

An inventory is usually taken at cost prices. 

An inventory of merchandise is never found by taking the balance of the merchan- 
dise account. This is true because the cost prices and the sale prices are not the 
same, and the true condition of the account can be shown only by using the 
inventory. 



FUNDAMENTAL PRINCIPLES ' 25 

Expense and other items are inventoried frequently. 

This is true because only a part of that which was charged to Expense may have 
been consumed or disposed of. 

The inventories in each set should be copied into the journal imme- 
diately following the last journal entry. 

Unless otherwise instructed, date each inventory under the last day of 
the month in which the set was written. 

The inventories are recorded in the journal as a matter of convenience. In busi- 
ness, it is a common practice to make out the complete inventory on sheets of paper ; 
these sheets are then bound and filed for subsequent use. 

In working out the following classification of accounts, refer to the 
model ledger and the model trial balance on pages 3 and 4. 

In the Merchandise account, what are the total purchases? the total 
sales ? What is the value of the goods on hand (the inventory) ? Now 
it can be determined if any gain has been realized. 

By putting together the amount of the goods sold, the credit, and the 
value of the goods on hand (the inventory), the money value of the Mer- 
chandise account at the close of the month is shown : |639 -f $1026 = 
11665. These goods cost (the debit) |1565.40 ; the difPerence ($1665 - 
$1565.40) is $99.60, the gain. 

To summarize, using two methods : 

No. 1 No. 2 

Merchandise : Merchandise : 

Cr. $639. Cr., sales $639. 

Inv. 1026. Dr., cost $1565.40 

Total $1665. Less inv. 1026. 

Dr. 1565.40 Cost of sales 539.40 

Gain $99.60 Gain $99.60 

In the work of this text the first form will be used. Note the working out of this 
result in the model statement, page 4. 

Refer to the Expense account. What was the expenditure to carry 
on the business for the month ? This is a loss. Why ? 

If the gain on merchandise is $99.60 and the loss on expense is $50, 
what is the net gain, that is, the excess of the gain over the loss ? 

Find the net gain in each of the following, and make a written state- 
ment according to the model, page 4. 

1. Merchandise account: debit, $655.20 ; credit, $503.50 ; inventory, 
$254.25. Expense account : debit, $55. 



26 ' BOOKKEEPING 

2. Merchandise account: goods bought, 1732.50; goods sold, $525; 
goods on hand, $310. Expense account: debit, $45. 

3. Merchandise account : debit, $1235.25; credit, $894.75; inventory, 
$521.50. Expense account: debit, $75. 

4. Merchandise account: goods bought, $1052.60; goods sold, $825; 
goods on hand, $410.15. Expense account: debit, $60. 



EXERCISE 24 

For Oral and Written Work 
CLASSIFICATION OF ACCOUNTS 

In working out this exercise refer to the model ledger and the trial 
balance on pages 3 and 4. 

Refer to the Cash account in the trial balance. What is the total cash 
received ? the total paid out ? the balance on hand ? Is this balance a 
resource (property on hand) or a liability (amount owed) ? 

What is the condition of D. Simons's account? Does he owe the 
business, or does the business owe him ? Is the balance a resource or 
a liability ? 

If he owes the business, the amount owed is a resource. 

What is the condition of O. Lane's account ? Does the business owe 
him, or does he owe the business ? Is the balance a liability or a resource ? 
If the business owes him, the amount is a liability. 

Is the merchandise on hand (inventory) a resource or a liability ? 
For the present, treat all inventories as resource items. 

The difference between the resources and the liabilities is the capital, or 
the present worth. 

In the Proprietor's account, James Wilson, what is the total invest- 
ment ? the total withdrawal ? the net investment (the balance of the 
Proprietor's account) ? 

If James Wilson's net investment is $2000 and the business has gained 
for him $49.60 above all losses, what is he worth on January 31 ? 

In the above exercises it is clear that each open account (an account that does not 
balance) has a positive bearing on the condition of the business, and if these results 
are properly classified, both what has been accomplished by the business and the 
present state of affairs may be determined. 

In business, these results are usually set forth at stated periods, either once or 
twice a year. 



FUNDAMENTAL PRINCIPLES 27 

EXERCISE 25 
TERMS DEFINED AND EXPLAINED 

Books are kept for the purpose of determining the results and the 
condition of the business. 

The Results are shown by the gains realized, or the losses sustained. 
A formal statement of losses and gains is usually called a Business 
Statement. 

The Condition is shown by the resources and the liabilities. 
A formal statement of resources and liabilities is usually called a 
Financial Statement. 

The Net Gain is the excess of gains over losses. 
The Net Loss is the excess of losses over gains. 

Resources or Assets are property belonging to the business, or amounts 
due the business. 

Liabilities are amounts owed by the business. 

The Present Worth or Capital is the excess of resources over liabilities ; 
the excess of liabilities over resources is Insolvency. 
In all loss and gain accounts : 

If the credit, including the inventory, is the larger, the account shows 
a gain. 

If the debit, including the inventory, is the larger, the account shows 
a loss. 

Gains are realized : 

If resources increase and liabilities remain unchanged. 
If liabilities decrease and resources remain unchanged. 
If resources increase and liabilities decrease. 
Losses are sustained; 

If liabilities increase and resources remain unchanged. 
If resources decrease and liabilities remain unchanged. 
If liabilities increase and resources decrease. 
In personal accounts : 

If the debit is the larger, the account shows a resource. 
If the credit is the larger, the account shows a liability. 
If a personal account is given up as not collectible, it then shows a loss. 

In the introductory part of the text all inventories are resources. 

A trial balance is a copy of the ledger, only in a more convenient form. 

The bookkeeping thus far explained is in double-entry form, and the 
cardinal principle of double-entry bookkeeping is Equal Debits and Equal 
Credits. 



28 



BOOKKEEPING 



EXERCISE 26 

A Written Review 

Herewith are a number of trial balances from which statements of 
conditions are to be made, using loose sheets of journal paper. 

As an oral exercise, it piay be first determined which accounts show 
resources or liabilities, losses or gains. 

Note. Unless otherwise instructed, use the form of statement given on page 4. 

Then make the statements, as follows : 

1. Copy the trial balance at the head of the journal page. 

2. The Loss and Gain Statement, showing the 7iet gain. 

3. The Resource and Liability Statement, showing the present worth. 

4. The proof or verification of the statements. 
Date each statement Jan. 31, 19 — . 

Pass all work to the instructor for approval. 

No. 1 



Student 
Cash 
Mdse. 
Expense 
R Gross 
M. King 
J. Howe 
F. Young 



$200 

1685 

2470 

75 

310 

342 

219 

524 



12200 

750 

1873 

100 
250 
452 
200 



Student 
Cash 
Expense 
Mdse. 

C. Mason 

D. Koe 
S. Miller 

E. Lane 



No. 2 

1100 

1755 

85 

2250 

325 

485 
505 



$1900 
1325 

1935 

235 
110 





$5825 


$5825 


Inventory : 






Merchandise 


$725 




No. 3 




Student 


$200 


$2500 


Cash 


1680 


844 


Mdse. 


2640 


1850 


Expense 


75 




A. Ward 


300 


800 


E. Dunn 


420 


120 


L. Jones 


360 


60 


M. Martin 


800 


100 


B. Lewis 


299 


500 




$6774 


$6774 





$5505 


$5505 


Inventory : 

Merchandise 


$475.25 




No. 4 




Student 


$100 


$1700 


Cash 


1425 


610 


Expense 


65 




Mdse. 


1820 


1260 


A. Crane 


380 


120 


S. Adams 


100 


400 


C. Lyman 


450 


130 


D. Owen 


200 


500 


H. Howe 


180 






$4720 


$4720 



Inventory : 

Merchandise $921.40 



Inventory : 

Merchandise $742.50 



FUNDAMENTAL PRINCIPLES 29 

EXERCISE 27 

For Written Work 

In this exercise use the trial balances the student has made in Sets A, 
B, and C. Follow the directions given in Exercise 26. 

This work should be done without reference to the textbook. 

After each statement is approved by the instructor, keep all work 
for a subsequent exercise. 

Make statements from the following trial balances ; the inventories 
will be found in the textbook at the close of each set: 

1. Exercise 9, Set A. 2. Exercise 21, Set B. 3. Exercise 22, Set C. 
The Expense Inventory 

The Expense inventory is made up of items which when bought were charged to 
Expense ; the unused portion, at the time of making the statements, constitutes the 
inventory. 

Illustration : If 10 T. coal were bought at the beginning of the month, and 4 T. 
were unconsumed at the end of the month, the 4 T. would constitute the inventory. 

When there is an expense inventory, the loss on Expense is found as 
follows: 

Expense : 

Dr. $65.50 

Inv. 15.50 

Loss $50 

The loss is the difference between the debit of the account and the 
inventory. 

In making the resource and liability statement, record the expense in- 
ventory as a resource^ just the same as the merchandise inventory. In 
the loss and gain statement, subtract the inventory from the debit of 
expense, as shown in the above illustration. 

It is unusual for the Expense account to have any credits. If some 
item that was debited to expense when bought should be sold, then 
expense would be credited. 

If a man bought a safe for $80, his entry would be : Expense., $60, 
Cash, $60; if he sold it for $50, his entry would be: Cash, $50, 
Expense, $50. After posting these entries, there will be both a debit and 
a credit item in the ledger account of Expense. 



30 



BOOKKEEPING 



ElfERCISE 28 
For Written Work 

The results and the condition of the business in Sets A, B, and C have 
been shown by the statements just made. The next step is to show the 
results of the business in the ledger. To do this it will be necessary to 
close the Loss and Gain Accounts in the ledger. 

To close the ledger it is necessary to close only such accounts as affect 
the results shown by the business ; • that is, the accounts that show loss or 
gain and the Proprietor's account. 

Preparatory to closing the ledger the student should have some exer- 
cises in ruling. 

The ruling of the following ledger page is the same as the ruling re- 
quired in closing a ledger account. Practice this ruling until it is done 
well. Use red ink for this exercise. 

Notice that the single line extends over only the dollars and cents columns, while 
the double lines cover all the perpendicular columns, the explanatory column excepted. 



In business it is customary to show actual results, that is, make business 
and financial statements only once or twice a year. The ledger is closed 
after such statements have been made. 



• EXERCISE 29 

CLOSING THE LEDGER 

The following script page is an illustration of a ledger closed prop- 
erly. Study the following explanations in connection with this page. 
To close the Merchandise account : 
1. Enter the inventory on the credit side, in red ink. 



FUNDAMENTAL PRINCIPLES. 



31 



Ledger Closed 



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32 . BOOKKEEPING 

2. Find the difference between the sides of the account, the inventory 
included. This difference is the gain. 

3. Enter the gain on the debit side, in red ink, under Loss and 
Gain. 

4. Rule and foot the account ; write the footings in black ink. 

5. Bring the inventory below the rulings, on the debit side, in black 
ink, under Feb. 1. 

6. Transfer the gain to the credit side of the Loss and Gain account, 
in black ink, under Jan. 31. 

The principle of equal debits and equal credits must be rigidly enforced ; there- 
fore the entries in red ink, as the inventory and the gain, must be transferred to the 
opposite side of the ledger. This was accomplished as directed in 5 and 6. 

To close the Expense account : 

1. Enter the inventory on the credit side, in red ink. 

2. Find the difference between the sides of the account, the inventory 
included. This difference is the loss. 

3. Enter the loss on the credit side, in red ink, under Loss and Gain. 

4. Rule and foot the account. 

5. Bring the inventory below the rulings, on the debit side, in black 
ink, under Feb. 1. 

6. Transfer the loss to the debit side of the Loss and Gain account, in 
black ink, under Jan. 31. 

If there is no inventory in this account, simply enter the debit footing as a loss. 
See illustration on page 5. 

To close the Loss and Gain account : 

1. Enter the difference between the sides of this account as net gain, 
on the ^e^Y "side," ill Ted -ink.- — .. 

2. Rule and foot the account. 

3. Transfer the net gain to the credit side of the Proprietor's account. 

To close the Proprietor's account : 

1. The net gain has been entered on the credit side, in black ink, 
under Jan. 31. 

2. Find the difference between the sides of the account, the net gain 
included. This difference is the present worth. 

3. Enter the present worth on the debit side, in red ink, under Jan. 31. 

4. Rule and foot the account. 

5. Bring the present worth below the rulings, on the credit side, in 
black ink, under Feb. 1. 

The student will now make an exact copy of the closed ledger on 
page 5. Use a half sheet of ledger paper. 



FUNDAMENTAL PRINCIPLES 



33 



EXERCISE 30 



For Written Work 



On slips of ledger paper find the gain or the loss in each of the follow- 
ing accounts : 

1. Merchandise : debit, $650 ; credit, $425 ; inventory, $310. 

2. Expense: debit, $55; inventory, $25. 

3. Merchandise: debit, $840; credit, $525; inventory, $415. 

4. Expense: debit, $40. 

5. Merchandise: debit, $565; credit, $339; inventory, $319.50. - 

6. Expense: debit, $74.50; inventory, $35. 

Find the net gain or the present worth in each of the following accounts 

1. Loss and Gain: debit, $86.45; credit, $92.50. 

2. Proprietor: debit, $75; credit, $1750; net gain, $120. 

3. Loss and Gain: debit, $43.25; credit, $76.40. 

4. Proprietor: debit, $50; credit, $1600; net gain, $61.25. 
^; Make an exact copy of the closed ledger on page 31. 



EXERCISE 31 

For Written Work 

On a half sheet of ledger paper open the following accounts; allow 
ten lines for each account. 



Student, Proprietor 



19— 

Jan. 



23 



100 



19- 

Jan. 



2000 



Merchandise 



19- 






— 






19— 






— 






Jan. 


7 




3 


900 




Jan. 


9 




2 


750 






13 




4 


200 






24 




3 


275 






26 




4 


135 

















34 



BOOKKEEPING 
Expense 



19— 

Jan. 



10 

27 



25 
10 



Inventory : 

Merchandise 

Open a Loss and Gain account ; close the ledger. 



$350 



II 
W. A. Jones, Proprietor 



19— 

Feb. 



21 



50 



19- 

Feb. 



1900 



Merchandise 



19— 






— 






19— 






— 






Feb. 


4 




3 


250 




Feb. 


8 




3 


175 


20 




15 




4 


455 


25 




18 




4 


310 


50 




21 




5 


536 


75 




25 




5 


502 


70 



Expense 



19- 

Feb. 



50 
35 



Inventories : 

Merchandise 
Expense 



$450 
25 



Open a Loss and Gain account ; close the ledger. 



FUNDAMENTAL PRINCIPLES 



35 



III 

Student, Proprietor 



ID- 
Mar. 



Merchandise 



1850 



19- 






— 






19— 







— 






Mar. 


3 




1 


525 


60 


Mar. 


8 




2 


385 


25 




15 




2 


326 


70 




17 




2 


250 






22 




3 


516 


10 




25 




3 


457 


80 




26 




4 


110 






30 




4 


225 


35 



Expense 



19— 

Mar. 



1 


55 


1 
20 






2 


30 








2 


10 


25 







Inventories : 

Merchandise 
Expense 

Open a Loss and Gain account ; close the ledger. 



$510.50 
42.50 



EXERCISE 32 



For Written Work 



The ledgers which the student posted and kept will now be used for this exer- 
cise. After closing each ledger keep it for a subsequent exercise. 

In each ledger open a Loss and Gain account, immediately following 
the last account on the page. Use the inventories given in the text. 

1. Set A. Close the ledger. Compare the results with those shown 
in the statement of this set. 

2. Set B. Close the ledger. Compare the results with those shown 
in the statement of this set. 



36 



BOOKKEEPING 



3. Set C. Close the ledger. Compare the results with those shown 
m the statement of this set. 

After closing the above-named ledgers, close the Cash account in each 
by balance, according to the following model : 





/ 




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/ 




a. 




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Closing an account by balance has nothing whatever to do with closing the ledge^. 

After closing the above account the condition of it is shown as a single item, the 
balance. 

It is sometimes a great convenience to close an account by balance when it covers 
a large part of the ledger page, even before it is necessary to transfer the balance 
to a new sj^ace. 

Any account may be closed by balance when the space assigned to it 
is filled and it is necessary to transfer it to a new space. 

It is often desirable to close any account when it balances ; this form 
of closing is shown on page 24. 

Bed ink is used commonly for rulings of all kinds, for closing entries 
in the ledger, and for records that require emphasis. In closing, the 
ledger entries to be transferred to some other place are usually Avritten 
in red ink, and entries that have been transferred from some other source 
are always written in black ink. The transfer is necessary to preserve 
the balance or equality of the ledger. 

The use of red ink is largely a matter of custom. Many bookkeepers use no red 
ink at all, insisting that it is a waste of time to change from one color to another. 
The use of red ink is advised for exercises in this book. 



11^ 



vPu:npamental principles 37 

EXERCISE 33 

SET D. HARDWARE 

Journalize the following transactions, post, take a trial balance, make 
the two statements, close the ledger ; close the Cash account by balance, 
and then take a second trial balance. 

Write on loose sheets of journal paper and ledger paper. 

If the student is able to do this work without assistance, he is ready for sub- 
sequent work ; if not, he should rewrite one or more of the preceding sets. 

Memoranda of Transactions 

. April 1. A. W. Tenny began the Hardware business, investing cash, 
♦3000. 

3. Bought of E. M. Chase & Son, on account, their complete stock 
of hardware, which inventories at |2500. 

5, Sold A. S. Osborn for cash : 

5 doz. Coal Hods at $7.50 10 doz. Hammers at |6 

8. Sold A. L. Sanford on account : 

12 doz. Door Knobs at 750 5 doz. Lanterns at |6 

• 20 doz. Planes at |24 

10. Paid A. W^JBates cash, for rent of the store for 1 mo., $60. 
12. Paid Wetm^e & SoiT5hish, for office books, per bill, |22.50. 
15. Paid A. H. Robbins cash, for office safe, |65. 

18. Received of A. L. Sanford cash, to apply on account, $125. 

19. Sold W.. L. Hunter on account : 

5 doz. Coal Hods at $8 6 doz. Door Knobs at |1 

15 doz. Hammers at |6 10 Ice-cream Freezers at |2.50 

5 doz. Lanterns at $6 

20. Paid E. M. Chase & Son cash, to apply on account, $1000. 
23. Received of W. L. Hunter cash, to apply on account, |150. 
25. The Proprietor withdrew cash, for personal use, $50. 

27. Gave E. M. Chase & Son a note at 10 da., to apply on account, 
$1000. '"- 

29. Received of A. L. Sanford his note at 10 da., to apply on account, 
$300. 

30. Paid E. M. Chase & Son cash, to apply on account, $250. 
30. Paid E. L. Harris, a clerk, cash for his salary, $25. 



38 



BOOKKEEPING 
Inventories, April 30, 19 — 



Merchandise 
Expense : 

Office Books and Stationery 

Office Safe ' 



12035 



♦15 

65 t80 



Allow ten lines for each account in the ledger. 

In the resource and liability statement, bills receivable are always a 
resource^ and bills payable, always a liability. 



>■ 



EXERCISE 34 



CORRECTION OF ERRORS 



The correction of errors in books of record is a matter of special 
importance. Even careful workers make occasional errors, but correc- 
tions can be made so that the neatness of the books and their legal value 
are not affected. When an error is made, consult the instructor before 
attempting to correct it. Do not erase. 

If a journal entry is wrong, correct it as follows: Draw a red line 
through the wrong name, and then write the correct name either above 
or at the right of the correction, as follows : 



^^ 



52^y 



^^T'T'-O-Li^ aCu^€^jt0-aii;^^ 



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J-0 



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If a journal entry is reversed, it may be corrected by writing, in red 
ink., Cr. after the debit item and Br. after the credit item. Then post 
correctly. 



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If it is found that a wrong amount has been entered in the ledger, 
correct as follows : 

1. Rule a red line through the wrong amount. 

2. Write the correct amount in black ink just above the amount 
canceled. 



FUNDAMENTAL PRINCIPLES 



39 










If an amount has been entered on the wrong side of the ledger, correct 
it as follows : 

1. Draw a red line through the amount that is wrong. 

2. Enter the correct amount in black ink on the proper side of the 
ledger. 



~^ a^J^Ji^ 









Note. Sometimes a correction may be made by a counter entry in the journal. To 
illustrate : Suppose one had made this entry, Mdse., Dr., Cash, Cr., and it was a wrong 
entry. It may be canceled as follows : Cash, Dr., Mdse., Cr. As the wrong entry is thus 
disposed of, the correct entry may now be made. 



FORMS OF STATEMENTS 

Business and financial statements are made in many different forms, 
depending on the character and the volume of the business, and the facts 
that are to be set forth. 

In a business under the control of one proprietor, a very simple state- 
ment may answer every requirement. In a partnership, when a number 
of persons are interested, a more complete setting forth of the facts of 
the business is necessary. In a corporation, organized under the laws of 
the state or the nation, the statements must show the results and the 
condition according to the demands of the authority under which the 
corporation is organized. In cities where many departments require 
separate accounting, still another form of statement may be demanded 
to set forth the facts that public business requires to be made known. 

On pages 4 and 40 simple statement forms are presented. The first is 
recommended for the beginner. 

As the student advances in the work of this text he will become 
familiar with other forms of statements. 



40 



BOOKKEEPING 



THE SIX-COLUMN STATEMENT 

The following script model represents a form of statement which 
affords condensed information regarding the results and the condition of 
the business. The first two columns are the trial balance. The inven- 
tories are recorded in the proper columns, either resource or liability, in 
red ink, to distinguish them from other resources and liabilities. After 
recording the inventories, each account in the trial balance should be 
extended into the column where it belongs. The footings show the vari- 
ous column totals, and the summary at the bottom sets forth the net 
gain and the present worth. 



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p. 


NAME OF ACCOUNT DEBIT 


CREDIT 


LOSS 


GAIN 


RESOURCES 


LIABILITIES 


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* To be written in red ink. 



SET I. RETAIL FUEL AND FEED BUSINESS 

The Object of this set is to illustrate in a practical manner one of the 
simplest forms of bookkeeping. In the preceding illustrative work the 
student has recorded all transactions and entries on loose sheets of journal 
paper and ledger paper, but now he is given a set of bound books, in 
which all records will be made. 

The Books used are the journal, the ledger, and the statement book. 
No business forms are handled, but different forms are illustrated, and 
entries are made directly from them. 

Directions and Suggestions. In working out this set the student should 
observe the following : 

1. For the introductory memorandum, refer to the model journal on 
page 2. Follow this model carefully. 

2. In this beginning work it is well for the student to journalize the 
transactions first on a loose sheet of journal paper ; after correction, this 
work may be copied into the bound journal. The posting should be 
directly to the ledger. 

3. A. M. Benton is represented as the proprietor. 

4. Use the same explanatory forms as in the model journal. 

5. The- books should be paged consecutively, 1, 2, 3, etc. 

6. Take pains in all writing ; make neat, small figures. 

Price List for January 



Article 


Cost 


Selling Price 


Grate Coal 


$6.10 


$7.25 '. 


Stove Coal 


16.25 


$7.50 


Nut Coal 


$6.20 


$7.50 


Hay 


$10.50 


$14.50 



Memoranda of Transactions for January 

Jan. 1. A. M. Benton, Buffalo, N.Y., began the Retail Fuel and Feed 
business, investing cash, $2750. 

2, Paid Edward N. Shaw cash, for rent of the store for 1 mo., 
January, $30. 

S. Bought ofi&ce supplies as per bill on the following page : 

41 



42 



BOOKKEEPING 





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Debit Expense for the above bill. 

A detailed statement of goods bought or sold is called either a hill or an invoice, 

A detailed statement of goods bought to be used or consumed, or a statement of 
services rendered, is usually called a hill. 

Thus, a physician's statement of services rendered, and the charges for the same, 
is called a hill; a statement of a quantity of silk bought or sold by a merchant is 
called either a hill or an invoice. 



Jan. 4. Bought of Allen & Parker for cash : 



50 T. Grate Coal 
40 T. Stove Coal 

5. Sold John S. Adams for cash : 

10 T. Grate Coal 

6. Sold A. M. Paterson on account : 

15 T. Stove Coal 

8. Sold John S. King for cash : 

5 T. Grate Coal 

9. Sold Charles M. Gray on account 

10 T. Stove Coal 



35 T. Nut Coal 
20 T. Hay 

5 T. Hay 
10 T. Nut Coal 

5 T. Hay 
10 T. Hay 



SET I. RETAIL FUEL AND FEED 43 

Jan, 11, Bought of Henry A. Stevens on account : 
15 T. Stove Coal 15 T. Hay 

12, Received cash as shown by the following check : 



traders Rational ^ank 



"Pay to the order of r>f. //f .. A X ^^ .^t( ^r77^ , f / 1,^-^ 



A Check is an order on a bank by a depositor for the payment of money. 
13, Received the following note to apply on account : 



^' . "^ -<:Z^.,.--7^^.^-s^-^^!L^^t^^ ■ nfier date^ZiLpromise to pay to 

the order of ' ' /^^ yy^. '^^X^^t ^ J^^?^^ ^ 



Ualue receioed 



Ko.-lj2— "Due '/zj -dJ^^J^^^ 1^.jJ^^^._ 



Y- 



^ 15, Gave Henry A. Stevens a note at 10 da. to apply on account, $150 

16, Bought of Johnson & Main for cash : 

5 T. Nut Coal 

17, The Proprietor withdrew cash for personal use, |50. 

18, Gave the Monroe Typewriter Exchange cash for the following : 

1 Typewriter, $50 1 Office Desk, f 25 

Debit Expense for this bill. 

19, Received of A. M. Paterson his check for the balance of the in- 
voice sold him on Jan. 6, |62.50. 

W, Received of Charles M. Gray cash, to apply on account, $75. 
W, Sold James W. Traver on account ; 

20 T. Grate Coal 12 T. Nut Coal 



44 



BOOKKEEPING 



Jan. 22. Bought of Lane & Son merchandise, as shown by the fol- 
lowing invoice: 






Vo 



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1^2^ >/< ? 



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23. Received of Charles M. Gray cash for his note which is due 
to-day, JllO. 

24. Received of James W. Traver his check, to apply on account, 
*100. 

25. Gave Henry A. Stevens cash for a note which fell due to-day, $150. 

26. Sold A. M. Paterson on account : 



5 T. Hay 



5 T. Grate Coal 



27. Gave Henry A. Stevens cash, to apply on account, $50. 

29. Gave Lane & Son a note at 10 da., to apply on account, $135. 

31. Paid Student cash, for services to date, $20. 

Pass the journal sheet to the instructor for correction and .criticism ; 
then copy carefully into the bound journal. 

Below the last journal entry copy the following, using the form given 
on page 6. 

Inventories, January 31, 19 — 
Merchandise : 

20 T. Grate Coal $6.10 $122. 

30 T. Stove Coal 6.25 187.50 

18 T. Nut Coal 6.20 111.60 

30 T. Hay 10.50 315. $736.10 



SET I. RETAIL FUEL AND FEED 45 

The student should verify the merchandise inventory. 

Expense : 

Typewriter $50 

Office Desk 25 

Office Supplies _5 |80 

Posting. Open accounts in the ledger, three on each page, in the 
following order : Proprietor, Cash, Expense, Merchandise. 

After posting, foot the accounts having more than one item, in pencil, 
making very small figures. Recheck the posting. 

Take a trial balance of the ledger, omitting all accounts that balance ; 
record it in Blank No. 1, on the page indicated by the index. 

Make a Loss and Gain Statement. 

Make a Resource and Liability Statement. 

Make a proof or verification of statement. 

Record the statements and proof in Blank No. 1, on the page indicated 
by the index. 

Closing the Ledger. Open a Loss and Gain account ; close the Mer- 
chandise and Expense accounts into the Loss and Gain account ; close 
the Loss and Gain account into the Proprietor s account. 

Balance the Cash account ; take a trial balance. 

Present all books to the instructor for approval. 

EXERCISE 35 
A Written Review 

The following review exercises are suggested. 

a. Journalizing. Journalize orally or in writing each of the following 
transactions, and state the reason for each debit and each credit named. 

1. You began business with the following investment: cash, $1500; 
merchandise, |1200. 

When several resource items represent the proprietor's investment, each item is 
debited, under its appropriate name, and the proprietor is credited for the total of 
the resources. 

The following is the correct entry for No. 1 : 

Cash *1600 

Mdse. 1200 

Student 12700 

Note the explanation of this entry on page 46. 



46 BOOKKEEPIlSrG 

This is a compound entry ; it may consist of any one of the following : 
Several debits and one credit. 
One debit and several credits. 
Several debits and several credits. 

2. Chas. E. Snyder began business with the following investment : 
cash, $1000 ; John A. Wilder's note, $950 ; merchandise, |1325. 

3. Wm. A. Russell began business with the following resources: 
cash, $560 ; merchandise, $1975 ; H. H. Redding's note, $450 ; coal for 
use in store, on hand, $35. 



The following is the correct entry for No. 3 : 




Cash 


$560 


Mdse. 


1975 


Bills Rec. 


450 


Expense 


35 


Wm. A. Russell 





$3020 

4. W. A. Lincoln began business with the following resources : cash, 
$1750 ; account against Freeman & Co., $350 ; merchandise, $1275 ; 
John G. Reed's note, $500. 

5. You began business with the following resources : cash, $1000 ; 
Geo. O. Overman's note, $400; merchandise, $1500; account against 
Prince & Lane, $250. 

6. Gave Geo. S. Ware your note at 60 da., to apply on account, $325. 

7. Gave H. M. Marshall your note at 30 da., with interest, to apply 
on account, $450. 

No entry is made for the interest until the note is paid. 

8. Received of R. D. Record his note at 10 da., to apply on account, 
$176. 

9. Received of Lyman & Son their note at 30 da., with mterest, to 
apply on account, $275. 

10. Received of Thomas & Co. cash for their note and interest ; face 
of the note, $320 ; interest, $16. 

The above is journalized as follows : 

Cash $336 

Bills Rec. $320 

Interest 16 

Interest is debited when it costs something; it is credited when it 
produces something. 

When the statement is made that we pay interest, we really mean that we pay 
cash for the interest. 



EEVIEW EXERCISES 47 

11. Paid your note and interest in cash, in favor of W. D. Longman ; 
face of the note, |275 ; interest, |12. 

The above is journalized as follows : 

Bills Pay. $275 

Interest 12 

Cash $287 

12. Received of W. L. Clark cash, for his note due to-day, |187.50. 

13. Received of Frank Likly cash for his note and interest; face of 
the note, |245 ; interest, $11. 

14. Paid your note and interest in favor of James A. Boyce, in cash ; 
face of the note, $160 ; interest, $7.50. 

15. Paid your note in favor of Geo. K. Johnson, in cash, $300. 

16. Received a check of H. A. Preston for his note, $452.50. 

17. Paid your note in favor of H. D. Bryan, in cash, $275. 

18. Received a check from A. S. Kemp for his note and interest; 
face of the note, $150 ; interest, $6.25. 

19. Paid your note and interest in favor of A. R. Sharp, in cash; 
face of the note, $200 ; interest, $9.50. 

20. Gave Robbins & Co. your note at 60 da., with interest, to apply 
on account, $500. 

b. Statements. Make the two statements and the verification from the 
following trial balances. Observe these directions : 

The bills receivable are a resource. The bills payable are a liability. 

Interest, as an open ledger account, is always a loss or a gain item; if the 
balance is a debit, the account shows a loss ; if the balance is a credit, the account 
shows a gain. 

Date each statement Feb. 28, 19 — . 

No. 1 



Student, Prop. 




$5096. 


Cash 


$2443. 




Merchandise 


952.50 


200.50 


Expense 


100. 




Interest 


12.25 


8.50 


James & Co. 


397.50 




Bills Receivable 


600.20 




Henry S. Willis 


1011. 




John K. Searle 


61.40 




A. L. Gracey 




101.35 


Bills Payable 




172. 


W.W.Hays 


100.50 






$5578.35 


$5578.35 


Inventories : 






Merchandise 


$794.50 




Expense 


76.50 





k 



48 



BOOKKEEPING 



No. 2 



Geo. M. Lee, Prop. 
H. K. Paine, Prop. 
Cash 
Merchandise 


11061.30 
2096.75 


11200. 
1200. 

1723.50 


Expense 

Wm. H. Lowney 
J. I. Percy 
Arden & Co. 


110.50 
125.30 
206.30 
215.15 




Jas. P. Hunter 




116.25 


Bills Payable 
Interest 


15.85 


125. 
16.40 


Bills Keceivable 


550. 






$4381.15 


14381.15 


Inventories : 






Merchandise 


$578.45 




Expense 


67.20 





c. Closing the Ledger. On a loose sheet of ledger paper copy the 
following accounts; allow ten lines for each account. 



Student, Proprietor 



19— 

Jan. 



10 



2 125 



19— 

Jan. 



2550 



Merchandise 



19— 












19- 


■ 








Jan. 


5 




1 


516 


20 


Jan. 


10 




2 


412 


75 




12 




2 


78 


40 




17 




3 


310 


25 




24 




3 


285 


70 















Expense 



19— 

Jan. 



35 
25 



50 



REVIEW EXERCISES 



49 



Inventories : 

Merchandise 
Expense 

Open a Loss and Gain account ; close the ledger. 



$275.20 
22.50 



II 



James R. Turner, Proprietor 



19— 

Feb. 



75 



19— 

Feb. 



2650 



Merchandise 



19- 






— 






19— 












Feb. 


11 




2 


289 


50 


Feb. 


13 




2 


609 


20 




18 




3 


546 


70 




19 




3 


335 






23 




4 


715 


45 




25 




4 


255 


60 




27 




5 


100 



























Expense 












19- 
























Feb. 


1 
10 
26 




1 
2 
4 


50 
35 
21 


50 















Interest 



19— 

Feb. 



12 



12 



10 



19— 

Feb. 



19 



Inventories : 

Merchandise 
Expense 



$725.25 
72.50 



The model for closing the Interest account is on page 54. 
Open a Loss and Gain account ; close the ledger. 



50 BOOKKEEPING 



REVIEW QUESTIONS 

1. What is a business transaction ? 2. In how many ways does a business transac- 
tion affect the business ? 3. Define merchandise. 4. B, a dry-goods merchant, bought 
3 T. coal for heating his store. Should this purchase be recorded under merchandise ? 
Why ? What is the name of the purchase to the merchant who sold it ? 5. Define cash. 
6. Define expense. 7. Who is a debtor? a creditor? 8. Define debit; credit. 9. What 
is an account? 10. Name the two sides of an account. 11. What are personal ac- 
counts ? 12. Define a negotiable promissory note. 13. What is meant by journaliz- 
ing? 14. Define bookkeeping. 15. What is the object of bookkeeping? 16. Name 
the two methods of bookkeeping. 17. What is the purpose of the journal ? 18. What 
is posting ? 19. What is the purpose of the ledger ? 20. What is a trial balance ? 
From what is it taken ? 21. What facts are set forth in the trial balance ? 22. What 
is an inventory, and how is it found ? 23. When is merchandise debited ? when cred- 
ited ? 24. When is expense debited ? 25. When are personal accounts debited ? when 
credited? 26. When are bills receivable debited? when credited? 27. When are 
bills payable debited? when credited? 28. What is a gain? a loss? 29. What are 
resources or assets? liabilities? 30. Define net gain; net loss. 31. Define capital; 
insolvency. 32. Name the two general classes of accounts. 33. Name the class 
to which each of the following accounts belong: cash; merchandise; personal 
accounts; expense; interest; discount; bills receivable ; bills payable. 34. On which 
side of the ledger are losses found? gains? resources? liabilities? 35. What is 
the object of making business and financial statements ? 36. What is meant by 
closing an account ? 37. When are resource and liability accounts closed in business ? 
loss and gain accounts ? 38. Explain the process of closing a loss and gain account. 
39. The accounts showing loss and gain are closed into what account ? 40. The loss 
and gain account is closed into what account? 41. How is the proprietor's account 
closed when there is a net gain ? when there is a net loss ? 42. Which side of the 
cash account must always be the larger when there is any difference ? of the bills 
receivable account? of the bills payable account? 43. What is an entry? 44. What 
is the difference between interest and discount ? 45. When is interest or discount 
debited? when credited? 46. When does a personal account show a resource? a 
liability ? 



SET II. WHOLESALE CARPET BUSINESS 

This set is separate from Set I, but the character of the work is similar. 

The books used are the same as in Set I. 

Directions and Suggestions. Observe the following directions : 

1. First journalize on a loose sheet of journal paper. 

2. James R. Denison is represented as the proprietor. 

Selling Price List for February 



Axminster 
$2.50 


Brussels 
$1.35 


Ingrain 

75^ 


Linoleum 
60^ 


Oilcloth 
30^ 


Wilton 
$2.65 



Memoranda of Transactions for February 

Feb. 1. James R. Denison, Boston, Mass., began the Wholesale Carpet 
business with the following resources: cash, $500; merchandise, $2595.50; 
fixtures, $200 ; coal, for heating the store, $15 ; the note on page 62. 

The following is the opening journal entry for this set : 





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2, Paid Lee & Crane cash for the following expense items : stationery, 
$4.50 ; office books, $3.50. 

S. Paid George R. Daniels cash, for rent of the store for 1 mo., Feb- 
ruary, $75. 

4. Bought of W. B. Mason & Co., Philadelphia, on account, invoice 
of carpets amounting to $572.50. 

5. Bought of A. R. Prescott & Co., New York, on account, invoice 
of carpets amounting to $612.95. 

51 



52 BOOKKEEPING 



— V-C^'^^^.^r^^-?^ afltr Jatel:t^promke to pay to 

the order n f y^..^>^^^.d^/\^^ /^ ■ ■— 

*Oalue received 



Feb, 6. Sold W. F. Pratt, Springfield, on account : 

200 yd. Brussels 150 yd. Ingrain 

100 yd. Axminster 

6. Sold Jas. R. Holcomb, City, for cash : 

100 yd. Oilcloth 40 yd. Axminster 

9, Sold John W. King, City, on account : 

40 yd. Oilcloth 16 yd. Linoleum 

60 yd. Brussels 

9, Sold M. F. Newbury, Providence, on account : 

100 yd. Wilton 120 yd. Axminster 

10. Remitted A. R. Prescott & Co. a note at 10 da., with interest 
at 6%, in full for the mvoice of Feb. 5. 

11. Received of Ernest B. Jackson cash for his note and interest due 
to-day ; face of note, $300 ; interest, 50<^ ; total, |300.50. 

12. Received of W. F. Pratt his note at 10 da., with interest at 6%, 
$250, and the balance of the invoice of Feb. 6 in cash. 

13. Sold Geo. S. Rollins, City, for cash : 

100 yd. Brussels 100 yd. Linoleum 

15. Bought of A. R. Prescott & Co., New York, on account, invoice 
of carpets amounting to $172.50. 

16. Sold W. F. Pratt, Springfield, on account : 

40 yd. Ingrain ^5 yd. Brussels 

100 yd. Axminster 

16. The Proprietor appropriated for his own use : 

1 Rug 14' X 18', $40 1 Rug 16' x 20', $85 

20. The First National Bank presented for payment the note in favor 
of A. R. Prescott & Co., due to-day. Paid the note and interest in 
cash; face of the note, $612.95; interest, $1.02; total, $613.97. 



SET 11. WHOLESALE CARPET 53 

Feb, W. Sold John A. Newton, City, for cash : 

70 yd. Wilton 

22. Received of W. F. Pratt cash for his note and interest due to-day ; 
face of the note, $250 ; interest, 42(^ ; total, 1250.42. 

22. Bought of C. W. Allen & Co., City, for cash, an invoice of carpets 
amounting to $410.50. 

23. Received the following check, to apply on account : 



traders 3^ational ^ank 

^ay to the order of i^^7^i-7^^^..<i^ /i':'^ 2?^ j> t^'^ 



■ ■ t^- 

^y!^1^^ r^y Ahf^.-?^^y?^^ ''//O^ • "Polk 



Under what name is this check entered ? 

As checks are used so commonly in business, a careful study of this form is 
commended. 

25. Sold John W. King, City, the following (received cash, $65 ; 
balance on account) : 

50 yd. Ingrain 40 yd. Axminster 

Make the following entry for this sale : Debit King and credit Mdse. for the 
whole bill; then debit Cash and credit King for the money received. Date each 
entry Feb. 25. 

26. Received of John W. King his note at 30 da., with interest at 6%, 
for the amount of the invoice of Feb. 9. 

26. Remitted W. B. Mason & Co. a note at 30 da., with interest at 6%, 
in full for the invoice of Feb. 4. 

27, Sold Lewis & Parsons, City, for cash : 

200 yd. Ingrain 50 yd. Linoleum 

100 yd. Oilcloth 

27. V2i\di Student for services to date, $40; paid A. M. Olcott for 
services to date, $30. 

Pass the journal sheet to the instructor for approval ; then copy into 
the regular journal, beginning on the page indicated by the index for 
Set II, in Blank No. 1. 



64 BOOKKEEPING 

Below the last journal entry copy the following : 

IXVENTORIES, FEBRUARY 28, 19 

Merchandise : 

Per schedule prepared by Denison $2214.92 

Expense : 

Fixtures on hand |195. 

Posting. Open accounts in your ledger, three on each page, in the 
same order as in Set I, beginning on the first full blank page. 

Foot the accounts in pencil ; recheck the posting. 

Take a trial balance, omitting all accounts that balance ; after approval, 
record it in Blank No. 1, on the page indicated by the index. 

Make the usual statements, and the verification ; after approval, record 
them in Blank No. 1, on the page indicated by the index. 

Closing the Ledger. Open a Loss and Gain account ; close the follow- 
ing accounts into it : Merchandise, Expense, Interest. 

The model for closing the Interest account is given on this page. 

Close the Loss and Gain account into the Proprietor's account. 

Close the Cash account by balance. 

Take a trial balance. 

Present all books to the instructor for approval. 

Model for closing Interest 



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EXERCISE 36 

A Written Review 

The following review exercises are suggested : 

a. Statements. Make the two statements and the verification from the 
following trial balances. 

Date each statement March 31, 19 — . 



REVIEW EXERCISES 



55 



No. 1 



Student^ Prop. 


$100. 


$2450. 


Expense 


120. 




Cash 


1876.25 


1214.50 


Merchandise 


3354.75 


1827.40 


Chas. J. Hardy 


365. 




Interest 


8.35 


13.75 


Frederic & Co. 




286.50 


Martin & Son 


235.20 




Geo. L. Grace 




67.40 


Bills Payable 




325. 


Bills Receivable 


125. 






$6184.55 


$6184.55 


Inventories : 






Merchandise 


$1926.50 




Expense 


77.50 

No. 2 




George S. Mitchell 


, Prop. $100. 


$3400. 


Expense 


155. 




Merchandise 


3875.50 


2300.60 


Cash 


2364.35 




John F. Henry 


308.20 




Maurice & Co. 




215.50 


James F. Hawkins 


127.75 




Wm. H. Reeder 




87.90 


Interest 


15.65 


11. 


Bills Payable 




611.45 


H. H. Wyatt 




320. 




$6946.45 


$6946.45 


Inventories : 






Merchandise 


$1729.55 


• 


Expense 


102.50 





b. Closing the Ledger. On a loose sheet of ledger paper copy the 
following accounts ; allow ten lines for each account. 



Student, Proprietor 



19— 

Mar. 



11 



150 



19- 

Mar. 



2650 



56 



BOOKKEEPING 
Merchandise 



19— 












19— 






— 






Mar. 


3 




1 


352 


55 


Mar. 


8 




1 


560 


25 




12 




2 


250 


50 




15 




2 


337 


50 




19 




3 


425 






23 




4 


211 


20 




27 




5 


516 



























Expense 












19— 
























Mar. 


2 
11 
30 




2 
3 
5 


42 
35 

18 

























Interest 












19— 












19- 












Mar. 


13 




5 


5 


60 


Mar. 


18 




6 


7 


80 




20 




6 


8 


20 




23 




6 


4 


10 



Inventories : 

Merchandise 
Expense 

Open a Loss and Gain account ; close the ledger. 

II 

James S. Cone, Proprietor 



1625.75 
45. 



19— 

Apr. 



75 



19— 

Apr. 



3250 



Merchandise 



19— 






— 






19— 


^ 




— 






Apr. 


3 




1 


1256 


20 


Apr. 


8 




1 


986 


40 




10 




2 


835 


70 




12 




3 


632 


70 




16 




2 


255 


75 




19 




3 


587 


50 




25 




4 


490 


50 















REVIEW EXERCISES 
Expense 



57 



19- 






— 


















Apr. 


4 
10 
29 




1 
3 
4 


75 
15 
10 


50 
25 
40 















Interest 



19- 












19- 












Apr. 


11 




5 


11 


75 


Apr. 


17 




4 


9 


90 




14 




6 


5 


25 




24 




5 


15 


25 




22 




7 


3 


40 


- 













Inventories : 

Merchandise J1070.80 

Expense 62.50 

Open a Loss and Gain account ; close the ledger. 
c. Journalizing. Journalize orally or in writing each of the following 
transactions and state the reason for each debit and each credit named. 

1. You began business by investing cash, |1250; merchandise, $800; 
real estate, $1750. 

Real Estate includes all land, and whatever legally belongs to the land. 

2. James R. Durham began business with the following resources: 
merchandise, $975; cash, $850; account against George H. Sand, $250; 
Jas. L. Perrin's note, $550 ; real estate, $750. 

3. Thos. Hardy gave you his note at 60 da., with interest, to apply 
on account, $400. 

4. You gave A. H. Wheeler your note at 30 da., with interest, to 
apply on account, $300. 

5. Bought merchandise of Lane & Gross amounting to $650. Gave 
them cash for one half the invoice ; balance on account. 

6. Sold James R. Mann merchandise amounting to $750. Received 
his check for one haK the invoice ; balance on account. 

6. Paid your note in favor of Harry F. Meekins, in cash, $350. 

8. Received a check from Thomas Harlan for his note due to-day, $100. 

9. You gave Lamed & Co. cash for your note and interest due 
to-day; face of the note, $235; interest, $10.50. 

10. Received a check from J. A. Markham for his note and interest 
due to-day ; face of the note, $425 ; interest, $21. 



58 BOOKKEEPING 

11. You withdrew from the business for personal use cash, |100. 

12. Borrowed of T. K. Jones cash, |150, and gave him your note 
at 30 da. 

13. Loaned A. H. Decker cash, $200, and received his note at 60 da. 



LABOR-SAVING DEVICES: DIFFERENT BOOKS USED 

It has been seen that all the transactions of a business may be recorded 
in a book called the journal. In business it is more convenient, simple, 
and effective to classify transactions as they occur ; this is accomplished 
by using the following books : 

The Cashbook contains a record of all receipts and all disbursements of 
cash. It is the cash account of the business, and when it is used no 
account with cash need be kept in the ledger. The left-hand page con- 
tains a record of all the cash debits (receipts), together with the names 
of the accounts to be credited, and a brief explanatory statement. The 
right-hand page contains a record of all the cash credits (payments), to- 
gether with the names of the accounts to be debited, and a brief explana- 
tory statement. The difference between the two sides of the cashbook 
should show the amount, balance, of cash on hand. 

The Sales Book contains a record of all sales on account, and usually 
of all cash sales, except small retail sales for which no bills are rendered. 
The records consist of the names and the addresses of the purchasers, 
the terms, the items, the prices, and the amounts of the goods sold. At 
regular intervals the book is footed and closed. 

The Purchase Book contains, usually, an abstract of all bills of merchan- 
dise bought. At regular intervals the book is footed and closed. 

When the cashhook, the sales hook, and the purchase hook are used, only 
such transactions as do not affect these books are entered in the journal. 

As a preliminary drill it will be found helpful to journalize on the blackboard 
each cash transaction and beside it make the cashbook entry. The same plan may 
be followed for both purchases and sales. 

EXERCISE 37 

SET E (MODEL SET). FLOUR AND GRAIN 

On pages 63 to 67 is a complete model set, in script, in which the 
journal, the cashbook, the sales book, the purchase book, and the ledger 
have been used. This set was written from the following memoranda of 
transactions, but different prices were used in some instances. 



CLASSIFICATION OF TRANSACTIONS 59 

Directions and Suggestions. Write the set from the memoranda of 
transactions following ; be guided by frequent reference to the model 
script set. 

1. Use a double sheet of journal paper, four pages, and a sheet of ledger 
paper, two pages. 

2. On the upper half of page 1 of the journal sheet write the journal^ 
and on the lower half the purchase hook; on pages 2 and 3, the cash- 
hook; on page 4, the sales hook. On the portion of pages 2 and 3, below 
the cashbook, write the trial balance, the statements and the verification. 

3. This set is not to be recorded in the bound books. 

4. The entries will be the same as in the script model, but the amounts 
will differ in some transactions. 

5. A. B. Coates is represented as the proprietor. 

Memoranda of Transactions 

March 1. A. B. Coates, Chicago, 111., began the Grain and Produce 
business, investing cash, $1500. 

Make a memorandum in the journal ; enter the cash received by the business in 
the cashhook. 

1. Paid G. H. Irving cash for rent of the store for 1 mo., $65. 

1. Paid E. M. Snow cash for stationery, $6. 

2. Bought of F. E. Rogers & Co., Peoria, on account, 30 da. : 

500 bbl. Flour at $4 

3. Bought of L. O. White & Co., City, for cash: 

750 bu. Wheat at 61(^ 

Enter in the purchase hook, placing a check mark ( V ) in the folio (page) column 
against the name of the firm ; enter the cash paid on the right side of the cashbook 
and place a check mark in the folio column against the name of the firm. Neither 
entry need be posted. 

If the ledger is designed to show just how much business is done with each firm 
of whom we buy or to whom we sell, then the items should not be checked, but post- 
ings should be made from both the purchase book and the cashbook. 

When the check mark is used, as above, it means do not post. 

Until otherwise instructed, all purchases for cash will be entered in the purchase 
book and the cashbook, and checked ; all sales for cash will be entered in the sales 
book and the cashbook, and checked ; neither will be posted to the ledger. 

5. Sold D. E. French, Joliet, on account, 20 da. : 

300 bbl. Flour at |4.75 150 bu. Wheat at 89^ 



60 BOOKKEEPING 

March 9: Bought of F. E. Rogers & Co., Peoria, on account, 30 da.: 
1000 bu. Oats at 39^ 

10, Sold P. Q. Reed, City, on account, 20 da. : 

200 bu. Wheat at 89^ 

11. Sold J. K. Loveless, City, for cash less 2% : 

100 bbl. Flour at $4.85 200 bu. Oats at 50(^ 

Enter in the sales book and check ; then enter in the cashbook and check. 
Unless otherwise instructed, all cash purchases and all cash sales will be entered 
as already described. 

15, Sold D. E. French, Joliet, on account, 20 da. : 

500 bu. Oats at 55^ 200 bu. Wheat at 89^ 

20, Sold C. A. Wesp, City, for cash less 2% : 

100 bbl. Flour at $4.95 300 bu. Oats at 53<^ 

28, Bought of M. N. Olson, City, on account, 3 da. : 
1500 bu. Wheat at 63<^ 

25. Received of D. E. French his check in full for the invoice of 
March 5, 11558.50. 

A check is regarded as cash; record the amount on the left side of the cashbook. 

26. Gave M. N. Olson cash in full for the invoice of March 23. 

27. Remitted F. E. Rogers & Co., a note at 10 da., with interest in 
full for the invoice of March 2. 

50. Received cash of P. Q. Reed in full for the invoice of March 10. 

51. Paid the bookkeeper, H. C. Ray, his monthly salary in cash, |40. 
Balance the cashbook ; follow the model script form. 

Make the closing entry in the purchase book. 
Make the closing entry in the sales book. 

Post all the books to the ledger; allow ten lines for each account, 
as follows : 

1. Post the journal in the usual way, writing J in the explanation 
column of the ledger to indicate the book from which it was posted. 

2. Post the cashbook. The amounts on the debit (left) side should 
be posted to the credit of the ledger accounts named. The amounts on 
the credit (right) side should be posted to the debit of the ledger 
accounts named. Write Q in the explanation column of the ledger. 
Write the page of the ledger in the folio column of the cashbook. 
Checked items must not be posted. 



CLASSIFICATION OF TRANSACTIONS 61 

3. Post the sales book. Debit each personal account that is not al- 
ready checked, and credit merchandise for the total sales, the footing. 
Write S for sales book in the explanation column of the ledger. Write 
the ledger page iji the folio column of the sales book. 

4. Post the purchase book. Credit each personal account that is not 
already checked,, and debit merchandise for the total purchases, the foot- 
ing. Write P for purchase book in the explanation column of the ledger. 
Write the ledger page in the folio column of the purchase book. 

Recheck the posting ; foot the ledger accounts. 
Take a trial balance. 

Remember that the balance of the cash in the cashbook must be carried to the 
trial balance, on the debit side. 

Have the trial balance approved. 
Pass all work to the instructor. 

Note. If an additional exercise is required, use Exercise 22, Set C. 

"^'^ EXERCISE 38 

SET F. COAL AND WOOD 

Directions and Suggestions. This set is designed to give further drill 
in the use of the cashbook, the sales book, the purchase book, the journal, 
and the ledger. 

1. Use loose sheets of journal paper and ledger paper. 

2. This set is not to be recorded in the bound books. 

3. Follow the directions given in the model script set. 

4. Student is represented as the proprietor. 

Memoranda of Transactions 

April 1. Begin a Coal and Wood business, investing cash, |1750. 

2. Rent a coal and wood depot of C. M. Estes, 17 Warren Street; 
give him a check for one month's rent, |75. 

3. Buy of M. L. Travers for cash : 

2 Work Horses, $130 each 1 Delivery Wagon, {100 

1 set Double Harness, |35 1 Osgood Scales, |200 

Debit Expense for the above items. 

4. Buy of C. F. Osbom & Co., City, on account, 10 da. : 
100 T. Egg Coal at $6 100 T. Grate Coal at |6.10 



62 BOOKKEEPING 

April 6. Buy of Stevens & Co., Pittsburgh, on account, 10 da.: 

100 T. Stove Coal at $6.25 100 T. Nut Coal at |6.20 

100 T. West Virginia Coke at $5 

8. Buy of C. L. Smith, City, for cash : 

10 cd. Maple Wood at $3.50 10 cd. Pine Wood at $4.50 

10 cd. Body Hickory Wood at $5.50 * 

9. Sell George H. Marshall, Homeville, on account : 

50 T. Stove Coal at $7.50 50 T. Grate Coal at $7.25 

11. Sell Gaylord & Son, City Point, on account : 

50 T. West Virginia Coke at $6 50 T. Nut Coal at $7.50 

12. Sell G. A. Collier, City, for cash less 2%: 

50 T. Stove Coal at $7.50 10 cd. Maple Wood at $4.50 

10 cd. Body Hickory Wood at $6.50 

15. Pay C. F. Osborn & Co. cash, to apply on account, $500. 

16. Receive of Gaylord & Son cash, to apply on account, $250. 

17. Give Stevens & Co. a note at 30 da. with interest, to apply on 
account, $1000. 

18. Withdraw cash for personal use, $100. 

20. Receive of Gaylord & Son their check to balance account, $425. 
25. Receive of George H. Marshall cash, to apply on account, $350. 
27. Sell G. A. Collier, City, for cash less 2%: 

10 cd. Pine Wood at $5.50 50 T. Grate Coal at $7.25 

29. Pay Mary L. Pierce, the bookkeeper, her monthly salary in cash, 
$30 ; pay James Torrey, the teamster, his monthly salary, $30 ; E. L. 
Higgins for care of the horses, $16.50. 

Debit Expense for the above items. 

30. Make an additional investment in cash, $750. 

Inventories, April 30, 19 — 
Merchandise : 

50 T. Nut Coal at $6.50 
100 T. Egg Coal at $6 
50 T. West Virginia Coke at $4.75 

Expense : 

Horses, Wagons, and Harness at 1% below cost, $391.05 
Osgood Scales at 1% below cost, $198 



MODEL SCRIPT SET 
Set £. Journal 




68 






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2-0 (P (y 



2.(P c? (? 



Set E. Purchase Book 






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^£. 



64 



BOOKKEEPING 
Set £ 



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30 


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/ 
/ 






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MODEL SCRIPT SET 
Cashbook 



65 



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This line to be written in red ink. 



Sales Book 



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BOOKKEEPING 



Set E. Ledger 



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INTRODUCTION TO BUSINESS PRACTICE 



67 



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Close all the books. 

Post to the ledger ; allow ten lines for each account. 
Take a trial balance. Make the statements and the verification. 
Close the ledger ; take a trial balance, 
all work to the instructor. 



INTRODUCTION TO BUSINESS PRACTICE 
THE BANK ACCOUNT 

A Bank, primarily, is an institution chartered by the state or the 
national government, to deal in credits and to provide for the safe- 
keeping of money. 

A Commercial Bank renders important and diversified services to busi- 
ness men, among which are the following : 

1. It grants credit to business men who wish to borrow money. 

2. It is a safe place to keep money, securities, and valuables. 

3. It facilitates the payment of money by allowing deposits to be 
drawn out on an order called a check. It does away with the necessity 
of sending money from one place to another. 

4. It is especially helpful to business men in making collections, such 
as notes, checks, and drafts. 

A person opens an account with a commercial bank by being identified 
if he is not known to the bank. After identification he writes his name 
in a signature hook or on a signature card. He then makes out a deposit 
ticket for all items deposited, as cash, checks, etc. The bank furnishes 
deposit tickets and a check book, a book of blank checks and stubs, 
without charge. 



68 BOOKKEEPING 

The Signature Card gives such information as the bank may require concerning 
the depositor, but the most important is the depositor's signature. Any paper pre- 
sented at the bank bearing the depositor's name admits of identification by reference 
to the signature card. 

A plain, neat signature is most difficult to imitate. One should always write his 
name in exactly the same form. 

The following shows a signature card properly filled out : 



AUTHORIZED SIGNATURE OF 



For the HAMPDEN NATIONAL BANK of Westfield, Mass. 






Address 

Business /'/^-^^'7.^tA2^y / / O-^'^^l^- 





Date -J^5'^^-Z.^^^'^^/4^I3— 



Deposit tickets are not uniform in arrangement. The following illus- 
tration shows how the items of a deposit may be classified for the con- 
venience of the bank which receives them. The stars show the totals. 
The whole deposit is summarized at the bottom of the ticket. 

These tickets are commonly made up on an adding machine ; a dupli- 
cate copy may be made for the file of the depositor. The file of these 
duplicates is valuable for reference. 

The deposit ticket and the items for deposit should be handed to the 
receiving teller., the official who generally receives all money and all de- 
posits passed to the bank. He examines the deposit, and if everything is 
found to be correct, he enters it in a book called a Pass Book. 

The pass book is returned to the depositor by the teller and serves 
as a receipt for the money deposited in the bank ; it should always 
accompany a deposit. Under no circumstances should the depositor 
make an entry in his pass book. 



INTRODUCTION TO BUSINESS PRACTICE 



69 



DEPOSITED WITH 

CONTINENTAL NATIONAL BANK 
OF CHICAGO 

FOR ACCOUNT OF 

HORACE A. WELLMAN 



September 19, mi 



CHECKS ON OTHER 
CHICAGO BANKS 


CHECKS ON 
THIS BANK 


CHECKS AND DRAFTS ON OTHER 
TOWNS AND CITIES 




Dollars 


Cents 




Dollars 


Cents 




Dollars 


Cents 




25 

46 

103 

174 


32 
28 
00 
60 


* 


16 
8 

24 


20 
14 

34 


# 


7 
11 
36 

54 


18 
02 
24 
44 




TOTAL CHICAGO 

TOTAL ON THIS BANK 

OUTSIDE 




174 


60 






24 


34 






54 


44 




CURRENCY 

SILVER 

GOLD 




160 


00 






30 


70 












GRAND TOTAL 
LESS EXCHANGE 




444 


08 
30 






443 


78 



70 



BOOKKEEPING 



Herewith is given another form of a deposit ticket and a method of 
keeping a duplicate of it. On the ticket, in addition to the currency 
items, each check is hsted by giving the name of the city on which it 

is drawn, for the convenience 



Reverse Stub of the Check Book 



o^-^te.^2-t?-cl^t-^ : 



^a 



J~J- 



of the bank which receives 
the deposit. 

The reverse, or left, stub of 
the check book shows a dupli- 
cate of the deposit ticket, and 
each check is listed under the 
name of the maker, for the 
convenience of the depositor. 

This form is convenient for 
recording a deposit of a limited 
number of items, but when a 
lengthy deposit ticket is made up, 
the plan given on page 69 is more 
convenient, as a large number of 
items could not be recorded on the reverse stub of an ordinary check book. 

When the depositor wishes to withdraw money from the bank, he 
writes an order called a Check. 






/Cy^ 



A Check Book is a book of blank 
checks furnished to the depositor 
by the bank. It consists usually of 
two parts, the stubs and the checks. 
The stub contains a memorandum 
of the check and is valuable for ref- 
erence after the check has been de- 
tached, and for comparison when 
the check is returned, canceled. 

The illustration on page 71 shows 
one page of a check book, both 
the checks and the stubs having 
been filled out. The checks may be 
totaled and the amount carried for- 
ward to the top of the next page. 



Deposit Ticket 



The proof of cash is necessary at 
stated times, and in proving cash the 
check book must be depended on to 
show the condition of the bank account. 
By keeping a total of the checks drawn and a total of the deposits made, the balance 
shown by the check book may be readily ascertained at any time. 



THE UNION BANK 

DEPOSITED BY 
Please list each check separately 



Bills_ 
Gold- 



Silver, 



Checks "Tw^^ 



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INTRODUCTION TO BUSINESS PRACTICE 



71 



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72 BOOKKEEPIlSra 

The deposits may be recorded on the reverse, or left, stub, an illustra- 
tion of which is given on page 70. The deposits may be carried forward 
on the reverse stub, and then the balance shown by the check book may 
be readily found by finding the difference between the total deposits and 
the total checks. 

Page 71 is an illustration of a common form of check book. It shows the transac- 
tions of a depositor, Charles H. Jones, with The Union Bank for two consecutive days. 

Notice the manner of filling out the check, the important items of the check re- 
produced on the stub, the total after the second check has been written, and the 
amount of the two checks carried forivard. 

Great care should he taken in the writing of each check. There should be no erasures 
of any kind in the check book. 

The first figure in the amount of a check should be written close to the dollar 
sign ; an amount in figures should be written as follows : $15-. The first word in 
writing the amount should begin at the head of the line, and cents should be ex- 
pressed as a fraction of a dollar, as 25/100 ; any other space on this line should be 
filled in with a waved or broken line. 

It should be borne in mind that there are manifold ways of keeping a check book. 
The method outlined herewith is a simple one and well serves the need of the student 
in his work in business practice. 

The Left, or Reverse, Stub may be used for recording any memoranda 
that the depositor deems important. 

Deposits should be entered in the pass book by the teller of the bank 
at the time the deposit is made. If at any time a deposit is made with- 
out the pass book, a duplicate deposit ticket should be obtained by the 
depositor. 

Different banks use different methods for keeping records in a pass 
book. All deposits may be entered in it; at the end of the month the 
checks are totaled on an adding machine, the amount carried to the 
pass book, and the balance shown. 

However, it is more common, at least in large banks, to record deposits 
in a pass book, and at the end of each month all deposits and all checks, 
itemized or in total, are entered on a slip or on an envelope, and the 
balance shown as a monthly statement. This statement, together with 
all canceled checks, is given to the depositor and constitutes a statement 
of his dealings with the bank for a given month. 

In this text, in business practice, all deposits will be entered in the 
pass book at the time they are made. 

In the package of business forms, an envelope is provided for each 
month on which a monthly statement of the bank account should be 
made. Upon this envelope the student's name should be written, and 
as checks are drawn they may be filed in it. 



INTRODUCTION TO BUSINESS PRACTICE 



73 



We UNION BANK 

STATEMENT OF ACCOUNT 




DATE 


CHECKS 


DATE 


DEPOSITS 


//E^y>^ 


^ 


2/^^ 


___ 


Balance 








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TOTALS: 

DEPOSITS 


Zy.ft? 


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CHECKS 


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TOTAL 


C^3 


iU 


BALANCE 


^^^/ 


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At the end of a month a statement of the student's bank account 
should be made on the outside of this envelope, recording simply all 
deposits and all checks, as shown in the above illustration, and the 
balance. 



74 BOOKKEEPIKO 

The deposits in the pass book may be totaled and the checks, in total, 
subtracted therefrom, thus showing the balance in the pass book. 

Place all the checks in the envelope. This constitutes a complete 
monthly statement of the student's bank account. 



EXERCISE 39 
TRANSACTIONS WITH A BANK 

Make the following blank forms : rule lengthwise two sheets of paper 
about 6x8 inches ; rule two checks, two stubs, and the reverse stub on 
each sheet. This represents a page of a check book and the reverse stub. 
Follow the models given on page 71. 

Under date of March 1, enter on the reverse stub of the sheet just 
ruled a deposit of $1500. 

Under date of March 9, write a check for |250, in favor of Henry S. 
Lee, No. 1. Fill out the stub first and then write the check. 

Under date of March 13, enter a deposit of $150. 

Under date of March 16, write a check for $137.50, in favor of Wm. 
G. Howe, No. 2. Remember to fill out the stub first. 

Forward the total deposits to the reverse stub, and the total checks to 
the regular stub, on sheet number two. 

Under date of March 19, write a check for $100, in favor of E. T. Perry. 

Under date of March 23, enter a deposit of $75. 

Under date of March 30, write a check for $28.40, in favor of Amos 
H. Wells. 

What balance now remains in the bank ? 

This exercise may be continued at the discretion of the instructor. 

EXERCISE 40 

BUSINESS FORMS 



Soston, Mass., je?^.^?^^. f, 19. 
T^eceived o f -^^^^^^^-^.^^1^. AJ X ^ ^ 



7-- ^^ A- 77-''~A^^.-r^^^^^ /"" dollars 



7^ 



$ ZC^(P' — :^- '~ i/7-r^^ Jr^p'^^^.^^^^..<^^^ 



INTRODUCTION TO BUSINESS PRACTICE 75 

The Receipt. Study the model receipt, page 74, in every detail. 
Write the following receipts on slips of paper properly ruled : 
S. T. Wade owes you ^56.75, and pays the whole amount. 
The receipt bears these words: in full of account. 

R. O. Warner owes you 1120.50, and pays you t75. 
The receipt bears these words : to apply on account. 

You owe John Wheeler $102.50, and pay it all. 

You owe J. H. Leaman $62.50, and pay him |35. 

Near the bottom of page 19 is an open ledger account with J. A. Lyons. 
Write the receipt that he should give you, assuming that you pay the 
account in full. 

The Invoice. This model shows how an invoice should be made out 
when goods are bought or sold. The terms are on account^ 60 da., there- 
fore it is not receipted. 

























-^-s^^^^^ j.,-^^ ^^^_^ 






©r. 


T^e.rmR ^^ ,c7^^ 








? 


.^r>^^.d^.^. y^ -^^^^^^^^/'^.r<£^ vr: ^^ 


/ .rv 


.ra 








/ £> 


— ^^z2-.52^i=^ ~X^^y^,.</^^.-r:^~^>€7^ /T^-?^ 


r / 


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,r 


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,r 


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7 

r.9 


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(?r 























































































In this invoice who is the buyer? the seller? What is meant by terms 60 da.f 
Note that the dollar sign is not used in writing either the prices or the exten- 
sions on an invoice. 



76 BOOKKEEPING 

This model invoice is receipted because the terms are cash. 






.r 



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_^£_ 



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Study these model invoices in every detail, then rule two sheets of 
paper according to the model, and write the following invoices. Do 
your best work, — good writing and neat, legible figures. 

Turn to Set I, page 42, and write the invoices under the dates of 
Jan. 4 and 9. 

Turn to Set II, page 52, and write the invoices under the dates of 
Feb. 6 and 9. 

Filing Invoices. For convenience in handling, invoices may be folded 
lengthwise with the printed matter outward. 

The manner of folding the invoice (noted above) is not imperative. 
The invoice may be folded lengthwise, the printed matter within ; on the 
left end write the name of the seller, the amount in figures, and the date. 

For the student's work in business practice the first method is recommended. 

After the invoices are folded a rubber band may be placed around 
them, and then they are in a convenient form for handling. The filing 
should be in the order of the dates. 

These suggestions are simply for the students in the classroom. 



INTRODUCTION TO BUSINESS PRACTICE 



77 



The Promissory Note. Study all the details of the following model 
note : 



fU^ZJZJL 



i./- 



^^^^<<>g^ ^^^;^;>^,yl.^^ - 



after date^^ promise to pay to 



the order nf y/^tp-r-z^^.^y^^ ^^^^^>f^<r^^^ P^^.-f7r^- 



'^^^^.^^y^^r-^^^.^-T^.^^ijC^^.^^ 



fDoll 



ars 



at J^^^.-t^^r-'iP^y^^^^!^^ 
Value received 
^o. /A. 'Dae'r^^Arr ^r^^Y^-^rd-u y^^::^^^ 



T 



Who is the maker of this note ? the payee ? Does it draw interest ? When is the 
maturity of the note? Who holds this note hefore maturity? After it is paid who 
will hold it ? Why is this called a promissory note ? 

Write the following notes on slips of paper. Use the current date. 

1. Gave Henry A. Morton your note, at 60 da., with interest, payable 
at the First National Bank, #250. 

2. Received of Henry S. Mercer his note, at 30 da., payable at The 
Union Bank, |128.50. 

3. Gave Wilson & Brown your note, at 2 mo., payable at your office, 
1175.20. 

4. Received of A. D. Rose & Son their note, at 1 mo., with interest, 
payable at their office, $200. 

The Purchase Book. The following model represents a purchase 
book, — a book in which all purchases may be recorded. 

Model Purchase Book 



' / -^t^^^.^yy^^!^'^'i^?^z,y-c-^ 



NAMES AND ADDRESSES 



XERMS 



3(? <S^€iX 



AMOUNT 



C4/J. 



f¥ 









S0(? 



J 



S:^^ 



^?z-<^^.<^ 



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78 



BOOKKEEPING 



Various books are designed for recording purchases, but the illustra- 
tion given on page 77 shows the general plan of any book that may 
be used for this purpose. In the more advanced portion of this work an 
invoice book will be introduced. 

The posting of this book is explained on page 61. 

Daily Cash Proof. In the following sets the student will use repre- 
sentative money in carrying out his business transactions. At the close 
of each day's business cash should be proved. 



DAILY CASH PROOF 



Name 




Date 



Cash received per cashbook, total ^ y ^ ^ , 

Cash paid per cashbook, total / kJ^ ^ ^ . ' 



Balance per cashbook 



^4^^^_ 



A^a 



Cash on hand per cash drawer ^^^ ^^£— v 

Cash in bank per check book A^ ^ /a ^ . ^^^-^ 

Total 4^4^^^^ 



V ^ 



How to prove cash: 

1. The left side of the cashbook shows all cash received. 

2. The right side of the cashbook shows all cash paid out. 

3. The difference shows the amount of cash the business has on hand. 

4. The money in the cash drawer added to the amount in the bank 
should equal the difference shown by the cashbook. 

5. If no bank account is kept, the cash in the drawer should equal 
the difference shown by the cashbook. 

6. If all money is in the bank, the true bank balance should equal 
the balance shown by the cashbook. 

It is suggested that the above form of proof b^ used. 



mTRODUCTION TO BUSINESS PRACTICE 



79 



EXERCISE 41 

THE TRIAL BALANCE 

Thus far all trial balances have been made by taking the footings of 
the debit and the credit items of each account, omitting all accounts that 
balanced. It is a common practice for bookkeepers to take a trial balance 
by using the balance of each account. This form of trial balance is illus- 
trated herewith. 

Refer to the model trial balance, page 4 ; compare it with the following trial balance : 



Trial Balance, January 31 


,19— 






James Wilson 
Cash 


1123 


60 


2000 




Expense 
Mdse. 


50 

926 


40 






D. Simons 


100 








0. Lane 






200 




2200 




2200 













To find Errors in the Trial Balance. If the debit and the credit items 
are not equal, that is, do not balance, observe the following suggestions 
in tracing the error : 

1. Go over all additions, both in the trial balance and in the ledger. 

2. Find the exact amount of the error ; if ten or some 'power of ten^ the 
error is usually in addition. 

3. If the amount of the error is exactly the same as some amount in 
the journal, the trouble is likely to be with that amount. 

4. Divide the amount of the error in the trial balance by 2, and 
look for an amount corresponding to this result. If a debit item has 
been posted to the credit, it will cause an error equal to twice the amount 
of the item thus posted. 

5. If the amount of the error is divisible by 9, the error is probably 
the result of the transposition of figures. 

6. If necessary, recheck the posting to determine if that work was 
done correctly. (This manner of rechecking is described on page 19.) 
Rechecking involves a great deal of extra work ; it should be undertaken 
only as a last expedient. 

A trial balance that balances is not absolute proof that the ledger is correct. If 
a credit of Merchandise was posted to the credit of Cash, it would not affect the 
trial balance. 



SET III. GRAIN AND SEED BUSINESS 



WORK FOR MARCH 



The Object of this set is to give systematic drill in elementary business 
practice. Student is represented as the proprietor. Business forms are 
used, and all transactions in cash admit the handling of currency. An 
account is kept with the bank, deposits are made and checks are drawn. 
This set covers a period of two months, March and April, the books 
being closed at the end of each month. 

The Books used in this set are the journal, the cashbook, the sales 
book, the purchase book, the statement book, and the ledger. 

All business forms handled are either Incoming Papers or Outgoing Papers. 
Incoming papers are those received from others ; outgoing papers are 
those given to others. Incoming papers will be received and recorded 
by the student as in business, and he will issue and record all outgoing 
papers as in business. 

Different selling price lists may be used if desired. 

Twenty-five selling price lists are provided for this set. When the in- 
structor gives the student the necessary blank forms he should assign 
him a price list. Any one of the selling price lists may he used in connection 
with the buying price list. 



















Selling 


Price Lists 


ARTICLE 


1 


2 


3 


4 


5 


6 


7 


8 


9 


10 


11 


Clover Seed . . 


3.70 


3.65 


3.80 


3.75 


4.00 


3.88 


3.68 


3.73 


3.79 


3.71 


3.78 


Dwarf Beans . . 


4.20 


4.30 


4.15 


4.25 


4.15 


4.38 


4.33 


4.38 


4.44 


4.21 


4.43 


Field Corn . . 


.48 


.50 


.48 


.48 


.46 


.66 


.53 


.58 


.64 


.49 


.63 


Garden Corn . . 


1.90 


1.95 


1.90 


1.80 


1.80 


2.08 


1.98 


2.03 


2.09 


1.91 


2.08 


Millet, Common . 


.98 


1.05 


.95 


.98 


.90 


1.16 


1.08 


1.13 


1.19 


.99 


1.18 


Oats 


.34 


.37 


.33 


.38 


.40 


.52 


.40 


.45 


.51 


.35 


.50 


Spring Rye . . 


1.10 


1.16 


1.06 


1.15 


1.05 


1.28 


1.19 


1.24 


1.30 


1.11 


1.29 


Timothy Seed . 


2.40 


2.50 


2.40 


2.50 


2.65 


2.58 


2.53 


2.58 


2.64 


2.41 


2.63 


Wheat . . . . 


.90 


.96 


.90 


1.00 


1.00 


1.08 


.99 


1.04 


1.10 


.91 


1.09 



After a price list has been assigned, copy it for ready reference. Ask 
the instructor for Business Forms, No. i, and then proceed to write Set III. 

Directions and Suggestions. This set may be written in any of the 
following ways: 

1. Simply record the transactions as in the preceding sets. 

80 



SET III. GRAIN AND SEED 



81 



2. In addition to recording the transactions, all business forms may 
be used. 

3. In addition to recording the transactions, using the forms, etc., all 
the business called for may^ be done, such business to be transacted 
according to the directions of the instructor. 

The memoranda and all directions are given, so that complete business practice 
may be used if desired. 

4. Prove the cash at the close of each day. (See model, page 78.) 

. 5. If the tablet of Incoming Business Forms is not used, make out 
the forms on page 82 and file them in the envelope for Incoming Papers^ 
before beginning Set III, and use them instead of the tablet. 

Unless otherwise instructed, keep the cashbook on a loose sheet of journal paper 
and copy at the close of the month. All other work may be recorded directly in 
the required books. 

Incoming Business Forms for March 

These incoming forms are included in the text for the following reasons : 

1. All material in any given set is included in the text proper. 

2. The student is able to make a study of the work of the set before 
attempting to write it ; this is especially important. 

3. By having all matter included in the text, extended and varied 
reviews are made possible. 



for March and April 



12 


13 


14 


15 


16 


17 


18 


19 


20 


21 


22 


23 


24 


25 


3.80 


3.80 


3.84 


3.76 


3.89 


3.69 


3.74 


3.81 


3.72 


3.82 


3.81 


3.83 


3.85 


3.77 


4.30 


4.45 


4.34 


4.26 


4.39 


4.34 


4.39 


4.46 


4.22 


4.47 


4.31 


4.48 


4.35 


4.27 


.58 


.65 


.62 


.54 


.67 


.54 


.59 


.66 


.50 


.67 


.59 


.68 


.63 


.55 


2.00 


2.10 


2.04 


1.96 


2.09 


1.99 


2.04 


2.11 


1.92 


2.12 


2.01 


2.13 


2.05 


1.97 


1.08 


1.20 


1.12 


1.04 


1.17 


1.09 


1.14 


1.21 


1.00 


1.22 


1.09 


1.23 


1.13 


1.05 


.44 


.52 


.48 


.40 


.53 


.41 


.46 


.53 


.36 


.54 


.45 


.55 


.49 


.41 


1.20 


1.31 


1.24 


1.16 


1.29 


1.20 


1.25 


1.32 


1.12 


1.33 


1.21 


1.34 


1.25 


1.17 


2.50 


2.65 


2.54 


2.46 


2.59 


2.54 


2.59 


2.66 


2.42 


2.67 


2.51 


2.68 


2.55 


2.47 


1.00 


1.11 


1.04 


.96 


1.09 


1.00 


1.05 


1.12 


.92 


1.13 


1.01 


1.14 


1.05 


.97 



A tablet, separate from the text, containing all the incoming business 
forms, is available for use with this set when business practice is used. 
All incoming checks are drawn on Traders National Bank. 

If business practice is not used, the tablet of incoming forms and the 
package of blank business forms will not be needed. 



82 BOOKKEEPING 

In Set III all merchandise is to be bought at the following prices, 
per bushel : 



Clover Seed 
$3.50 


Dwarf Beans 

$4 


Field Corn 
44^ 


Garden Corn 

$1.75 


Millet, Common 
90^ 


Oats 

30^ 


Spring Rye 

$1 


Timothy Seed 

$2.25 


Wheat 

80^ 



Form 1. Invoice of E. C. Ferry, City, March 2. Terms : cash. 
50 bu. Clover Seed 100 bu. Field Corn 

100 bu. Oats 

Form 2. Invoice of S. D. Welch, City, March 5. Terms : on account. 
20 bu. Dwarf Beans 40 bu. Garden Corn 

100 bu. Millet 100 bu. Wheat 

Form 3. Receipt of Amos Graves, March 7, in your favor, for rent of 

the store for March, $35. 
Form 4. Bill of David Ross for office books and stationery, March 8. 

Office Books, $8.50 Stationery, $4 

Form 5. Invoice of Henry Bruce, City, March 10. Terms: on account. 
100 bu. Spring Rye 50 bu. Timothy Seed 

Form 6. Bill of I. N. Moss, City, for 2 T. coal at $5.20, March 11. 

Terms: cash. 
Form 7. Bill of A. C. Webb, City, for office safe, $75, March 12. 

Terms: cash. 
Form 8. Invoice of Haynes & Co., City, March 14. Terms : on account. 
30 bu. Dwarf Beans 100 bu. Spring Rye 

200 bu. Field Corn 200 bu. Wheat 

100 bu. Millet 

Form 9. Check of Boyd & Co., City, for $200, in your favor, March 23. 
Form 10. Invoice of S. D. Welch, City, March 24. Terms: on account. 
10 bu. Dwarf Beans 100 bu. Millet 

100 bu. Field Corn 100 bu. Oats 

20 bu. Garden Corn 

Form 11. Invoice of Henry Bruce, City, March 25. Terms: on account. 
100 bu. Spring Rye 200 bu. Wheat 

Form 12. Note of Jesse Watson, City, for $180, in your favor, at 30 da., 

with interest, March 29. 
Form 13. Check of John Wells, City, for $100, in your favor, March 29. 
Form 14. Check of Oscar Wilson, City, for $242, in your favor, March 31. 



SET III. GRAIN AND SEED 



83 



Memoranda of Transactions for March 

March i. Begin the Grain and Seed business, investing cash, |2400. 

Place the above raemorandunl in the journal, hut make no journal entry. Make 
the proper entry in the cashbook. Receive the currency from the instructor and put 
it in the Business Cash envelope. 

1. You have entered into an agreement with Amos Graves for the 
rental of his store, at 120 Main Street, at |35 per month. 

No entry is required. A memorandum of this agreement may be made and filed 
with the incoming papers. 

2. Buy of E. C. Ferry, City, for cash, merchandise as per invoice. 
Form 1. 

Remove this invoice from the tablet of Incoming Papers. Note the extensions 
and the addition. 

In business, the goods received are compared with the invoice, and if found to be cor- 
rect, check marks are placed at the leji, as shown in the following script illustration ; 
then the extensions and the addition are verified and checked as shown at the right. 

Verify the extensions and the addition. 

Make the proper entries in the cashbook and the purchase book. These items 
should be checked in each. The check mark means do not post. 

In the purchase book write the name, the address, the terms, and the amount on 
one line. 

Pay for the invoice. 

Fold the invoice once lengthwise, face outward, and place it in the Paid Bills 
envelope. 



if^^, /Unryf^ 



2^19. 






^errm "^^^ 



i^uiS 



'-i^y. ^-^rt^n^^^-^^^^ 



/7^" — 



/ 



/^r? 



^auz 









^^f 



7^ 



84 BOOKKEEPING 

March 3. Sell John Williams, City, for cash, at the prices given 
herewith : 

20 bu. Clover Seed at $3.70 50 bu. Field Corn at ^^ 

40 bu. Oats at 34(^ 

Make out an invoice and receipt it. If correct in every detail, record it in the 
sales book and the cashbook, and check in each. Do not put any check marks on any 
bill of goods that you sell. Receive the cash and place it in the Business Cash 
envelope. 

Pass the bill to the office, or dispose of it according to directions received. 

Take great pains in counting all cash. 

4. Deposit in The Union Bank cash, |2000. 

Read pages 68 and 70 for instructions. 

Make out a deposit ticket. Record the amount in the check book, on the reverse 
stub. 

Place the currency and the deposit ticket in the pass book, and hand it to the bank. 

6. Buy of S. D. Welch, City, on account, merchandise as per invoice. 
Form 2. 

Remove the invoice from the tablet. Check the extensions and the footing. 
Record it in the purchase book. Fold and place it in the Unpaid Bills envelope. 
Do not receipt this invoice. Why ? 

6. Sell John Wells, City, on account : 

5 bu. Dv^arf Beans 20 bu. Garden Corn 

50 bu. Millet 

Write the invoice, but do not receipt it. Why ? Use the selling prices of the list 
assigned to you. Record in the sales book. Refer to the model, page 64. Dispose of 
the invoice according to directions received. 

7. Pay Amos Graves cash, for rent of the store for March, $35, Form 3. 

Remove this receipt. Make the entry in the cashbook. Pay the money. Place 
the receipt in the Paid Bills envelope. 

8. Pay David Ross cash, for office books and stationery, $12.50, Form 4. 

Examine and check the bill. If correct, pay it. Make the entry in the cashbook. 
Fold the bill and file it in the Paid Bills envelope. 

9. Give S. D. Welch your check, to apply on account, $200. 

Fill out the stub in the check book, No. 1. (See model check book, page 71.) 
Write the check and detach it. Make the entry in the cashbook. 

A receipt need not be taken when an amount is paid by check, as the canceled 
check will be returned as a receipt. However, a receipt may be taken if desired. 

In the package of business forms there is an envelope for keeping a record of 
your dealings with the bank for one month. 



SET III. GRAIN AND SEED 85 

If the checks are passed to an office, this envelope should be left at the office. The 
form and the use of this envelope are illustrated and explained on page 73. Place the 
student's name on the envelope. As checks are received, they may be filed therein. 

If the checks are kept by the student at his desk, he may keep the envelope and 
do this work himself. 

March 10. Buy of Henry Bruce, City, on account, merchandise as per 
invoice. Form 5. 

Remove this invoice from the tablet. Examine and check as previously instructed. 
Enter in the purchase book. Fold and file the invoice. 

11. Pay the bill of I. N. Moss in cash for 2 T. coal at $5.20, Form 6. 
Remove the bill from the tablet. Examine and check it. If correct, pay it. 

12. Pay the bill of A. C. Webb by check, for office safe, |75, Form 7. 

Remove the bill from the tablet. Total the two checks and carry the amount 
forward to the top of the next regular stub. 

IS. Receive of John Wells cash, to apply on account, flOO. 

Write a receipt in favor of John Wells and receive the currency. Make the cash- 
book entry. Place the money in the Business Cash envelope. 

14. Buy of Haynes & Co., City, on account, merchandise as per invoice, 
Form 8. 

Examine and check the invoice, and then proceed as usual. 

15. Sell Boyd & Co., City, on account : 

100 bu. Field Corn 50 bu. Spring Rye 

100 bu. Millet 10 bu. Dwarf Beans 

Write the invoice and record it in the sales book. 

16. Deposit currency, $200. 

Make out the deposit ticket. Record it in the check book, on the reverse stub. The 
total of the deposits may now be carried forward to the top of the next reverse stub. 
Place the currency and the ticket in the pass book and hand it to the bank. 

17. Pay Henry Bruce by check, to apply on account, $112.50. 

Write the check and make the entry in the cashbook. How do you dispose of 
the check ? 

18. Sell Howard Young, City, on account, at the prices given herewith : 
20 bu. Clover Seed at $3.65 10 bu. Timothy Seed at $2.50 

Write the invoice and record it. 

19. Sell Jesse Watson, City, on account, at the price given herewith ; 

200 bu. Wheat at 90^ 



86 BOOKKEEPING 

March 20. Withdraw cash, for personal use, |50. 

Take |50 in currency from the Business Cash envelope and place it in the envelope 
for Personal Cash. Make the entry on the right side of the cashbook. Under what 
name will you enter it ? 

23, Receive of Boyd & Co. their check, on account, |200, Form 9. 
Remove the check and enter it in the cashbook. Place the check in the Business 
Cash envelope. 

23. Pay Haynes & Co. by check, to apply on account, $500. 
Write the check and make the entry. 

24. Buy of S. D. Welch, City, on account, merchandise as per invoice. 
Form 10. 

Examine and check it. 

2d. Buy of Henry Bruce, City, on account, merchandise as per invoice. 
Form 11. 

26. Sell John Wells, City, on account : 

50 bu. Spring Eye 150 bu. Wheat 

27. Give S. D. Welch your note at 8 da., to apply on account, |100. 
Write the note, payable at my office. The note which you write will be similar to 

the script form given herewith. The signature will be your name. 






.after date^^promise to pay to 



the order n f ~ Ji^. ^f~ y^/^^^^^ 



at y?^?^^^ .-r^-jC^^yy -^---^ ^^^ - :^^ 

*Oalue received 



Make the entry in the journal. Dispose of the note according to directions 
received. 

28. Sell Boyd & Co., City, on account : 

100 bu. Wheat 10 bu. Clover Seed 

5 bu. Dwarf Beans 10 bu. Garden Corn 

Write the invoice. What record is made ? 

29. Receive of Jesse Watson his note at 30 da., in full of account. 
Form 12. 

Remove the note from the tablet. Make the journal entry. Place the note in 
the Unpaid Bills envelope. 



SET III. GRAIN AND SEED 



87 



March 29, Receive of John Wells his check, on account, JlOO, Form 13. 

Remove the check and enter it in the cashbook. Place the check in the Business 
Cash envelope. 

31. Sell Oscar Wilson, City, for cash, at the prices given herewith, 
receiving in payment his check. Form 14. 

50 bu. Field Corn at 48(^ 100 bu. Oats at 34(^ 

10 bu. Garden Corn at $1.90 150 bu. Spring Rye at |1.10 

AVrite the invoice ^nd receipt it. Record it in the sales book and the cashbook, 
and check the item in each. Remove the check and place it in the Business Cash 
envelope. 

31. Deposit the three checks and all the currency on hand. 

Take the currency and the checks from the Business Cash envelope ; count the 
currency and make out the deposit ticket. 

Indorse each check, as shown in the following illustration : 









\ 


2-f, 19- ^0. /,? 

Bank 


\v 


'Dnllnrs 


\^ 


^yOhjy^^ 


\. 




\ 





The full indorsement, shown in the accompanying illustration, is the one most 
commonly used in business, and some banks and the clearing houses insist that 
this form must be used. 

The blank indorsement is simply the writing of one's name on the back of the 
paper. (See page 90.) 



88 BOOKKEEPING 

Place the currency and the checks in the pass book and hand it to the bank. 
Examine the pass book to see that all is entered correctly. 

March SI. Give Henry T. Dale, your clerk, a check for his salary, |30. 
Write the check and record it. 

At this point the monthly bank statement should be made. 

If the deposits and the checks have been passed to an office, these instructions 
should be followed by the one in charge of that work; if not, the student may 
make the statement himself. Proceed as follows : 

Enter all deposits and all checks on the outside of the bank envelope, 
in which the checks have been filed from day to day. Refer to page 73 
for illustrations. Total both the deposits and the checks and find the 
balance. Place the checks in the envelope. 

Total the deposits in the pass book, subtract the total checks therefrom, 
enter the balance, rule and foot. Bring the balance down under April 1. 

Before closing the books, hand them to the instructor for inspection 
and approval. 

Record the following in the journal, in the usual form, at the cost 
price. 

Inventories, March 31, 19 — 
Merchandise : 

40 bu. Dwarf Beans 60 bu. Oats 

200 bu. Pield Corn 50 bu. Spring Rye 

20 bu. Garden Corn . 40 bu. Timothy Seed 
150 bu. Millet 50 bu. Wheat 

Expense : 

Office Safe ^75. 

Office Books 8. 

Office Supplies 2.75 

Coal 6.40 192.15 



Closing the Work for March 

Close each of the following: the cashbook, the sales book, and the 
purchase book. Refer to pages 63 to 65. 

Post the books to the ledger, three accounts to the page, as follows : 

1. Post the journal, writing J'in the explanatory column of the ledger. 

2. Post the cashbook, writing O in the explanatory column of the 
ledger. 

3. Post the sales book, writing S in the explanatory column of the 
ledger. 



EEVIEW EXERCISES 89 

4. Post the purchase book, writing P in the explanatory column of 
the ledger. 

Foot the ledger accounts. 

Take a trial balance, using only the balance of each account. (See 
page 79.) Do not forget the balance of cash from the cashbook. 

Have the trial balance approved; record it in Blank No. 1, on the 
page indicated by the index. 

Make the two statements and the verification ; after approval, record 
them in Blank No. 1, on the page indicated by the index. 

Close the ledger. Take a second trial balance. 

Submit all work to the instructor for approval. 

When the monthly statement of your bank account has been com- 
pleted, compare each check with the stub in the check book ; if they 
agree, put a large check mark on the stub. This shows that the check 
issued has been returned canceled. 

Does the balance of your monthly bank statement agree with the balance shown 
in your check book ? Place the canceled checks in the Paid Bills envelope. 



EXERCISE 42 

A Written Review 

The following review exercises are suggested : 

a. Journalize orally or in writing each transaction in March. 

b. Use trial balances 1 and 2, page 28. Make the two statements, 
using $25 for the expense inventory in each statement. 

c. Use Exercise 31, I and II, pages 33 and 34 for closing the ledger. 



INDORSEMENTS 

An Indorsement is the writing of one's name on the back of commercial 
paper with the intent to transfer the title or to assume legal responsi- 
bility for its payment. 

Sometimes a payment of interest, or a partial payment of the face, is recorded on 
the back of an instrument. 

The Object of indorsement is to effect a transfer of the title, or to make 
the indorser conditionally liable for payment, or both. 
Indorsements are made by using a rubber stamp or by writing. 

The indorsements most commonly used are the special or fuM^ the 
blank, the qualified, and the restrictive. 



90 



BOOKKEEPING 






^^^ 



Blank 



C::^^K^-^^^^z>^^ /'^-^^ 



Qualified 




or 



Special A special indorsement names 

the indorsee ; the instrument 
could not again be negotiated 
without the indorsee's indorse- 
ment. 

A blank indorsement names no 
indorsee. Any holder may, how- 
ever, convert this into a special 
indorsement by writing " Pay to 
Qih name) or order" above the 
blank indorsement. 

A qualified indorsement simply 
passes the title without rendering 
the indorser liable. In form, this 
nidorsement may be either in 
blank or special. 

A restrictive indorsement con- 
stitutes the indorsee an agent of 
the indorser, usually for the col- 
lection of the paper. 

This form of indorsement is not com- 
mended by banks and clearing houses. 

Note the indorsement on page 
87. All commercial paper offered 
for deposit at a bank must be in- 
dorsed, and the special indorse- 
ment is most commonly used. 

This form is a protection to the 
lawful holder because the payee 
is named, and payment will be 
made only on his order, by in- 
dorsement. 

If a check or a note bearing 
a special indorsement is lost or 
stolen, it is valueless to such a holder. 

When one has a check cashed at the bank, the blank indorsement 
may be used, as the check will be canceled as sooii as cashed. 

As the qualified indorsement relieves the indorser of responsibility for 
payment, commercial paper bearing this indorsement should be accepted 
with great caution. 




Restrictive 






SET III. GRAIN AND SEED BUSINESS 

WORK FOR APRIL 

The memoranda following are a continuation of the memoranda for 
March. No new principles are introduced, and the familiar business 
forms are used. As such full and explicit instructions were given in 
March, much explanatory matter will be omitted in April. If anything 
is not understood, refer to a similar transaction in the preceding month. 

Directions and Suggestions. The following general directions should 
be observed: 

1. Use the same price list, the same books, etc., as in March. 

2. Begin a new page in the journal. In the sales book leave a space 
of three lines, then write the first sale in April under the last sale in 
March. 

3. The balance brought down from the March cashbook, under April 1, 
is to be reckoned with the cash receipts in April. Use a new envelope for 
the bank account. Record the balance at the head of the deposit column. 

Incoming Business Forms for April 
Form 15. Invoice of Henry Bruce, City, April 6. Terms : on account. 

50 bu. Clover Seed 300 bu. Oats 

50 bu. Garden Corn 100 bu. Millet 

Form 16. Invoice of S. D. Welch, City, April 9. Terms : on account 

200 bu. Field Corn 100 bu. Spring Rye 

200 bu. Wheat 

Form 17. Invoice of C. V. Cronin, City, April 11. Terms: cash. 

50 bu. Timothy Seed 

Form 18. Note of Boyd &; Co., City, for |100, in your favor, at 10 da., 

April 14. 
Form 19. Check of Howard Young, City, for |145, in your favor, April 15. 
Form 20. Check of Boyd & Co., City, for |165, in your favor, April 23. 
Form 21. Check of Boyd & Co., City, for |100, in your favor, April 24. 
Form 22. Invoice of Smith & Bowers, City, April 25. Terms : cash. 

20 bu. Dwarf Beans 200 bu. Field Corn 

50 bu. Garden Corn 
91 



92 BOOKKEEPING 

Form 23. Check of Jesse Watson, City, for $175, in your favor, April 27. 
Fonn 24. Check of Jesse Watson, City, for $180.90, in your favor, April 28. 
Form 25. Check of Howard Young, City, for |90, in your favor, April 29. 

Memoranda of Transactions for April 

April 1. Give Amos Graves your check for the rent of the store for 
April, 135. 

1. Give Henry Bruce your check in full of account. 

Turn to Henry Bruce's account in the ledger and find the balance of his account; 
write the check for this amount. 

3. Receive of Howard Young cash, in full of account, |98. 

Turn to Howard Young's account in the ledger and verify the balance. Write 
the receipt and get the money. Enter it in the cashbook. 

4. The note in favor of S. D. Welch falls due to-day; pay it by check. 

Write the check. Pass it in and receive the canceled note. The note will be can- 
celed by writing across the face, Paid April 4, 19 — . Make the entry in the cashbook. 
What account is debited in the cashbook? Place the canceled note in the Paid 
Bills envelope. 

6. Buy of Henry Bruce, City, on account, merchandise as per invoice, 
Form 15. 

Remove the invoice from the tablet and proceed as usual. 

7. Sell Howard Young, City, on account, at the prices given herewith: 

100 bu. Field Corn at 48(^ 50 bu. Millet at 98^ 

20 bu. Timothy Seed at $2.40 

9. Give S. D. Welch your check, to apply on account, $200. 
9. Buy of S. D. Welch, City, on account, merchandise as per invoice, 
Form 16. 

10. Sell Boyd & Co., City, on account : 

30 bu. Garden Corn 20 bu. Clover Seed 

100 bu. Oats 

11. Buy of C. V. Cronin, City, for cash, merchandise as per invoice, 
Form 17. 

Check the invoice ; if it is correct, write a check in payment. 

W. Sell P. H. Morse, City : 

20 bu. Timothy Seed 100 bu. Field Corn 

100 bu. Wheat 



SET III. GRAIN AND SEED 93 

Receive cash, ♦125; balance on account. 

Write the bill. Terms : cash, $125 ; balance on account. Enter the entire bill in 
the sales book, and the cash received in the cashbook as a receipt on account. Neither 
entry should be checked. Why? Record the amount of the cash on the bill and 
receive the money. 

April 13. Receive of Boyd & Co. their note at 10 da., to apply on 
account, |100, Form 18. 

Place the note in the Unpaid Bills envelope. 

13, Give Henry Bruce your note at 30 da., to apply on account, $200, 
payable at his office. 

15. Sell Jesse Watson, City, on account : 

20 bu. Dvrarf Beans 50 bu. Spring Rye 

50 bu. Millet 10 bu. Timothy Seed 

15. Receive of Howard Young his check for invoice of April 7, $145, 
Form 19. 

17. Deposit the check and all currency on hand except |25. 

18. Give S. D. Welch your check in full for the invoice of April 9, |348. 
Verify the amount by referring to the purchase book. 

19. Sell Howard Young, City, on account, at the price given herewith : 

100 bu. Wheat at 90^ 

20. Sell F. G. Morgan, City, for cash, at the prices named herewith : 
10 bu. Clover Seed at |3.70 10 bu. Timothy Seed at |2.40 

Write a receipted bill and enter it in the sales book and the cashbook; check the 
item in each. Pass in the bill and receive the currency. 

M. Sell Boyd & Co., City, on account : 

30 bu. Timothy Seed 20 bu. Garden Corn 

50 bu. Millet 40 bu. Spring Rye ' 

22. Sell John Wells, City, on account : 

200 bu. Oats 50 bu. Millet 

100 bu. Field Corn 

23. Receive of Boyd & Co., their check, to apply on account, $165, 
Form 20. 

24. Receive of Boyd & Co. their check in pa3rment of their note due 
to-day, tlOO, Form 21. 

Enter the amount of the check in the cashbook. Under what name ? Cancel the 
note and pass it in. 



94 BOOKKEEPING 

April M, Deposit the two checks and all currency on hand. 
Indorse the checks. 

25. Buy of Smith & Bowers, City, for cash, merchandise as per in- 
voice. Form 22. 

Examine and check the invoice ; if correct, pay it by check. Enter in the purchase 
book and the cashbook, checking the item in each. 

26. Sell Johnson & Pease, City, for cash, at the prices named herewith: 

10 bu. Dwarf Beans at $4.20 100 bu. Field Corn at ^^ 

25 bu. Garden Corn at |1.90 

After entering the invoice in the required books, receipt it, pass it in, and receive 
the currency. 

27. Receive of Jesse Watson his check, to apply on account, |175, 
Form 23. 

28. Prepay your note in favor of Henry Bruce by check. Face of the 
note, |200 ; discount, 50(^ ; amount of the check, $199.50. 

This note has 15 da. to run, and the interest on $200 for 15 da. is 50^. Write the 
check. Enter it in the cashbook as follows : on the right side debit Bills Payable for 
$200 ; on the left side credit Interest for 50^. Hand in the check and receive the 
note. Across the face of the note write. Paid April 28, 19 — . Place the canceled note 
in the Paid Bills envelope. 

Interest and discount are practically synonymous terms, interest is paid, usually, 
at the maturity of a loan, and discount is allowed before such maturity. For this 
reason all discount items will be entered as Interest. 

Study this transaction until it is understood. The discount and the prepayment of 
notes are common business transactions. 

28. Receive of Jesse Watson his check for note and interest due to-day, 
Form 24. Face of the note, $180 ; interest, 90(/;. 

What two entries are made in the cashbook ? Cancel the note and pass it in. 

29. Receive of Howard Young his check for the invoice of April 19, 
Form 25. 

30. Give Henry T. Dale, your clerk, a check for his salary, $30. 
SO. Deposit the checks and all currency on hand. 

Indorse the checks. 

30. Withdraw by check the balance on deposit in The Union Bank. 

This withdrawal is made as a matter of convenience in closing the set. The 
amount of the check is for the balance in the bank. Make the check payable to Self 
and pass it in. No entry is required. 

Proceed with your bank account as you did at the close of March. 

Before closing the books hand them to the instructor for inspection and approval. 



SET III. GRAIN AKD SEED 96 

Record the following in the journal, in the usual form, at the cost 
price : 

Inventories, April 30, 19 — 
Merchandise: 

30 bu. Dwarf Beans 50 bu. Millet 

20 bu. Clover Seed 60 bu. Oats 

200 bu. Field Corn 60 bu. Spring Rye 

45 bu. Garden Corn 50 bu. Wheat 

Expense : 

Office Safe $75. 

Office Books 7.50 $82.50 

Closing the Work for April 

After looking over the closing of each book in March, close the cash- 
book, the sales book, and the purchase book. 

The careful bookkeeper checks his work at every step. Check all additions before 
writing the results in ink. A simple way to check addition is to add the columns in 
reverse order. If the results agree, the work may be assumed to be correct. 

Post the books to the ledger. Post to the same accounts as in March. 
If any new accounts are to be added, allow one third of a page for each. 

Foot the ledger accounts. 

Take a trial balance ; after approval, record it in Blank No. 1, on the 
page indicated by the index. 

Make the two statements and the verification ; after approval, record 
them in Blank No. 1, on the page indicated by the index. 

Close the ledger. Take a second trial balance. 

Submit all work to the instructor for approval. 

When your monthly bank statement has been completed, compare each 
check with the stub in the check book. If they agree, check the stub. 

Place all canceled checks in the Paid Bills envelope. 



EXERCISE 43 ^ ^J^v-w^ 
A Written Review 

The following review exercises are suggested: 

1. Journalize orally or in writing each transaction in April. 

2. Use trial balances 3 and 4, page 28. Make the two statements, 
and the verification for each ; use $30 for the expense inventory in each 
statement. 



96 BOOKKEEPING 

3. Write from memory on blank paper, cut to the proper size, the 
following business forms : 

a. A Receipted Bill. Jan. 17, C. H. Palmer, Trenton, N.J., bought of 
Student for cash, less 3%: 25 doz. table knives at $7.50, 15 doz. nail 
hammers at |9,' 25 doz. safety locks at |4.50. 

h. A Promissory Note. Jan. 20, Student gave James B. Stevens a 
60-da. interest-bearing promissory note payable at First National Bank. 
Face of the note, $125. 

c. A Receipt. Jan. 22, Frank H. Jackson paid Student $127.85 in full 
for invoice of Jan. 12. 

d. A Check. Jan. 25, Student gave William E. Hitchcock a check on 
Commonwealth Trust Company for $200. 



EXERCISE 44 

INTEREST AND DISCOUNT 

The rate of interest allowed by law is called the Legal Rate. Persons 
may agree to pay less than this rate, but not more, unless a higher rate 
by special agreement is permitted by statute. If an agreement for the 
payment of interest specifies no rate, the highest legal rate in the state 
where the contract is signed will be understood. 

In the Commercial World 12 mo. of 30 da. each — 360 da. — are reckoned 
as 1 yr. In bank discount the exact number of days is used. 

Throughout the business practice employed in this text the rate will 
be 6%, based on the commercial year of 360 da. 

This method is not exact, but it is the most common because the most con- 
venient. It has been legalized by statute in some states and is generally used in 
all the states. 

A great variety of methods is employed to compute interest and dis- 
count, but it is suggested that the student use the day method, as follows : 
Point off to the left three decimal places in. the principal, multiply by 
the number of days, and then divide by 6. Cancel when possible. 

Example. What is the interest on $146.50 for 50 da. at 6% ? 

Solution. .1465 x 50 = 7.325. 

7.325 H- 6 = 1.22, or $1.22, the required interest. 

When a man borrows money at a bank, he not infrequently pays the 
interest in advance ; when he sells a note to a bank, he allows discount 
to the bank, and such allowance is called Bank Discount. 



INTEREST AND DISCOUNT 97 

The maturity of negotiable paper is determined as follows : When the 
time is expressed in months, calendar months are used to fix the date of 
maturity ; but when the time is expressed in days, the exact number of 
days is used. 

To illustrate : A note dated Jan. 28, 29, 30, or 31, at 1 mo., will mature on 
Feb. 28 (leap years excepted); but a note with any of the dates just noted at 30 da. 
will mature on Feb. 27, 28, March 1, or 2, respectively. 

The Tenn of Discount is the time from the date of discount to the 
maturity of the note. Banks differ as to method in finding the term, but 
in this text the exact number of days will he used uniformly. 



EXERCISE 45 

INTEREST AND DISCOUNT ENTRIES 

This exercise is not a set, but a series of illustrations. It may be used 
first as an oral exercise. 

Use a sheet of journal paper for the cashbook, and enter the following transac- 
tions ; balance and rule the cashbook. 

May 1. Student begins business and invests cash, |1600. 

2, Give Henry A. Dunton a check for your note, which falls due 
to-day, $172.50. 

4, Receive a check from Henry A. Gray for his note, which is due 
to-day, 1235.20. 

6. Pay your note and interest, due to-day, in favor of H. H. James, 
in cash. Face of the note, $325 ; interest, $11.50. 

8. Receive of Hale & Son their check for their note and interest, 
due to-day. Face of the note, $220.35; interest, $7.75. 

9. Discount at The Union Bank W. K. Marsh's note. Face of the 
note, $300 ; discount allowed for 45 da. 

What entry is made on the left side of the cashbook ? on the right side ? 

12. Prepay your note in favor of Geo. R. Gushing. Face of the note, 
$400 ; discount allowed for 30 da. 

20. Receive a check from Johnson & Co. for their note, due to-day* 
Face of the note, $256.25. 

24. Prepay your note in favor of E. R. Sterling. Face of the note, 
$222.40 ; discount allowed for 60 da. 

26. Discount at First National Bank T. T. Hunger's note. Face of 
the note, $257.80 ; discount allowed for 60 da. 

30. Make an additional investment in the business in cash, $500. 



98 



BOOKKEEPING 



EXERCISE 46 



COMPOUND ENTRIES 

The Compound Entry is explained on page 46. Refer to that explana- 
tion before proceeding with this exercise. 

A Simple Entry consists of one debit and one credit. 

Several of the preceding interest and discount entries are here used 
as illustrations of compound entries ; they will serve for reference in 
subsequent work. 

Journalize Exercise 45. 

The making of these entries in both the cashbook and the journal will make the 
debits and the credits clearer in each transaction. 



MaijG. Bills Pay. |325. 

Interest 11.50 

Cash $336.50 

MaijO. Cash $297.75 

Interest 2.25 

Bills Eec. $300. 



Maij 8. Cash $228.10 

Bills Rec. $220.35 

Interest 7.75 

May 12. Bills Pay. $400. 

Cash $398. 

Interest 2. 



Selling Price Lists 



ARTICLE AND QUANTITY 


1 


2 


3 


4 


5 


6 


7 


8 


9 


10 


11 


Carpenter's Chis- 
els, ^-in., doz. . 


4.75 


5.00 


5.00 


5.00 


5.10 


4.96 


5.01 


5.06 


5.11 


5.16 


4.76 


Coal Hods, doz. . 


9.00 


10.00 


9.00 


9.00 


9..30 


9.21 


9.26 


9.31 


9.36 


9.41 


9.01 


Copying Presses, 
each .... 


8.00 


7.50 


8.00 


8.25 


8.20 


8.21 


8.26 


8.31 


8.36 


8.41 


8.01 


Door Knobs, doz. 


1.00 


1.20 


1.10 


1.10 


1.05 


1.21 


1.26 


1.31 


1.36 


1.41 


1.01 


Grindstones, each 


.5.00 


6.00 


5.00 


5.25 


5.20 


5.21 


5.26 


5.31 


5.36 


5.41 


5.01 


Hammers, doz. . 


8.00 


9.00 


8.00 


8.20 


8.60 


8.21 


8.26 


8.31 


8.36 


8.41 


8.01 


Handsaws, doz. . 


21.00 


22.50 


21.50 


22.00 


22.75 


21.21 


21.26 


21.31 


21.36 


21.41 


21.01 


Ice-cream Freez- 
ers, each . . 


3.25 


3.20 


3.30 


3.10 


3.30 


3.46 


3.51 


3.56 


3.61 


3.66 


3.26 


Knives and Forks, 
set .... 


1.60 


1.50 


1.75 


1.70 


1.65 


1.81 


1.86 


1.91 


1.96 


2.01 


1.61 


Lanterns, doz. . 


7.50 


8.00 


7.80 


8.00 


7.75 


7.71 


7.76 


7.81 


7.86 


7.91 


7.51 


Mortise Locks, 
doz. .... 


6.00 


6.80 


6.25 


6.20 


6.35 


6.21 


6.26 


6.31 


6.36 


6.41 


6.01 


Nails, 8d, wire, keg 


4.00 


4.25 


4.25 


4.20 


4.20 


4.21 


4.26 


4.31 


4.36 


4.41 


4.01 


Planes, ^4, doz. . 


30.00 


32.00 


30.00 


29.00 


31.00 


30.21 


30.26 


30.31 


30.36 


30.41 


.30.01 


Railroad Picks, 
9-lb., doz. . . 


13.00 


12.00 


15.00 


12.50 


14.25 


13.21 


13.26 


13.31 


13.36 


13.41 


13.01 


Steelyards, doz. . 


16.00 


17.50 


18.00 


16.25 


15.80 


16.21 


16.26 


16.31 


16.36 


16.41 


16.01 


Steel Axes, doz. . 


12.00 


12.50 


13.00 


12.25 


12.50 


12.21 


12.26 


12.31 


12.36 


12.41 


12.01 


Try-squares, 6- in., 
doz 


6.00 


7.00 


6.30 


6.50 


6.20 


6.21 


6.26 


6.31 


6.36 


6.41 


6.01 



SET IV. GENERAL HARDWARE BUSINESS 

WORK FOR MAY 

The Object of this set is to continue the work of Set III and to give 
more extended business practice. A partnership is introduced. 
Directions and Suggestions. Observe these general directions : 

1. The same bound books are used as in Set III. 

2. Student and James A. Hart are represented as proprietors. 

3. The firm name is to be Student & Hart. 

4. Student will keep the books and manage the business. 

5. Begin a new page in the cashbook, the journal, the check book, and 
the sales book. 

6. Unless otherwise stated, all payments are to be made hy check. Use 
a new envelope for the bank account. 

Different selling price lists may be used if the instructor so desires. The 
following table provides twenty-five such lists : 



for May and June 



12 


13 


14 


15 


16 


17 


18 


19 


20 


21 


22 


23 


24 


25 


4.80 


4.84 


4.88 


4.92 


4.97 


5.02 


5.07 


5.12 


5.17 


4.77 


4.81 


4.85 


4.89 


4.93 


9.05 


9.09 


9.13 


9.17 


9.22 


9.27 


9.32 


9.37 


9.42 


9.02 


9.06 


9.10 


9.14 


9.18 


8.05 


8.09 


8.13 


8.17 


8.22 


8.27 


8.32 


8.37 


8.42 


8.02 


8.06 


8.10 


8.14 


8.18 


1.05 


1.09 


1.13 


1.17 


1.22 


1.27 


1.32 


1.37 


1.42 


1.02 


1.06 


1.10 


1.14 


1.18 


5.05 


5.09 


5.13 


5.17 


5.22 


5.27 


5.32 


5.37 


5.42 


5.02 


5.06 


5.10 


5.14 


5.18 


8.05 


8.09 


8.13 


8.17 


8.22 


8.27 


8.32 


8.37 


8.42 


8.02 


8.06 


8.10 


8.14 


8.18 


21.05 


21.09 


21.13 


21.17 


21.22 


21.27 


21.32 


21.37 


21.42 


21.02 


21.06 


21.10 


21.14 


21.18 


3.30 


3.34 


3.38 


3.42 


3.47 


3.52 


3.57 


3.62 


3.67 


3.27 


3.31 


3.35 


3.39 


3.43 


1.65 


1.69 


1.73 


1.77 


1.82 


1.87 


1.92 


1.97 


2.02 


1.62 


1.66 


1.70 


1.74 


1.78 


7.55 


7.59 


7.63 


7.67 


7.72 


7.77 


7.82 


7.87 


7.92 


7.52 


7.56 


7.60 


7.64 


7.68 


6.05 


6.09 


6.13 


6.17 


6.22 


6.27 


6.32 


6.37 


6.42 


6.02 


6.06 


6.10 


6.14 


6.18 


4.05 


4.09 


4.13 


4.17 


4.22 


4.27 


4.32 


4.37 


4.42 


4.02 


4.06 


4.10 


4.14 


4.18 


30.06 


30.09 


30.13 


30.17 


30.22 


30.27 


30.32 


30.37 


30.42 


30.02 


30.06 


30.10 


30.14 


30.18 


13.05 


13.09 


13.13 


13.17 


13.22 


13.27 


13.32 


13.37 


13.42 


13.02 


13.06 


13.10 


13.14 


13.18 


16.05 


16.09 


16.13 


16.17 


16.22 


16.27 


16.32 


16.37 


16.42 


16.02 


16.06 


16.10 


16.14 


16.18 


12.05 


12.09 


12.13 


12.17 


12.22 


12.27 


12.32 


12.37 


12.42 


12.02 


12.06 


12.10 


12.14 


12.18 


6.05 


6.09 


6.13 


6.17 


6.22 


6.27 


6.32 


6.37 


6.42 


6.02 


6.06 


6.10 


6.14 


6.18 



99 



100 BOOKKEEPING 



Incoming Business Forms for May 

Note. Please read the instructions given under the Incoming Business Forms for 
March and apply them to the work of Set IV. 

Form 1. Invoice of Turner & Moss, City, May 2. Terms: cash. 

10 doz. Carpenter's Chisels 20 sets Knives and Forks 

6 Copying Presses 4 doz. Mortise Locks 

10 Grindstones 1 doz. Planes, #4 

3 doz. Handsaws 

Form 2. Bill of H. L. Mills, City, May 4. Terms : cash. 
Set Office Books, |12 Stationery, $3 

Form 3. Invoice of Wilder & Chase, City, May 7. Terms: 1/2 in 3 da., 
balance in 10 da. 

8 doz. Coal Hods 5 doz. Lanterns 

12 doz. Door Knobs 10 kegs Nails 

15 doz. Hammers 2 doz. Planes, #4 

10 Ice-cream Freezers 5 doz. Carpenter's Chisels 

Form 4. Invoice of Dunn & Sanford, City, May 9. Terms: 10 da. 

10 doz. Railroad Picks 12 doz. Steel Axes 

6 doz. Steelyards 20 doz. Try-squares 

Form 5. Check of Strong & Hunter, City, for $117.75, in your favor. 

May 11. 
Form 6. Invoice of Turner & Moss, City, May 14. Terms : on account. 

12 doz. Carpenter's Chisels 6 doz. Hammers 

10 doz. Coal Hods 6 Ice-cream Freezers 

15 Copying Presses 6 doz. Handsaws 

20 doz. Door Knobs 10 Grindstones 

10 sets Knives and Forks 

Form 7. Invoice of Wilder & Chase, City, May 16. Terms : on account. 

10 doz. Lanterns 10 kegs Nails 

6 doz. Mortise Locks 6 doz. Planes, #4 

Form 8. Invoice of Dunn & Sanford, City, May 20. Terms : 1/30. | 

10 doz. Railroad Picks , 6 doz. Steel Axes ! 

6 doz. Steelyards 10 doz. Try-squares 

The terms given mean that 1% will be taken off the face of the invoice if it is j 

paid within 30 da. 



SET IV. GENERAL HARDWARE 



mh 



Form 9. Check of Strong & Hunter, City, for $150, in your favor. May 23. 

Form 10. Check of John H. Sand, City, for |200, in your favor. May 30. 

In Set IV all merchandise is to be bought at the following prices : 



ARTICLE AND QUANTITY 


COST 


Carpenter's Chisels, ^-in 
Coal Hods, 


, doz 

u 


$3.75 
7.50 


Copying Presses, 
Door Knobs, 
Grindstones, 
Hammers, 
Handsaws, 
Ice-cream Freezers, 
Knives and Forks, 


each 

doz 

each 

doz 


6.00 

.75 

3.75 

6.00 

18.00 


each 

set 


2.50 
1.25 


Lanterns, 
Mortise Locks, 


doz 


6.00 
4.50 


Nails, 8d, wire, 
Planes, #4, 
Railroad Picks, 9-lb., 


keg 

doz 

« 


3.00 
24.00 
10.00 


Steelyards, 
Steel Axes, 


« 


12.00 


« 


9.00 


Try-squares, 6-in., 


<( 


4.50 







Memoranda of Transactions for May 

Mai/ 1. Student and James A. Hart begin a General Hardware busi- 
ness, investing cash, $3000. Each partner invests |1500. 

Place the above memorandum in the journal, hut make no journal entry. Receive 
the currency from the instructor. Make the following entry in the cashbook : 



(ou^li^ei^^^^ 









1, Deposit all currency in The Union Bank, under the firm name. 
In the pass book, above the student's name, write the firm name. Student & Hart. 



.;lt)2 BOOKKEEPING 

May 1. You have entered into an agreement with Wm. H. Kellogg 
for the rental of his store, at 266 Broad Street, at $50 per month. 

No entry is required. A memorandum of this agreement may be made and filed 
with the incoming papers. 

Engage Henry Lakey as a clerk at |35 per month. 

2. Buy of Turner & Moss, City, for cash, merchandise as per invoice, 
Form 1. 

Examine and check the invoice. Write a check in payment. Enter in the pur- 
chase book and the cashbook, and check in each. 

This check will be No. 1. Now that you are engaged in a partnership business, 
checks are to be signed with the Jirm name. 

3. Give Wm. H. Kellogg a check for rent of the store for May. 

4. Buy of H. L. Mills, City, for cash, books and stationery, as per 
bill, Form 2. 

Remember, all cash payments are made by check unless otherwise noted. 

5. W. D. Mendon, City, places an order for the following goods. 
Fill the order at the prices given herewith. Terms : cash. 

4 doz. Carpenter's Chisels at $4.75 1 doz. Handsaws at $21 

3 Copying Presses at $8 5 sets Knives and Forks at $1.60 

4 Grindstones at $5 2 doz. Mortise Locks at $6 

Record the invoice in the sales book and the cashbook, and check in each. 
Begin a new page in the sales book. 

Receipt the invoice and receive the currency. 

6. Hall & Son, City, place an order for the following goods. Fill the 
order. Terms: on account. 

3 doz. Carpenter's Chisels 6 sets Knives and Forks 
1 doz. Planes, #4 2 Copying Presses 

7. Buy of Wilder & Chase, City, merchandise as per invoice. Form 3. 
Terms; 1/2 in 3 da. ; balance in 10 da. 

7. Deposit currency, $100. 

8. Strong & Hunter, City, place an order for the following goods. 
Fill the order at the prices given herewith. Terms : on account. 

4 doz. Coal Hods at $9 6 doz. Hammers at $8 

3 kegs Nails at $4 3 Ice-cream Freezers at $3.25 

5 doz. Door Knobs at $1 2 doz. Lanterns at $7.50 

9. Buy of Dunn & Sanford, City, at 10 da., merchandise as per 
invoice, Form 4. 



SET IV. GENERAL HARDWARE 103 

May 9. Withdraw by check f 15, to be used for sundry office expenses. 

Write this check to the order of Cash. No entry is required because no cash has 
been paid out. Place the currency in the Business Cash envelope. This is called a 
cash check. 

10. Remit Wilder & Chase a check for one half the invoice of May 7. 

If there is a half cent in the division, call it one cent ; always reckon the odd cent 
on the first transaction. 

10. Pay S. H. Lyman, in currency, |5 for cleaning the store and 
basement. 

11. Receive of Strong & Hunter their check for invoice of May 8, 
P^orm 5. 

Examine the check; if correct, enter the amount in the cashbook. Place the check 
in the Business Cash envelope. 

12. Give each partner a check for $50, for his personal use. 

Write your check as follows : Pay to the order of Student. 
Make your partner's check payable to his own name. 
Sign each check with the firm name, as usual. 

Enter in the cashbook as payments, under each partner's name as a withdrawal. 
Place the currency in the Personal Cash envelope. 

13. L. P. Austin, City, places an order for the following goods. Fill 
the order. Terms : on account. 

5 doz. Railroad Picks 5 doz. Try-squares 

2 doz. Steelyards 5 doz. Hammers 

6 doz. Steel Axes 3 Ice-cream Freezers 

14. Buy of Turner & Moss, City, on account, merchandise as per 
invoice. Form 6. 

Id. Deposit the check on hand. 

15. Wilson & Barton, City, place an order for the following goods. 
Fill the order. Terms : 10 da. 

10 doz. Door Knobs 3 Ice-cream Freezers 

3 doz. Hammers 6 sets Knives and Forks 
2 doz. Handsaws 4 doz. Carpenter's Chisels 

16. Buy of Wilder & Chase, City, on account, merchandise as per 
invoice, Form 7. 

17. Remit Wilder & Chase a check for the balance of the invoice 
of May 7. 

Note the amount paid on this invoice on May 10. 



104 BOOKKEEPING 

May 18. John Howe, City, places an order for the following goods. 
Fill the order at the prices given herewith. Terms: cash. 

4 doz. Lanterns at |7.50 5 kegs Nails at $4 

3 doz. Mortise Locks at $6 3 doz. Planes, #4, at |30 

Record in the sales book and the cashbook, and check in each. 

19. Strong & Hunter, City, place an order for the following goods. 
Fill the order. Terms : on account. 

6 doz. Carpenter's Chisels 8 doz. Door Knobs 

4 doz. Coal Hods 4 Grindstones 

5 Copying Presses 3 doz. Hammers 

3 doz. Handsaws 5 sets Knives and Forks 

20. Buy of Dunn & Sanford, City, merchandise as per invoice. Form 8. 
Terms: 1/30. 

21. Receive of L. P. Austin cash, on the invoice sold to him on 
May 13, $100. 

AVrite the receipt and receive the currency. 

22. John H. Sand, City, places an order for the following goods. Fill 
the order. Terms: on account. 

6 doz. Railroad Picks 5 kegs Nails 

5 doz. Steelyards 6 Ice-cream Freezers 

10 doz. Try-squares 4 doz. Lanterns 

3 Grindstones 6 doz. Carpenter's Chisels 

23. Receive of Strong & Hunter their check for $150, to apply on the 
invoice of May 19, Form 9. 

24. Deposit the check on hand, and currency, $200. 

Remember, you must indorse all checks that you deposit. 

24. Remit Dunn & Sanford a check for the amount of the invoice 
bought of them on May 9. 

25. Receive of Wilson & Barton cash, for the amount of the invoice 
sold them on May 15. 

Remember the receipt. 

26. Give Wilder & Chase your note, at 15 da., with interest, for the 
invoice of May 16. 

Write the note and make the journal entry. The invoice should be receipted as 
follows : Paid hy note at 15 da., Wilder Sf Chase. 



SET IV. GENERAL HARDWAKE 105 

May 27. P. D. Anson, City, places an order for the following goods. 
Fill the order. Terms : 10 da. 

3 doz. Coal Hods 6 Grindstones 

5 Copying Presses ^ 2 doz. Hammers 

4 doz. Door Knobs 1 doz. Handsaws 

27. Give Turner & Moss a check for one half of the invoice bought 
of them on May 14. 

28. Receive of Hall & Son cash, to apply on the invoice sold them 
on May 6, $50. 

29. L. P. Austin, City, places an order for the following goods. Fill 
the order at the prices given herewith. Terms ; 3/10, ^^/30. 

4 sets Knives and Forks at $1.60 3 doz. Mortise Locks at $6 

3 doz. Lanterns at $7.50 4 kegs Nails at |4 

29. Wilson & Barton, City, place an order for the following goods. 
Fill the order. Terms : on account. 

2 doz. Planes, #4 2 doz. Steelyards 

4 doz. Railroad Picks 4 doz. Steel Axes 

30. Receive of John H. Sand his check to apply on account, $200, 
Form 10. 

31. Deposit the check and all currency on hand. 

31. Give Henry Lakey, your clerk, a check for his salary, $35. 

Make the monthly bank statement. 

Before closing the different books, hand them to the instructor for 
inspection and approval. 

Record the following in the journal, in the usual form, at the cost 
price : 

Inventories, May 31, 19 — 
Merchandise : 

4 doz. Carpenter's Chisels 2 doz. Lanterns 

7 doz. Coal Hods 2 doz. Mortise Locks 

6 Copying Presses 3 kegs Nails 

6 doz. Door Knobs 3 doz. Planes, #4 

4 Grindstones 5 doz. Railroad Picks 

3 doz. Hammers 3 doz. Steelyards 

2 doz. Handsaws 8 doz. Steel Axes 

2 Ice-cream Freezers 15 doz. Try-squares 

4 sets Knives and Forks 
Expense : 

Office Books and Stationery $12 



106 



BOOKKEEPIKG 



Closing the Work for May 

Look over the closing of each book in April, and then close the books. 
Post to the ledger, beginning on a new page ; allow one third of a 
page for each account. 

There are iiuo proprietors in this set ; their accounts should be on the first page 
of the ledger. 

Foot the ledger accounts. 

Take a trial balance ; after approval, record it in Blank No. 1, on the 
page indicated by the index. 

Make the usual statements, and the verification ; after approval, record 
them in Blank No. 1, on the page indicated by the index. 

Close- the ledger as follows: 

1. Close the Merchandise and Expense accounts to the Loss and Grain 
account. 

2. As there are two proprietors in this set, divide the gain equally 
between them, and close the Loss and Gain account as shown in the 
following model: 



,^^^d^ ^^"^^U-ny 



3/ 



3/. i^ilg^e^t^Tle^'Sk^ ^ 



3/ 



^^0 



zg2M 



^ 



3/ ^9^10^6^ 



/^yzi? 



/^7Z<P 



11 



Take a second trial balance. 
Submit all work to the instructor for approval. 

After receiving your monthly bank statement, check the stubs of 
your check book. 

EXERCISE 47 <p/^^^ 
A Written Review 

The following review exercises are suggested : 
«. Journalize orally or in writing each transaction in May. 
h. On loose sheets of paper write Set I, page 41, as follows : Enter 
all cash items in the cashbook ; journalize all other items ; post to the 
ledger, three accounts to the page ; take a trial balance ; make the usual 
statements ; close the ledger \ take a second trial balance. 



SET IV. GENERAL HARDWARE BUSINESS 

WORK FOR JUNE 

The following memoranda are a continuation of the memoranda for 
May, representing a partnership business. 

Directions and Suggestions. The following general directions should 
be observed: 

1. Use the same price list and the same books as in May. 

2. Begin a new page in the journal. In the sales book leave a space of 
three lines, then write the first sale in June under the last sale in May. 

3. The balance brought down from the May cashbook, under June 1, 
is to be reckoned with the cash receipts in June. Use a new envelope 
for the bank account. Record the balance at the head of the deposit 
column. 

Incoming Business Forms for June 

Form 11. Invoice of Wilder & Chase, City, June 3. Terms: 2/10, n/30. 

6 doz. Carpenter's Chisels 5 doz. Hammers 

10 doz. Door Knobs 6 doz. Handsaws 

6 Grindstones 

Form 12. Invoice of Dunn & Sanford, City, June 5. Terms : on account. 

6 Ice-cream Freezers 10 doz. Mortise Locks 

12 sets Knives and Forks 20 kegs Nails 

10 doz. Lanterns 6 doz. Planes, #4 

Form 13. Check of Arnold & Davis, City, for $100, in your favor, June 5. 
Form 14. Note of P. D. Anson, City, for |100, in your favor, at 10 da., 

with interest, June 6. 
Form 15. Bill of H. L. Mills, City, June 9. Terms : cash. 

Office Stationery, |6.75 

Form 16. Invoice of Turner & Moss, City, June 12. Terms: 1/2 cash; 
balance in 30 da. 

10 doz. Carpenter's Chisels 6 Grindstones 

6 doz. Coal Hods 6 doz. Hammers 

6 Copying Presses 5 doz. Handsaws 

6 doz. Door Knobs 

Form 17. Check of L. P. Austin, City, for $71.50, in your favor, June 14. 

107 



108 BOOKKEEPING 

Form 18. Invoice of Wilder & Chase, City, June 15. Terms : 1/2 cash ; 
balance in 30 da. 

6 Ice-cream Freezers 12 doz. Mortise Locks 

10 sets Knives and Forks 20 kegs Nails 

6 doz. Lanterns 5 doz. Planes, #4 

Form 19. Invoice of Turner & Moss, City, June 21. Terms : 1/2 cash ; 
balance in 10 da. 

12 doz. Raih'oad Picks 6 doz. Steel Axes 

8 doz. Steelyards 10 doz. Try-squares 

Form 20. Check of P. D. Anson, City, for $100, in your favor, June 25. 

Memoranda of Transactions for June 

June 1. Give Wm. H. Kellogg a check for rent of the store for 
June, 150. 

2. Receive of Hall & Son cash for the balance of the invoice of 
May 6. 

2. Give Turner & Moss your note at 15 da. for the balance of the 
invoice of May 14. 

3. Buy of Wilder & Chase, City, merchandise as per invoice. Form 11. 
Terms : 2/10, n/^O. 

4. Hall & Son, City, place an order for the following goods. Fill 
the order. Terms : 30 da. 

4 doz. Coal Hods 3 doz. Carpenter's Chisels 

2 Copying Presses 3 doz. Hammers 

3 doz. Handsaws 5 doz. Try-squares 

5. Buy of Dunn & Sanford, City, on account, merchandise as per 
invoice. Form 12. 

5. Arnold & Davis, City, place an order for the following goods. 
Fill the order at the prices given herewith. Terms: cash, $100 ; balance 
in 15 da. 

3 Ice-cream Freezers at f 3.25 5 doz. Lanterns at |7.50 

3 doz. Try-squares at |6 6 doz. Mortise Locks at $6 

8 sets Knives and Forks at $1.60 2 doz. Planes, #4, at $30 

Enter in the sales book. Receive their check for $100, Form 13, and enter it in 
the cashbook. Do not check in either book. Why ? Under what name is the check 
entered ? 

6. Receive of L. P. Austin cash for the balance of the invoice of 
May 13. 



SET IV. GENERAL HARDWARE 109 

June 6, Receive of P. D. Anson his note at 10 da., with interest, 
Form 14. 

Do not make any entry for the interest. 

6. Receive of Strong & Hunter cash for the balance of the invoice 
of May 19. 

6. Deposit the check on hand, and currency, $200. 

8, Receive of L. P. Austin cash for the invoice of May 29, less 3%. 

The allowance of 3% on this invoice for early payment is called Merchandise Dis- 
count. Such allowances are common in business. 

Enter in the cashbook in this set, as follows : 



Receipts 
L. P. Austin, Inv. 5/29 $62.90 



Payments 
Mdse. Disc, Inv. 5/29, less 3 % $1.89 



It is very convenient to write dates in fractional form. 5/29 means the 5th month 
and 29th day, — May 29. 

8. Give Dunn & Sanford a check for the invoice of May 20, less 1%. 

9. Pay the bill of H. L. Mills by check for office stationery. Form 15. 

10. Give Wilder & Chase a check for your note, in their favor, due 
to-day, with interest. 

11. Strong & Hunter, City, place an order for the following goods. 
Fill the order. Terms: 15 da. 

5 doz. Door Knobs 2 doz. Handsaws 

3 Grindstones 6 kegs Nails 

2 doz. Hammers 4 doz. Try-squares 

12. Buy of Turner & Moss, City, merchandise as per invoice. Form 16. 
Terms : 1/2 cash ; balance in 30 da. 

Enter the entire amount in the purchase book. Remember the check. 

13. Give Wilder & Chase a check for the amount of the invoice of 
June 3, less 2%. 

13. Give each partner a check for $50, for personal use. 

Sign each check with the firm name. 

14. L. P. Austin, City, places an order for the following goods. Fill 
the order at the prices given herewith. Terms : 1/2 cash ; balance in 30 da. 

4 doz. Carpenter's Chisels at |4.75 2 Grindstones at |5 

3 Copying Presses at $8 3 doz. Hammers at |8 

3 doz. Door Knobs at |1 3 doz. Handsaws at $21 

Enter the invoice in the sales book. Receive a check for one half the amount. 
Form 17. 



110 BOOKKEEPIKG 

June 15. Buy of Wilder & Chase, City, merchandise as per invoice. 
Form 18. Terms : 1/2 cash ; balance in 30 da. 

16, Receive of P. D. Anson cash for his note and interest due to-day. 

Compute the interest on the note and receive the currency. Remember, there are 
two entries in the cashbook. What titles will be used ? 

16. Deposit the check on hand, and currency, $200. 

17. Give Turner & Moss a check for your note, in their favor, due to-day. 
19. V. M. Furnham, City, places an order for the following goods. 

Fill the order at the prices given herewith. Terms : cash. 

6 kegs Nails at $4 2 doz. Railroad Picks at $13 

W. Receive of Arnold & Davis cash for the balance of the invoice 
of June 5. 

21. Buy of Turner & Moss, City, merchandise as per invoice, Form 19. 
Terms: 1/2 cash; balance in 10 da. 

22. Wilson & Barton, City, place an order for the following goods. 
Fill the order. Terms: cash, |75; balance in 10 da. 

5 doz. Carpenter's Chisels 5 Grindstones 

3 doz. Coal Hods 3 doz. Hammers 

4 doz. Door Knobs 2 doz. Handsaws 

22. Deposit currency, $175. 

2S. Give Dunn &; Sanford your note at 30 da., to apply on account, 
♦200. 

24. Jolm H. Sand, City, places an order for the following goods. Fill 
the order. Terms: cash, |150; balance in 30 da. 

6 Ice-cream Freezers 6 doz. Mortise Locks 
8 sets Knives and Forks 10 kegs Nails 

5 doz. Lanterns 3 doz. Planes, #4 

25. P. D. Anson, City, places an order for the following goods. Fill 
the order. Terms : cash, $100 ; balance in 10 da. 

5 doz. Railroad Picks 4 doz. Steel Axes 

5 doz. Steelyards 3 doz. Try-squares 

Receive his check for $100, Form 20. 

26. Receive of Strong & Hunter cash, for the invoice of June 11. 

26, Deposit the check on hand, and currency, $250. 

27. Strong & Hunter, City, 'place an order for the following goods. 
Fill the order. Terms : 10 da. 

3 doz. Railroad Picks 4 doz. Try-squares 

10 kegs Nails 2 doz. Steel Axes 



SET IV. GENERAL HARDWARE 111 

June 28. Henry Zaner, City, places an order for the following goods. 
Fill the order at the price given herewith. Terms : cash. 

6 kegs Nails at $4 

29, Prepay your note in favor of Dunn & Sanford, issued on June 23, 
by giving them a check for the net proceeds. 

A corresponding transaction is fully explained under April 28. 

29, Hall & Son, City, place an order for the following goods. Fill the 
order. Terms : on account. 

2 Copying Presses 3 Ice-cream Freezers 

3 Grindstones 2 doz. Handsaw.s 

SO, Give Henry Lakey, your clerk, a check for his salary, $35. 

30, Deposit all currency on hand. 

30, Withdraw, by check, the balance on deposit in The Union Bank. 

Write the check payable to the order of Cash. The reasons for this withdrawal 
were given at the close of April. No entry is required. 

Make the monthly bank statement. 

Hand all books to the instructor for inspection and approval. 

Record the following in the journal, in the usual form, at the cost price: 

Inventories, June 30, 19 — 
Merchandise : 

8 doz. Carpenter's Chisels 8 doz. Lanterns 

6 doz. Coal Hods 12 doz. Mortise Locks 

5 Copying Presses 5 kegs Nails 

9 doz. Door Knobs - 9 doz. Planes, #4 

3 Grindstones 7 doz. Railroad Picks 

3 doz. Hammers 6 doz. Steelyards 

1 doz. Handsaws 8 doz. Steel Axes 

2 Ice-cream Freezers 6 doz. Try-squares 

10 Sets Knives and Forks 
Expense : 
Office Books and Stationery $12.50 

Closing the Wokk for June 

Close the different books. 

May and June constitute one set of books; therefore the work for 
June will be posted to the same accounts as that for May. 

Foot the ledger accounts. 

Take a trial balance ; after approval, record it in Blank No. 1, on the 
page indicated by the index. 



112 BOOKKEEPING 

Make the usual statements, and the verification ; after approval, record 
them in Blank No. 1, on the page indicated by the index. 
Open a ncAv Loss and Gain account ; close the ledger. 

Refer to the Loss and Gain account in May for a suggestion as to the proper 
division of the gain between the partners. 

Take a second trial balance. 
Submit all work to the instructor for approval. 

After receiving your monthly bank statement, check the stubs of 
your check book. 

EXERCISE 48 ^^ \.\aA' > >^ ^ 

A Written Review 

The following review exercises are suggested : 
^ 1. Journalize orally or in writing each transaction in June. 

2. On loose sheets of paper write Set II, page 51, as follows : Use the 
cashbook, the journal, the purchase book, the sales book, and the ledger. 
Complete the set in every detail and pass it to the instructor. 

3. The following written test in business forms : Write from memory 
on blank paper, cut to the proper size, the following business forms; 
make the entry for each party. 

a, A Promissory Note. May 27, Student gives Henry S. Miller a 30-day 
promissory note, bearing interest at 6%, payable at Second National bank. 
Face of the note, $237.50. 

h. A Promissory Note. June 16, Student receives of Adam H. Free- 
man a 60-day promissory note, without interest, payable at Union 
National Bank. Face of the note, |348.20. 

c. A Check. On May 15, Student receives of Howard & Co. a check 
drawn on the City National Bank for |88.40. 



EXERCISE 49 k c^ 

SET G. GRAIN 

This set is given as an optional review set, or it may be used for 
additional work by those students who finish the regular sets in advance 
of the class. 

The books used are the journal, the cashbook, the sales book, the pur- 
chase book, and the ledger. Loose sheets of journal paper and ledger 
paper should be used for recording the transactions. Allow one third 
of a page for each account in the ledger. 



A REVIEW SET 113 

Memoranda of Transactions 

June 1. Student and Wm. G. Allston begin the Grain and Seed busi- 
ness, investing cash, |2000. Each partner invests $1000. 

2, Pay Edward S. Green by check, for rent of the store for 1 mo., $50. 
•5. Buy of Wm. S. Duncan by check : 

500 bu. Wheat at 90^ 600 bu. Corn at 43^ 

4. Sell Harvey & Co. for cash : 

200 bu. Wheat at $1.10 150 bu. Corn at 50^ 

6, Buy of E. S. Harlan on account : 

1000 bu. Oats at 32(^ 

6. Pay T. J. Coleman by check, for a set of office books, stationery, 
and supplies, $22.50. 

G. Sell Graves & Co. on account : 

250 bu. Corn at 51(^ 400 bu. Oats at ^^ 

8. Pay E. S. Harlan by check, on account, $200. 

9, Buy of Richard F. Goodman on account : 

500 bu. Corn at 44(^ 

10. Sell Henry P. Button on account : 

150 bu. Wheat at $1.12 100 bu. Corn at 50<^ 

200 bu. Oats at ^^ 

11. Buy of S. M. Collins by check : 

400 bu. Wheat at 92(^ * 

12. Pay Reading & Co. by check, for an office safe, $75. 

13. Student withdraws cash, for personal use, $50. 

13. Wm. G. Allston withdraws cash, for personal use, $50. 

15. Give E. S. Harlan your note, with interest, at 10 da., $120. 

16. Receive of Graves & Co. their check, on invoice of June 6, for $175. 

17. Give Richard S. Goodman your check for the invoice of June 9. 

18. Receive of Henry P. Button his check for the invoice of June 10. 

19. Sell Kelsey & Co. on account: 

200 bu. Wheat at $1.15 100 bu. Corn at 50^ 

200 bu. Oats at 37^*^ 

20. Receive of Graves & Co. their check for the balance of the invoice 
of June 6. 



114 BOOKKEEPIKG 

June 22. Sell Graves & Co. on account, 2%, 10 da. : 

200 bu. Wheat at $1.10 200 bu. Corn at 50^ 

100 bu. Oats at 38(^ 

23. Buy of Geo. M. Barber on account : 

500 bu. Oats at 33^ 

24. Sell Henry P. Dutton on account : 

60 bu. Wheat at $1.12 200 bu. Oats at 39(^ 

25. Pay E. S. Harlan by check for your note and interest due to-day. 

26. Receive of Graves & Co. their check for the invoice of June 22, 
less 2%. 

27. Pay Geo. M. Barber by check, on account, |100. 
27' Buy of E. S. Harlan on account : 

300 bu. Wheat at 91(^ 

29. Receive of Henry P. Dutton his check, on account, $75. 

30. Receive of Kelsey & Co. their note, with interest, at 30 da., $250. 
30. Pay Fred A. Walker, your clerk, by check, one month's salary, 

$30. 

Inventories, June 30, 19 — 
Merchandise : 

400 bu. Wheat at 90^ 
300 bu. Corn at 43^ 
400 bu. Oats at 320 

Expense ^ 

Office Books and Stationery, $20 
Office Safe at Cost 



EXERCISE 50 

CONSIGNMENTS 

A fruit grower in Oregon may send a quantity of apples to a merchant 
in New York, who will act as agent in selling the apples. This agent is 
called a Commission Merchant. 

The quantity of apples received is called the Consignment ; the one who 
sent the apples, the Consignor; the commission merchant who received 
them, the Consignee ; the itemized statement sent by the consignee to the 
consignor, the Account of Sales. 



CONSIGNMENTS 115 

After the apples are sold, the merchant deducts a certain per cent of 
the sales as his Commission, pays all the other charges, and remits the 
balance. 

The following transactions afford illustrations of the application of 
debit and credit to this kind of business. Journalize each transaction. 



Memoranda 

July 1, Henry Brown, a commission merchant of New York, received 
a consignment of pineapples from the Day Porto Rican Fruit Company, 
Manati, Porto Rico, by the steamer Coamo, to be sold, on their account 
and risk, as follows : 

100 crates 36's 100 crates 30's 

100 crates 24's 100 crates 18's 

No debit and no credit entry for this, simply a memorandum. 
36's, 24's, etc., set forth the number of pineapples in each crate, and indicate the 
size of the fruit. 

2. The freight charges, |0.482 per crate, wer'e paid by check to the 
New York & Porto Rican Steamship Company. 

Charge the Day Porto Rican Fruit Company for the amount of this check. 

S, Upon examination it was found that some of the fruit was damaged, 
and the entire shipment was repacked at a charge of 2^ per crate. The 
following were the losses : 

3 crates 36's 2 crates 30's 

2 crates 24's " 1 crate 18's 

Charge the Company and credit Labor. 
The charge is for the total number of crates. 

4, Sold H. B. Smith on account : 

50 crates 36's at $2.90 60 crates 24's at $3.25 

5, Sold J. B. Conley for cash, less 2% : 

47 crates 36's at $2.90 50 crates 30's at $3.10 
Charge the net amount. 

6, Sold C. H. White on account : 

48 crates 30's at $3.15 50 crates 18's at $3.60 

7, Sold P. C. Wilson for cash : 

48 crates 24's at $3.20 49 crates 18's at $3.50 



116 BOOKKEEPING 

July 8, The company is charged for the following items : 
Labor, |4 ; cartage, 2(f, per crate; commission, IO70 on the sales. 
Credit the accounts named. 

9. A check is remitted for the net amount due the Day Porto Rican 
Fruit Company. Make the necessary entry for this remittance. 



COMMERCIAL DRAFTS 

Note. A brief study of the commercial sight draft and the bank draft is introduced 
at this stage of the student's work for the convenience and accommodation of those 
instructors who desire to take up the study of drafts, in a brief way, in connection with 
the introductory work of the text. 

Study the following illustration, giving particular attention to the 
relation that the different parties bear to each other. 

Chas. H. Hardy, Hartford, Conn., owes Geo. H. Allen, Chicago, 111., 
|500. Amos R. Graham, Chicago, 111., owes Chas. H. Hardy the same 
amount. What may Chas. H. Hardy do to serve his own convenience, 
and at the same time save Amos R. Graham the trouble of sending the 
money from Chicago to Hartford ? 

Chas. H. Hardy writes an order directing Amos B.. Graham to pay Geo. H. Allen 
$500. Allen presents the order to Graham, and he pays it in cash. Does this 
accomplish the same result as if Graham had sent the money to Hardy, and Hardy 
had sent it to Allen ? 

Whom should Chas. H. Hardy debit? Whom should he credit? 

Whom should Geo. H.Allen credit? What should he debit? 

Whom should Amos R. Graham debit ? What should he credit ? 

A Commercial Draft is a written order in which one person directs another 
to pay a specified sum of money to the order of himself, or to the order 
of a third person. 

The primary object of commercial drafts is to effect the settlement of 
debts without the risk or the inconvenience of transmitting money. 
There may be either three parties or two parties to a draft. 
The Original Parties to a three-party draft are : 
The Drawer, the one who draws the draft ; 
The Drawee, the one on whom the draft is drawn. 
The Payee, the one to whom the order is made payable. 

Many commercial drafts are drawn as a means of collecting debts, and a large 
number of them are dishonored. Unless there is a special reason, such as dealing 
with a delinquent debtor, a draft should not be drawn without a previous arrange- 
ment or an understanding between the persons. Without such notice, a draft ordi- 
narily has no more significance than the sending of a monthly statement of account. 



COMMERCIAL DRAFTS 



117 



Sight Paper is paper payable on presentation. 
The following is the usual form of a sight draft. 

Sight Draft 



d^^-d^^^^^^^^ — — — ^ay to the order of 



- ^^3.^ 



S=Z± 



r 



U.^i<<^ 



^::n4^.^f^.''nrCt^.,^ \ 



/Dollars 



Value received and charge to account of 
'tNlo..z^ T>ue -^A^. 



P> 4 ^^i ^^<^^^y^-^^ 



study this sight draft in connection with the following diagram : 

C. W. Gray, payee 
Springfield 




F. C. Gorham, drawee, 
Springfield 



Mason & Young, drawers 
Boston 



The persons to a three-party commercial draft usually bear the follow- 
ing relation to each other : 

The Drawee generally owes the drawer; 

The Drawer generally owes the payee ; 

The Payee and the drawee bear no relation to each other. 
The drawee and the payee usually live in the same place. 

While not bound to do so, the drawer usually notifies the drawee before or at the 
time of drawing the draft. 

It is customary to send it to the payee, and he presents it to the drawee. 



118 



BOOKKEEPING 



The Drawer's Entry. Mason & Young mail the following draft to 
C. W. Gray, and make this journal entry : 



Mason & Young's Journal 



Z^.'tZ^ 






i^-T-Z^ 



iZyOO^ 



S(?0 



S^(? 



Mason & Young have given C. W. Gray an order equivalent to $500 cash, when 
presented to Gorham ; therefore they should debit Gray. 

When F. C. Gorham pays the sight draft, he gets out of Mason & Young's debt, 
$500. He gave the money to Gray, but /or tlie account of Mason 8^ Young ; therefore 
Mason & Young will credit F. C. Gorham. 

The Payee's Entry. Immediately upon the receipt of this draft Gray 
will take it to F. C. Gorham and receive the cash, or deposit it in his 
bank for collection and credit. Gray will get the cash, $500 ; he will 
make this cashbook entry on the left side: 

Gray's Cashbook 



.x'i^^.^i^-^^^zyK ^:W<>:?^^- <:z^l-a^A^a^Uz^/^tP'^ 



SOO 



The cash received by Gray came from Mason & Young through Gorham ; there- 
fore Gray should credit Mason Sj- Young. 

The Drawee's Entry. When the draft is presented to Gorham, he will 
pay it, and make this cashbook entry on the right side : 

Gorham' s Cashbook 



j-^^ 



Gorham paid Gray $500, but he paid one of his debts to Mason & Young, and 
thus got out of their debt ; therefore he should debit them. 

The three-party draft is not used so frequently as formerly. 

The Two-Party Draft; its General Uses. Business men frequently 
employ the sight draft as an aid in the collection of accounts that are 
past due. For example, suppose Edgar McMickle, Paterson, N.J., owes 



COMMERCIAL DRAFTS 



119 



Wilbert, Closs & Co., Springfield, Mass., |260.50. The account is past 
due, and Wilbert, Closs & Co. want the money. They will, after proper 
notice, draw the following draft : 



% 2.(^(7 



:^ -.c^^^^ 



^ 



J^^^^2^^^^ 



'a.<i^. ,, ^^^ , 9, 1 9 — 



^ — r 

=JPay to the order of 



■■Y^.<1^^t^^/^.r<^.. 



^:^T4/.^^g^^^g ?^ .^ r^ -- ? ?7^ ^ ^ 



/Dollars 



Value received and charge to account of 
^o..AI^T>ue. ^ 




^^yi'/i^^r^^.^^J^^ 



Wilbert, Closs & Co. will indorse the draft and leave it with the 
Springfield National Bank for collection. As they have no account with 
a Paterson bank, they will again indorse the draft and forward it to the 
Chemical National Bank of New York City, with whom they have a 
regular account. The following indorsements will appear on the back 
of the draft. 




The blank indorsement, simply the name, is but little used in business. Banks 
insist on the use of the full indorsement. 

A number of indorsements that are common in business are illustrated and 
explained on page 90. 

The Chemical National Bank will collect the money from McMickle 
through a bank in Paterson, and then notify the Springfield National 
Bank that the draft has been collected and the amount credited. The 
Springfield National Bank notifies Wilbert, Closs & Co. that the pro- 
ceeds have been credited. 



120 



BOOKKEEPING 



The following are the entries for this draft : 

The Drawer's Entry. Wilbert, Gloss & Co. make this entry on the 
left side of their cashbook : 



Wilbert, Closs & Co.'s Cashbook 



1^0 



sol 



Should the bank make a charge for collecting this draft, the amount of such 
a charge would appear on the right side of the above cashbook. 

The Drawee's Entry. When Edgar McMickle pays the draft, he will 
debit Wilbert, Closs & Co. on the right side of his cashbook, as follows : 

McMickle' s Cashbook 



iCo SO 



From the preceding discussion the following principles are deduced 
regarding the entries for commercial sight drafts : 

Drawer's Entry when a three-party sight draft is drawn : 
Payee Drawee 

Drawer's Entry when he draws a sight draft in his own favor, and it is 

collected: /-, i t-^ 

Cash Drawee 

Payee's Entry when he receives a sight draft and collects it, on account : 

Cash Drawer 

Drawee's Entry when he pays a sight draft : 

Drawer Cash 



EXERCISE 51 
WRITING DRAFTS 

Write each of the following drafts, at sight, and make the entry for 
each party. Use the current date. The following script model shows an 
orderly arrangement of the work. 

It is suggested that the students rule ordinary sheets of writing paper to corre- 
spond to the model on page 121, and use them when writing the drafts outlined on 
page 122. 



COMMEECIAL DRAFTS. SCRIPT MODEL 121 

Model Draft and Entries 






i^^^^i/'gi.'^-t^ 



v^:^5CZd.s^T^^yC-^2>^2^^.,5^ "^v^^ _w^- 



lyU'^TZyf'Zy 






36? ^ 



3CfO 



/a^u-d.^J^ 0.^-<>-t^^^^ (p-7-2^-^t^£-^^.-<d'^^-c^..£y (^ 



<^^^M. 



v^^^ 



cn^i^.A^c-gpA^-Kd^c-g^d^^ 



'^a^t^tZ7^o/!)'y/.>^-u^rz.>'9^ 



30 (P 



0^'' 



12 




BOOKKEEPING 






DRAWER 


'-^ DRAWEEN! ^^^ PAYEE 


AMOUNT 


1. 


J. C. Green 
(Your Place) 


Amos Hamilton 
Albany, N.Y. 


L. B. Messer 


*350. 


2. 


Student 

(Your place) 


John Garson 
Columbus, 0. 


Henry F. Cook 


1402.10 


3. 


A. B. Mentor 
Chicago, 111. 


Student 

(Your place) 


Carl V. Martin 


$378.50 


4. 


David M. Gay 
Alton, 111. 


John A. Saxon 
(Your place) 


Student 


*1200. 



5. You owe Ralph M. Wells, New York, $400, and Geo. M. Warren, 
New York, owes you $500. Draw a sight draft and make the required 
entries, assuming that the draft will be paid on presentation. 

6. F. A. Wright, Atlanta, Ga., owes you $42.50 on account. Draw 
a-sight draft on him, in favor of yourself, indorse it, and leave it at The 
Union Bank for collection. In 5 da. the bank informs you that the draft 
has been collected. Make the entries. 

7. The Union Bank presents a sight draft drawn by O. M. Howe, 
Denver, Colo., on you, in favor of himself, for $104.25. Pay it by check 
and make the entries. 

When you pay a sight draft drawn on you, the draft should be canceled and kept 
as a. receipt. 

8. Frank Weeks, Austin, Texas, owes you $200 on account. Draw 
a sight draft on him, in favor of yourself, for that amount, indorse it, 
and leave it at the First National Bank for collection. In 6 da. the bank 
informs you that the draft has been collected. Make the entries. 

9. The First National Bank presents a sight draft drawn by L. W. 
Stacey, Peoria, 111., on you, in favor of himseK, for $100. Pay it by check 
and make the entries. 

REVIEW QUESTIONS 

1. Define commercial draft. 2. State the object of drafts. 3. What names are 
given to the parties to a draft? 4. What is the drawer's entry when he draws a 
sight draft on A in favor of B ? 5. What is the payee's entry for a sight draft 
received and collected ? 6. What is the drawee's entry for a sight draft paid ? 7. Do 
all drafts have three distinct parties? Explain. 8. How is a sight draft used to 
collect a debt ? 9. Is it wise to draw on a good customer without notifying him in 
advance ? Why ? 10. How would you indorse a sight draft left at The Union Bank 
for collection ? 

Commercial Time Drafts are used in business, but not so extensively as 
Sight Drafts ; these time drafts will be discussed in a more advanced 
portion of this text. 



DRAFTS 123 



BANK DRAFTS 



Business men usually keep an account with a bank and make a large 
proportion of their payments by check. However, they find it necessary 
sometimes to make payment to persons or firms who do not care to 
give credit for private checks, and then some other form of transfer must 
be used. A very common and convenient form of remittance is by means 
of a check of one bank upon another. This is called a Bank Draft. 

Suppose that C. C. Canan, Boston, Mass., wishes to buy a bill of goods 
of Jordan, Marsh & Co., New York, amounting to |400.60. If his finan- 
cial standing is unknown to Jordan, Marsh & Co., he should not send 
his personal check. He therefore draws the following check and exchanges 
it at his bank for a New York draft. 

Check to pay for Bank Draft 



traders Rational ^ank 

"Pay to the order o f //. I^^^^ ^^^r^ ^^^ 



The check is drawn for 50(^ more than" the face of the draft, and this 

charge is called Exchange. Some banks do not make any charge to regular 

customers. For this check the Traders National Bank will issue the 

following draft: 

Bank Draft 



Boston, fJ<r.n^!. JU/^^//C: \9^ Nn. ^Z^ 

traders Rational Sank 

"Pay to the order n f ^'~Xo.~6y^^^^-> ^^^^<^^ ■- $J,^/2A^ 

^0 Chemical tNjational S^nk 1 ";^^^^>A^^>^^^^--^^ 

tKew York J '^ SsAfer 



124 



BOOKKEEPING 



A bank draft is usually drawn payable to the order of the purchaser, 
who indorses it to the person or the firm to whom it is to be sent, as 
shown herewith. 




]9.=L-^o,f^Z£, 



T>ollars 



Cashier 



In this way the name of the sender appears on the draft and he is 
identified as such, and the draft, when canceled, is filed and serves as a 
receipt. 

The one who purchases a bank draft may require the name of the one to whom 
it is to be sent to appear as the payee. 

In opening letters that contain drafts, if the name of the sender does not appear 
on the draft, care must be taken to keep the draft and the letter together. If his 
name is on the draft, it may be identified without the letter. 

The Entries. The sending of this draft constitutes a cash payment by 
C. C. Canan to Jordan, Marsh & Co., and he makes the following entry 
on the right side of his cashbook : 



0,.<e>c>A^iZ.'-rt^^.i!>^ iP-9z^ £Z^^'-zn/~6y 



^^^ 



BANK DRAFTS 125 

Upon the receipt of the draft Jordan, Marsh & Co. will make this 
cashbook entry on the left side: 



7 



tZ^T^Z-iSZyT'Z^ 



--j2^>^;^,^W'»r'-^iiC^-</ tf^eZ^ 



^OC? 



Co 



When Jordan, Marsh & Co. make their deposit for the day they will include the 
draft received from Canan, sucli drafts being treated as checks. 



EXERCISE 52 

For Oral Work 

1. Receive from Henry Belmont a bank draft to apply on account, 
$750. Give your entry ; give his entry. No exchange charged. 

2. Receive from Green & Co. a bank draft to apply on account, 
$328.40. Give your entry ; give their entry. No exchange charged. 

3. Buy of your local bank by check, Henry C. Lucas, Cashier, a draft 
on the Chemical National Bank, of New York, No. 6846, payable to your 
order, for $250. Send it to Louis I. Brace in payment of your note due 
to-day. Give your entry; give his entry. In whose favor should this 
draft be drawn ? Indicate the proper indorsement. No exchange charged. 

4. Buy of the First National Bank, of your city, Thomas E. Gross, 
Cashier, a draft on the Second National Bank, of New York, No. 2378, 
payable to your order, for $32.50. Indorse it and send it to the Jones 
Manufacturing Company for a set of office books, to be used in your 
office. Give your entry ; give their entry. No exchange charged. 

As a review, write the check and the draft called for in No. 3, and the draft called 
for in No. 4. 



SUGGESTIONS FOR BUSINESS CORRESPONDENCE 

When ordering goods it is a common practice in business to keep a 
duplicate of the order, and as these orders are generally made by letter, 
a copy of the letter is a convenient and exact record for the office file. 
When a bill of the goods is received, if any question arises regarding the 
original letter, this duplicate is available for reference. 

As business correspondence is closely allied to business practice, and 
is commonly taught in connection with it, the script letter on page 126 
is given as a suggestion to the student and to the instructor. 



126 BOOKKEEPING 

It is not unusual for the instructor in correspondence to select some 
of the orders of purchase and sale in the bookkeeping text, and ask 
the student to write the required letters for these orders. This plan 
correlates the work in correspondence very closely with the work in 
bookkeeping, and affords an unusual variety of material for practice in 
the writing of this kind of letters. 

Model Letter ordering Goods 





^^.^^:.^.^^^<^^^^^^^./^- 


>/^&<^.^.^..,^^J^^^^?z-,d.^ 


-^^^^^.^^W^^z^.^;-^^^ >^7^^-<^<^ 


--c::^^^.^-^?-e'^^^:<?^^-z-.5-^'-^x- 


-Q^/€^^-/^^J^A^lJi^^--c^c^ ^e^^7^^'2::-^/'^^^^2:z.<^^ 


-^^t^d.-'C^^^A^ 




^0.^/-t>^ .y^^C^^:^;^-^^-^:::^^:^;^^-^;^^ 


Z^ 


-<::C-C<:Z^y^z^€?C€Zyt^ 


Zip 


^^!^^6^ ^ ^-<^^^l-g^ly7''Z.^€^6^C^^ 


/o ,, 


:;^^%i^^^-'^^.^-2:-t^<^<^v_^^^^-^ 


^ 


0^'<;^^-t^€^'Tt^O^£:L^^^^^>'^^ 




:?^L^;;^.,^i^^4^:'li^^ 




-..^.f^^^ 



PART 11. INTEEMEDIATE WORK 



COMMERCIAL DRAFTS 

EXERCISE 53 
A WRITTEN REVIEW OF SIGHT DRAFTS 

On pages 116 to 122 the discussion of the Sight Draft showed that it 
is an impoi'tant factor in business. A review of these pages is suggested, 
and then the following exercises may be worked out. 

1. You owed Samuel T. Porter $325 on account, and on May 6 you 
drew a sight draft on Warren & Son, St. Louis, Mo., in favor of Porter, 
for the amount named. 

a. Make your entry, and the necessary explanations. A script model is given 
on page 121. 

2. On May 10 you drew a sight draft on Patterson & Co., Atlanta, 
Ga., for an invoice dated May 1, for |165.20, in favor of yourself, and 
left it at your bank for collection. 

a. Write the draft. 

b. Show the necessary indorsement. 

c. Make the entry for each pei;son when the draft is collected. 

3. On May 15 you sold an invoice of merchandise to Geo. H. Powell, 
Cleveland, Ohio, amountmg to $125.50, subject to a sight draft in 10 da. 
On May 24 you drew a sight draft on Geo. H. Powell in favor of W. R. 
Haynes, Cleveland, Ohio, for the amount of the invoice, and remitted 
the draft to Haynes. 

a. Trace the course for this draft until it is paid. 

b. Write the draft. 

c. Make your entry. 

d. Make the entry for each of the other persons. 

4. On May 20 you bought an invoice of goods of Thos. H. Head, 
Omaha, Nebr., amounting to $450, subject to a sight draft in 10 da. 
On May 31, A. A. Lewis, of your city, presented a sight draft drawn 

127 



128 



BOOKKEEPING 



on you, in his favor, by Thos. H. Head, for the amount of the invoice. 
The draft was paid by a check on The Union Bank. 

a. Write the check. 

h. Write the draft, and make the entry for each person. 

If a sight draft was presented to the drawee, and payment, by request, was de- 
ferred for a number of days, it would be proper for him to accept the draft. After 
acceptance, the sight draft may be treated as a time draft. Some states allow 3 da. 
of grace on sight drafts. 

Time Drafts. Time drafts are of two kinds : namely, those payable a 
certain time after date, and those payable a certain time after sight, that 
is, a certain time after presentation for acceptance. 



Draft Payable after Date 



$ .^Z^ 




'•;^64^r^,^^^:^^ y. /^^^^^ 



^19^ 






JPay to the order of 



^^^^^^i /^^y-^-^-T^st^;^ 






Value received d^'i:^afge to account of 

*Gb C^, Jx^^^-^'(^^^^'^, . 

V^o./2- "Due. 



TU 



/Delia 



An Acceptance is a time draft which has been accepted. The preceding 
form is an Acceptance, and it is treated in business as a promissory note. 

Without the writing across the face of this draft it was not binding upon the 
drawee. He had not agreed to pay the draft, and could not be held legally for 
payment. 
« 

Method of Procedure in handling Time Drafts. The drawer writes the 
draft and mails it to the payee, who presents it to the drawee for accept- 
ance. In the foregoing draft the date of maturity was not determined 
by the acceptance of E. W. Masten, and it was not absolutely neces- 
sary for William M. McKay to present the draft until it was due, and 
then only for payment; until the draft is accepted, there is no legal 
obligation on the part of Masten to pay it, so it would be unbusinesslike 
on the part of McKay not to present the draft for acceptance within a 
reasonable time after it was received. 

When the foregoing draft is presented, Masten is not bound to accept 
it. However, if he does accept it, he becomes the acceptor and is held for 



COMMERCIAL DRAFTS 



129 



its payment in the same way that he would be held if he had written 
his promissory note for the amount. 

Maimer of accepting. If the drawee is willing to meet a draft on him 
according to the conditions named therein, he writes the word Accepted 
and signs his name. This is generally done in red ink across the face of 
the draft, though the color of the ink has no particular significance. 

In those states that allow days of grace on sight drafts it is necessary to have 
them accepted in the same manner as time drafts payable after sight, unless they 
are paid upon presentation. 

To Aonor a sight draft is to pay it; to lionor a time draft is to accept it or to prepay it. 

Analysis of Entries of Parties to a Time Draft. - Compare the foregoing 
draft with the sight draft explained on page 117. The relation of the 
parties is identical. Osgood & Co. owe McKay, and Hasten owes 
Osgood & Co. It is expected that Masten will accept the draft when 
it is presented to him by McKay. 

Drawers' Entry: 

1. F. V. Osgood & Co. have given William M. McKay value which, 
when accepted by E. W. Masten, is the same as bills receivable. There- 
fore they should debit McKay. 

. 2. When Masten accepts the draft he binds himself to pay one of 
Osgood & Co.'s debts. He is expected to honor the draft, and Osgood 
& Co. should therefore credit him, because by accepting the draft he 
cancels a debt to the amount of 1320.64. 






F. V. Osgood & Co.'s Journal Entry 






JZ0 



6^ 



JZO 



Payee's entry : 

1. The payee, William M. McKay, instead of receiving cash, as in the 
case of the sight draft, has received simply E. W. Masten's written 
promise to pay. We have already learned that other people's written 
promises are debited to Bills Receivable when received. 

2. As in the case of the sight draft, F. Y. Osgood & Co. are respon- 
sible for McKay's getting the draft, and he should credit them. 



130 



BOOKKEEPING 
William M. McKay's Journal Entry 



^ 



^:7-?e^ 



JZ(P 



JZ^ 



Drawee's entry: 

1. When E. W. Masten has accepted the foregoing draft, he has given 
the equivalent of his promissory note, and we have already learned that 
when one issues his promissory note he credits Bilh Payable. 

2. It is for F. V. Osgood & Co. that Masten has promised to be bound 
by this draft ; therefore he should debit them. 



E. W. Masten' s Journal Entry 



i^^^ 



/?J//^^^. 



i::^.^ 



1/fz,.^.'i.^r<J ^ ■ 



.<^-7^l^. 




JZ^ 



6^ 



JZO 



^4/! 



Draft Payable after Sight 



' ^ ^^-^ ^ ^ ^ 







Y.^^\-;^J^^ V* TTT 



JDollan 






This draft is the same as the draft drawn payable after date except 
as to the manner of acceptance. In an order payable after sight it is 
necessary to date the acceptance in order to fix the date of maturity. 

The difference between a draft payable after date and one payable after sight is 
that the former begins to mature on the date of the draft, the latter on the date on 
which the draft is accepted. The date of acceptance must be given in a draft pay- 
able after sight, while it may or may not be given in a draft payable after date. 



COMMERCIAL DRAFTS 



131 



Another Use of Time Drafts. The ordinary time draft is sometimes 
used in connection with sales of merchandise. For instance, Quincy, 
Bradley & Co. sell L. B. Wade & Co. merchandise amounting to |1305 
on the following terms : 30-day draft for $500, balance in 60 da. 

A draft similar to the following is mailed with the bill : 



$.^r ? ^ ^ 



AJSUrrtZ^T^^^ //7.^.A^ y^yf^^ 



g/^ /.^ 19^=:, 



C y>^^^.<±^.,J^, 



/Jy^^^Ly ^^^^^ a.J^^^ /^ 



/Pay to the order of 



Or^^^,<d^^^y^ ^^ 



^^'^A-^^ 7/^..^^^^^^ 



JDoUan 



Value received and charge to account of 



tKo.y3 "Due y/^ /K ld ^ '^ ^ .i/^^A<f. S ^^ ^^lU^T^O.^ 



The Object of drawing a time draft in connection with a sale of mer- 
chandise is twofold : 

1. When accepted, the draft serves as a written contract. 

2. Since an acceptance is negotiable, it may be discounted and cash 
realized upon it before maturity. 

Necessary Entries for Second Time Draft. The sale will be recorded 
in the sales book in the regular way. No entry will be made for the 
draft until it is returned, accepted. 

Some houses instead of mailing the foregoing draft with the invoice 
place it in their bank for collection. This is the usual way of handling 
paper of this kind, but both methods are illustrated in this work. 

If Quincy, Bradley & Co. placed the foregoing draft in the hands of 
their bankers for collection instead of sending it to the drawees, they 
will make the entry the same as if the draft were in their possession, 
accepted, for L. B. Wade & Co., by the terms of the purchase, have con- 
tracted to accept the draft. 

The following is the form of the journal entry : 



Quincy, Bradley & Co.'s Journal 









--^^^'2^4^<?2^- 



■^^■^Cy^^'i'-i^-T^zy 



S^i7 



S^O 



132 



BOOKKEEPING 



Should Quincy, Bradley & Co. wish to offer the draft, when accepted, 
for discount, they may do so. If this draft is discounted July 20, the 
date it is assumed they received it from L. B. Wade & Co. accepted, 
they will make the following cashbook records: 



2^ 



Left Side 



2^5^ 



^>/3:J^..^t€^-€>e^y^^cJ^i>i^ 



S(7lP 



2^ 



^Ul^^^teA-^^d^ 



Right Side 



or 



Note. Some business men prefer to make two distinct entries for the above, as 
follows : 

1. BilU Receivable to L. B. Wade & Co. for the acceptance received. 

2. Bills Receivable on the left side of the cashbook, |500, and Interest on the right side 
for $2.08, when the acceptance was offered for discount. 



PRINCIPLES FOR TIME DRAFTS 

1. Drawer's Entry when a time draft with three distinct parties is 
accepted : 

Payee Drawee 

2. Drawer's Entry when he receives his draft, drawn in his own favor, 
accepted : 

Bills Receivable Drawee 

3. Payee's Entry when he receives a time draft properly accepted : 

Bills Receivable Drawer 

4. Drawee's Entry when he accepts a time draft : 

Drawer Bills Payable 

5. Drawer's Entry when he draws a time draft on a second party in 
favor of himself, and the drawee prepays it in cash : 

Cash Drawee 

Interest 

6. Drawee's Entry when he prepays a time draft, in cash : 

Drawer Cash 

Interest 



COMMERCIAL DRAFTS 133 

EXERCISE 54 

For Written Work 
Note. These exercises may be used first orally. 

1. On June 1, W. G. Gambee, Denver, Colo., drew on you at 45 days' 
sight, in favor of Fred G. Mercier, of your city. Upon presentation, 
June 5, you accepted the draft. Face of the draft, $500. 

a. Write the draft and the acceptance. 

b. Make the entry for each person. 

2. You bought of R. H. Macey & Co., New York, 750 yd. Scotch 
ginghams at 15(f, and received their 30-da. draft dated June 4. This 
you accepted on June 6, for the amount of the invoice. 

a. Write the draft and your acceptance. 

b. Make your entry for the draft. 

c. Make R. H. Macey & Co.'s entry when they received the draft accepted. 

In the above it is assumed that R. H. Macey & Co. made one entry in their sales 
book at the time of shipping the goods, and another on the receipt of your accept- 
ance ; also that you e(iitered the invoice in your invoice book, and made a journal 
entry when the draft was accepted. 

3. You owed D. E. Smith, Seattle, Wash., $275, due in 30 da., and 
F. C. Kirkman, of Seattle, owed you $426.50, on account. You wrote a 
draft payable 30 da. after date, and sent it to Smith ; he presented the 
draft to Kirkman, who accepted it. This canceled your debt to Smith. 

a. Show the proper acceptance on the draft. 

b. Make the entry for each person. 

4. S. C. Davis, St. Louis, Mo., owed you $500, due in 30 da. You 
needed the money at once, and drew a 30-da. sight draft on him, in favor 
of yourself, and sent it to him. He accepted it and returned it to you. 
The draft was dated June 16, and the acceptance, June 18. 

a. Write the draft and show the acceptance. 

b. Make the entry for each person. 

5. You drew a draft payable 30 da. after date on Frank H. Wilson, 
Trenton, N.J., in favor of yourself, for an invoice dated July 1, for 
$210.50, and left it at Traders National Bank for collection. The bank 
presented the draft, and it was duly accepted. At maturity Traders 
National Bank collected the draft, deducted 25^ for charges, and 
remitted the balance to you. 

a. Write the draft and the indorsement. Show Wilson's acceptance and entry. 

b. Make your entry when notified that the draft had been accepted. 

c. Make your entry when you received the remittance. 



134 BOOKKEEPING 

6. You drew a draft payable 10 da. after date on James B. Stillman, 
Louisville, Ky., in favor of yourself, for |500, and sent it to Stillman 
for acceptance. The draft is dated July 6, and the acceptance, July 9. 
He returned the draft, and you held it until it was paid at maturity. 

a. Write the draft. 

b. Show the acceptance. 

c. Make the entry for each person, after acceptance. 

d. Make the entry for each person at the time of payment. 



EXERCISE 55 

For Oral Work 

1. You drew a draft payable 30 da. after date on W. K. Darling, in 
favor of Isaac B. Langley. 

a. State your entry when you draw the draft. 

b. State the drawee's entry when he accepts the draft. 

c. Will the acceptance need to be dated ? Why ? 

2. You accepted J. E. Keating's draft at 10 days' sight, in favor of 
Wells & Warriner. 

a. State your entry. 

b. When does a draft payable after sight begin to mature ? 

3. Your draft at 10 days' sight for |200, drawn on The Geo. B. Fur- 
man Company, in favor of yourself, for the invoice of Jan. 15, has been 
received, accepted. 

a. State your entry. 

b. Will the acceptance of The Geo. B. Furman Company on the above 

draft need to be dated ? Why ? 

4. The draft in Example 3 was taken to the bank and discounted 8 da. 
before maturity. 

a. The draft is payable to the order of myself Shall you need to indorse 

it? Why? 

b. State your entry when you discount the acceptance. 

c. State the entry of The Geo. B. Furman Company when they pay their 

acceptance at maturity. 

QUESTIONS ON TIME DRAFTS 

1. Explain the difference between drafts payable after date and drafts payable after 
sight. 2. What is meant by the term acceptance ? 3. To what ledger account will 
the acceptances of other people be posted? 4. To what ledger account will our 
own acceptances be posted? 5. When does an acceptance need to be dated? Why? 
6. Will banks take unaccepted drafts for collection ? 7. When a bill of goods is sold 



COMMERCIAL DRAFTS 135 

and a time draft is drawn for all or a part of the sum, what is the proper method of 
treating the draft ? 8. Will banks discount unaccepted drafts ? 9. Give the drawee's 
entry when he accepts a time draft drawn upon him. 10. Give the drawer's entry 
when a time draft with three distinct parties is drawn. 11. How do the entries of 
the drawer of a time draft compare with the entries of the drawer ci a sight draft ? 
Why ? 12. Give the payee's entry when he receives an accepted time draft to apply 
on account. 13. Give the payee's entry when he receives payment for an acceptance 
at maturity. 14. Are sight drafts ever accepted? Why? 15. Are days of grace 
allowed on sight drafts in your state ? on time drafts ? 16. An acceptance matures 
on Sunday. In your state when should it be paid? 17. When, in your state, should 
notes and acceptances maturing on July 4 be paid? on February 22, if that date 
occurs on Saturday? 

EXERCISE 56 
A Written Review 

1. Paid by check Arthur S. Harrington's sight draft on you, dated 
Birmingham, Ala., Aug. 5, in favor of Horace C. Nelson, of your city, 

for $425. 

a. Write the draft and the check. 
h. Make the- entry for each party. 

2. On Feb. 2, Roger P. Mills, Oakland, Cal., accepted your draft at 
60 days' sight, dated Jan. 29, in favor of yourself, for |900. The draft 
is payable at Alliance National Bank. 

a. Write the draft and show the acceptance. 

b. Show the maturity of the draft. 0/^'^^ 3 • 

c. Make the entry for each person when the draft was accepted. 

d. Make the entry for each person when the draft was paid at maturity. 

Note. When the time of a note or a draft is expressed in months, calendar months 
(i.e. without regard to the exact number of days in each month) are used to determine 
the date of maturity ; but when the time is expressed in days, the exact number of days 
is used. 

A note or a draft due two months from date matures on the corresponding day of the 
second following month, provided there is a sufficient number of days in that month to 
make this possible. If there is not, it is due on the last day of that particular month. / 

Example. Notes and drafts dated Jan. 28, 29, 30, or 31, and payable one month after 
date, would each mature on Feb. 28, except in leap year ; but if payable 30 da. after date, 
they would be due Feb, 27, 28, and March 1 and 2, respectively. 

In most states the added day for leap years is not counted. For example, a note or a 
draft payable 30 da. after Feb. 25 in any leap year is due March 27, instead of March 26, 
as would be the case if the extra day were counted. 

3. On Feb. 1 you sold F. B. Norton, Buffalo, N.Y., on his acceptance 
at 60 da., 150 doz. cotton hose at $2.50. The draft drawn on the date of 
the sale, payable' 60 da. after date, was received, accepted, on Feb. 5. 

a. Write the draft and show the acceptance. 

b. Make your entry for the draft. 



136 BOOKKEEPING 

4. On Feb. 6 you bought of Mechanics National Bank by check a 
draft, No. 7521, on the Puritan National Bank, New York City, for 
$96.24, and remitted it to S. G. Metzer & Co., Cincinnati, Ohio, in full 
of account. Exchange on draft, 10^. 

a. Write a check on Mechanics Bank to cover the draft and the exchange. 

b. Write the New York draft. A. Turner, Cashier. 

c. Make your entry. 

5. On Feb. 20 you remitted your sight draft on Williams & King, 
Lansing, Mich., in favor of Goodwin Bros., in payment of an invoice of 
Feb. 18, less 5% discount. Face of the draft, $190. 

a. Find the face of the invoice. ^^xjt> 

b. Write the draft. 

c. Make your entry. 

6. Write these drafts on paper cut to the proper size : 

a. Your sight draft on Chas. S. Snell, Dover, Del., for $122.50, in 
favor of J. B. Thompson. 

b. Your sight draft on Wm. S. Drake, Topeka, Kan., for $240, in 
favor of yourself. 

c. Your draft on C. H. Spring, Nashville, Tenn., for $300, in favor of 
S. M. Kline, payable 30 da. after date. Show C. H. Spring's acceptance. 

d. Your draft on Davis & Berry, Creston, Iowa, for $75, in favor of 
yourself, payable 30 da. after sight. Show Davis & Berry's acceptance. 

TEST QUESTIONS ON DRAFTS 

1. Are drafts ever interest^bearing ? 2. Under what circumstances would you 
offer a bank sight paper (a) for collection? (b) for deposit? 3. Would the banks 
of your city readily accept for deposit or for collection any paper with your restrict- 
ive indorsement upon it ? Why ? 4. When will a draft drawn payable 10 da. after 
date mature in your state if the date of it is Feb. 19, 1904 ? 5. What is the drawee's 
entry when he prepays a time draft instead of accepting it? 6. As a rule, do banks 
make any charge for cashing bank drafts? 7. What negotiable paper considered 
thus far may, under any circumstances, be treated as cash ? 



EXERCISE 57 

OPENING DOUBLE-ENTRY BOOKS 

The following exercises illustrate the opening of double-entry books 
when the proprietor begins business with both resources and liabilities. 

The student is requested to give special attention to these exercises, as they illus- 
trate the opening entries that will be used in subsequent sets. 



OPENING ENTRIES 



137 



a. W. D. Fain began the Jobbing Furniture business July 1, with the 
following resources and liabilities : 

Cash in drawer, |2500 

Merchandise, per inventory, $1600 

Jas. R. Milem's note, |500 

Interest accrued on the above note, $12 

Real estate, store and lot, $5000 

Expense, per inventory, $125 

Office furniture, safe, books, etc., $460 

The following owed him on account : 

Wm. K. Duffey, $1240 

R E. Bush, $400 

C. 0. Bond, $300 
He owed the following on account : 

Ralph Dewey, $400 

Arthur Lehan, $1600 
His note in favor of Chas. B. Hawley, $1387 
Discount on the above note to maturity, $10.95 

The following is the entry for these resources and liabilities : 
Madisox, Wis., July 1, 19 — 



C.B. 



I, W. D. Fain, have this day begun the 
Jobbing Furniture business with the fol- 
lowing resources and liabilities: 



Resources 



Cash 

Mdse. 

Bills Rec. 

Interest 

Real Estate 

Expense 

Office Fixtures 

Wm. K. DufEey 

F. E. Bush 

Interest 

C. O. Bond 

To W. D. Fain 



On hand 
f*er inventory 
Per bill book 
Accrued on above 
Store and lot 
Per inventory 
Safe, etc. 
Owes on account 
Owes on account 
On bills payable 
Owes on account 
Total resources 



Liabilities 



W. D. Fain 

To Ralph Dewey 
Arthur Lehan 
Bills Pay. 



Total liabilities 
Due him 
Due him 
Per bill book 



2500 
1600 

500 

12 

5000 

125 

460 
1240 

400 
10 

300 



3387 



95 



12147 



400 
1600 
1387 



95 



138 BOOKKEEPING 

The cash item should also appear on the left side of the cashbook 
as follows: 



Julyl 



J. 



W. D. Fain Cash invested 



2500 



The cash item is checked Q, B. in the journal because it has been 
placed to the debit of the Cash account by the above record. 

W. D. Fain's account is checked J. in the cashbook because this 
item has been counted in determining the total resources and liabiUties 
in the journal. 

On a sheet of journal paper, or on paper ruled in journal form, make 
entries for the following: 

h. Chas. R. Osgood began the Furniture business July 1, with the 
following resources and liabilities: 

Cash in drawer, $1700 

Chas. R. Dean's note, |500 

Interest accrued on the above note, $10 

Merchandise, per inventory, $2600 

The following owed him on account : 

A. B. Knowlton, $1200 

George K. Brown, $150 
He owed the following on account : 

Foster, Hills & Co., $250 

Traver, Bowe & Co., $300 
His note in favor of M. B. Hanway, $600 
Interest accrued on the above note, $10 

G. C. B. Ellis began business July 1, with the following resources 
and liabilities : 

Cash in drawer, $2000 

Merchandise, per inventory, $1300 

F. M. Everett's note, $1200 

Interest accrued on the above note, $19.50 

City Water Works stock, $4200 

Dividend on above, earned but unpaid, $168 

House and lot, 1625 Main Street, $4500 

Rent due from tenants, $95 

Horse and wagon, $150 

He owes Manning & Son on account, $1750 

His note in favor of C. 0. Bond, $1200 

He owes Ellis B. Hanway, on horse and wagon, $75 



OPENING ENTRIES 139 

d, Howard A. Johnson began business July 1, with the following 
resources and liabilities: 

Cash in drawer, |1750 

Cash on deposit in The Union Bank, $1278.50 

Merchandise, per inventory, |3875.40 

He held notes against the following ; 

John S. Gray, $625 

A. S. Coleman, $450 ; interest accrued, $8.75 
Store and lot, $4000 

His note in favor of W. A. Brown, $516.50 
Interest accrued on the above note, $11.50 
He owed the following on account : 

Samuel B. Lewis, $265 

French & Co., $376.40 

e. John D. Rowland began business July 1, with the following 
resources and liabilities: 

Cash in drawer, $975 

Cash on deposit in First National Bank, $1845.50 

Office fixtures valued at $180 

A horse and wagon valued at $280 

Merchandise, per inventory, $3246.50 

Real estate valued at $1800 

20 shares of A. & S. Ry. stock at 96J per share 

His note in favor of Frank Lee, $437.50 

Interest accrued on the above note for 60 da. 

He owed Lake & Son on account, $275 

Lacey & Co. owed him on account, $256.75 

H. S. Chapin's note, $375 

Discount on the above note to maturity, 30 da. 

/. Henry MacLane began business July 1, with the following resources 
and liabilities : 

Cash on deposit in The Union Bank, $2356.70 

Merchandise, per inventory, $4623.55 

Expense, per inventory, $78.50 

Real estate valued at $3450 

His note in favor of Henry R. Lete, $356.25 

Ralston & Cooper's note, $350 

Interest accrued on the above note for 48 da. 

A horse and wagon valued at $250 

He owed Curtis & Co., on account, $267.40 

Peterson & Co. owed him, on account, $237.50 



SET V. JOBBING FURNITURE BUSINESS 

Object. This set is designed to illustrate the Jobbing Furniture 
business. A variety of advanced business forms is illustrated and 
explained, and two new books of record are used. The transactions 
deal largely with commercial paper, and the actual handling of money 
is avoided as far as possible. Notes, drafts, and acceptances, and the 
relations existing between the parties connected therewith, are made a 
prominent feature of the work. 

Books Used. In addition to the books with which the student is 
already familiar, the bill book and the invoice book are introduced. 



Model 
Bills 



NO. 


DRAWEE OR MAKER 


DRAWER OR 
INDORSER 


FOR WHAT 
RECEIVED 


WHERE 
PAYABLE 


DATE 




RECEIVED 


DRAWN 




1 

2 
3 


J. B. Maxwell 
W. D. Rimbach 
Walker, Brown & Co. 


J. B. Topham 
Student's name 


On account 
On account 
Inv. July 2 


Union Bank 
Union Bank 


July 


1 
1 


June 
July 


15 
3 
2 





Bills 



TO WHOM PAYABLE 



Allen & Bailey Fum. Co, 
C. O. Boswell 
Derby Mfg. Co. 



FOR WHOSE 
ACCOUNT 



C. 0. Boswell 
Derby Mfg.Co, 



FOR WHAT ISSUED 



Infullofacct 
InfuUofacct, 
Inv. July 2 



WHERE PAYABLE 



Union Bank 
Union Bank 
Union Bank 



June 
July 



June 



July 



140 



SET V. JOBBING PUKNITURE 



141 



Bill Book. This book is used for recording all notes or acceptances 
which are received by the business, or which are issued by the business. 
It is generally divided into two parts, one for bills receivable and the 
other for bills payable. When notes or acceptances are received or issued, 
a full description of the paper should be recorded in the bill book. This 
book should exhibit the same balances as the Bills Receivable and the 
Bills Payable accounts in the ledger. 

The Model Bill Book given below is self-explanatory. Care should be 
taken to record in the proper columns the information called for. Com- 
plete records for the first three bills receivable and bills payable for the 
month of July are properly entered in this model. 

NoTB. The amounts in the model bill book are for price list No. 1. 

Bill Book 
Receivable 



TIME 



30 da. 
30 da. 
30 da. 



DATE 
DUE 



July 



Aug, 



AMOUNT 



INT. 

500 
450 

883 



DATE 
DIS- 
COUNTED 



DATE SENT 
TO COLLECT 



July 



July 



Aug. 



Payable 



HOW PAID 



Paid at bank 
Paid at bank 
Paid at bank 



1 mo. 

30 da. sight 

10 da. sight 



July 



AMOUNT 



INT. 

2500 
1000 
1376 



90 



July 



HOW PAID 



Charged at bank 
Charged at bank 
Charged at bank 



142 



BOOKKEEPING 
Model Invoice Book 



ORIGINAL INVOICES 



(Boston, ^Miasi., ^JJC^^^^ P- fQ- 



7^ 



Sought of "Derby ^Mfg. Co 



1 T 



II .1 II ZI 



/XC^^^^^^ 



V^ew York. 




w^^^ C, . 79- 



^ 



w/-^ ?^ 



^o Qray, Salisbury & Co., ©r. 

-/if-^ ,^^>-?^^ ^^e,,d^ J ^ 
I II I II ^^ 



64^2 J f 



ijs-- 



'Trenton. !K.J., JU^^y / 2-, \9=^ 

fought ofC IV. Allen & Co. 



'^fj^ C^-yyyi^^^.^^s ^'^^f^^^e^x 



W^ .?f.^ 



f^/ ^ ^iT 



C-^g^^^ ^--V ?^-Yg<>r-r^?^7y^<^^ 



,^^ A^^. 



2^/Cf.f /C^^.^^^^>^^:gi,^i^et^..^t?-^^ 



7-^-"^ 



//4^^Sa 



/ /<^4^ 



Jjl 



/fU 



/^ 



SET V. JOBBING FUENITURE 



143 




^ /f- 



ORIGINAL INVOICES 



'^ 



# 



M. 






•y/^^y 



fought of 'Vhe Skills Furniture Co. 



"^e, ,^77^K^J^':e^et^, 



r^ 



lA 



^v^:<? ^ ^^ 



/ ^ar (J^^^^ -^^ ^^^.^i^-r^-^^^^^ 



^/^ ^^..<^<.^d.r^ ^^. ^.-ez-^ri^rr^yt^. 



^^^ 



..A^ 



/ Zi'C 



2.fa 



■ J*^^ 



'/'f^9y 



'fsy 



Jf^^Ja 



S^ 



Invoice Book. This book illustrates another form for recording the 
amounts of all merchandise bought by the business, and takes the place 
of the purchase book with which the student is already familiar. It is 
generally made up of original bills. In regular work these bills are 
received and audited and then pasted into the invoice book. The net 
amount of each bill is carried to the money columns, which are ruled 
on the right of each page. In entering items in the invoice book 
observe the following: 

1. Do not allow the edges of the bills to extend into the money col- 
umn. Invoices coming from different houses will not be of uniform size, 
and when necessary the edges of some of these bills should be trimmed. 

2. Use but little mucilage. Paste the upper and the lower corner of 
the first bill on each page, but paste only the lower corners of all the 
other bills, and let them lap over each other as shown in the model 
invoice book. 

3. Place the amount of each bill in the money column directly oppo- 
site the name of the firm of whom the goods have been purchased. 

How to post the Invoice Book. This book is posted in practically 
the same way as the purchase book. In posting observe the following : 

1. Be sure to forward the total of the money column from page 
to page. 



144 



BOOKKEEPINa 



2. At the end of the month, or at such other periods as may seem 
advisable, post the aggregate of the money column to the debit side of 
the Merchandise account. 

3. Post the amount of each bill directly from the invoice book to the 
credit of the firm of whom the merchandise was purchased. 

Cashbook. The cashbook used in this set differs slightly from that 
used in the preceding sets. A special column is provided on each side 
for merchandise discounts. A careful study of the following illustration 
will enable the student to use this book intelligently. 

Note. The Mdse. Disc, column is given a place in the cashbook as a matter of con- 
venience. It shows the deduction on the invoice, and the posting to the credit of the 
customer's account requires that the net cash received should be added to the Mdse. Disc, 
to ascertain the amount of the bill settled. 

The Mdse. Disc, is not used in proving cash. 



Cash Receipts, July, 19 — 



DATE 


F 




MDSE. 
DISC. 
DR. 


GENERAL 


TOTALS 




1 

8 
12 
16 
20 
25 
30 
31 


J. 

9 
12 
18 
20 
11 
11 
14 


J. H. Sampson Investment 
J. E. Bender Inv. 7/7, less 3% 
C. W. Gray Inv. 7/5 
Bills Rec. Moran's note 
Interest On above 
C.O.D. Accounts C. B. Moore 
J. 0. Brown & Co. Inv. 6/12, less 1% 
Mdse. Disc. Dr. Total for month 


36 

12 


16 
60 


6000 

1169 

1240 

660 

5 

50 

1247 


09 
10 

60 

40 


10272 
10272 


19 




48 


76_ 






19 

















SET V. JOBBING EURNITURE 



145 



The Incoming Business Forms. The list of incoming business forms 
for July is given on pages 151 to 154. If the set is written without 
using the tablet of printed incoming forms, it will be necessary for the 
student to prepare them before he begins to write the set. 

After these forms are written, they should be placed in the envelope 
marked Incoming Business Forms, and withdrawn as they are needed 
when writing the set. 

Whatever plan the instructor may adopt, either using business prac- 
tice or writing the set as a study of the theory of bookkeeping only, this 
material is immediately at hand for reference, for class drills and dis- 
cussion, for reviews during the progress of the set or when the set is 
finished. 

This plan of the text does away with the necessity of using a pad of vouchers 
which are wholly independent of the text. 

Cash Payments, July, 19 — 



DATE 



MOSE. 
DISC. 
CR. 



TOTALS 



Expense 

Expense 

Expense 

J. O. Moran 

Cobb, Bates & Co. 

C. W. Allen & Co. 

Expense 

Expense 

Bills Pay. 

J. K. Levy & Co. 

Stoddard & Co. 

Bills Pay. 

Interest 

Expense 

Mdse. 

Mdse. Disc. Cr. 

Balance 



Rent 

Office safe 

Insurance 

Sight draft paid 

Inv. 7/6, less 2% 

Inv. 7/6, less 2% 

Telegram 

Stationery, etc. 

Accept, favor King 

Draft favor Brown & Co. 

Inv. 7/10, le^s 2% 

Note favor Ellis Mfg. Co, 

On above note 

Salaries to date 

Freight and cartage 

Total for month 

In safe, 67.09; bank, 3600 



24 



65 



40 



150 

250 

120 

200 

1176 

852 

1 

4 

900 

1100 

1176 

500 

5 

120 

50 



40 



60 



50 



6605 



3667 



10272 



10 



09 



19 



146 



BOOKKEEPING 



Selling Price Lists for July and August 



ARTICLE AND DESCRIPTION 


1 


2 


3 


4 


5 


No. 3116 


Antique Card Table . . . 


119.75 


113.50 


115.00 


117.50 


$24.00 


" 2546 


Antique Library Rocker . 




12.00 


29.25 


11.75 


22.00 


13.50 


" 693 


Antique Wardrobe . . . 




25.75 


27.50 


29.50 


28.75 


22.90 




Blue Chenille Curtain . . 




5.00 


5.00 


5.00 


5.00 


5.00 


" 16 b 


Brass Easel 




15.00 


15.00 


11.75 


13.00 


12.00 


" 635 


Brass Bedstead .... 




22.50 


24.00 


21.50 


23.00 


21.69 


" 15 


Cane-seat Dining Chair . 




2.25 


1.85 


1.75 


2.22 


2.69 


« 59 a 


Cheval Glass 




21.25 


21.99 


22.00 


20.50 


19.75 


« 71 A 


Child's Crib 




15.75 


9.50 


16.79 


15.65 


18.50 


« 10 


China Closet 




25.00 


24.50 


39.00 


19.90 


14.50 


" 20 


Corner Chair .... 




26.00 


26.00 


26.00 


26.00 


26.00 


« 245 


Cedar Chest 




11.00 


19.00 


9.50 


9.65 


6.25 


" 16 a 


Complete Dining-room Set 




110.00 


98.00 


90.50 


110.00 


95.00 


« 572 


Drawing-room Suite 




100.00 


152.25 


175.00 


125.00 


92.50 


" 170 


English Clothes Pole . 




5.50 


4.10 


3.60 


3.15 


3.15 


« 5932 


Empire Toilet Table . 




50.00 


39.75 


33.75 


39.75 


27.00 


" 3016 


Fancy Rocker . . . 




10.00 


10.00 


10.00 


8.50 


9.75 


" 36 b 


Gentleman's Chiffonier 




10.00 


9.00 


17.25 


22.50 


15.90 


« 6387 


Hall Settle .... 




23.25 


19.25 


21.00 


22.00 


17.75 


« 16 k 


Leather-seat Dining Chair 




9.50 


9.00 


7.50 


9.50 


8.00 


" 169 c 


Library Table . . . 




25.00 


23.75 


21.50 


15.00 


39.00 


« 91 


Lace Curtain .... 




6.00 


6.00 


6.00 


6.00 


6.00 


" 16 


Lady's Dressing Cabinet 




40.00 


23.50 


35.00 


39.50 


38.50 


" 835 


Music Cabinet . . 




5.00 


9.00 


10.00 


6.00 


3.00 


« 50 


Mahogany Parlor Table 




21.25 


20.00 


19.25 


15.00 


12.50 


« 626 


Mahogany Office Chair 




16.50 


17.25 


19.00 


13.50 


11.75 


" 396 


Mahogany Hall Stand . 




65.00 


65.00 


65.00 


65.00 


65.00 


« 89 


Mahogany Chamber Set 




80.00 


75.00 


112.50 


60.00 


149.50 


« 1008 


Oak Sideboard . . . 




195.00 


145.00 


135.00 


120.00 


117.50 


« 2229 


Oak Dining Table . 






12.25 


12.00 


10.00 


15.00 


12.75 


" 73 


Oak Writing Desk . 






10.00 


14.75 


18.59 


15.00 


11.50 


" 68 


Oak Bookcase . . . 






9.75 


9.75 


9.75 


9.75 


9.75 


" 76 a 


Oak Chamber Set . 






14.25 


14.25 


14.25 


14.25 


14.25 


« 687 


Ornamental Table . 






5.25 


12.00 


10.00 


9.50 


4.50 


" 20 D 


Parlor Cabinet . . 






37.00 


43.50 


50.00 


65.00 


35.00 


" 821 


Parlor Lamp . . . 






16.00 


10.00 


9.50 


7.50 


11.50 


" 176 c 


Piano Chair . . . 






17.00 


9.00 


6.00 


9.50 


13.00 


" 57 


Reclining Couch . . 






28.00 


21.00 


21.50 


17.50 


14.50 


" 17 a 


Roman Chair . . . 






18.75 


18.75 


18.75 


18.75 


18.75 


" 73 


Sofa Bed .... 






38.00 
92.00 


15.50 
137.50 


19.75 
139.50 


20.00 
- 75.00 


21.00 


« 5926 


Secretary Book Cabinet 






65.00 


" 65 


Turkish Rocker . . 






24.75 


22.00 


25.00 


15.00 


18.00 


« 27 c 


Woven-wire Mattress 






3.25 


3.00 


2.50 


4.00 


5.00 


" 16 


Wool Mattress . . 






4.00 


3.00 


3.00 


2.75 


2.90 


« 495 


White Iron Bedstead 






5.00 


4.00 


5.00 


5.50 


6.50 



SET V. JOBBING FUKNITUEE 



147 



Selling Price Lists for July and August 



6 


7 


" 8 


9 


10 


11 


12 


13 


$19.00 


$16.50 


$20.50 


$23.20 


$24.00 


$15.00 


$18.50 


$19.50 


12.25 


17.00 


22.00 


1^.25 


12.00 


19.25 


26.00 


27.25 


24.50 


26.75 


28.00 


29.00 


27.50 


29.50 


24.00 


30.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


13.50 


12.25 


14.00 


14.50 


17.00 


11.00 


12.75 


14.75 


22.00 


23.50 


22.50 


20.00 


21.50 


21.75 


22.25 


23.25 


2.10 


2.45 


1.90 


2.45 


2.50 


1.80 


2.20 


2.00 


21.00 


21.25 


22.00 


22.50 


19.00 


20.50 


21.50 


19.50 


15.00 


12.70 


14.50 


13.75 


10.40 


12.70 


18.00 


18.50 


24.00 


26.50 


17.75 


19.50 


14.00 


12.80 


32.50 


24.50 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


11.50 


9.75 


10.00 


9.50 


7.75 


16.00 


15.50 


12.50 


105.00 


97.50 


112.50 


95.00 


100.00 


90.00 


94.50 


110.00 


97.50 


100.00 


115.00 


102.50 


92.50 


120.00 


135.00 


137.50 


4.00 


5.20 


3.65 


3.00 


4.25 


5.00 


5.25 


3.50 


32.50 


50.00 


40.00 


42.50 


35.00 


27.50 


27.00 


36.50 


8.00 


10.00 


8.50 


9.00 


9.50 


8.25 


9.25 


10.25 


15.00 


12.50 


13.50 


17.50 


16.00 


11.50 


12.50 


22.00 


17.50 


23.25 


21.00 


17.75 


22.50 


19.75 


18.50 


17.00 


9.00 


7.20 


8.50 


7.50 


8.40 


9.50 


8.00 


7.00 


23.50 


25.00 


27.50 


29.00 


31.00 


32.50 


22.50 


19.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


35.00 


25.00 


27.00 


33.50 


38.00 


25.00 


34.00 


39.20 


5.50 


6.00 


5.00 


7.00 


6.50 


9.00 


10.00 


8.75 


20.00 


21.25 


19.50 


13.00 


15.50 


17.50 


19.25 


15.00 


15.00 


12.60 


16.40 


14.50 


18.50 


17.00 


15.00 


11.50 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


95.00 


140.00 


87.50 


90.00 


100.00 


75.00 


110.00 


105.50 


150.00 


125.00 


145.00 


120.00 


135.00 


137.50 


120.00 


160.00 


12.00 


16.00 


10.50 


13.25 


11.00 


13.20 


11.00 


13.20 


13.00 


17.50 


11.00 


14.00 


10.50 


12.40 


18.00 


17.00 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


14.25 


14.25 


14.25 


14.25 


^ 14.25 


14.25 


14.25 


14.25 


6.50 


7.00 


5.00 


4.50 


8.00 


7.50 


9.00 


10.00 


40.00 


37.50 


50.00 


52.50 


60.00 


62.00 


65.00 


63.50 


8.00 


7.50 


12.50 


15.00 


13.50 


12.00 


10.50 


14.00 


10.00 


12.00 


14.50 


9.50 


8.50 


13.00 


11.00 


9.50 


20.00 


27.00 


18.00 


14.50 


16.20 


15.90 


21.50 


25.00 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


22.00 


35.00 


21.20 


24.60 


30.50 


22.70 


16.25 


28.00 


100.00 


96.00 


125.00 


132.50 


91.50 


124.00 


110.00 


112.50 


21.00 


16.25 


14.75 


24.20 


18.75 


19.40 


22.50 


23.00 


3.50 


4.00 


3.75 


4.50 


5.00 


5.50 


2.50 


3.25 


3.00 


4.00 


2.90 


3.25 


2.70 


3.20 


4.00 


3.00 


5.00 


4.00 


6.00 


4.50 


5.25 


6.25 


4.25 


6.20 



148 



BOOKKEEPING 



Selling Price Lists for July and August 



ARTICLE AND DESCRIPTION 



14 



15 



16 



17 



No 


3116 


« 


2546 


« 


693 


(( 


16 b 


(I 


635 


u 


15 


l( 


59 a 


u 


71a 


(( 


10 


i( 


20 


(( 


245 


(I 


16 a 


u 


572 


(I 


170 


u 


5932 


u 


3016 


u 


C6b 


t( 


6387 


tl 


16 k 


« 


169 c 


i( 


91 


« 


16 


<( 


835 


(I 


50 


(I 


626 


(I 


396 


« 


89 


(( 


1008 


(( 


2229 


iC 


73 


u 


68 


ii 


76 a 


(C 


687 


(( 


20 D 


u 


821 


li 


176 c 


il 


57 


i( 


17 a 


(I 


73 


« 


5926 


« 


65 


(( 


27 c 


(( 


16 


(( 


495 



Antique Card Table . . . 
Antique Library Rocker . 
Antique Wardrobe . . . 
Blue Chenille Curtain . . 

Brass Easel 

Brass Bedstead .... 
Cane-seat Dining Chair 

Cheval Glass 

Child's Crib 

China Closet 

Corner Chair 

Cedar Chest 

Complete Dining-room Set 
Drawing-room Suite . . . 
English Clothes Pole . . 
Empire Toilet Table . . 

Fancy Rocker 

Gentleman's Chiffonier . . 

Hall Settle 

Leather-seat Dining Chair 

Library Table 

Lace Curtain 

Lady's Dressing Cabinet . 

Music Cabinet 

Mahogany Parlor Table 
Mahogany Office Chair. . 
Mahogany Hall Stand . . 
Mahogany Chamber Set . 
Oak Sideboard .... 
Oak Dining Table . . . 
Oak Writing Desk . . . 

Oak Bookcase 

Oak Chamber Set . . . 
Ornamental Table . . . 
Parlor Cabinet . . . . 

Parlor Lamp 

Piano Chair 

Reclining Couch . . . . 

Roman Chair 

Sofa Bed 

Secretary Book Cabinet 
Turkish Rocker . . . . 
Woven-wire Mattress . . 
Wool Mattress .... 
White Iron Bedstead . . 



$21.60 
14.50 
25.00 

5.00 
12.50 
21.00 

1.75 
23.00 
16.75 
27.50 
26.00 
14.25 
88.50 
96.50 

3.60 
34.00 
10.00 
20.00* 
17.50 

8.75 
25.00 

6.00 
32.00 

4.50 
21.00 
12.00 
65.00 
112.50 
150.00 
14.00 
15.50 

9.75 
14.25 

9.50 
45.00 
16.00 

7.00 
27.50 
18.75 
16.00 
75.00 
20.00 

4.20 

2.90 

5.50 



$13.50 
18.00 
26.00 

5.00 
16.00 
20.50 

1.95 
23.50 
16.40 
30.00 
26.00 
10.75 
94.25 
99.50 

4.20 
28.50 

9.75 
21.50 
20.00 

9.50 
35.00 

6.00 
30.00 

7.00 
18.00 
15.50 
65.00 
125.00 
130.00 
12.50 
16.50 

9.75 
14.25 

8.50 
47.50 
10.00 
10.00 
20.50 
18.75 
19.75 
65.00 
23.75 

2.50 

3.00 

4.70 



$16.50 
26.00 
25.00 

5.00 
13.00 
24.00 

2.00 
21.50 
15.75 
25.00 
26.00 
11.20 
106.00 
152.25 

4.30 
40.00 

8.00 
16.40 
17.50 

9.50 
25.50 

6.00 
34.00 

5.50 
20.00 
12.50 
65.00 
85.00 
125.00 
12.50 
13.75 

9.75 
14.25 
10.00 
50.00 

8.25 

9.50 
21.40 
18.75 
22.50 
80.00 
22.00 • 

2.75 

2.90 

4.90 



$20.00 
17.50 
27.50 

5.00 
15.00 
21.50 

2.90 
24.25 
17.25 
33.60 
26.00 
15.00 
91.50 
125.00 

5.40 
37.50 

9.50 
21.20 
19.00 

7.70 
23.00 

6.00 
31.50 

7.00 
17.50 
14.50 
65.00 
142.00 
147.50 
14.90 
17.50 

9.75 
14.25 

7.50 
43.50 
10.50 
13.00 
27.90 
18.75 
31.50 
90.00 
16.60 

3.45 

4.00 

4.40 



SET V. JOBBING FURNITURE 



149 



Selling Price Lists for July and August 



18 


19 


20 


21 


22 


23 


24 


25 


$15.20 


$22.00 


$21.50 


$24.00 


$23.50 


$18.00 


$19.50 


$22.50 


22.00 


16.00 


24.00 


Ifi.OO 


28.20 


21.60 


26.40 


30.00 


26.00 


24.00 


29.00 


28.00 


22.50 


27.50 


22.90 


25.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


5.00 


15.40 


11.50 


14.20 


16.25 


13.25 


12.00 


13.40 


14.50 


20.00 


23.00 


21.00 


21.40 


23.50 


21.75 


22.25 


20.50 


1.80 


2.30 


1.90 


2.40 


2.30 


1.70 


1.95 


2.25 


23.00 


20.00 


19.00 


19.50 


23.50 


19.75 


22.00 


22.50 


15.40 


10.70 


12.40 


13.75 


16.20 


9.90 


11.75 


12.90 


37.50 


17.50 


18.50 


26.70 


24.90 


23.20 


15.00 


17.20 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


26.00 


7.50 


6.75 


8.90 


14.20 


18.00 


12.60 


13.75 


14.50 


96,40 


100.00 


89.50 


92.00 


98.00 


97.50 


109.20 


107.00 


100.00 


160.00 


142.50 


94.50 


102.50 


99.50 


110.00 


120.00 


3.90 


3.75 


4.60 


4.40 


6.50 


4.20 


3.10 


3.35 


27.50 


35.00 


29.50 


33.50 


28.00 


35.50 


45.00 


50.00 


10.00 


9.75 


8.50 


9.25 


10.50 


8.25 


10.25 


9.00 


22.00 


23.00 


15.40 


13.90 


12.50 


9.90 


10.50 


11.80 


21.00 


22.50 


23.25 


20.00 


19.75 


17.75 


20.50 


23.00 


6.45 


9.20 


8.80 


7.60 


9.30 


9.50 


8.50 


9.00 


27.00 


22.50 


30.00 


.31.50 


28.00 


21.00 


17.50 


35.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


6.00 


24.50 


23.90 


26.20 


32.00 


39.00 


37.50 


39.00 


40.00 


9.50 


8.00 


5.00 


10.00 


8.50 


6..50 


4.50 


7.50 


16.00 


19.25 


15.50 


18.50 


21.25 


17.00 


16.25 


20.50 


16.00 


17.20 


11.70 


19.20 


18.60 


17.50 


13.30 


14.75 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


65.00 


130.00 


117.50 


94.40 


97.50 


124.00 


101.75 


109.00 


114.20 


122.50 


165.00 


175.00 


127.50 


162.50 


180.00 


187.50 


190.00 


16.20 


12.75 


10.80 


11.40 


13.65 


14.75 


11.50 


10.50 


14.65 


11.50 


10.80 


13.75 


15.60 


18.50 


17.90 


15.60 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


9.75 


14.25 


14.25 


14.25 


14.25 


, 14.25 


14.25 


14.25 


14.25 


9.50 


8.25 


7.75 


9.20 


11.00 


10.50 


7.20 


6.50 


32.50 


28.20 


31.50 


43.50 


52.00 


57.50 


60.00 


35.50 


9.75 


12.25 


11.50 


13.20 


8.75 


7.50 


11.20 


14.25 


14.20 


15.00 


12.50 


9.60 


7.80 


10.50 


15.25 


16.00 


24.20 


21.00 


25.20 


14.90 


13.80 


17.60 


20.50 


26.75 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


18.75 


23.90 


17.70 


16.90 


26.25 


27.50 


19.40 


20.00 


22.50 


88.40 


97.50 


101.00 


74.20 


81.80 


135.00 


127.50 


92.20 


15.50 


24.80 


16.75 


23.90 


22.60 


23.20 


18.80 


17.90 


4.15 


3.65 


4.40 


5.25 


4.80 


3.90 


3.35 


4.15 


3.80 


2.95 


3.90 


3.25 


3.15 


3.65 


3.00 


4.00 


6.60 


4.25 


5.35 


6.40 


6.60 


5.25 


5.10 


4.75 



150 



BOOKKEEPING 



Buying Prices for July and August 



ARTICLE AND DESCRIPTION 



No. 3116 Antique Card Table $14.50 

2546 Antique Library Rocker 9.00 

693 Antique Wardrobe 21.75 

Blue Chenille Curtain 4.00 

16 B Brass Easel 12.50 

635 Brass Bedstead 15.75 

15 Cane-seat Dining Chair 1.50 

59 A Cheval Glass 15.25 

71a Child's Crib 11.50 

10 China Closet 17.25 

20 Corner Chair 20.00 

245 Cedar Chest 8.50 

16 A Complete Dining-room Set 78.00 

572 Drawing-room Suite 75.00 

170 English Clothes Pole 3.50 

5932 Empire Toilet Table 39.00 

3016 Fancy Rocker 7.50 

36 B Gentleman's ChifEonier . 7.50 

6387 Hall Settle 16.50 

16 K Leather-seat Dining Chair 6.50 

169 c Library Table ^ 20.00 

91 Lace Curtain 4.50 

16 Lady's Dressing Cabinet 30.00 

835 Music Cabinet 4.00 

50 Mahogany Parlor Table 15.25 

626 Mahogany Office Chair 12.50 

396 Mahogany Hall Stand 43.00 

89 Mahogany Chamber Set 60.00 

1008 Oak Sideboard 150.00 

2229 Oak Dining Table 9.75 

73 Oak Writing Desk 7.50 

68 Oak Bookcase 7.50 

76 A Oak Chamber Set 11.00 

687 Ornamental Table 4.00 

20 D Parlor Cabinet 25.00 

821 Parlor Lamp " '. 13.00 

176 c Piano Chair 12.50 

57 Reclining Couch 21.00 

17 A Roman Chair 15.00 

73 Sofa Bed 30.00 

5926 Secretary Book Cabinet 65.00 

65 Turkish Rocker 18.00 

27 c Woven-wire Mattress 1.75 

16 Wool Mattress 2.25 

495 White Iron Bedstead 3.75 



I 



SET V. JOBBING FURNITURE 151 

Incoming Business Forms for July 

A tablet, separate from the text, containing all the incoming business 
forms, is available for writing this set when business practice is used. 
A list of the forms is given herewith, so that the text affords all mate- 
rial for writing the set if business practice is omitted. These forms also 
afford an opportunity for the study of the set as a whole before writing 
it, thus meeting a requisite for adequate drill work, whether business 
forms are used or not. 

If the set is written without using the business practice, blank invoice 
forms may be used for the invoice book, in recording the merchandise 
bought; these blanks may be secured of the publishers. 

Twenty-five selling price lists are available for this set, and each one 
may be used in connection with the business forms, whether business 
practice is used or not. 

Let the instructor assign to each student a price list, and if business 
practice is used, he should be given the necessary blank forms. 

In all the following invoices the student is represented as the purchaser. 

Form 1. Note of J. B. Maxwell, dated City, June 15, drawn in your favor, 
payable at The Union Bank 30 da. after date, with interest 
at 6%, $500. 

Form 2. J. B. Topham's draft in his own favor, on W. D. Rimbach, City, 
transferred to you by full indorsement. Draft is for |450 and 
is dated City, June 3, payable at The Union Bank 30 da. 
after date. 

Form 3. Bill of Thorp, Martin & Thorp, 798 Franklin St., City, dated 
July 1. Terms: cash, less 2%. Items as follows: 

4 M Letterheads at $2 1 Ledger, $6 

2 M Envelopes at f 1.50 1 Journal, $3 

1 M Billheads, $2 ' 1 Cashbook, |3.50 

2 gro. Steel Pens at 75^ 1 Sales Book, |3 

1 qt. Writing Fluid, 75^ 1 Bill Book, |1.50 

1 doz. Pencils, 30^ 1 Invoice Book, $1 

Deduct the discount on the bill and receipt it. 

Form 4. Invoice of Cobb, Bates & Co., 62 Portland St., City, dated 
July 3. Terms : 3/10, net 30 da. Items as follows : 

9 #5932 Empire Toilet Tables 10 #76 a Oak Chamber Sets 

12 #36 B Gentleman's Chiffoniers 5 #1008 Oak Sideboards 

5 #16 Lady's Dressing Cabinets 6 #693 Antique Wardrobes 



152 BOOKKEEPING 

Form 5. Invoice of Derby Mfg. Co., 17 Portland St., City, dated July 3. 
Terms: draft at 10 da. for the amount of the bill, less 2%. 
Items as follows: 

4 #20 D Parlor Cabinets 10 #3116 Antique Card Tables 

4 #169 c Library Tables 5 #89 Mahogany Chamber Sets 

10 #16 A Complete Dining-room Sets 

Deduct the discount on the bill, as a draft will be attached when it comes into 
your possession. 

Form 6. Draft of Derby Mfg. Co., dated City, July 3, payable at 10 days' 

sight, on you, in favor of themselves, for the net amount of 

the above bill. 
Form 7. J. O. Moran's sight draft, dated City, July 5, on you, in his 

own favor, |200. 
Form 8. Check of J. E. Bender, dated Troy, July 8, on Traders National 

Bank, in your favor, $1169.09. 
Form 9. Invoice of W. H. Stearns & Co., Chicago, 111., dated July 9. 

Terms : 30-da. draft for one half of the bill ; balance in 60 da. 

Items as follows : 

100 #15 C. Dining Chairs 20 #626 M. Office Chairs 

100 #16 K L. Dining Chairs 20 #3016 Fancy Rockers 

10 #2229 0. Dining Tables 6 #2546 Ant. Lib. Rockers 

Form 10. W. H. Stearns & Co.'s draft, dated Chicago, 111., July 9, payable 
30 da. after date, on you, in favor of themselves, for one half 
the amount of the above invoice. 

Form 11. Your draft at 30 da. from July 5 on Samuel W. Bradley, Bed- 
ford, in favor of yourself, accepted, for $840.25. 
Acceptance is dated July 5. 

Form 12. Samuel W. Bradley's draft, dated Bedford, July 12, at 30 da. 
from date, on J. E. Farley, City, in favor of himself, for $179. 
Transferred to you by full indorsement. 

Form 13. A bank draft drawn by Traders National Bank, Springfield, on 
Chemical National Bank, New York, July 10 ; drawn pay- 
able to G. H. Ingalls & Co., A. B. Turner, Cashier, for 
$1085.19. Transferred to you by full indorsement. 

Form 14. Invoice of C. W. Allen & Co., Trenton, N.J., dated July 9. 
Terms : 2/30, net 60 da. Items as follows : 

24 #27 c Woven-wire Mattresses 10 #71 a Child's Cribs 

24 #16 Wool Mattresses 24 #495 White Iron Bedsteads 

50 #635 Brass Bedsteads 



SET V. JOBBING FURNITUEE 163 

Form 15. Invoice of William Leavens & Co., 32 Canal St., New York 
City, dated July 11. Terms: sight draft in 10 da. for the 
amount of the bill, less 2%. Items as follows: 

12 #73 Oak Writing Desks 3 #5926 Sec. Book Cabinets ■ 

15 #68 Oak Bookcases 6 #396 Mahogany Hall Stands 

Deduct the discount. j 

Form 16. Stoddard & Co.'s draft, dated City, July 14, on you, in favor 
of themselves, at 15 da. from date, for |400. 

Form 17. E. F. Green & Co.'s draft, dated Bangor, July 14, on H. B. 
Claflin & Co., City, in your favor, at 30 da. from date, for 

*400. 
Form 18. Invoice of Randall Mfg. Co., 126 East 123d St., New York City, 
dated July 8. Terms: 3/10, 1/30, net 60 da. Items as 
follows : 

10 #57 Eeclining Couches 50 #65 Turkish Rockers 

5 #73 Sofa Beds 

Form 19. Invoice of S. T. Udell & Co., Chicago, 111., dated July 16. 
Terms: sight draft in 20 da. Items as follows: 

19 #50 M. Parlor Tables 11 #10 China Closets 

Form 20. William Leavens & Co.'s sight draft, dated New York City, 
July 20, on you, in favor of themselves, for the net amount 
of Form 15. 

Form 21. C.O.I), envelope. Get $50 of the instructor and place it in 
the envelope. Data as follows: Cash inclosed, $50. Goods 
were shipped by you to Ciias. B. Lyman, Springfield, July 17. 

Note. An envelope containing the required amount of cash will be found in the back 
part of the tablet of Incoming Business Forms. If business practice is used and the 
incoming business forms are not used, get the cash of the insti-uctor. 

Form 22. Check of David E. Teeter, dated City, July 23, on Traders 
National Bank, in your favor, for $1291.95. 

Form 23. M. N. Overman's draft on Rogers, Peet & Co., Buffalo, in favor 
of himself, dated Albany, July 13, payable at 30 days' sight, 
for $469.39. Accepted July 15. Transferred to you by full 
indorsement. 

Form 24. New York draft, dated City, July 24, drawn by The Union 
Bank on Chemical National Bank, in your favor, Chas. H. 
Palmer, Cashier, for $319.72. 



154 BOOKKEEPING 

Form 25. Invoice of C. W. Allen & Co., Trenton, N.J., dated July 23. 
Terms : 2/30, net 60 da. Items as follows : 

17 #572 B Drawing-room Suites 5 #59 a Cheval Glasses 

Form 26. Stoddard & Co.'s sight draft, dated City, July 27, on you, in 

favor of themselves, for |150. 
Form 27. Bill of the Metropolitan Carting Co., dated City, July 28. 

Items as follows: 

July 3, Cartage, $12.25 

10, Cartage, 9.50; Freight, |126.50 
13, Cartage, 7.50; Freight, 54.20 
26, Cartage, 3.75 

Receipt the bill as follows : Metropolitan Carting Co. 

Form 28. Receipted bill of the Consolidated Gas and Electric Light Co., 
City, dated July 29. Terms: cash, less 5%. Items as 
follows : 

Meter at current date, 8200 cu. ft. 

Meter at last settlement, 2000 cu. ft. 

Gas consumed, 6200 cu. ft., at |1.20 per 1000 

Deduct the discount before receipting the bill. In receipting, sign the name of the 
gas company, per your initials. 

Memoranda of Transactions for July 

July 1 

You begin a Jobbing Furniture business at 269 Causeway St., with 
the following resources and liabilities : 

Resources 

J. B. Maxwell's note, dated June 15, in your favor, payable at The 
Union Bank 30 da. after date, with interest at 6%, |500 ; interest accrued 
on the above note to date, |1.33, 

Discount on bills payable, |4. 

Accepted draft, dated June 3, payable at The Union Bank 30 da. 
after date, $450. This draft is drawn by J. B. Topham, in his own 
favor, on W. D. Rimbach and transferred to you by full indorsement. 

The stock of furniture of the late Allen & Bailey Furniture Co., as 
per schedule on file, |7150. 

Cash on hand, $6200. 

Store and lot, 269 Causeway St., as per warranty, deed on file, |7000. 



» 



SET V. JOBBING FURNITURE 165 

Office fixtures, etc., as per schedule on file, $450. 
Two horses, harness, delivery wagon, etc., valued at |450. 
The following persons owe you : J. E. Bender, Troy, $1350 ; Samuel 
W. Bradley, Bedford, $750 ; E. F. Green & Co., Bangor, $400. 

Liabilities 

Your note at 1 mo. from June 25, in favor of Allen & Bailey Furni- 
ture Co., payable at The Union Bank, for $2500, with interest at 6%; 
interest accrued, $2.50. 

Discount on bills receivable, 15^. 

C. O. Boswell's draft at 30 days' sight, dated New York City, June 20, 
on you, in his own favor, for $1000. You accepted it June 25, payable 
at The Union Bank. 

You owe the following persons on account : J. O. Moran, City, $2100 ; 
Paine Manufacturing Co., Bedford, $350 ; Stoddard & Co., City, $4750. 

Note. The ledger title for the store and lot is Real Estate; for the schedule of office 
supplies, Office Fixtures ; for horses, harness, and delivery wagon, Horse & Wagon. 

The Interest account and the Discount account will be united in one account under 
the title Interest. 

Make the opening journal entry ; enter the cash item in the cashbook 
also. Record the notes in the bill book. 

Write the note and the draft given in the liabilities., and hand them in. 

Did you remember to cljeck the cash item in the opening journal entry in both 
the cashbook and the journal ? , How are they checked ? 

In opening a set of books it is always necessary to find the present 
value of the notes on hand and outstanding, in order to determine the 
actual net investment. 

The item of $4 under interest on the list of resources is for 24 days' discount on 
the acceptance in favor of C. O. Boswell. The draft is not interest-bearing, so it 
will not be worth its face value until maturity. Computing the discount for 24 da., it 
is found that a cash payment of $4 less than the face will cancel the acceptance 
July 1. Since Bills Payable must be credited for the face of the draft, the discount 
is treated as an available resource. 

In like manner it is found that W. D. Rimbach's acceptance is worth 15^ less than 
its face value on July 1. Bills Receivable must be debited for the face of the accept- 
ance, and Interest credited for 15^ to offset the overcharge of resources. 

Take J. B. Maxwell's note, Form 1, and W. D. Rimbach's acceptance. 
Form 2, and place them in the Unpaid Bills envelope. The warranty 
deed, the schedule of property on hand, etc., are assumed to be on file, 
and you will make no reference to them at this time. 



156 BOOKKEEPING 

Apply to the instructor for the cash investment. 

Deposit in The Union Bank all the cash on hand except |100. 

The bank account will be kept in the same manner as in the introductory work. 
An envelope for filing the checks drawn, and for making the monthly bank state- 
ment, will be found in the package of business forms. The left stub of the check 
book may be used for recording any important memoranda. 

Pay by check the bill of Thorp, Martin & Thorp, for books, station- 
ery, etc.. Form 3. 

Place the bill in the Paid Bills envelope. 

Secure from the Manhattan Fire Insurance Co. a policy of insurance 
for |12,000 on the store, the goods, and the fixtures at 1^% premium. 

Pay the premium by check in favor of Chas. M. Shaw, general agent for your 
place. Charge Expense. 

The policy, it is assumed, was received and filed yesterday. 

Note. A policy of insurance is simply an insurance company's contract with the 
insured. Such a contract covers usually the following : 
Premium paid by the insured. 
Term of insurance. 
Amount of insurance. 
Description of the property insured. 
Extent of the company's liability, etc. 
This agreement is signed usually by the president and the secretary of the company 
as well as by the local agent of whom you obtained it. 

Engage Harry K. Sutton at |60 and Harvey L. Grant at $50 per month 
as salesmen ; Michael Donovan at $30 per month as delivery man ; Daniel 
L. Coon and Geo. W. Ainsley at |48 and $40 per month, respectively, 
as upholsterers and finishers. 

A memorandum of the above may be made by the student and filed with the 
incoming papers. 

THINGS TO OBSERVE IN WRITING LETTERS ORDERING GOODS 

1. Arrange the items one on a line. 

2. Give shipping directions in out-of-town orders. 

3. In case of a first order : 

a. Give satisfactory references. 
6. State how you intend to pay. 

4. When you name prices, state at what point you expect the goods f.o.b. 

5. Always be definite with regard to the quality and the quantity of the articles 
ordered. 

6. If it is a special order, state the purpose for which the goods are intended. 

7. State, if necessary, when the goods must reach you. 



SET V. JOBBING FURNITURE 157 

Model Letter for ordering Goods 

Hartford, Conn., July 1, 19 — 
Mr. Harold M. Bates 

136 Main Street ^ 

Detroit, Michigan 
Dear Sir : 

Please ship the following goods, subject to your 
best cash discount : 

10 #5926 Secretary Book Cabinets 
15 #396 Mahogany Hall Stands 
20 #73 Oak Writing Desks 
10 #57 Reclining Couches 
50 #65 Turkish Rockers 
25 #68 Oak Bookcases 
5 #73 Sofa Beds 

I am permitted to refer you to the First National 
Bank, of this city, as to my business standing. 

Yours truly 

Write letters, ordering the following goods : 

1. Of Cobb, Bates & Co., 62 Portland St., City, the goods outlined 
in Form 4. 

Give references and ask for their best cash discount. 

Note. In this set no entry will be made at the time of ordering goods. Almost all 
of the orders are sent to out-of-town firms, and sufi&cient time is allowed to elapse for 
the student to receive the invoice and the goods before making any entry. 

f 

2. Of William Leavens & Co., 32 Canal St., New York City, the 
goods outlined in Form 15. 

Offer to honor their sight draft in 10 da. for the amount of the bill less the 
regular discount for payments within 10 da. 

As you are a stranger to this firm, give New York City references. 

3. Of C. W. Allen & Co., 46 Merrimac St., Trenton, N.J., the goods 
outlined in Form 14. 

You have had dealings with this firm before and expect their regular terms. 

4. Of Derby Manufacturing Co., 17 Portland St., City, the goods 
outlined in Form 5. 

Ask them to allow you their usual discount, and to draw on you for the amount 
of the bill at 10 da. from date. 



158 BOOKKEEPING 

5. Of W. H. Steams & Co., Chicago, 111., the goods outlined in 
Form 9. 

Tell them that you will honor their 30-da. draft for one half the bill, and will 
pay the balance in 60 da. 

Cancel your indebtedness to Paine Manufacturiug Co., Bedford, by a 
sight draft on Samuel W. Bradley of the same place. 

Write a letter of remittance and send it with the above draft to Paine Manu- 
facturing Co. Also write a letter to Samuel W. Bradley, notifying him of the draft 
you have drawn on him at sight. Make the journal entry. 

The following suggests what the letters should contain. 

I 

Boston, Mass., May 25, 19 — 
0. M. Behrns & Co. 

Syracuse, N. Y. 
Gentlemen : 

Inclo^d find a sight draft on K. P. Shedd of your 
city, drawn in your favor, for Three Hundred Fifty (350) 
Dollars, in full settlement of account to date. 

Very truly yours 

E. R. Gaylord & Co. 

per 7n. 
II 

Boston, Mass., May 25, 19 — 
Mr. K. P. Shedd 

Syracuse, N. Y. 
Dear Sir : 

We have this day drawn upon you at sight, in favor 
of 0. M. Behrns & Co., of your city, for Three Hundred 
Fifty (350) Dollars. 

Very truly yours 

E. R. Gaylord & Co. 
per m^ 

July 2 

David E. Teeter, 360 Main St., City, orders the following goods. The 
order is filled at the prices given herewith : 

10 #5932 E. Toilet Tables at $50 3 #89 M. Chamber Sets at |80 

1 #16 A C. Dining-room Set at $110 2 #1008 0. Sideboards at $195 

1 #396 Mahogany Hall Stand at $65 

Terms: 3/5, 1/30, net 60 da. 



SET V. JOBBING FURNITURE 159 

Note. The space allowed for recording the terms of sale on a bill is generally limited, 
and bookkeepers find it necessary to use symbols and abbreviations to indicate them. The 
following list explains the meanings of the abbreviations for terms used in this work. 

Net 30 da. means that the bill is to be paid in thirty days without discount. 

1/30 means that 1% discount will be allowed if the bill is paid within thirty days. 

3/10, net 30 da., means that 3% discount will be allowed if the bill is paid within ten 
days, or the amount of the bill will be due in thirty days without discount. 

Benj. P. Freefman & Co., 924 East St., City, order the following 
goods : 

12 #170 Eng. Clothes Poles 12 #495 W. Iron Bedsteads 

5 #245 Cedar Chests 25 #821 Parlor Lamps 

Fill the order. Terms: sight draft in 10 da., less 3%. 

Make out the bill, have it approved by the instructor, and then copy 
it into the sales book. Deduct the discount on the bill and in the sales 
book also. Draw a sight draft in favor of yourself, dating it 10 da. ahead. 
Write To be given to the bank July 12 on a slip of paper, pin the slip to 
the draft, and place both in the Business Cash envelope. Make no entry 
for the draft until July 12. 

Note. Some business men prefer to wait until the 10 da. have expired before drawing 
the draft. It is considered better, however, to draw the draft at the time of billing the 
goods, since the matter may be overlooked if it is deferred 10 da. 

Walker, Brown & Co., Albany, order: 

5 #20 D Parlor Cabinets 10 #835 Music Cabinets 

24 #176 c Piano Chairs 15 #821 Parlor Lamps 

Fill the order. Terms : draft at 30 da. from date. 

The goods called for in the above order will be sent by freight, and 
it will be necessary for you to prepare a bill of lading and the duplicates, 
the shipping order^ and the memorandum. 

Study carefully the following illustration and the explanation. This is a new 
feature of your work ; be sure you understand it thoroughly. 

In the box of business forms there is a pad of bill of lading blanks, and full 
instructions for using this form. 

Use the pad marked Straight Bill of Lading. 

BILLS OF LADING 

As a means of serving the convenience of both the shippers and the 
railway companies, the Interstate Commerce Commission approved a 
uniform bill of lading, for general use, June 27, 1908. This approval 
applies to two forms of the bill of lading as follows : the straight bill of 
lading and the order bill of lading. 



160 



BOOKKEEPING 



Model Bill of Lading 

I BIU af Lading -Sttadird tem el StnlgM BHI of Ladlag a|>prDvad by the letentate Commerce Commluioa by Order No. 787 of June 27, IMS 



THE COMMERCIAL TRANSPORTATION CO. 

STRAIGHT BILL OF LADINQ-ORIQINAL-NOT NEGOTIABLE 



Shipper's No- 
Agent's No. - 



BECEWED, subject to the claasificAtioiu and 



from- 



^^?7. 



Z-L 



riSs in eflect on the date of issue of this Original 



>^?Z<^C^ 



>f.<>^>-^»?^^r^ 



Of Lading, 



y ^^ 



J.9- 



-the property described below, in apparent good order, except as noted 



(contents and condition of contente of packages unknown), marked, consigned and destined as Indicated below, which said Company agrees to carry 
to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually 
agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- 
ested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, 
herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigns 



The Bate of Freight from. 



-18 in Cents per 100 1 



IF-Tinmlft IF l>t Cl>u 



IFRul*3S IF4thCI«u IFSth 



Consigned to U-^^d^. .^/V^^^f^^Zfe 



y^ ^^. 



^.^r?y r-Qn (^. 




-i^ ~;>^. ^^'j!A/^^^<t^ ^^ R hippp-r _ ^^&>.^r?^.'/P^ .r V^ ^^^ ^ gent 



(ThU BUI of LMUog U to be signed by the shipper wd ftoX of the earrler iHUlnc iaiDe) 



Model Memorandum {Heading) 



hr aM b conMCtlofl wWi tte Standard form •• Straight Bill of Uding approved by the hrtsrrtale Cemmaree Commteilon by Order No. 787 of lone 27, 1908 

THE COMMERCIAL TRANSPORTATION CO. 



la an acknowledgment that a Bill of Lading haa been isaned and la not the Original Bin of Shipper S No.. 

THIS MEMORAN U M lading, ooi a copv «r duplicate, covering the property named herein, and ia intended solely 

for filing or record. Agent's No.- 



RECEIVED, subject to the classifications and tarifls in effect on the date of the receipt by the carrier of the property described in the 
Original BUI of fading, ^ ^ ^-. /I /? 

yZt^^y, Y^^^^^ rT 19—. 



at 




^ 






^ 



'^fr-^r-'T^y? ^y 



y^^u^^ 



-the property described below, in apparent good order, except as noted 



(contents and condition (rf contents of packages unknown), marked, consigned and destined as Indicated below, whieb said Company agrees to carry 
to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually 
agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- 
ested in all or any of said property, that every service to be performed hereunder shaU be subject to all the conditions, whether printed or written, 
herein contained Cmduding conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigns. 



TliA PjktA nf Pmialit frntn 






















is in Cents per 100 fb. 






\r. 


IF S»mW 


IF SpKi*l 


IF TiWM lltl IF lit CISM IF 2d Cl.t. IF Rul. 25 


IF 3d Clu* 


IF Rul. 26 


IF Rul. 28 


IF 4th CISM IF StK CI.M IF 6»»t CI.M 


P« 


1 




■ 




I 







SEr V. JOBBING FUIRNITURE 161 



Model Shipping Order (Heading) 

hi connwtlsa wHIi th* Standird lorm ot Straight Bill of Lading approvtd by the Interstate Commerce CommlukNi by Order No. 787 of Juw Tt, 19 

THE COMMERCIAL TRANSPORTATION CO. 

must be legibly filled In, In ink, la Indelible pencU, or In c*rbon, and Shipper's No_ 



THIS SHIPPING ORDER „^^^^ ,y ^he agent. AgeuX'i Ho. 

RECEIVE, subject to the claeaiflcatloiw and tarifis in effect, on the date of Issue of this Shipping Order, 

at. -^^^^^.^^^^rz^^^^A^ //7^..±^±^ ^ U -U ^ ^ , f , 19=., 

^..^^ ^ / / 

from ~v^j .^^ ^tC-'C'-zi-fi^.^'^^^7''y^^<d^ the property described below, in apparent good order, except as noted 

(contents and condition of contents of packages unknown), marked, consigned and destined as indicated below, which said Company agrees to carry 
to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually 
agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time inter- 
ested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, 
herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and bis 

The Bate of Freight from 



-is in Cents per 100 lb. 



IF TImn i ttl IF i «< Ci*u IF 2d Citn IF Rui* 2i IF 3d Glut IF RuK 3e IF Rui* 38 IF 4th Clui IF 5th Ciui 



Note. Bills of lading were lacking in uniformity until a final decision of the Inter- 
state Commerce Commission regarding them was secured. Previous to this they were so 
varied in size and form as to occasion much confusion and a consequent loss of time. 

To obviate these difiBculties, business men appealed to the Interstate Commerce Com- 
mission to issue an order that would require a uniform bill of lading for all shipments. 

This request resulted in many conferences between the shippers, the transportation 
companies, and the Commission, with the result shown in the form of the bill of lading 
illustrated herewith. 

The straight bill of lading is drawn up in a set of three papers, du- 
plicates being made by using carbons, as follows : the straight bill of 
lading, original ; the memorandum, an acknowledgment that a bill of 
lading has been issued ; the shipping order. This form is not negotiable^ 
and must be printed on white paper. The shipping order is signed by 
the shipper only, while the others are signed by both the shipper and 
the agent of the railway company. The shipping order is left with the 
agent ; the bill of lading is sent t® the purchaser of the goods ; the 
memorandum is retained by the- seller. The goods may be delivered to 
the purchaser without his surrender of the bill of lading. 

The order bill of lading is also drawn up in a set of three papers, 
but in this form the bill of lading must be printed on yellow paper and 
the duplicates on blue paper. The order bill of lading is negotiable 
by indorsement, and is extensively used in the shipping of freight that 
is not to be delivered until it is paid for. 

When the order bill of lading is used, the shipment is termed a 
Shipper's Order, and is recorded as a C.O.D. account. 

When an order bill of lading is used, it is customary to draw a sight 
draft, attach it to the bill of lading, and make the collection through a 
bank. The name of the bank is written after Consigned to Order of and 
the name of the consignee after Notify. The consignee cannot get the 



162 BOOKKEEPING 

bill of lading until he pays the draft, and he cannot get the goods until 
he surrenders the bill of lading. For this reason, the shipper's order is a 
C.O.D. transaction. 

The bill of lading must be used in connection with all out-of-town shipments, 
the straight bill of lading for general orders, and the order bill of lading for all orders 
that are not to be delivered until the goods are paid for. Observe this distinction 
carefully. 

Prepare the straight bill of lading and the duplicates ; sign the ship- 
ping order and the duplicates, and then have the instructor or the 
freight agent sign the bill of lading and the memorandum. Place the bill 
of lading with the invoice, inclose both in an envelope addressed to 
Walker, Brown & Co., and hand it in. The shipping order should be 
left with the freight agent, and the memorandum placed on file by the 
shipper. 

Draw a draft, in favor of yourself, payable 30 da. from the date of 
the invoice. Indorse the draft properly and leave it with your bank for 
collection. 

It should be borne in mind that Walker, Brown & Co. have agreed to accept the 
draft, and it will be honared in due course. 

Make no entry in the check book. Some banks make a memorandum entry in 
the pass book for paper left for collection, but do not extend the amount into the 
money column. 

The straight bill of lading will always be used, unless you are otherwise instructed 
at the time of the transaction. 

Make an entry in the journal in the same way as if the accepted draft were in 
your possession. Make the proper record in the bill book. Refer to the model bill 
book, page 140. 

Leave W. D. Rimbach's acceptance at the bank for collection. 

Indorse it properly and make the necessary record in the Date S'ent to Collect 
column of the bill book. 

July 3 

J. E. Bender, Troy, has agreed to honor your sight draft, in favor of 
Stoddard & Co., for |300. 

Write the draft and the letters and hand them in. Make the proper entry in the 
journal. 

The Metropolitan Carting Co. has just delivered to you the goods 
ordered of Cobb, Bates & Co. on July 1. 

Look up the invoice, Form 4. Enter it in the invoice book. (See illustration, 
page 142.) 



SET V. JOBBING FURNITURE 



163 



THINGS TO BE OBSERVED WHEN ENTERING PURCHASES IN 
THE INVOICE BOOK 

1. In actual business never enter a bill in the invoice book until the goods have 
been received. Sometimes it may happen that more than one bill is sent for the 
same goods, or perhaps a bill is sent and the goods are not delivered. 

2. When the goods have been received, the invoice for the same should be checked. 

3. If everything called for in the invoice has been received, then the bill should 
be compared with the order to find out whether or not you have received the goods 
you ordered. 

4. If the items on the bill agree with the order, next observe if the prices and 
the terms are what you bargained for. 

5. Examine the extensions of the invoice carefully and, if everything is found 
to be correct, paste the bill into the invoice book. 

6. If the checking shows any irregularities on the bill or in the goods received, 
do not paste the invoice into the invoice book, but hold it, and immediately notify 
the persons of whom you are purchasing the goods. 

The goods ordered of Derby Manufacturing Co. have been delivered. 

Look up the invoice. Form 5, and. the draft sent with it. Form 6. Enter the 
invoice in the invoice book. Accept the draft, payable at The Union Bank, and 
make the journal entry. Record it in the bill book. Place the draft in an envelope, 
address it, and hand it in. 

The deduction of 2% from the face value of this invoice is a trade discount, and 
really amounts to a reduction from the list price. Only the net amount is extended 
to the money column on the invoice, as this is the selling price of the goods, and 
this amount is to be posted to the ledger. 

This discount appears only on the invoice, as no ledger account is kept with the 
trade discount. 

W. D. Rimbach's acceptance has been collected. Go to the bank and 
have the amount placed to your credit in the pass book. Make the 
following record on the left stub of ypnv check book : 



JU^ 



/ tX-OiU-^;^^- 



a^-:n--a.€y 



4<jr^ 



Credit Bills Receivable on the left side of the cashbook. Mark the note Paid in 
the bill book. 

July 5 

Pay by check J. O. Moran's sight draft on you, in favor of himself, 
for $200, Form 7. . 

Write the check and make the cashbook entry. Hand in all outgoing papers. 



164 BOOKKEEPING 

Samuel W. Bradley, 126 James St., Bedford, orders the following 
goods. The order is filled at the prices given herewith. 

5 #3116 A. Card Tables at |19.75 3 #1008 0. Sideboards at $195 

6 #687 0. Tables at $5.25 . 5 #169 c Library Tables at $25 

Terms : draft at 30 da., in favor of yourself, for the amount of the bill. 

Write the draft and have it approved. Inclose the invoice, the bill of lading, 
and the draft in an addressed envelope, and hand it in. Make no entry for the 
draft until it has been returned, accepted. 

Telegraph Randall Manufacturing Co., 126 Ea^t 126th St., New York, 
ordering : 

50 #&^ Turkish Rockers 10 #57 Reclining Couches 

5 #73 Sofa Beds 

Do not use more than twenty words for the message. 

Write the telegram and hand it to the instructor for approval. Pay 75^ charges 
in currency. Debit Expense in the cashbook. 

The following suggests the general wording and the form of a telegram: 



THE UNION TELEGRAPH CO. 

INCORPORATED 

15,000 Offices in America Cable Service to all the World 

"W. H. ARMISTEAD, President and General Manager 



Receiver's No. 



Time Filed 



Check 



O t N U the following message subject to the J BOStOIl, MaSS., JulV 1, 1 Q- 
terms on back hereof, which are hereby agreed to. ) ? ? s^ ? L^- 

To Wm. M. Brown & Co. 

New York City 

Ship fast freight twenty number sixty library tables 

Manning , Ball & Co. 



S^^READ THE NOTICE AND AGREEMENT ON BACK.=^ 



SET V. JOBBING FURNITUKE 165 



THINGS TO BE OBSERVED IN WRITING TELEGRAMS 

1. Omit the salutation, the complimentary close, and all superfluous words. 
Avoid such expressions as. Ship immediately hy American Express, etc. Here, and in 
all similar expressions, such words as immediately, at once, etc. are entirely unneces- 
sary. A telegram in itself implies urgency. 

2. Make all messages as short as possible, but clear and definite. A fixed charge 
is made for all messages, except those sent by cable, not exceeding ten words, and 
for every word in excess of that number there is an additional charge. All charges 
are regulated somewhat by distance. 

3. No charge is made for the name and the address of the person who is to 
receive the message, or for the name of the sender. 

4. The sender of a message should never include his street number, when writ- 
ing his address. A charge is made for everything in the address except the name 
of the city or the town, the state, and the date. If you are not generally known in 
a large city or town, give the sending operator your street address, and answers will 
be delivered promptly, and no additional charge made. 

5. Numbers should be written in full, since the charge is the same for a figure 
as for a word. For example. Send hy fast freight 20 #1000 mahogany library tables would 
be counted as fourteen words, while Send fast freight twenty number one thousand ma- 
hogany library tables would be counted as ten words. 

6. Except in a cable message, each part of a compound word is counted as an 
entire word. For instance, twenty-five is counted as two words. 

7. Each initial of a name is charged as a separate word ; but a few abbreviations 
are counted as one word ; as, f.o.b., C.O.D., a.m., p.m., etc. 

8. In cable messages a charge is made for the name and the address of the one 
to whom the message is sent, and for the signature as well as for the message. 

9. Many kinds of cipher language are used to guard the secrecy and reduce the 
expense of messages. This plan is found very serviceable when the cost of transmis- 
sion is great, or when very important matters are to be telegraphed without giving 
information except to those entitled to it. Almost all cable messages are in cipher. 
To telegraph or cable in cipher, business men employ what is called a code, — a 
system of abbreviations in which a single word stands for a whole phrase or sentence ; 
as. Autumn might stand for Knoivlton, Beach Sf Co., Butleigh, Glastonbury, England, or 
We arrived here this morning, or any other expression understood by both the sender 
and the receiver of a telegram or a cable message. 

10. All messages of importance should be repeated. For one half the original 
cost of a telegram the sender of any message can have the receiving operator re- 
peat it to the operator who sent it. Errors in important telegrams are in this way 
avoided. 

11. Night messages are taken at reduced rates. These can be sent at any time 
after 6 p.m., but they are not delivered until the next morning. 

12. Night letters will be received not later than midnight, to be transmitted for 
delivery on the morning of the next business day. Fifty words or less may be sent 
for the day rate of ten words. Additional charges are made for more than fifty words. 

13. Day letters will be transmitted at one and one-half times the standard night 
letter rate for fifty words or less. Additional charges are made for more than fifty 
words. 



166 BOOKKEEPma 

■J" 

July 7 

J. E. Bender, 127 Main St., Troy, orders : 

15 #396 Mahogany Hall Stands 9 #68 Oak Bookcases 

10 #76 A Oak Chamber Sets 

Fill the order. Terms : 3/5, 2/10, net 30 da. 
Prepare the bill of lading as under July 5. 

July 8 

Receive a check from J. E. Bender for the amount of the invoice of 
July 7, less 3%, Form 8. 

Enter the check on the left side of the cashbook. Refer to the second entry in 
the model cashbook, under cash receipts, page 144. Note the manner of recording 
the Merchandise Discount. 

Merchandise Discount is an allowance for the payment of an invoice 
within a specified time from its date. It is usually the result of giving 
optional terms of settlement to the buyer, as S/10, 1/30, '^/60 ; that is, 
a reduction of 3% if payment is made within 10 da., or 1% if paid 
after the 10 da. and within 30 da., or the face of the bill if payment 
is made after the 30 da. and within 60 da. 

Because the buyer has this option the invoice is billed without reduction, as it is 
not known which option the buyer will choose. If he pays within the time for which 
the discount is allowed, a record is made of this discount as a regular entry, under 
the title Merchandise Discount. 

July 10 

The Metropolitan Carting Co. has just delivered the goods shipped 
to you by W. H. Stearns & Co., Chicago, 111., Form 9. 

Accept the draft, payable at The Union Bank, Form 10, place it in 
an envelope addressed to W. H. Stearns & Co., and hand it in. 

Make the required journal entry, and then record in the bill book. 

Samuel W. Bradley, Bedford, returns your draft of July 5, on him, 
accepted. Form 11, together with an acceptance. Form 12, payable 30 da. 
from July 12, drawn on J. E. Farley, City, in favor of himself, for $179. 
Form 12 is transferred to you by full mdorsement. 

Make a journal entry for each draft, and then record them in the bill book. 
Each acceptance is journalized under the same name. Place them in the Unpaid 
Bills envelope. 



SET V. JOBBING FURNITURE 



167 



Telegraph S. T. Udell & Co., Chicago, 111., asking them to ship you 
by fast freight : 

11 #10 China Closets 19 #50 Mah. Parlor Tables 

Limit the message to fourteen words. Hand it in, and pay 75^ charges in 
currency. 

July 11 

G. H. Ingalls & Co., Springfield, order: 

25 #20 Corner Chairs 25 #17 a Roman Chairs 

They inclose a New York draft to cover the cost "of the order. 
Form 13. 

Fill the order. Terms : cash, less 3 % . 



Write the invoice, deducting the 3% allowed for" cash, 
of lading and the duplicates, in the usual form. 

Enter the draft in the cash- 
book, but do not record the dis- 
count, as the persons have been 
charged in the sales book with 
only the proceeds of the invoice. 



Prepare the straight bill 



THE UNION BANK 

DEPOSITED BY 

LUKE S. WARDEN 



July 12, 10 



July 12 

Deposit in the bank the 
check on hand ; also the New 
York draft and the sight draft 
on Benj. P. Freeman & Co. 
Collection J^ % on the check. 

Note. Banks usually charge 
their depositors a small fee for 
collecting out-of-town checks. 
There is no uniform custom in 
charging for checks, sight drafts, 
and the various other negotiable 
instruments offered for collection. 
Nearly always a small charge is 
made for collecting any paper pay- 
able out of town. These charges 
range from ■^^% to \%. As a rule, 
no charge is made to a regular 

depositor for collecting paper payable in the city nor to a customer who keeps a large 
bank account. The student will be instructed when the bank makes any charges. 

Make out a deposit ticket and deduct the collection. 

Indorse each paper and then enter the deposit in the check book. Debit Collec- 
tion Sc Exchange for the bank's charges. Credit Benj. P. Freeman Sf Co. for the 
sight draft in the cashbook, for no entry was made when the draft was drawn. 



Please list each check separately 




Bills 






CtoIH 






wSilvftr 






Charts ^ 


1140 


15 




511 


20 




278 


75 




1930 


10 


Less Exchange 


1 


14 




1928 


96 



168 



BOOKKEEPING 



July 12 
Leave J. B. Maxwell's note at the bank for collection. 

Take J. B. Maxwell's note from the Unpaid Bills envelope, indorse it, and then 
hand it to the bank teller. No record will be made in the pass book until the bank 
reports the collection. 

Discount Samuel W. Bradley's acceptance for the invoice of July 5, 
and receive credit for the proceeds. 

Take Bradley's acceptance from the Unpaid Bills envelope, indorse it, and then 
make out a discount memorandum similar to the following : 

Form of Discount Memorandum 



DISCOUNT MEMORANDUM 




Date X A ^yf . ^^ / ^^ 19^= 

Discounted fo r Cy(y^7<^yr"/Y . y/Z^^^7-^^^^ 

Make r /j^^ T- T ^^^^ C/f y ^^ 

Indorser 



Face, I V / ^/^ - ^ nterest, \. 



.Total. I^f^^rr 



Discount (^ ^ d^ \ f~-^ Coll., \ Total, \s^ 

Proceeds, \ 4^^f 6~^^ 



Compute the discount at 6%. 

Pin the discount memorandum and the acceptance together, place them in the 
pass book, and then hand it to the bank teller, who will give you credit for the 
proceeds. 

Enter the proceeds as a deposit in the check book. 

In the cashbook remember to credit the acceptance for its face value; debit 
Interest for the discount. 

In the bill book, in the Date Discounted column, write July 12. 



SET V. JOBBING FURNITUEE 169 

Give Cobb, Bates & Co. a check for the invoice of July 3, less the 
discount allowed for prompt payment. 

Write the check, hand it in, and make the entry in the cashbook. The cashbook 
entry will be the same, except the amounts, as the jifth entry in the model cash- 
book, under payments, page 145. 

Receive the goods ordered of C. W. Allen & Co., on July 1, Form 14. 

July 13 

The Metropolitan Carting Co. has delivered the goods ordered of 
William Leavens & Co. 

Look up the invoice, Form 15, and enter it in the invoice book. Note that 
William Leavens & Co. have deducted the discount on the invoice. You will receive 
their sight draft on you for the net amount of the invoice in 10 da. 

No entry is made for the trade discount. Why ? 

Remit C. W. Allen & Co. a check for invoice of July 9, less the dis- 
count allowed for prompt payment. 
Also order the following : 

5 #59 A Cheval Glasses 17 #572 Drawing-room Suites 

Write the check and have it approved ; enter it in the cashbook. Write a letter, 
inclosing the check and ordering the goods. 

Your acceptance in favor of Derby Manufacturing Co., made payable 
at your bank, is due to-day. The bank charges the amount to your account. 



THE CIRCUMSTANCES UNDER WHICH A BANK WILL CHARGE A 
DEPOSITOR WITH A NOTE OR A DRAFT 

1. Banks are not uniform in their practice of charging notes, accepted drafts, etc. 
In some places, notably in Chicago and several other large Western cities, they 
require their patrons to meet all such paper by check. 

2. The practice followed by some banks is to pay notes, acceptances, etc. out of a 
firm's deposit, and to charge the depositor the same as they would had he drawn 
a check. Court decisions and special laws in force in a number of states hold that 
notes, acceptances, etc. made payable at a bank are orders upon that bank and may 
be charged to a depositor's account at maturity the same as a regular check. 

3. These special laws and decisions are in operation in New York, Massachusetts, 
Connecticut, and a few other states. In these sections many banks charge notes, 
etc., to their patrons* accounts at maturity. 

Enter the amount in the check book on the regular stub, and include this item in 
the total that is carried forward to the next stub. 

Debit Bills Payable in the cashbook. Mark the acceptance paid in the bill book. 



170 



BOOKKEEPING 



July 15 

Your bank has received cash for J. B. Maxwell's note and the interest 
due to-day. 

Enter the sum of the note and the interest as a deposit in the check book. 

Accept, payable at your bank, Stoddard & Co.'s draft in favor of 
themselves, at 15 da. from July 14, for $400, Form 16. 

Do not date the acceptance. Why? Make the journal entry, and then record the 
acceptance in the bill book. 

Receive of E. F. Green & Co. a draft drawn in your favor, payable 
30 da. from July 14, on H. B. Claflin & Co., City, for $400, Form 17. 

Present the draft to the instructor ; he will give you directions about having it 
accepted for H. B. Claflin & Co. 

Receive the goods ordered of Randall Manufacturing Co. on July 5, 
Form 18. 

July 16 

Give Randall Manufacturing Co. your check for the amount of the 
invoice of July 8, less 3%. 

July 17 

M. N. Overman, 493 King St., Albany, orders : 

3 #693 Antique Wardrobes 30 #65 Turkish Rockers 

3 #73 Sofa Beds 

References are satisfactory and you fill the order. Terms : 3/10, 1/30, 
net 60 da. 

AVrite the invoice and have it approved, and then record it in the sales book. 
Place the invoice and the bill of lading in an envelope and hand it in. 

Receive a telegraphic order from Chas. B. Lyman, Springfield, for 

4 pr. Blue Chenille Curtains 5 pr. #91 Lace Curtains 
The goods are to be shipped by express C.O.D. 

Make out a receipted invoice ; enter it in the sales book as follows : 



S^^kdy: #^/ c^^^^jrz-^^T^^ift^^-^^^^.^?^^ 



J 


Zc? 






/-^ 


3 


— 


^0 


" 







SET V. JOBBING FURNITURE 171 

Place the invoice in a C.O.D. envelope, fill it out properly, and hand it in. 

When posting, debit Chas. B. Lyman under C.O.D. Accounts^ as 
follows : 



7^. CyTc^/y^ (^yCc^i>t^-t^.^n.^ 



'7 



'^'fietd . /'^^^s^y^n-tt^ny 6> 



S^ 



July 18 

Receive the goods ordered of S. T. Udell & Co., Chicago, 111., on 
July 10, Form 19. 

July 19 

P. R. Brown, Rochester, orders : 

25 #635 Brass Bedsteads 25 #6387 Hall Settles 

Fill the order, subject to the order of The Union Bank. 



DRAFT WITH BILL OF LADING ATTACHED 

For the convenience of shippers when the responsibility or the credit of the 
buyer is limited or when his business standing is unknown, railway and steamship 
companies have provided a way whereby goods may be sent by freight so that the 
buyer cannot obtain possession of them without first paying for them. This 
method is commonly known among business men as Shipper's Order, and is anal- 
ogous to C.O.D. shipments in the express business, as explained in the transaction 
of July 17. 

Throughout the text, transactions of this kind will be entered as C.O.D. accounts. 

In this shipment it will be necessary to make out an order bill of 
lading. This form is described and illustrated on pages 159 to 162. 
Observe the following directions: 

After the words Consigned to order of, write The Union Bank, and on the line 
following write your address. 

After Notify, write P. R. Brown, and on the line following write Rochester, N. Y. 

Write a sight draft for the amount of the invoice, indorse it to The 
Union Bank, attach it to the bill of lading, and then leave it with the 
bank for collection. 



k 



Send the invoice to your customer in the usual way. 

Enter in the sales book as a C.O.D. item. See script illustration under July 17. 



172 



BOOKKEEPING 



HOW THE COLLECTION WILL BE MADE BY YOUR BANK 

Your bank will indorse both the draft and the bill of lading, and send them to 
its correspondent at Rochester. 

When the Rochester bank receives the draft it will notify Brown. If he pays 
it, the bank will give him the freight receipt, which receipt, when properly indorsed 
and given to the transportation company, will give him access to the goods. 

Transportation companies will not deliver goods without obtaining an order bill 
of lading, for they would thereby render themselves liable to the shippers should the 
consignee not pay for the goods. 

July 22 

Pay William Leavens & Co.'s sight draft, in favor of themselves, for 
the amount of the invoice of July 11, Form 20. 

Verify the amount of the draft by comparing it with the amount of the invoice 
in the invoice book. If correct, write a check for it. Make the cashbook entry. Write 
Paid across the face of the draft and keep it as a receipt. 

Receive returns for the C.O.D. shipment of July 17, Form 21. 

Take the money out of the C.O.D. envelope and place it in the Business Cash 
envelope. (If the Incoming Business Forms are used, the envelope containing the 
currency will be found in the back of the tablet.) 

Enter in the cashbook as follows : 



Left Side 



Z2 



SO 



July 23 

Receive a check of David E. Teeter, in full for the invoice of July 2, 
less 1%, Form 22. 

Examine the check and verify the amount ; if correct, make the cashbook entry. 

Receive of M. N. Overman, Roger, Peet & Co.'s acceptance at 30 da. 
from July 16, to apply on account, $469.39, Form 23. 

The draft has 22 da. yet to run, so it is not worth its face value. The discount 
for 22 da. at 6% should be deducted. Make the journal, entry, and then record in 
the bill book. Do not mark it Discounted in the bill book, but enter the draft at 
its face value. 

July 24 

Write a letter to J. K. Levy & Co., 27 East 126th St., New York, 

ordering : 

15 #693 Antique Wardrobes 



SET V. JOBBING FURNITURE 173 

Inclose a New York draft for the amount, less 2%. Buy the draft by- 
check. Exchange, 30^. 

Write a check to cover the draft and the exchange. The form of this check is 
given on page 123. 

Take the New York draft, Form 24, and indorse it. Debit J. K. Levy ^ Co. in the 
cashbook for the face of the draft, and debit Collection S^ Exchange for the amount 
of the exchange. 

Inclose the draft in a letter. 

When a remittance is sent with an order, the amount may have been determined 
by previous correspondence, or by reference to prices quoted in a catalogue issued 
by the firm. 

July 25 

Your acceptance in favor of C. O. Boswell, and your note with interest 
for one month, in favor of Allen & Bailey Furniture Co., have been 
charged to your account at the bank. 

Make the entries in the cashbook and the check book. Refer to a similar transac- 
tion under July 13. Mark the notes Paid in the bill book. 

Chas. B. Sherman, 23 West Ave., Rochester, orders : 

50 #15 Cane-seat Dining Chairs 3 #2229 Oak Dining Tables 

25 #16 K Leather-seat Dining Chairs 16 #3016 Fancy Rockers 

References are satisfactory and you fill the order. Terms : sight draft 
in 30 da. for the amount of the bill, less 1%. 

Prepare the usual bill of lading. Place the invoice and the bill of lading in an 
addressed envelope and hand it in. 

Draw a sight draft, dating it ahead 30 da., in favor of yourself, for the amount of 
the bill, less 1%. Have the draft approved and place it in the Business Cash envelope. 
Do not count this draft in proving cash. 

The Metropolitan Carting Co. has delivered to you the goods ordered 
of C. W. Allen & Co. on July 13, Form 25. 
Draw cash for private use, $75. 

Take $75 from the Business Cash envelope and place it in the Personal Cash 
envelope. 

July 27 

Pay by check Stoddard & Co.'s sight draft, in favor of themselves, 
for *150, Form 26. 

Place the draft in the Paid Bills envelope. 

Deposit the check and all the cash on hand. 

Make the proper indorsements before offering any paper for deposit. 



174 



BOOKKEEPING 



David E. Teeter, City, placed the following order with you over the 
telephone this morning. The order is filled at the prices given herewith : 

15 #16 B Brass Easels at $15 19 #68 Oak Bookcases at $9.75 

5 #20 D Parlor Cabinets at $37 

Terms : 3/5, 1/30, net 60 da. 

Pay by check the bill of the Metropolitan Carting Co. for freight and 
drayage to date, $213.70. 

Examine the bill, Form 27. Debit Merchandise for the amount. 

Note. Merchandise is charged for the freight and cartage because such an expenditure 
is made for handling the goods bought and sold. 

July 29 • 

Pay by check gas bill for the month, $7.07, Form 28. 
Pay by checks salaries to date, as follows : 

Harry K. Sutton $60 Michael Donovan $30 

Harvey L. Grant 50 Daniel L. Coon 48 

Geo. W. Ainsley $40 

Write the checks and have them approved. Charge Expense in the cashbook. 
Enter the five checks as one item. 

July 30 

Your acceptance of July 15 in favor of Stoddard & Co., made payable 
at the bank, has been charged to your account. 

Make the entries in the cashbook and the check book. Mark the note Paid in 
the bill book. 

The reason for charging notes to a depositor's account is set forth on page 169. 



Closing the Work for July 

The student should now proceed to close the month's work as follows : 

1. The monthly bank statement should be made. 

2. Prove the cash, and balance and post the cashbook. (See model, 
pages 144 and 145.) 

In posting from the cashbook observe the following : 

a. In debiting or crediting a personal account when a discount has been allowed, 
be guided by the following form : 

Williams, Dowd & Co. 



19— 
July 



Discount 
N.Y. draft 



42 
2058 









19— 




9 


2100 




June 
July 


28 
30 
15 



LB. 
LB. 
LB. 



2100 

592 

1241 



60 
60 



SET V. JOBBING FURNITURE 175 

h. Post only the totals of the Merchandise Discount columns. The total of the 
column on the left side should be posted to the debit of Merchandise Discount in the 
ledger, because that column shows the aggregate discounts allowed to others for 
prepaying their bills during the month of July. The total of the column on the right 
side should be posted to the credit of Merchandise Discounts, because that column 
shows the aggregate discounts allowed to you for prepaying bills during the month 
of July. 

3. In posting, allow one page for your account, one half page each for 
all property accounts, and one third of a page for all accounts receivable 
and all accounts payable. 

Accounts Receivable is a term applied to the total amount due the business on 
personal accounts ; Accounts Payable is a term applied to the total amount owed by 
the business on personal accounts. (The Proprietor's account is not included.) 

These terms, Accounts Receivable and Accounts Payable, are to be used in mak- 
ing trial balances and statements in subsequent work ; the result of using them is 
to shorten both the trial balance and the statement. 

Another advantage of using the terms suggested in the preceding paragraph is to 
give information in concrete form. The important fact shown by these accounts in 
the statements is the amount due the business on account, and the amount owed by 
the business on account, as single items, rather than as a list of the individual debtors 
and creditors. 

Information presented in concrete form is always a desirable feature in book- 
keeping. 

Note. Blank ruled pages are provided at the beginning of the ledger for an index. 
Observe the following directions In preparing the index. 

List all titles from the ledger alphabetically. 

In each Individual name write first the surname and then the Christian name ; for 
example, Burton, John L. 

Illustrations for writing firm names: Brlghtwood & Co., John H. ; Cobb, Bates & Co. ; 
Sherwood & Son, Henry L. 

Write on every other line, and place the page number of the account immediately after 
the name. 

When an account is transferred to a new page in the ledger, the number of this page 
should be written just after the number of the page on which the account was first 
written, as follows : Merchandise, 4, 76, etc. The last number Indicates the page on which 
the open account may be found, and the series of page numbers enables the bookkeeper 
to refer to any page on which the account stands. 

Any new accounts that may be opened in the ledger should be written in the index 
at once. 

4. Rule, foot, and post the sales book and the invoice book. 

5. Post the journal. 

6. Prove the bill book. 

Note. To prove the bill book, find the total of the uncanceled Bills Receivable. This 
sum should agree with the balance of the Bills Receivahle account In the ledger. 

In like manner find the total of the unredeemed Bills Payable, and this sum should 
agree with the balance of the Bills Payable account in the ledger. 



176 



BOOKKEEPING 



7. Prepare monthly statements of the customers' accounts. Place 
them in envelopes properly addressed and hand them in for approval. 
(See form for statement, page 178.) 

8. Take a trial balance of the balances of the ledger accounts and hand 
it to the instructor for approval. 

9. Inventory of stock was completed by Harvey L. Grant and Harry 
K. Sutton yesterday. The following are their figures. Copy in the journal 
in the usual form, using the buying price for the merchandise. 



Inventories, 
Merchandise : 

5 #3116 A. Card Tables 
17 #2546 A. Library Eockers 

4 #693 Antique Wardrobes 
25 #635 Brass Bedsteads 

10 #16 B Brass Easels 
150 #15 Cane-seat Dining Chairs 

5 #59 A Cheval Glasses 
10 #71 A Child's Cribs 
10 #20 Corner Chairs 

9 #16 A C. Dining-room Sets 
15 #10 China Closets 
17 #572 Drawing-room Suites 
12 #3016 Fancy Kockers 
12 #36 B Gentleman's Chiffonien 
10 #6387 Hall Settles 
250 #16 K L. Dining Chairs 

5 #169 c Library Tables 



July 31, 19 — 

10 pr. #91 Lace Curtains 

5 #16 L. Dressing Cabinets 
19 #50 M. Parlor Tables 
.20 #626 M. Office Chairs 
10 #396 M. Hall Stands 
2 #89 M. Chamber Sets 
7 #2229 0. Dining Tables 
12 #73 Oak Writing Desks 
5 #68 Oak Bookcases 
5 #20 D Parlor Cabinets 
10 #57 Reclining Couches 
12 #73 Sofa Beds 
5 #5926 S. Book Cabinets 
J 20 #65 Turkish Rockers 

24 #27 c W.-wire Mattresses 
24 #16 Wool Mattresses 
12 #495 W. I. Bedsteads 



Office Fixtures : 




Cost 


$450. 


Depreciation 


4.50 1445.50 


Horse and Wagon : 




Cost 


|450. 


Depreciation 


45. $405. 


Real Estate 


17000. 


Expense : 




Unexpired Insurance 


|145. 


10. Make the usual statements of losses and gains, and of resources 


and liabilities. 





SET V. JOBBING FURNITURE 177 

The form of the loss and gain statement is changed for this set. The 
following suggests the form to be used: 



Statement of Losses and Gains, July 31, 



Mdse. 

Mdse. 

Freight and Drayage 

Mdse. 

Mdse. 

Gain on Mdse. 

Gain on Mdse. 
Mdse. Disc. 
Mdse. Disc. 
Interest 
Interest 
Expense 
Expense 
Coll. and Exch. 
Office Fixtures 
Office Fixtures 
Horse and Wagon 
Horse and Wagon 
Net Gain 



On hand July 1 

Bought during July 

Bill for July 

Sales for July 

On hand, July 31, per inv. 

Carried below 



From above 
On purchases 
On sales 
Allowed to us 
Allowed by us 
Cost, Dr. 
Unearned ins. 
Paid 
Cost, Dr. 
Inventory 
Cost 

Inventory 
For July 



150.20 

90.20 

25.50 

9.50 



490. 
100. 



430. 
425. 



250. 
224.50 



7500 

9200 

400 



1241 



18341 



390 
2 



25 

894 



1317 



9650 
8690 



18341 



60 
16 



1317 



50 
50 



The statement of resources and liabilities is to be made in the same form as in 
the previous sets. 

11. Make out a statement proof or verification. 
Statement Proof, July 31, 19 — 







Student's investment 

Student's withdrawals 

Student's net gain per statement 

Student's present worth per statement 


250 
6644 


50 


6000 
894 


50 




6894 


50 


6894 


50 















12. Hand the statements and the proof of statement to the instructor 
for approval. 

13. If the statements and the proof are correct, close the accounts 
showing loss and gain, and then show the proprietor's present worth. 

14. Compare the check book with the monthly bank statement. 



178 



BOOKKEEPING 



HOW TO COMPARE THE CHECK BOOK WITH THE MONTHLY 
BANK STATEMENT 

1. Arrange the canceled checks in the order of their numbers. 

2. Compare each canceled check with the corresponding stub ; if they agree as 
to the number, the date, the amount, to whom given and for what purpose, place a 
large check mark on the stub. 

3. If all the stubs are checked, the balance shown by the check book will agree 
with the balance shown by the monthly bank statement. 

4. If the balances do not agree, find the total of the stubs not checked. This 
sum should equal the difference between the check book and the balance shown 
by the monthly bank statement. 

Note. If, at the time of making this comparison, any outstanding checks of a pre- 
vious month have been returned, they must be checked with the stubs from which they 
were detached. 

15. Place the canceled checks in the Paid Bills envelope. 

16. Pass all books to the instructor for approval. 



STATEMENT OF ACCOUNT 



-:^^r^.<Ur^J2^^^^ (^.A^. 9/ 19 



In account ti)Uh -^^■t7^^^^}i~^A^^^^.^/C^-y^ ^ 



-^Cx^^^^^^^ yy^^^^^ 



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±^^2^2^L£^ 



/s f^ 



OjZ. 



^-Z- 



-rz/y 



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REVIEW EXERCISES 179 

EXERCISE 58 

A Written Review 

The following review exercises are suggested : 

1. Journalize orally or in writing each transaction in the month 
of July. 

All amounts may be omitted, as the value of the exercises is in determining 
debits and credits. 

2. Make the following opening entries, referring to pages 137 and 138 
to determine the correct form of entry: 

Student begins business this day with the following resources and 
liabilities : 

a. Cash in drawer, f 231.40 

Deposit in First National Bank, |1674.50 
Stock of merchandise valued at |9645.50 
The following owe you on account : 

Henry A. Pell, |67.50 

Morris & Co., |253.10 

M. M. Bell, $167.25 

Amos T. Young, |76.45 
You owe the following on account : 

Barber & Co., $56.75 

Young & Brown, |100.50 

Thos. L. Parr, $25.25 

h. Cash in drawer, $325 

Deposit in The Union Bank, $2365.10 
Store and lot valued at $4200 
Stock of merchandise valued at $11,457.20 
The following owe you on account : 

Warren & Son, $176.25 

John K. Lamb, $200 

C. H. Hartman, $423.50 

D. B. Vance, $153.95 

You owe the following on account : 

Marshall & Co., $235 

Henry Marvel, $310 

Chas. L. Burt, $65.70 
You hold notes against the following : 

H. T. Inman, $125 ; interest accrued for 60 da. 

L, L. Pond, $250 ; interest accrued for 30 da. 

Mason & Son, $230 
You have the following notes outstanding : 

R. N. Banks, $200 ; interest accrued for 45 da. 

T. S. Little, $100 ; interest accrued for 75 da. 

Alden & King, $75 



180 



BOOKKEEPING 



3. Make the usual statements from the following trial balances 



a. John A. Smart, Prop. 
Cash 

Merchandise 
Expense 
Real Estate 
Bills Receivable 
Accounts Receivable 
Accounts Payable 
Bills Payable 
Interest 

Merchandise Discount 
Office Fixtures 
Horse and Wagon 



$125. 

1165.50 

7796.25 

250.50 
3005.20 

270.45 
1256.10 



42.10 



150. 
200. 



$10500. 



2645.50 

964.25 

61.95 

89.40 





$14261.10 


$14261.10 


Inventories : 






Merchandise 


$9857.50 




Real Estate 


3000. 




Expense 


25.50 




Office Fixtures 


145. 




Horse and Wagon 


190. 




h. L. S. Woods, Prop. 


$150. 


$12500. 


Cash 


1346.20 




Merchandise 


9865.45 




Expense 


265. 




Real Estate 


2500. 




Office Fixtures 


210.50 




Horse and Wagon 


225. 




Bills Receivable 


265.70 




Bills Payable 




826.55 


Accounts Receivable 


1950.75 




Accounts Payable 




3625.40 


Interest 


75.85 




Merchandise Discount 


97.50 






$16951.95 


$16951.95 



Inventories (Resource) : 

Merchandise $12345.25 

Expense 43.50 

Real Estate 2500. 

Office Fixtures 197.50 

Horse and Wagon 209.75 

Inventory (Liability) : 

Merchandise, unpaid freight bill $110.40 

Note. The liability inventory is treated in each statement in just the reverse way 
from the resource inventory, — as a liability, in the resource and the liability statement. 
In the loss and gain statement it is subtracted from the resource inventory before finding 
the gain on merchandise. 



SET V. JOBBING FURNITURE 



181 



PARTNERSHIP 

The work for August is a continuation of the work in July. 

You are desirous of extending your business, and not having suffi- 
cient capital to do so, you have decided to enter into a partnership 
agreement with Harvey L. Manning. 

For the resources enumerated below you admit Harvey L. Manning 
as an equal partner in your business. 

Draw up articles of copartnership between yourself and Manning, 
embodying the following conditions. (See Form V, Appendix F.) 

1. The firm name shall be Student & Co. 

2. Student shall contribute the net resources shown by his July state- 
ment of resources and liabilities. 

3. Manning shall invest : 



Cash 

Merchandise 

Account with Foley Bros, due him 



$7000 
1500 
5725 



4. Each partner shall devote his entire time to the business. 

5. Neither partner shall engage in any other business. 

6. The gains and the losses shall be divided equally. 

7. The partnership shall continue for two years unless sooner dis- 
solved by mutual consent. 

Hand the articles of copartnership to the instructor for criticism. If 
they are correct, he will sign for Harvey L. Manning. 



Model for Briefing 



Articles of Copartnership 

between 

Student 

and 

Harvey L. Manning 

Aug. 1, 19 — 



Make a copy of the July statement of resources and liabilities, attach 
it to the articles of copartnership, fold the sheets together, and in the 
outer right-hand corner at the top brief as shown in the Model for 
Briefing on this page. 



182 BOOKKEEPING 

Note. Some business men prefer to make the reference to investments in the articles 
of copartnership cover merely the net amounts invested in the business by each partner, 
and then transfer all rights and interests in goods and personal property by means of a 
bill of sale. However, if the articles of copartnership are drawn up in accordance with 
the above directions, the bill of sale is wholly unnecessary. Each partner should receive 
a copy of the articles of copartnership. 

Keal property cannot be transferred by the ordinary bill of sale nor by articles of 
copartnership ; a deed is necessary. In order not to multiply complicated forms at this 
point of the work, it is assumed that the student's real estate has been transferred by 
a warranty deed drawn this day by his attorney, Fred V. Smith, and placed on file in 
the oflfice of the new firm. 

Ordinarily, a business man does not draw up his own warranty deeds, articles of 
copartnership, etc., but employs an attorney. 

When any change in the personnel of a business occurs, all who have had dealings 
with the house should be notified promptly, by means of circular letters or otherwise. In 
this case it is assumed that these letters have been written and mailed. 



Incoming Business Forms for August 

In this connection the student is referred to the instructions given for the business 
forms in the month of July, page 151. 

Remember that the business is now conducted under the firm name of 
Student & Co. 

Form 29. Check of Harvey L. Manning, dated City, Aug. 1, drawn on 
Traders National Bank, in favor of your firm, for $7000. 

Form 30. Invoice of J. K. Levy & Co., New York City, dated July 31. 
Terms: cash, less 2%. 

15 #693 Antique Wardrobes 
Deduct the discount from the amount of the invoice ; receipt it, per your initials. 

Form 31. New York draft, dated Olean, Aug. 1, drawn by The Union 
Bank of Olean, on Chemical National Bank of New York, in 
favor of M. L. Covey & Co., for |283.72, W. D. Byron, 
Cashier. Transferred to Student & Co. by full indorsement. 

Form 32. Draft on your firm by Stoddard & Co., in favor of Curry, 
Browning & Co., dated City, Aug. 3, payable at 10 days' 
sight for $1500. 

Form. 33. Invoice of Cobb, Bates & Co., City, dated Aug. 3. Terms: 
3/10, net 30 da. Items as follows : 

25 #5932 Empire Toilet Tables 18 #1008 Oak Sideboards 

25 #76 A Oak Chamber Sets 

Remember that all goods bought are now billed to your firm. 



k 



SET V. JOBBING FURNITURE 183 

Form 34. Invoice of Derby Mfg. Co., City, dated Aug. 3. Terms : draft 
at 10 da. for the amount, less 2%. Items as follows : 

5 #16 A Comp. Dining-room Sets 5 #693 Antique Wardrobes 

10 #89 Mahogany Chamber Sets 

Deduct the 2% discount, but do not receipt the bill. 

Form 35. Draft of Derby Mfg. Co., City, on your firm, in favor of them- 
selves, for the net amount of the above invoice, dated Aug. 3, 
payable at 10 days' sight. 

Form 36. Invoice of C. W. Allen & Co., Trenton, N.J., dated Aug. 3. 
Terms : 2/30, net 60 da. Items as follows : 

30 pr. Blue Chenille Curtains 20 pr. #91 Lace Curtains 

Form 37. Check of David E. Teeter, City, dated Aug. 6, drawn on 
Traders National Bank, in favor of Student & Co., for 
$589.30. 

Form 38. Bill of Ward, Macey & Co., dated City, Aug. 6, for 1 letter file 
and cabinet, $65. Terms : cash. 
Receipt the bill. 

Form 39. Bill of Tracy Coal Co. to Harvey L. Manning, dated Aug. 6, 
for 3 T. coal at $5. Terms : cash. 

Receipt the bill. 

Form 40. C.O.I), envelope. Data as follows: Cash inclosed, |22. Goods 
were shipped by your firm to J. W. Clark, Waltham, Aug. 5. 

Note. Refer to the note under Form 21, page 153. 

Form 41. Check of David E. Teeter, City, dated Aug. 9, drawn on 

Traders National Bank, in favor of your firm, for $1248.87. 
Form 42. New York draft, dated City, Aug. 11, drawn by The Union 

Bank, in favor of your firm, on Chemical National Bank, 

New York, for $438.55, Chas. H. Palmer, Cashier. 
Form 43. Sight draft of S. T. Udell & Co. on your firm for $479.50, dated 

Chicago, 111., Aug. 10 ; drawn payable to W. D. Lapham. 
Form 44. Check of J. E. Bender, dated Troy, Aug. 11, drawn on Traders 

National Bank, in favor of your firm, for $920.95. ■ 
Form 45. Draft of J. O. Moran, drawn on your firm, in favor of Geo. L. 

Jones, dated City, Aug. 13, payable in 60 da. from date, for 

$1900. 
Form 46. Check of Walker, Brown & Co., dated Albany, Aug. 12, drawn 

on Traders National Bank, in favor of your firm, for $712.95. 



184 BOOKKEEPING 

Form 47. Check of H. B. Claflin & Co., dated City, Aug. IB, drawn on 
Traders National Bank, in favor of your firm, for $400. 

Form 48. Invoice of C. W. Allen & Co., Trenton, N.J., dated Aug. 14. 
Terms: 2/30, net 60 da. Items as follows: 

50 #176 c Piano Chairs 20 #6387 Hall Settles 

25 #835 Music Cabinets 50 #170 English Clothes Poles 

Form 49. Invoice of Cobb, Bates & Co., City, dated Aug. 22. Terms : 
3/10, net 30 da. Items as follows : 

25 #16 L. Dressing Cabinets 25 #36 b Gentleman's Chiffoniers 

25 #5932 Empire Toilet Tables 

Form 50. Invoice of Fowler Furniture Co., Rochester, dated Aug. 22. 
Terms: cash, less 2%. Items as follows: 

10 #245 Cedar Chests 10 #2229 Oak Dining Tables 

10 #687 Ornamental Tables 15 #17 a Roman Chairs 

Deduct the discount arid receipt the bill. 

Form 51. New York draft, dated Springfield, Aug. 24, drawn by The 
Union Bank of Springfield, on Chemical National Bank, New 
York, in favor of G. H. Ingalls & Co., for |732.35, A. R. Shef- 
field, Cashier. Transferred to your firm by full mdorsement. 

lorm 52. Check of Samuel W. Bradley, Bedford, dated Aug. 26, drawn 
on Traders National Bank, in favor of your firm, for |1587.60. 

Form 53. Note of Chas. B. Sherman, Rochester, dated Aug. 25, at 30 da., 
with interest at 6%, in favor of your firm, for $352.69. 

Form 54. Draft of Traders National Bank, Bangor, dated Aug. 26, drawn 
on Chemical National Bank, New York, in favor of your 
firm, for |454.06, W. H. Gould, Cashier. 

Form 55. Invoice of William Leavens & Co., New York, dated Aug. 27. 
Terms: sight draft in 10 da., for the amount of the bill, less 
2%. Items as follows: 

25 #5926 Secretary Book Cabinets 40 #68 Oak Bookcases 
50 #396 Mahogany Hall Stands 

Form 56. Bill of the Metropolitan Carting Co., City, dated Aug. 31 
Items as follows: 

Aug. 1, Freight and Cartage, $24.25 

16, Freight and Cartage, 57.50 

22, Cartage, 8.50 

23, Freight and Cartage, 43.50 
30, Freight and Cartage, 139.50 

Receipt the bill. - 



SET V. JOBBING FURNITURE 185 

Memoranda of Transactions for August 

August 1 

Draw a check in favor of Student & Co., on The Union Bank, for the 
amount of the balance on deposit. Have the check approved, and place 
it in the Business Cash envelope. 

This check is drawn in order that the bank account with the student may be 
closed. Presently this check will be deposited to the credit of the new firm. 

Receive Harvey L. Manning's check on Traders National Bank, 
for the amount of his cash investment. Form 29. 

Carry the July balance to a new page in the cashbook. On the first line below 
the balance, credit Manning for his cash investment, $7000. 

Indorse the two checks on hand and deposit them in The Union Bank 
in the name of the new firm. Above the student's name on the pass book 
write the firm name. Make a memorandum in the journal, setting forth 
the change in the personnel of the business. Make a journal entry for 
the merchandise and the personal account invested by Manning. 

Remember to check every cash item that is entered in both the journal and the 
cashbook. 

Your bank reports that the draft on P. R. Brown, attached to a bill 
of lading, has been collected. Collection, |1. 

Have the amount entered in the pass book, and record it in the check book. 
The entry in the cashbook is the same as the entry of the C.O.D. shipment to 
Lyman, July 22. Debit Collection and Exchange for the $1 collection. 

The Metropolitan Carting Co. has delivered to you the goods ordered 
of J. K. Levy & Co. on July 24, Form 30. 
Draw a cash check for office expenses, |25. 
Ask for $5 in change. Enter in the check book only. 

Telegraph C. W. Allen & Co., Trenton, N. J., ordering : 

20 pr. Blue Chenille Curtains 20 pr. #91 Lace Curtains 

Limit the message to fifteen words. Pay the charges in cash, 60^. 

The draft drawn on Walker, Brown & Co., July 2, and left with the 
bank for collection, has been paid. Collection, 75^. 

The bank teller will make the proper record in your pass book. Enter the amount 
in the check book and the cashbook. 

Make the proper record in the bill book. 



186 BOOKKEEPING 

August 2 

J. E. Bender, Troy, sends the following order. Fill the order at the 
prices given herewith : 

50 #15 C. Dining Chairs at |2.25 5 #495 W. Iron Bedsteads at |5 
10 #16 Wool Mattresses at $4 5 #m Turkish Rockers at $24.75 

50 #16 K L. Dining Chairs at |9.50 3 #73 Sofa Beds at |38 
3 #626 Mahogany Office Chairs at $16.50 

Terms : 3/5, 2/10, net 30 da. 
M. L. Covey & Go., Olean, order : 

3 #396 Mahogany Hall Stands 2 #68 Oak Bookcases 

3 #20 Corner Chairs 

Fill the order. Terms: cash, less 3%. 

Deduct the discount on the invoice and in the sales book. Prepare the bill of 
lading as usual. 

A New York draft was inclosed in payment of the order. Form 31. 
Make a cashbook entry for the draft. 

Note. But few special instructions will be given to the student for entering the trans- 
actions of this month. He is supposed to be sufficiently familiar with the different books 
and the various transactions recorded therein to proceed without a guide. If in doubt 
at any time, he should consult the instructor. 

Place the following orders over the telephone : 
Cobb, Bates & Co., City: 

25 #5932 Empire Toilet Tables 25 #76 a Oak Chamber Sets 

18 #1008 Oak Sideboards 

Derby Manufacturing Co., City : 

10 #89 Mahogany Chamber Sets 5 #693 Antique Wardrobes 

5 #16 A Complete Dining-room Sets 

Note. Some memorandum should be made of each order placed as above. When 
these orders are frequent, a special order book is used. In this set the memoranda for 
all orders placed over the telephone may be written on a sheet of paper and filed with 
the incoming papers. 

August 3 

Draw a draft, payable at 30 days' sight, on J. E. Bender, for the amount 
you owe W. H. Stearns & Co. 

Make the required journal entry. 

Write a letter to W. H. Stearns & Co. and inclose the draft. Also, write a letter 
to J. E. Bender, informing him of the draft drawn. Refer to similar letters under 
Julyl. ., 



SET V. JOBBING FUENITUEE 187 

Accept, payable at The Union Bank, Stoddard & Co.'s draft, on your 
firm, in favor of Curry, Browning & Co., drawn at 10 days' sight, for 
$1500, Form 32. 

Make the journal entry. Record the draft in the bill book, and then hand it in. 

You have received the goods, ordered of Cobb, Bates & Co. on Aug. 2, 
Form 33. 

Goods ordered of Derby Manufacturing Co. have been delivered. 
Form 34. 

Accept the draft which they inclosed, payable at The Union Bank, 
Form 35. 

The goods ordered of C. W. Allen & Co., on Aug. 1, have been 
received. Form 36. 

August 5 

A telegraphic order has been received from Henry L. Miller, Provi- 
dence, for : 

15 #5932 Empire Toilet Tables 15 #1008 Oak Sideboards 

Fill the order, subject to the order of The Union Bank, less 2%. 

Deduct the discount on the invoice, and treat in the same manner as the ship- 
ment to P. R. Brown, July 19. 

A telegraphic order has been received from J. W. Clark, Waltham, for : 

2 pr. #91 Lace Curtains 2 pr. Blue Chenille Curtains 

The goods are to be shipped by express C.O.D. 
Treat the same as the order of Chas. B. Lyman, July 17. 

David E. Teeter, City, has given you the following order over the 
telephone : 

Fill the order at the prices given herewith : 

5 #5932 E. Toilet Tables at $50 10 #693 Antique Wardrobes at |25.75 

3 #396 M. Hall Stands at |65 3 #1008 Oak Sideboards at $195 

Terms : 3/5, 1/30, net 60 da. 

August 6 

Receive of David E. Teeter his check, for the invoice of July 27, less 
1%, Form 37. 

Pay by check Ward, Macey & Co.'s bill for a letter file and cabinet for 
use in the office, |65, Form 38. 

Charge Office Fixtures. 

Pay by check Charles B. Hanley for sundry repairs, $10.50. 



188 BOOKKEEPING 

Pay by check Tracy Coal Co.'s bill for coal for private use of Harvey 
L. Manning, $15, Form 39. 

Leave J. E. Farley's acceptance, received July 10, with the bank for 
collection. 

Deposit the check and the New York draft on hand. 

August 8 

Acceptance in favor of W. H. Stearns & Co. is due to-day, payable 
at the bank. 

In the month of July our notes and acceptances payable at the bank 
were charged to the depositor's account. This matter was explained 
under July 13. Hereafter such notes and acceptances will be paid by 
check, the check being made payable to the payee of the note or the 
acceptance. 

Issue a check in payment. 

Enter in the cashbook, and make the usual record in the bill book. 

Write a letter to C. W. Allen & Co., Trenton, N.J., ordering the 
following : 

60 #176 c Piano Chairs 25 #835 Music Cabinets 

50 #170 English Clothes Poles 20 #6387 Hall Settles 

August 9 

Benj. P. Freeman & Co., City, order: 

5 #10 China Closets 10 #16 Wool Mattresses 

5 #495 White Iron Bedsteads 5 #65 Turkish Kockers 
2 #5926 Secretary Book Cabinets 

Fill the order. Terms: sight draft in 10 da. for the amount, less 3%. 

Treat in the same way as their order of July 2. 

Walker, Brown & Co., Albany, send in the following order. Fill the 
order at the prices given herewith : 

5 #89 M. Chamber Sets at |80 5 pr. B. Chenille Curtains at $5 
15 pr. #91 Lace Curtains at $6 2 #16 a C. Dining-room Sets at $110 

Terms : 3/5, net 30 da. 

J. B. Cox & Co., Somerville, order: 

7 #572 Drawing-room Suites 3 #59 a Cheval Glasses 

5 #3016 Fancy Rockers 12 #2546 Ant. Library Eockers 

Fill the order. Terms : 20-da. draft for the amount of the bilL 

Treat in the same way as the order of Walker, Brown & Co., July 2. 

Receive returns, for C.O.D. shipment of Aug. 5, Form 40. 



SET V. JOBBING FURNITURE 189 

August 10 

Receive of David E. Teeter his check for the amount of the bill of 
Aug. 5, less 3%, Form 41. 

August 11 
Your bank has collected J. E. Farley's acceptance due to-day. 
Take your pass book to the bank and receive credit for the amount. 

Leave the acceptance of Rogers, Peet & Co. with the bank for collec- 
tion ; also deposit |20 currency and the check on hand. 

You receive frequent calls for a line of furniture manufactured by 
the Fowler Furniture Co., Rochester. From their catalogue you have 
made the following selections : 

10 #687 Ornamental Tables 10 #245 Cedar Chests 

10 #2229 Oak Dining Tables 15 #17 a Roman Chairs 

Write a letter, ordering the above goods and inclosing a New York 
draft to cover the amount, less 2%. Give references and some informa- 
tion about the volume of your business. 

The volume of business is shown by the total sales. 

Write the check and receive the draft, Form 42. The bank makes 
no charge for the draft. 

August 12 

Pay by check S. T. Udell & Co.'s sight draft on you, in favor of 
W. D. Lapham, |479.50, Form 43. 

Receive of J. E. Bender, Troy, his check for the invoice of Aug. 2, 
less 2%, Form 44. 

August 13 

Accept J. O. Moran's draft, payable 60 da. from date, in favor of Geo. 
L. Jones, for |1900, Form 45. 

Receive of Walker, Brown & Co. their check for the invoice of Aug. 9, 
less 3%, Form 46. 

Receive from H. B. Claflin & Co. their check, for their acceptance due 
to-day. Form 47. 

Make the following record in red ink across the face of the drq/?, and thenliand it in: 
Paid in full 8/13 
Student & Co., 

per (^Student's initials). 

Note. A canceled draft, note, or check should always be kept and filed as a receipt. 



190 BOOKKEEPING 

Your acceptances, in favor of Curry, Browning & Co. and Derby 
Manufacturing Co., are due to-day. 

Write checks for the payment of these notes, hand them in, and receive the 
canceled acceptances. 

August 15 

Deposit the checks on hand and the currency received from the C.O.D. 
shipment Aug. 9. Collection on the checks, $1.50. 

Your bank informs you that the acceptance of Rogers, Peet & Co., 
due yesterday, has been collected. 

Your bank informs you that the draft on Plenry L. Miller has been 
paid. Collection, $2. 

August 16 

The Metropolitan Carting Co. has this day delivered to you the goods 
ordered of C. W. Allen & Co., on Aug. 8, Form 48. 

E. F. Green & Co., Bangor, order the following. Fill the order at the 
prices given herewith : 

15 #176 c Piano Chairs at $17 5 #835 Music Cabinets at |5 

15 #170 E. Clothes Poles at $5.50 5 #6.387 Hall Settles at $23.25 

Rumors are current to the effect that the resources of E. F. Green & Co. are in 
an unsatisfactory condition, and you think it advisable not to sell them anything 
on account. Prepare the usual bill of lading. Make a sight draft on E. F. Green & 
Co., in favor of your firm, for the amount of the invoice, less 5%, and attach it to the 
bill of lading. Deduct the discount on the invoice and in the sales book. (Refer to 
the comment on the shipment to P. R. Brown, July 19.) 

Indorse the draft to the bank to which it is to be sent. Write a letter, inclose 
the draft and the bill of lading, and send it direct to Traders National Bank, Bangor, 
for collection. 

E. F. Green & Co. have consented to the terms of this shipment. 

August 17 
Your offer to prepay your acceptance in favor of Geo. L. Jones is 
accepted. 

Refer to the bill book for all details regarding this acceptance. 
Deduct the discount for the time the acceptance has yet to run, and write a 
check for the proceeds. Have the acceptance canceled, and keep it as a receipt. 

August 18 
Give C. W. Allen & Co. a check for the invoice of Aug. 14, less 2%. 

August 19 
Take the draft on Benj. P. Freeman & Co., drawn Aug. 9, from the 
Business Cash envelope, indorse it properly, and deposit it in the bank. 



SET V. JOBBING FURNITURE 191 

August 20 

Samuel W. Bradley, Bedford, sends in the following order. Fill the 
order at the prices given herewith : 

5 #36 B G. Chiffoniers at $10 10 #27 c W.-wire Mattresses at |3.25 

150 #16 K L. Dining Chairs at $9.50 50 #15 C. Dining Chairs at $2.25 

Terms : 3/5, 2/10, net 30 da. 

G. H. Ingalls & Co., Springfield, send in the following order. Fill 
the order at the prices given herewith : 

5 #2546 A. Library Rockers at $12 5 #635 Brass Bedsteads at $22.50 
5 #626 M. Office Chairs at $16.50 5 #572 D. Suites at $100 

Terms : 3/5, 2/10, net 30 da. 

Give Cobb, Bates & Co. the following order over the telephone : 

25 #36 B Gentleman's Chiffoniers 25 #5932 Empire Toilet Tables 
25 #16 Lady's Dressing Cabinets 

August 22 

Write a letter to William Leavens & Co., New York City, ordering ; 

50 #396 Mahogany Hall Stands 40 #68 Oak Bookcases 

25 #5926 Secretary Book Cabinets 

The Metropolitan Carting Co. has delivered the goods ordered of 
Cobb, Bates & Co., on Aug. 20, Form 49. 
M. N. Overman, Albany, orders : 

10 #50 Mahogany Parlor Tables 10 #10 China Closets 

Fill the order. Terms: 3/10, 1/30, net 60 da. 

August 23 

Give Cobb, Bates & Co. a check for the invoice of Aug. 22, less 3%. 
• You and your partner each withdraw from the business, by check, $150. 

Hand in Manning's check. Have yours cashed at the bank and put the currency 
into the Personal Cash envelope. 

Pay Chas. O. Rigdon, by check, $52.50 for stabling and feeding your 
horses. Also pay James Lundergan, by check, $9.20 for horseshoeing, etc. 
These are Expense items. 

The Metropolitan Carting Co. has delivered to you the goods ordered 
of the Fowler Furniture Co. on Aug. 11, Form 50. 



192 BOOKKEEPING 

August 24 

Chas. B. Sherman, Rochester, sends in the following order. Fill the 
order at the prices given herewith : 

5 #5932 E. Toilet Tables at $50 5 #50 M. Parlor Tables at $21.25 

Terms: 30-da. note with interest, less 1%. 

Deduct the discount on the invoice and in the sales book. The note will be 
received later ; make no entry until it is received. 

Take the sight draft on Chas. B. Sherman, dated to-day, from your 
Business Cash envelope, and deposit it in the bank, together with all the 
cash on hand. Collection on the draft, 50^. 

This draft is for the invoice of July 25. 
Enter in the cashbook. 

August 25 

Receive of G. H. Ingalls & Co. a New York draft, in payment of the 
invoice of Aug. 20, less 3%, Form 51. 

August 26 

Receive of Samuel W. Bradley his check, on Traders National Bank, in 
payment of the invoice of Aug. 20, less 2%, Form 52. 

August 27 

Receive of Chas. B. Sherman his note, dated Aug. 25, in favor of 
your firm, for the net amount of the invoice of Aug. 24, Form 53. 

Receive a New York draft, from Traders National Bank, Bangor, for 
the amount of the sight draft on E. F. Green & Co., Aug. 16, less 75(^ 
collection. Form 54. 

The account should be credited in the cashbook for the amount of the invoice in 
the sales book. 

Note. The amount of the draft is the face of the invoice less 75(^. E. F. Green & Co. 
deducted the collection, and this necessitates a charge on your books for the 75^, as it was 
paid by you. 

August 30 

Deposit the check which you received of Samuel W. Bradley on 
Aug. 26, and the two New York drafts on hand. The collection on 
Bradley's check is $1.50. 

Your bank informs you that the draft drawn on J. B. Cox & Co., 
Aug. 9, has been paid. Collection, $1. 



SET V. JOBBIKa FURKITUKE 193 

The Metropolitan Carting Co. has delivered to you the goods ordered 
of William Leavens & Co., on Aug. 22, Form 55. 

Discount at The Union Bank the note received of Chas. B. Sherman 
on Aug. 27. 

The bank gives you credit for the face of the note. 

Note. It is customary for many banks to give depositors credit for the face of interest- 
bearing notes discounted within a few days after they are made. The interest is the com- 
pensation received by the bank. 

August 31 
Give J. L. Bidwell & Son a check for |125 for one carriage horse. 
Charge this to the account of Harvey L. Manning. 

Pay by check the bill of the Metropolitan Carting Co., for freight and 
drayage to date, $273.25, Form 56. 

Charge Merchandise in the cashbook. 

Pay salaries to date by checks as follows : 

Harry K. Sutton $60 Michael Donovan $30 

Harvey L. Grant 50 Daniel L. Coon 48 

Geo. W. Ainsley $40 

Enter these salaries in the cashbook as one item. 

Closing the Work for August 

The student should now proceed to close the work for this month as 
follows : 

1. Have the monthly bank statement made, and compare it with the 
check book. 

2. In posting, allow one third of a page for all new accounts. 

As Harvey L. Manning is now one of the proprietors, write his name on the lower 
half of page 1. 

3. Rule, foot, and post the sales book and the* invoice book. 

4. Prove the cash, and balance and post the cashbook. 

5. Prove the bill book. 

6. Make out monthly statements for the customers. 

7. Make a trial balance of the balances of your ledger accounts, and 
hand it to the instructor for approval. 

8. An inventory of everything on hand has been completed by Mr. 
Sutton. A statement of it follows. Copy it in the journal in the usual 
way, computing the value at cost prices. 



194 BOOKKEEPING 

Inventories, August 31, 19 — 
Merchandise : 

5 #3116 Antique Card Tables 12 #626 M. Office Chairs 

14 #693 Antique Wardrobes 4 #50 M. Parlor Tables 

10 #16 B Brass Easels 54 #396 M. Hall Stands 

20 #635 Brass Bedsteads 17 #89 M. Chamber Sets 

13 pr. Blue Chenille Curtains 20 #835 Music Cabinets 

10 #245 Cedar Chests 25 #76 a Oak Chamber Sets 

50 #15 Cane-seat Dining Chairs 10 #687 Ornamental Tables 

2 #59 A Cheval Glasses 17 #2229 Oak Dining Tables 

10 #71 A Child's Cribs 12 #73 Oak Writing Desks 

7 #20 Corner Chairs 43 #68 Oak Bookcases 

25 #16 A C. Dining-room Sets 5 #20 d Parlor Cabinets 

5 #572 Drawing-room Suites 35 #176 o Piano Chairs 

25 #5932 Empire Toilet Tables 10 #57 Reclining Couches 

35 #170 English Clothes Poles 15 #17 a Roman Chairs 

7 #3016 Fancy Rockers 9 #73 Sofa Beds 

32 #36 B G. Chiffoniers 28 #5926 Sec. Book Cabinets 

25 #6387 Hall Settles 10 #65 Turkish Rockers 

50 #16 K L. Dining Chairs 14 #27 c W.-wire Mattresses 

5 #169 c Library Tables 4 #16 Wool Mattresses 

13 pr. #91 Lace Curtains 2 #495 White Iron Bedsteads 
30 #16 Lady's Dressing Cabinets 

Office Fixtures : 

Cost $515. 

Depreciation 
Horse and Wagon : 

Cost 

Depreciation 
Real Estate : 

Cost 

Depreciation 
Expense : 

Unexpired Insurance $130. 

9. Make the statements and the verification, and have them approved. 

Show the net gain as a total on the loss and gain statement, and the present worth 
as a total on the resource^ and liability statement. 

10. If the statements are correct, close the ledger as follows : 
a. Close the loss and gam accounts. 
h. Close the Loss and Grain account into the Proprietors' account. 

In closing the Loss and Gain account, remember that the net gain is to be 
divided equally between the partners. 



5.15 


1509.85 


$450. 
60. 


$390. 


17000. 
350. 


16650. 



DISSOLUTIOISr OF PARTNERSHIP 195 

<?. Close the Proprietors' accounts. 

d. Rule the personal accounts that balance. 

e. To give your ledger a more finished appearance, close all other 
accounts by Balance. 

11. Hand in all books to the instructor for approval. 



DISSOLUTION OF PARTNERSHIP 

It has been decided to dissolve the partnership existing between 
yourseK and Harvey L. Manning. You dispose of your interest to 
Manning for the following: 

A note at 60 da., with interest at 6^^, $7500. 

A check for the balance of your present worth as shown by your 
ledger account after closing, Aug. 31. 

Write the note and have the instructor sign for Manning. 

Make the journal entry, and then record the note in the bill book. 

Write the check for the balance of your present worth. 

Make the cashbook entry. Post both the entries to yo>iT account in the ledger 
and close the account. 

Harvey L. Manning is to conduct the furniture business at the old 
stand under the name of Harvey L. Mannmg. He is to have the net 
resources and assume all the liabilities of the old firm. 

Draw a check in favor of Harvey L. Manning for the balance of the 
cash in the bank in the name of the old firm, and hand it in. 

It is assumed that your attorney, Fred V. Smith, has drawn up the contract of 
sale and the warranty deed necessary to transfer the title to all the chattels and 
the real estate to Manning. These documents, it is assumed, are on file with other 
important papers. 

Consequences of Dissolution of Partnership. The direct consequence 
of a dissolution of partnership is the necessity of taking effectual 
steps to close the partnership affairs. Some disposition must always 
be made of the partnership effects. Sometimes articles of copartner- 
ship provide that property on hand shall be taken at dissolution by 
one of the partners according to a prescribed mode, and in that case 
the business may be continued without interruption. In this case there 
was no such agreement, but the partners between themselves entered 
into an arrangement whereby Manning continues the business and 
Student^ for a sufficient consideration, consents to withdraw. 



196 BOOKKEEPING 

Notice of Dissolution. A dissolution of partnership, so far as it con- 
cerns its own members, may be immediate, but with reference to the 
public the element of notice requires consideration. 

When Notice is Unnecessary. A notice of dissolution is unnecessary : 

1. When a partnership expires by its own limitation. 

2. When a partnership is dissolved by the operation of law. 

3. When dissolution occurs by the death of one of- the partners. 

4. When a dormant, or silent, partner retires. 

Manner of giving Notice. A notice of dissolution should be published 
in one of the usual advertising newspapers of the city in which the busi- 
ness has been conducted. This notice is deemed sufficient for all those 
who have not had previous dealings with the firm. 

A special notice of the dissolution should be sent to those who have 
had previous dealings with the firm. (See Form II, Appendix F.) 

Prepare a notice of your withdrawal from the firm. (See Form III, 
Appendix F.) Hand in the notice. 

It is assumed that a notice of dissolution has been inserted in one of 
your usual advertising newspapers, and that circulars embodying the 
facts stated in the notice have been mailed to each of the firms with 
whom you have had dealings. After writing the circular, the work of 
sending it to the various firms is purely mechanical, and it is thought 
best not to require the student to do all this work. 

After notices have been circulated as outlined above, your liability, 
so far as new debts are concerned, ceases. 



GENERAL REVIEW QUESTIONS 

1. Under what circumstances would a gain or loss on real estate be likely to 
occur ? 2. What are the principal advantages of the invoice book ? 3. Explain the 
posting of (a) the separate bills in the invoice book ; (b) the weekly, the monthly, or 
the quarterly totals of the invoice book, 4. Explain the advantages of the bill book. 
How is it proved ? 5. What provision was made in the cashbook of Set V for mer- 
chandise discounts ? What are the principal advantages of these special columns ? 
Explain how they are posted. 6. Explain the meaning of 3/5, 1/30, net 60 da. 
7. What is a discount memorandum ? 8. In which column of the sales book should 
discounts be deducted ? Why ? 9. Define and differentiate merchandise discounts 
and interest and discount. 10. What is a bill of lading? How is it usually 
drawn? What is done with each copy? 11. Are bills of lading assignable by 
indorsement? 12. Should transportation companies ever deliver goods without 
receiving the bill of lading? Why? 13. Explain the meaning of the following 
terms : (a) C.O.D. ; (b) f.o.b. ; (c) shipper's order. 14. Describe the usual method 
of making a shipment by express C.O.D. 15. Outline briefly the usual process 
for entering C.O.D. shipments (a) in the sales book ; (b) in the ledger. 16. What 



REVIEW EXERCISES 197 

means have railway and steamship companies provided for shipping goods by 
freight C.O.D. ? Explain this method fully. 17. Would you deposit a draft at- 
tached to a bill of lading for shipper's order in your local bank, or would it be 
more desirable to forward the same to a bank located in the place to which goods 
have been consigned ? 18. Are the net resources of a firm any less after it has paid 
one of its own non-interest-bearing notes? Why? 19. Are the net resources of a 
firm any less after it has paid one of its own interest-bearing notes ? Why ? 



EXERCISE 59 
A Written Review 

The following review exercises are suggested : 

1. Journalize orally or in writing each transaction in August. 

All amounts may be omitted, as the value of the exercise is in determining the 
debits and the credits. 

2. Make the following opening entries: 

a. James S. Brien and Howard A. Ferris began business with the fol- 
lowing resources and liabilities ; credit each proprietor with one half the 
net resources : 

Deposit in Traders National Bank, |4235.70 

Store and lot valued at |6750 

Stock of merchandise valued at 1 12,534. 20 

Office furniture valued at $425 

Horse and wagon valued at |275 

They have the following notes outstanding : 

George D. Raney, $1500 ; interest accrued for 2 mo. 

Henry D. Fowler, $725 ; interest accrued for 1 mo. 
Accounts receivable, $2256.45 
Accounts payable, $1725.50 

For estimated early payments make the following allowances: on accounts 
receivable, 2% ; on accounts payable, 2%. 

Note. Debit accounts receivable for the face value, and credit Mdse. Disc, for the 2% 
allowance. Credit accounts payable for the face value, and debit Mdse. Disc, for the 2% 
allowance. 

5. John S. Brady & Son began business with the following resources 
and liabilities ; credit the firm with the net resources : 

Stocks and bonds on hand, $4200 

Interest accrued on above, $156.20 

Stock of merchandise valued at $11,645.50 

Unpaid freight bill on merchandise, $76.25 (Liability) 

Real estate valued at $5500 



198 



BOOKKEEPING 



They hold notes against the following : 

Murray & Co., |450 ; interest accrued for 3 mo. 

James E. Marston, |320 ; discount allowed for 2 mo. 

J. H. Belden, $250 
They have the following notes outstanding : 

Thomas D. Fales, $350 ; interest accrued for 2 mo. 

Derby & Son, |300 ; discount allowed for 1 mo. 
Office fixtures valued at $325 
Horses and wagons valued at $500 
Accounts receivable, $2450 ; estimated discount, 1 % 
Accounts payable, $1800; estimated discount, 2% 

3. The formation of partnerships. 

The following illustrations apply to the formation of partnerships : 
Firsts the formation of a partnership on the basis of equal investment 
by each partner at the beginning of the business. 

The necessary entry is of the simplest character, as follows : 

Cash $4000 

A $2000 

B 2000. 

When posted, each partner's account will appear as follows : 

A 



19— 

Jan. 



2000 



19— 

Jan. 



2000 



Second^ the formation of a partnership by the individual proprietor 
when he sells a half interest in an established business. 

Illustration : A has an established business worth $15,000 ; he sells 
B a half interest for $7500 ; thus B becomes an equal partner. The 
money received by A is not a part of the capital of the new firm ; it is 
his individual possession, and the capital of the firm is $15,000. 

On A's books, as proprietor, the capital account appeared as follows : 



19— 
Jan. 



15000 



REVIEW EXERCISES 



199 



Under the partnership agreement one haK of this sum must be credited 
to each partner, and this is accomplished bj the following journal entry : 
A $7500 

B 17500 

When this entry is posted, the accounts of the proprietors, on the books 
formerly used by A, will appear as follows : 

A ' 



19— 

Jan. 



1 



7500 



19— 

Jan. 



15000 



19— 

Jan. 



7500 



Thirds the formation of a partnership when the incoming partner makes 
an investment equal to the value of the established business. 

Illustration: A has a business worth |18,000 ; B invests a like sum 
and becomes an equal partner. The money invested by B is a part of 
the capital of the firm, which is now |36,000. 

On A's books, as proprietor, the capital account appeared as follows : 

A 



19— 

Jan. 



18000 



The following entry should be made when B makes his investment : 
Cash 118,000 

B 118,000 

After posting this entry in the books formerly used by A, B's account 
will appear as follows : 

B 



19— 

Jan. 



18000 



A's account will remain unchanged, and each partner is now credited 
for one half of the capital of the firm. 

Note. The cash items in the illustrations may be entered in the cashbook ; the journal 
entry has been used simply to set forth the debit and the credit items more clearly. 

Only two partners have been considered, but the principles are the same whether there 
are two partners or more than two, and whether the investments are equal or unequal. 



200 BOOKKEEPING 

Make entries for the following partnership arrangements : 

a. Henry T. Jackson and James Young form a partnership, as follows : 
Henry T. Jackson invests cash, $1500, and a stock of merchandise 

valued at |2750. 
James Young invests cash, $1250, and a store and lot worth $3000. 
h. Student and Fred S. Carmen form a partnership, as follows : 

Student invests cash, $2000, and R. S. Good's note which he holds ; face 

of the note, $500, with accrued interest for 4 mo. 
Fred S. Carmen invests cash equal to the total investment of Student. 

c. Harold D. Powers owns a dry-goods business the present value of which 

is $16,450. He sells a half interest to Bernard F. Shaw for $8225. 

d. George D. Fuller owns a drug store, and he values the store, fixtures, 

and stock at $12,600. Ealph F. Varley becomes an equal partner with 
Fuller by investing cash, $7600, and a stock of drugs worth $5000. 

e. Henry S. Carey, George R. Downey, and Harry S. Mason form a part- 

nership on the following conditions : the capital is to be $25,000, of 
which Carey invests $12,500, Downey $7500, and Mason borrows 
$5000 of Carey and invests it in the business. 

Note. How much of the Mason investment and loan should be entered on the books 
of the business ? 



SET VI. WHOLESALE GROCERY BUSINESS 

The Object of this set is to illustrate in a brief way a system of 
bookkeepmg adapted to a general wholesale business. 

Special Features. Among the special features of the set are : 

1. Introduction and use of : 

a. Auxiliary ledgers. 

h. Special-column cashbook. 

c. Special-column journal. 

d. Proprietors' private accounts. 

2. Adjustment of interest in the Proprietors' accounts. 

3. Suggestions bearing upon business correspondence. 

The Books used are the cashbook, the sales book, the invoice book, the 
journal, the general ledger, the purchase ledger, the sales ledger, the 
bill book, and the check book. 

The bill book and the check book are the same as in the preceding sets. 







Form for making Closing Entry in 


Sales Book 












20 pkg. S. Yeast Cakes 


1.05 


21 












500 lb. P. Tapioca 


. ^ 


20 












25 bbl. R. P. Flour 


4.75 


118 


75 










40 doz. bottles M. Pickles 
16 


2.25 


90 




672 


98 












24 


J. M. Martin & Co. , Albany 
2/10, net 30 da. 
25 bx. W. L. Soap 


2.00 


60 












5 bbl. C. R. Oatmeal 


6.60 


27 


50 










5 bbl. S. P. Flour 


4.26 


21 


25 










150 gal. P. R. Molasses 


300 


45 










14 


150 gal. N. 0. Molasses 

Total sales for month 
Accounts Receivable 


40^ 


60 




203 


76 












6762 


95 




6762 


"95 








16 


Mdse. 








6762 


95 



















Sales Book. This book is treated in the same way as the one illustrated 
on page 64, except the posting. The amounts of the various sales are 
posted separately to the debit of the personal accounts in the sales ledger. 

201 



202 



BOOKKEEPING 



Price List for September and October 



ARTICLE 


DESCRIPTION 


HOW PUT UP FOR SALE 


COST 


SELLING PRICE 


Baking Powder 


Royal 


Cases of 1 doz. 1-lb. cans 


$3.60 case 


$4.80 

4.50 


(< n 


Cleveland's 


<( (( << 


3.50 case 


Beans 


Lima 


Bulk 


3.25 bu. 


3.50 


'< 


New York Medium 


" 


2.50 bu. 


2.75 


Butter Color 




Boxes 


1.50 box 


2.00 


Cocoa 


Baker's 


1-lb. cans 


.48 lb. 


.60 


" 


Huyler's 


i-lb. and 1-lb. cans 


.43 lb. 


.58 


Coffee 


Plain Rio 


125 lb. to bag 


.24 lb. 


.28 


" 


Genuine Mocha 


150 lb. to bale 


.20 lb. 


.24 


" 


Fancy Java 


75 lb. to mat 


.23 lb. 


.30 


Chocolate 


Hasty Lunch 


24 1-lb. tins in box 


.29 lb. 


.35 


(< 


Baker's 


12 1-lb. tins in box 


.27 lb. 


.34 


Crackers 


Oyster 


60 lb. to bbl. 


.08 lb. 


.10 


<( 


Cream Soda 


<( (( 


.06 lb. 


.08 


Candy 


Stick 


Pails 


.12 lb. 


.14 


« 


Standard Mixed 
Empire Chocolate 




.10 lb. 


.12 




Drops 


5-lb. boxes 


.07 lb. 


.10 


(( 


Peppermint Creams 


30-lb. pails 


.04 lb. 


.06 


(< 


Mixed Creams 


Pails 


1.40 pail 


2.10 


Diamond Salad 










Dressing 
Evaporated Fruits 




Cases of doz. bottles 


.90 case 


1.20 


Apricots 


25-lb. boxes 


.08 lb. 


.10 


<( (( 


Apples 


50-lb. boxes 


.m lb. 


.06 


<< (( 


Raspberries 


Bulk 


.17 lb. 


.22 


Fish 


Cream Codfish 


40-lb. boxes 


.07i lb. 


.09 


<( 


No. 1 Mackerel 


20-lb. pails 


1.80 pail 


2.40 


Flour 


Roller Process 


Barrels 


3.50 bbl. 


4.75 


" 


Searchlight Pastry 


" 


3.35 bbl. 


4.50 


<< 


Puritan Pancake 


Cases of 20 5-lb. sacks 


.12 sack 


.15 


<( 


Chef Pastry 


<< << (( 


.15 sack 


.18 


Horse-radish 




Cases of 1 doz. bottles 


.65 case 


.90 


Insect Powder 




Boxes 


.16 box 


.24 


Mucilage 




Boxes of 3 doz. bottles 


.90 box 


1.20 


Matches 


Gates 


3-gro. pkg. 


.90 pkg. 


1.20 


(< 


Parlor 


1-gro. boxes 


1.15 box 


1.53 


Molasses 


Porto Rico 


Bbls. of 50 gal. 


.25 gal. 


.30 


(( 


New Orleans 


<< a 


.30 gal. 


.36 


Mixed Pickles 




Doz. bottles 


1.70 doz. 


2.20 


Oatmeal 


Cedar Rapids 


Barrels 


4.50 bbl. 


6.00 


" 


H. O. 


24 2-lb. pkg. in box 


2.35 box 


3.10 


Olives 




Pint cans 


2.20 doz. 


2.75 


Raisins 


London Layer 


20-lb. boxes 


.07 lb. 


.10 


<( 


California 


50-lb. boxes 


.07 lb. 


.09^ 


Sugar 


Standard A 


325-lb. bbl. 


.04 lb. 


.05 


<? 


Fine Granulated 


<( <( 


.05 lb. 


.06 


K 


White C 


330-lb. bbl. 


.03 lb. 


'.o4 


(( 


Brown C 


300-lb. bbl. 


.02^ lb. 


Soap ' 


Sunlight 


Boxes of 100 bars 


3.00 box 


4.00 


n"^ 


Wool 


Boxes of 100 cakes 


3.00 box 


4.00 


tt 


Water Lily 


Boxes 


1.70 box 


2.20 


Salt 


Ice Cream 


200-lb. bags 


.57 bag 
1.50 bbl. 


.75 


" 


Lehigh Lump 


280-lb. bbl. 


1.75 


Starch 


Golden Grain 


160-lb. bbl. 


.03 lb. 


.04 


«< 


Hoyt's Wheat 


(( (( 


.05 lb. 


:o3| 


« 


Laundry 


<( <( 


.02* lb. 


Tea 


Choice Japan 
Medium Young 


75 lb. to half chest 


.26 "^Ib. 


!35 




Hyson 


70 lb. to half chest 


.21 lb. 


.28 


<< 


Finest Oolong 


60 lb. to half chest 


.35 lb. 


.51 


Tapioca 


Pearl 


Bulk 


.03 lb. 


.041 


«< 


Flake 


(< 


.031 lb. 


.041 


(( 


Rio 


<( 


.06 lb. 


.09 


Yeast Cakes 


National 


Pkg. of 1 doz. cakes 


•37i pkg. 


.50 


(( << 


Sunlight 


Pkg. of 3 doz. cakes 


.75 pkg. 


1.00 



SET VI. WHOL'ESALE GROCERY 203 

When the sales book is closed, the total sales are posted regularly to 
the debit of Accounts Receivable and to the credit of Merchandise in the 
general ledger. 

The sales book of some large concerns is provided with an extra column for cash 
sales ; the different amounts in this column are not posted to the sales ledger, but 
the total is entered in the cashbook daily, and credited to the Merchandise account 
at regular intervals. The general practice, however, is to treat all cash sales to 
regular customers* in just the same way as sales on account, that is, the goods are 
charged to the customer from the sales book and his account is credited through 
the cashbook for the amount received. The latter practice is followed throughout 
the intermediate portion of this text. The chief arguments in favor of this plan are 
as follows : 

1. In most wholesale houses cash is understood generally to mean payments 
that are made within five or ten days from the date of the bill. 

2. Wholesale houses would not be justified in quoting the same terms to all 
customers ; those who buy in large quantities can be given better terms than those 
who buy in small quantities. As a basis for determining the best possible terms, 
a customer's ledger account should be consulted. This account is incomplete, not 
furnishing full information, if the cash sales are not entered in the customer's 
account in the ledger. 

3. In some instances a customer, for good business reasons, might call for a 
statement of all his transactions for a year, and it would be to any dealer's advan- 
tage to be able to furnish such a statement readily. 

Cashbook. The cashbook used in this set is designed to illustrate 
the desirability of using special columns to meet the requirements of 
certain lines of business. The model cashbook on pages 204 and 205 
is self-explanatory. 

Note. Additional columns may be placed in the cashbook, when special columns are 
used, if their introduction will lessen the work and increase the value of the cashbook 
records. 

The first two columns on the left are reserved for receipts from 
customers on account. These columns are similar to those illustrated in 
Set V, but in this set they are used for personal items only. The sepa- 
rate items in these columns are credited to the customers in the sales 
ledger. At the end of the month, or as often as may be found desirable, 
the total of the first column is posted to the debit of Merchandise Dis- 
counts and to the credit of Accounts Receivable in the general ledger. 
(See page 204.) 

The total of the net proceeds column is posted to the credit of Accounts 
Receivable in the general ledger. 

All receipts of cash, aside from the items from personal accounts, are 
entered in the G-eneral column on the left side of the cashbook, and these 
items are posted separately. 



204 



BOOKKEEPING 



Cash Receipts, September, 19- 



DATE 



Sept. 



ACCOUNT TO BE CREDITED 



Balance 
R. 11. Traver 
Bills Bee. 
W. A. Harman 
F. E. Gardiner & Co, 
Tenny Bros, & Co. 
Bills Bee. 
Interest 
Bills Bee. 
Interest 
W. M. Fair 
Sam'l W. Hershey 
■Williams, Harding & Co. 
F, E. Bogers - 
W. W. Baker & Co, 
Mdse. Disc, Dr, 
To Accts. Bee. 
Accts. Bee. 



EXPLANATION 



In bank 
Investment 
Note of W. E. Frey 
Inv. 8/6, less 2% 
Inv. 8/30, less 3% 
Inv. 8/30, less 3% 
Note of B, O. Cook 
Int. on above note 
Note of J. H. Bair 
Int. on above note 
Inv. 9/3, less 3% 
Inv, 9/4, less 2% 
Inv. 7/15 
Inv, 7/30 
Inv. 9/16, less 3% 
Total discounts allowed 

on sales for montb 
Beets, on aeeount for month 



ACCOUNTS RECEIVABLE 



DISC. 
DR. 



70 



AMOUNT 
RECEIVED 



490 
1251 
1513 



356 
392 
1455 



13500 
5500 
1200 



900 

9 

1200 



29271 20 



SET VI. WHOLESALE GROCERY 



205 



Cash Payments, September, 19 — 











ACCOUNTS PAYABLE 


z 


z 




DATE 








DISC. 
CR. 


AMOUNT 
PAID 


2 


i= 




Sept. 


1 

1 

1 

2 

2 

4 

5 

5 

6 

9 

9 

11 

11 

12 

13 

15 

16 

17 

18 

19 

19 

22 

23 

23 

24 

25 

26 

26 

28 

28 

29 

30 

30 

30 


V' 

37 

39 
16 
5 

47 
54 

V 
V 
9 
>/ 

V 
42 
40 
16 
5 

10 
10 

V 
V 

1 
1 

42 

V 
16 
11 
8 


Expense 
Expense 
Expense 

Jordan, Marsh & Co. 
Coll. and Exch. 
N. P. Pond & Co. 
Bills Pay. 
Interest 
Coll. and Exch. 
A. B. Curtice & Co. 
C. 0. Bond & Co. 
Expense 
Expense 
Mdse. 

Coll. and Exch. 
Expense 
Expense 

R. H. White & Co. 
Sibley, Lindsay & Curr 
Bills Pay. 
Interest 
Coll. and Exch. 
Office Fixtures 
Office Fixtures 
Expense 
Expense 
R. R. Traver 
Jas. R. Bender 
R. H. White & Co. 
Coll. and Exch. 
Coll. and Exch. 
Bills Pay. 
Accts. Pay. 
To Mdse. Disc. 


Rent for Sept. 
Insurance premium 
Bill for stationery, etc. 
Inv. 8/16, less 2% 
On foreign checks 
Inv. 8/31, less 3% 
Note favor E. S. Lee 
Int. on above note 
On foreign checks 
Inv. 7/10 
Inv. 7/16 
Stamps 

Office stationery 
Freight Aug. 1 to Sept. 1 
On foreign checks 
Telegram 

Traveling salesman 
Inv. 8/12, less 2% 
Inv. 8/18, less 2% 
Note favor A. Swan 
Int. on above note 
On foreign checks 
Safe for office 
Letter press 
Coal bill to date 
Salaries to date 
Private account 
Private account 
Inv. 8/31, less 2% 
On above N.Y. draft 
On Brown's check 
Note favor J. Green 
Total discounts on pur- 
chases for month 


42 
30 

34 

18 

8 
i,72 




970 

395 
1193 

1G66 
882 

392 


62 
G4 


150 
120 

27 

5 
16 

125 

13 
220 


50 

42 
98 

75 
50 


2 
3 

1 


15 

65 
75 

25 
40 


1000 
10 

169 

1500 
7 

250 
9 

100 
100 

400 


50 

50 
50 




30 
30 


11 

14 


Accts. Pay. 
Expense 


Pay'ts on acct. for month 
Total for month 






7557 


2G 


679 


15 






7557 
679 


26 








15 




30 


18 


Coll. and Exch. 


Total for month 














T 


'20 


8 


20 




30 




Balance 


In bank 


















17480 


09 






= 






















29271 


"20 

























206 



BOOKKEEPIKG 



The first two columns on the right are reserved for payments to the 
creditors on account. These columns are for personal items only, and 
are similar in use to the columns for accounts receivable on the left side, 
except that they are posted to the debit of the separate accounts with 
the creditors in the purchase ledger. At the end of the month, or at 
other regular intervals, the total of the first column is posted to the 
debit of Accounts Payable and to the credit of Merchandise Discounts in 
the general ledger. (See page 205.) 

The total of the net proceeds column is posted to the debit of Accounts 
Payable in the general ledger. 

All items of expense are entered in the Expense column, and only the 
total of this column is posted. 

All items of collection and exchange are entered in the Collection and 
Exchange column, and only the total of this column is posted. 

All the other cash payments are entered in the General column, and 
these items are posted separately. 



Form for making Closing Entry in Invoice Book 



ll 



3^ 






rM. 



^^^^^^y?^. 



'Vrenton, ^J, jZ^^^,^/. 19- 



^frr.-'?^^^. 



-^> ^^ .,^. 



'^^^^ 



Sought ofC. W. Allen & Co. 



'Germs • ^/^.. ^-9^^-^, 9/7.<r/^^ 



tJ^Cew Yorh. 



^. 



-^-. <U^, ^ . 



^iu^.^^ /. 



^ 19=. 



'::^,^.^7o^.^ ^-i^v^..^^.^ r-^,^^:^ 



^^ 



'^^^^^ 



^^ 



^o Qray, Salisbury & Co., T>r, 

'Germs : /-f^ .■■■7^^,^-J t!>..^ti^^ _. 



MJ. r.r^^J -^-^9^..^^^^^^ 



^^^ 



.^^ 



/C^^y'-d^-:^^^ 



^ 97 



A^ 



'/J-^ Z 



/^fZO 



I^ZJ 



4^j-6z 



^s6i 



S4^ 



^r 



SET VI. WHOLESALE GROCERY 207 

Invoice Book. This book is illustrated and explained on pages 142 and 
143. The separate bills are credited to the various accounts in the pur- 
chase ledger, and the total is posted to the debit of Merchandise and to 
the credit of Accounts Payable in the general ledger. 

Purchase Ledger. The purchase ledger contains a record of trans- 
actions with the creditors. The principal items of credit in this ledger 
are posted from the invoice book, and the main items of charge, from the 
cashbook; but both debits and credits for the creditors' accounts may 
come from the journal. 

Sales Ledger. The sales ledger contains a record of transactions 
with customers. The mam items of charge come from the sales book, 
and the main items of credit from the cashbook ; but both debits and 
credits for the customers' accounts may come from the journal. 

General Ledger. The general ledger contains a record of all accounts 
of the business not entered in the purchase ledger or the sales ledger. 
The Accounts Payable account, or Purchase Ledger Account, in this ledger 
represents the purchase ledger, and the balance of the account should 
agree with the sum of the balances in the purchase ledger. The Accounts 
Receivable account, ^r the Sales Ledger Account, in the general ledger 
represents the sales ledger, and the balance of the account should equal 
the sum of the balances in the sales ledger. 

Advantages of Auxiliary Ledgers. The chief advantages resulting 
from the use of auxiliary ledgers may be stated as follows : 

1. By glancing at the balance of the Accounts Receivable in the general ledger a 
merchant may know at once the aggregate of the amounts due him. This would 
not be possible if a sales ledger were not used. 

2. By glancing at the balance of the Accounts Payable a merchant may know the 
aggregate of the amounts he owes. This account would not be in the books, except 
in scattered details, if a purchase ledger were not used. 

3. The Accounts Receivable and the Accounts Payable accounts aid in proving the 
correctness of the personal accounts of a business. 

4. Auxiliary ledgers show a classification of accounts which is necessary in the 
bookkeeping of large concerns ; they also give a business man classified information 
concerning many important details of his business. 

The Journal used in this set is provided with special columns. (See 
model journal, page 208.) 

This book is sometimes provided with a large number of columns to 
meet the requirements of some lines of business. The columns used 
here, however, are sufficient to give the student an idea of how special 
columns may be used to advantage in the journal. 

The Purchase Ledger Debits column may be used to advantage in 
houses where a separate ledger is kept for accounts with those from 



208 



BOOKKEEPING 



whom goods are bought. Any charges to these accounts in the journal 
should be extended into this column. The several amounts are posted 
separately to the debit side of the accounts in the purchase ledger, and 
the total is carried regularly to the debit of Accounts Payable in the 
general ledger. 

BosTox, Mass., September 25, 19 — 



ACCOUNT AND EXPLANATION 



M. O. Barry, R. O. Cook, and D. W. Baker have 
entered into a copartnership agreement as per con- 
ditions in the articles executed Sept, 15. 

The above parties have this day bought the entire 
resources and are to assume the entire liabilities of 
the late firm of A. J. Weaver & Co. as per contract on 
file. These resources and liabilities are as shown in 
the following entry made to open a new set of books. 

Mdse. Per inventory 

Bills Rec. Per bill book 

OflBce Fixtures Per inventory 

Good Will Established trade 

Accts. Rec. Per the following list 

Morgan & Co., Troy 1250 

Osborn, Frey & Co., Westfield 750 

L. O. Sweetland, Lynn 1900 

Insurance Unexpired premium 

Bills Pay. Per bill book 
Accts. Pay. Per the following list 
Smith, Perkins & Co. , N. Y. 1700.50 

Sprague& Co., Boston 1900.50 

Harmon & Brown, Chicago 3200. 

Bills Pay. Two notes given A. J. Weaver & Co. 
Cash Check given A. J. Weaver & Co. 



C. O. Bond & Co. 
Bills Pay. 



Accepted their 10-day draft 



27 



Williams & Co. 
S. W. Brown 

Forward 



Drew a sight draft on S. W. B. and 
remitted it to W. & Co. on acct. 



PURCHASE 
LEDGER 
DEBITS 



300 



1801 



GENERAL 
LEDGER 
DEBITS 



12000 
13000 
1200 
3000 
3900 



125 



94 



75 



SALES 
LEDGER 
CREDITS 



300 



GENERAL 
LEDGER 
CREDITS 



1900 
6801 



15000 
9525 



1500 



34727 



66 



75 



50 



BosTOx, Mass., September 30, 19 — 





8 
18 

5 
6 


Forward 

Bills Rec. Reed, their note as per 
Eaton & Co. bill book 

Accts. Pay. (Purchase Ledger Debits) 
General Ledger Debits 

Accts. Rec. (Sales Ledger Credits) 

General Ledger Credits 


1801 


35 


33226 
500 


75 


300 
500 


60 


34727 


50 




1801 


35 


33726 


75 


800 


60 


34727 


50 








1801 
33726 


35 
75 






800 
34727 


60 
50 








35528 


10 




= 


35528 


10 

















SET VL WHOLESALE GROCERY 209 

The General Ledger Debits column contains all the items of charge in 
the journal except the purchase ledger debits. The total is not posted. 

The Sales Ledger Credits column may be used to advantage in most 
houses where a separate ledger is kept for accounts with those to whom 
goods are sold. Any credits to these accounts in the journal should be 
extended into this column. The several amounts are posted separately to 
the credit side of the accounts in the sales ledger, and the total is carried 
regularly to the credit of Accounts Receivable in the general ledger. 

The General Ledger Credits column contains all the items of credit in 
the journal except the sales ledger credits. The total is not posted. 

Incoming Business Forms for September 

A tablet, separate from the text, containing all the incoming business 
forms, is available for use in writing this set when business practice is 
used. A list of the forms is given herewith so that the text affords all 
material requu-ed for writing the set if business practice is omitted. Also, 
these forms afford an opportunity for the study of the set as a whole 
before writing the same, thus meeting a requisite for adequate drill 
work, whether the business forms are used or not. 

If the set is written without using business practice, blank invoice 
forms may be used for the invoice book, in recording the merchandise 
bought ; these blanks may be secured of the publishers. 

If business practice is used either with or without the tablet, the student 
should be given the necessary blank forms for making out the following : 

Form 1. Check drawn by Student on Traders National Bank, City, 

Sept. 15, in favor of your firm, for |7000. 
Form 2. Note of Frey & Brown, City, dated Sept. 1, at 3 mo., for 

$8000. Note is drawn in Studenfs favor and is transferred 

by him to his firm by full indorsement. 
Form 3. Check of Geo. H. Dobbin, dated Sept. 15, drawn on Traders 

National Bank, City, in favor of your firm, for |1 0,000. 
Form 4. Check of Arthur M. Black, dated Sept. 15, drawn on Traders 

National Bank, City, in favor of your firm, for |14,000. 
Form 5. Note of F. Moore, dated Rome, Sept. 1, payable at The Union 

Bank, 2 mo. after date. Note is drawn for |1750, in favor 

of A. J. Weaver & Co., and is transferred to your firm by 

full indorsement. 
Form 6. Note of Walter L. Parker, dated City, Sept. 1, payable at The 

Union Bank, 30 da. after date. Note is drawn for |700, in 

favor of A. J. Weaver & Co., and is transferred to your firm 

by full indorsement. 



210 BOOKKEEPIKG 

Form 7. Note of Benton Bros. & Co., dated City, Aug. 26, payable at 
The Union Bank, 60 da. after date. Note is drawn for |300, 
in favor of A. J. Weaver & Co., and is transferred to your 
firm by full indorsement. 

Form 8. Bill of Eureka Coal Co. to your firm for 5 T. coal at |4.50. 
Terms : cash. Bill is "dated City, Sept. 18, and is receipted. 

Form 9. Bill of Geo. E. Roe & Co., for 1 one-horse delivery wagon, $65 ; 
1 heavy truck wagon, $90 ; 1 set single harness, $35 ; 1 set 
double harness, $85. Terms: cash. The bill is dated City, 
Sept. 19, and receipted. 

Form 10. Bill of the Daily Transcript Co. for advertising to date, $49.23. 
Terms: cash. The bill is dated City, Sept. 19, and receipted. 

Form 11. Bill of R. H. Myers & Co., for 1 sales ledger, $1.50; 1 pur- 
chase ledger, $1.50 ; 1 general ledger, $3 ; 1 journal,] 75(f ; 
1 cashbook, $2.75; 1 bill book, 75(f; 5 M No. 6 envelopes 
and printing, $6.50 ; 5 M sheets letter paper and printing, 
$9.60. Terms : cash, less 1 % . The bill is dated City, Sept. 20, 
and receipted. 

Form 12. Bill of Eureka Coal Co. to Geo. H. Dobbin for 3 T. coal at 
$4.50. Terms: cash. The bill is dated Sept. 20, and receipted. 

Form 13. Letter of application to your firm from Albert B. Curtis, 
dated City, Sept. 19. Applicant saw your advertisement in 
the Evening Transcript for a shipping clerk and wishes to be 
considered an applicant for the position. He is a high-school 
graduate and has had experience as a salesman with the firm 
of W. H. Glenny & Co., City. He refers to John W. Nellis, 
principal of the high school, and to G. B. Watkins, manager 
for W. H. Glenny & Co. 

Inclose the letter in an envelope, properly addressed. 

THINGS TO BE OBSERVED IN LETTERS OF APPLICATION 

1. The use of proper materials : 

a. Good ink. 

b. Paper of the proper size and quality. 

c. Envelopes of the proper size and quality. 

2. Good mechanical and grammatical construction. 

3. Brief and concise expressions. 

4. Good tone : 

a. Frank, sincere expressions. 

b. Sufficient self-confidence and self-respect. (State your qualifications 
modestly, but frankly.) 

c. Truthfulness. 



SET VI. WHOLESALE GROCERY 211 

5. Necessary information with regard to yourself : 

a. Qualifications, general and special. 

b. References. 

c. Salary expected (sometimes ; instructor should explain). 

d. Age (sometimes ; instructor should explain). 

6. Courteous introduction and closing. 

' Form 14. Draft of The Union Bank, City, dated Sept. 21, drawn on 

Chemical National Bank, New York, in favor of your firm, 

for 1841.47, W. B. Frey, Cashier. 
Form 15. Sight draft, dated City, Sept. 21, drawn by David R. Warriner, 

in favor of himself, on Arthur M. Black, for $50. 
Form 16. Draft drawn by The Union Bank, City, Sept. 24, on Chemical 

National Bank, New York, in favor of your firm, for $1297.18, 

W. B. Frey, Cashier. 
Form 17. Draft drawn by Traders National Bank, Weedsport, Sept. 23, 

on Chemical National Bank, New York, in favor of F. W. 

Earl & Co., for $950, C. W. Amsden, Cashier. The draft is 

transferred to your firm by full indorsement. 
Form 18. Check of D. L. Hinman & Co., City, on Traders National Bank, 

dated Sept. 24, in favor of your firm, for $411.99. 
Form 19. Invoice of Walter Baker & Co., New York, dated Sept. 22. 

Terms : 3/5, net 30 da. Items as follows : 

500 1-lb. cans B. Cocoa 500 bx., 6000 lb., B. Chocolate 

5000 lb. P. Tapioca 

Form 20. Draft drawn by Traders National Bank, Allston, Sept. 24, on 
Chemical National Bank, New York, in favor of Clinton, 
Jones & Co., for $292.04, W. F. Pratt, Cashier. The draft 
is transferred to your firm by full indorsement. 

Form 21. Invoice of Smith, Perkins & Co., New York, dated Sept. 24. 
Terms : 5/10, net 30 da. Items as follows : 

50 bags, 6250 lb., P. R. Coffee 100 half chests, 7500 lb., C. J. Tea 

50 bales, 7500 lb., G. M. Coffee 100 half chests, 6000 lb., F. 0. Tea 

100 mats, 7500 lb., F. J. Coffee 

Form 22. Note of Frank Moore & Son, City, dated Sept. 25, drawn in 

favor of your firm, for $745.69, payable 10 da. from date, at 

The Union Bank. 
Form 23. Check of Salisbury, Gray & Co., Rochester, dated Sept. 24, on 

Traders National Bank, in favor of your firm, for $260.51. 
Form 24. Check of J. D. Manning, Albany, dated Sept. 24, on Traders 

National Bank, in favor of your firm, for $600. 



212 BOOKKEEPING 

Form 25. Bill of R. O. Merrill & Co., City, dated Sept. 25. Terms: cash. 
Items as follows : 

30 #16 Packing Boxes at 20^ 35 #3 Packing Boxes at 10^ 

The bill is receipted by O. W. 

Form 26. Invoice of Geo. H. Buell & Co., City, dated Sept. 26. Terms : 
30-da. note in 10 da., with interest at 6%, less 1%. Items 
as follows : 

240 bu. N.Y. Medium Beans 200 lb. E. Raspberries 

25 bx., 1250 lb., E. Apples 

Form 27. Invoice of J. E. Seel & Co., City, dated Sept. 26. Terms : 2/10, 
net 30 da. Items as follows : 

25 pails M. C. Candy 500 lb. S. M. Candy 

50 bbl. L. L. Salt 

Form 28. Check of T. B. Welch & Co., Medford, dated Sept. 25, on 

Traders National Bank, in favor of your firm, for 1 296.94. 
Form 29. Draft drawn by The Union Bank, City, dated Sept. 25, on 

Chemical National Bank, New York, in favor of your firm, 

for $1949.70, W. B. Frey, Cashier. 
Form 30. C.O.I), envelope. Data as follows: Cash inclosed, $18.60. 

Goods were shipped by your firm to W. D. Greene, Dans- 

ville, Sept. 25. 

Note. An envelope containing the required amount of cash will be found in the back 
part of the tablet of Incoming Business Forms. If business practice is used and the In- 
coming Business Forms are not used, get the cash of the instructor. 

Form 31. Draft drawn by Traders National Bank, Troy, on Chemical 
National Bank, New York, in favor of Williams, Harmon 
& Co. for $399.35, R. C. Cook, Cashier. Draft is dated 
Sept. 25 and is transferred to your firm by full indorsement. 

Form 32. Sight draft of Salisbury, Gray & Co., Rochester, dated Sept. 25, 
in favor of your firm, on J. E. Seel & Co., City, for $50. 

Form 33. Invoice of Stickney, Poor & Co., New York, dated Sept. 26. 
Terms : 3/10, net 60 da. Items as follows : 

100 bx., 2500 lb., E. Apricots 250 bx. Insect Powder 

50 bx. Butter Color 50 bx., 2500 lb., E. Apples 

100 bx. Mucilage 100 bbl. R. P. Flour 

The discount is deducted and the bill receipted. 

Form 34. Check of W. L. Anderson, Perth Amboy, dated Sept. 26, on 
Traders National Bank, in favor of your firm, for |400. 



SET VI. WHOLESALE GROCERY 213 

Form 35. Invoice of Gray, Dunkle & Co., Chicago, dated Sept. 26. 
Terms; 3/10, net 30 da. Items as follows: 

26 bbl., 7500 lb., Br. C Sugar 10 bbl., 3300 lb., Wh. C Sugar 

200 half chests, 14,000 lb., M. Y. H. Tea 

Form 36. Check of James K. Lusk, City, dated Sept. 28, on Traders 
National Bank, in favor of your firm, for |369.07. 

Form 37. Invoice of Bates, Aldrich & Co., Boston, dated Sept. 27. 
Terms : 3/5, net 30 da. Items as follows : 

100 1-lb. cans Huyler's Cocoa 100 pails M. C. Candy 

60 bbl. S. P. Flour 20 bbl., 6500 lb., St. A Sugar 

20 bbl., 6500 lb., F. G. Sugar 

Form 38. Invoice of D. W. Simpson & Co., Chicago, dated Sept. 27. 
Terms : 3/10, net 30 da. Items as follows : 

60 bx. S. Soap 125 bx. W. Soap 

60 cases, 1000 sacks, C. P. Flour 50 bx. W. L. Soap 

20 bbl., 1200 lb., 0. Crackers 5 cases, 100 sacks, P. P. Flour 

20 bbl., 1200 lb., C. S. Crackers 

Form 39. Draft drawn by The Union Bank, City, dated Sept. 28, on 

Chemical National Bank, New York, in favor of your firm, 

for 1907.43, W. B. Frey, Cashier. 
Form 40. Check of W. D. Packard & Co., City, dated Sept. 28, on 

Traders National Bank, in favor of your firm, for |605.38. 
Form 41. Note of D. L. Hinman & Co., City, dated Sept. 29, payable at 

The Union Bank, 10 da. from date, to your firm, |500. 
Form 42. Bill of Enterprise Carting Co., City, dated Sept. 29. Terms: 

cash. Items as follows : 

Sept. 24, Freight, $15.75 ; Cartage, $1.60 

27, Freight, 49.25 ; Cartage, 6.50 

28, Cartage, 4.75 

The bill is receipted by W. M. O. 

Memoranda of Transactions for September 

Saturday, Sept. 15 

Since selling your interest in the furniture business of the late firm of 
Student & Co. you have had several conferences with Geo. H. Dobbin 
and Arthur M. Black, relative to making an investment in a wholesale 
grocery business. 



214 BOOKKEEPING 

To-day it has been decided to enter into a partnership for the purpose 
of conducting a wholesale grocery business under the following conditions : 

1. The name of the copartnership will be Student,, Black & Co. 

2. Investments will be as follows : 

a. Arthur M. Black makes a cash investment of $14,000. 
h. Geo. H. Dobbin makes a cash investment of |1 0,000. 
c. Student makes a cash m vestment of f 7000, and a note of Frey & 
Brown in his favor, dated Sept. 1, at 3 mo., for |8000. 

3. The partnership shall continue for two years, unless the parties 
mutually consent to a dissolution at an earlier date. 

4. Gams shall be shared equally and losses borne equally. 

6. Student and Black shall each receive $200 per month for their 
services, and Dobbin, $150. 

6. Whenever the books of the firm are closed, each partner shall be 
charged with interest at 6% on all sums withdrawn for private use, and 
shall receive interest at the same rate on all sums invested. 

Draw up articles of copartnership, fully covering the above points. 
(See Form V, Appendix F.) 

Fold and brief the articles (see page 181) and then hand them in. 

Each partner pays his investment as per agreement. 

Receive the three checks. Dobbin's and Black's checks are Forms 3 
and 4. Your check and note are Forms 1 and 2. 

Enter the note in the bill book and place it in the proper envelope. Credit 
Student, Black & Co. for the total investment on the left side of the cashbook, extend- 
ing the amount into the general column. Debit Bills Receivable on the right side 
of the cashbook for the amount of the note, $8000, extending the amount into the 
general column. The difference between the two amounts recorded in the cashbook 
will show the amount of cash received by the business, $31,000. 

Open an account with The Union Bank and deposit the three checks 
on hand. 

When signing the name of the firm to indorsements, notes, checks, etc., 
sign Student, Black & Co. 

Monday, Sept. 17 

A. J. Weaver & Co., of your place, have offered to sell you the entire 
resources and liabilities of their business located at 420 State St., on the 
following conditions t 

1. That you pay them $6000 for the good will of their business. 

2. That you buy all their resources at face value, the personal ac- 
counts and the quality and the quantity of the merchandise on hand to 
be covered by their written guarantee. 



SET VI. WHOLESALE GROCERY 215 

3. That you assume their lease of the building at 420 State St. and 
pay all their liabilities. 

4. That you pay them for the net assets of the business, cash, $14,000, 
and the balance in two notes payable in 3 mo. and 6 mo. respectively, 
without interest. 

GOOD WILL EXPLAINED 

The term good loill can hardly be said to have any precise signification. It is gen- 
erally understood to stand for certain advantages obtained by the purchaser of any 
business in consequence of his position before the public as succeeding to an enter- 
prise which has been identified in the past with the good name and the repute of 
his predecessor. Its value is dependent upon the ability of the purchaser to main- 
tain and improve past celebrity, reputation for skill, punctuality, etc. 

The Good Will account may appear as a resource on the books of the purchaser 
of any business, but its value is never definite. 

The value of the account is necessarily indefinite because of its dependence on 
the maintenance of the reputation and the success of the business, and as these 
are changing factors, the value of it is subject to change. 

When a business changes ownership, the good will is then subject to a definite 
valuation, as agreed upon by the buyer and the seller. 

The account is seldom opened except in connection with the purchase and the sale 
of an established business. When a business of recognized reputation is offered for 
sale, the good will is frequently as much a matter for consideration as any commodity. 
The account, however, is of more or less fictitious value, and many business men 
prefer to drop it gradually from their records in the ledger. This may be done by 
carrying regularly a definite portion of the account to the Loss and Gain account, 
when the books are closed. 

In the course of time, this plan of carrying a certain portion of the Good Will 
account to the Loss and Gain account will eliminate it from the open ledger 
accounts of the business. 

You accept the proposition of A. J. Weaver & Co. and ask them to 
make out a contract of sale at once. 



Tuesday, Sept. 18 

A contract of sale covering the following resources and liabilities was 
received by Mr. Black from A. J. Weaver & Co. this morning. It was 
duly examined by Joseph M. Gordon, Esq., the attorney for your firm, 
and when found strong and binding in every way was filed among other 
important papers in the firm's safe. 

Note. Form IV, Appendix F, is a contract of sale similar to the one which would be 
given by A. J. Weaver & Co. in the preceding transaction. 

If thought best, the instructor may require the student to prepare the contract for the 
preceding transaction. 



216 



BOOKKEEPING 



Resources 
Mdse., per schedule on file $14609.50 

Bills Eeceivable, per the following list 2750. 

1. Note of F. Moore, at 2 mo. from Sept. 1 $1750. 

2. Note of Walter L. Parker, at 30 da. from 

Sept. 1 700. 

3. Note of Benton Bros. & Co., at 60 da. from 

Aug. 26 300. 

Office Fixtures, per schedule on file 1920. 

Rent, due from tenants for subrentals 50. 

Insurance, unused premium 240. 

Good Will, estimated value 6000. 

Accounts Receivable, per the following list 16814.10 

Williams, Harmon & Co., Troy 6252.60 

Fred W. Hill & Co., Rome 1642.40 

W. L. Anderson, Perth Amboy 1400. 

Frank Moore & Son, City 2145.69 

James K. Lusk, City 592.50 

J. D. Manning, Albany 1600. 

D. L. Hinman & Co., City 420.40 

F. W. Earl «& Co., Weedsport 1500. 

Salisbury, Gray & Co., Rochester 1260.51 



Liabilities 

Bills Payable, per the following list $2300. 

1. Note at 30 da. from Aug. 26, in favor of 

King & Co., payable at The Union Bank $1500. 

2. Note at 30 da. from Sept. 3, in favor of Boyd, 

Evans & Co., payable at The Union Bank 800. 

Accounts Payable, per the following list 18166. 

Walter L. Mann & Co., Boston 2150. 

D. W. Smith & Co., New York 2100. 

Smith, Perkins & Co., New York 1450. 

Bates, Aldrich & Co., Boston 1365.45 

D. W. Simpson & Co., Chicago 7100.55 

Gray, Dunkle & Co., Chicago 4000. 

Note. In actual business the two bills payable would be in the possession of the 
payees or the bank at which they are made payable. In this case it is assumed that they 
are in the possession of the bank for collection. The student will therefore need to draw 
up both notes and hand them to the bank or to the instructor. Indorse them as they 
should be indorsed by the payees when left at the bank for collection. 

Write the check and the notes in payment of the purchase from A. J. 
Weaver & Co., as per agreement. 

Make the journal and the cashbook entries for the purchase. Study the model 
journal, page 208. Check the cash item in both the journal and the cashbook. 



SET VI. WHOLESALE GROCERY 217 

Take the notes of A. J. Weaver & Co., Forms 5, 6, and 7, and enter 
them in the bill book. Also enter the bills payable in the bill book. 

Post the journal and the cashbook entries just made to the proper ledgers. If 
necessary, consult the instructor. 

After posting the journal entries to the general ledger, debit the 
several personal accounts receivable in the sales ledger and credit the 
several personal accounts payable in the purchase ledger. 

In posting, allow one third of a page for each account in the general ledger, and 
one fourth of a page for each account in the sales ledger and the purchase ledger. 

Prepare an index for each ledger ; the general ledger on the first page, and the 
others on the second page. 

In the sales ledger and the purchase ledger write the address after each ledger 
title. This should be written in a smaller hand just to the right of the title. 

Wednesday, Sept. 19 

You desire to engage the services of a competent shipping clerk 
and decide to insert an advertisement in the Evening Transcript of 
your place. 

Prepare an advertisement stating the qualifications you consider desirable in a 
candidate for such a position as you have to fill. 

Write checks in payment of the following : 

Two work horses purchased of Walter H. Wood for |125 each; 
bill of Eureka Coal Co., Form 8, for coal, |22.50 ; bill of Geo. E. 
Roe & Co., Form 9, for wagons, harnesses, etc., $275 ; bill of the Daily 
Transcript Co., Form 10, for advertising to date, |49.23. 

Charge the advertising and the coal to Expense, and the other items to Horse 
and Wagon account. 

Note. Unless otherwise instructed, hand in all outgoing papers. When in doubt as 
to what should be done with any incoming forms, consult the instructor. 

Write letters, ordering the following : 

1. Of Walter Baker & Co., New York, the goods outlined in Form 
19, page 211. Give references and shipping directions and ask for the 
best cash discounts. 

2. Of Smith, Perkins & Co., New York, the goods outlined in 
Form 21, page 211. These people have had extensive dealings with 
the old firm of A. J. Weaver & Co., but you are entire strangers to 
them. Give such information concerning your firm as will secure 
prompt shipment of the goods you order. If necessary, consult the 
instructor. 



218 BOOKKEEPING 

Thursday, Sept. 20 

Pay the following bills by checks: bill of R. H. Myers & Co., 
Form 11, for office books, stationery, etc., |26.09 ; bill of Eureka 
Coal Co., Form 12, for the private account of Geo. H. Dobbin, $13.50. 
Open an account with Geo. H. Dobbin, Private, 



WHY PRIVATE ACCOUNTS WITH THE INDIVIDUAL MEMBERS OF A 
FIRM SHOULD BE OPENED 

Strictly speaking, these accounts do not represent a part of the investment of any 
business, but rather the items show the dealings of the business with the individual 
members of the firm ; it is, therefore, desirable that they be kept separate from the 
account or accounts representing the capital of the concern. 

The failure to keep such accounts confuses business and private affairs, fosters 
carelessness and extravagance, and sometimes results in financial disaster. 

The capital account or investment is a fund to be used in carrying on the business, 
and is not to be disturbed except by agreement of the partners and the amendment 
of the articles of partnership. 



ITEMS THAT ARE ENTERED IN PROPRIETORS' PRIVATE ACCOUNTS 

Debits 

1. Cash, or any other property belonging to the firm, withdrawn by a partner 
for private use. 

2. Private debts of a partner paid by the firm. 

3. Proper share of any net losses to be borne by a partner when the books are 
closed. 

Credits 

1. Cash advanced to the business by a partner and not counted as a part of the 
capital of the firm. 

2. Unpaid salary due a partner. 

3. Firm debts assumed by a partner. 

4. Proper share of any net gains of the business. 

Friday, Sept. 21 

In response to your advertisement of Sept. 19, for a competent ship- 
ping clerk, twenty-three letters were received ; one from Albert B. 
Curtis, 270 Tremont St., impressed you favorably. Form 13, and you 
have had an interview with the young man, which has resulted in his 
engagement with your firm at |25 per week. His appointment dates 
from Monday, Sept. 24. 

File the letter, as it may be needed for reference. 



SET VL WHOLESALE GROCERY 219 

Engage Edward McDorman as driver at |10 per week. 
Make a memorandum and place it on file. 

Write letters, ordering the following goods : 

1. Of Stickney, Poor & Co., New York : 

250 bx. Insect Powder 2500 lb. E. Apples 

50 bx. Butter Color 2500 lb. E. Apricots 

100 bx. Mucilage 100 bbl. R. P. Flour 

Inclose a New York draft in payment of the bill, less 3%. Buy the 
draft by check. Form 14 ; exchange, 25(f. 

2. Of Gray, Dunkle & Co., Chicago, the goods outlined in Form 35, 
page 213. Remember that this firm was one of the creditors of the late 
house of A. J. Weaver & Co., and word the letter accordingly. 

3. Of Bates, Aldrich & Co., Boston, the goods outlined in Form 37, 
page 213. The members of this firm were creditors of A. J. Weaver & Co. 

If you pay the balance in favor of D. W. Simpson & Co. this week, 
you will get a discount of 5%. 

Write your check for the amount shown in the purchase ledger, less 
5%. Take the check to your bank or instructor and have it certified. 

CIRCUMSTANCES UNDER WHICH CHECKS ARE CERTIFIED IN BUSINESS 

Checks pass as money very freely from one person to another. They cannot 
always be accepted as money, however, for there is nothing to prevent any person 
from drawing a check upon a bank in which he has no money on deposit. Before 
a business man accepts a check from a stranger he may require that it be certified ; 
that is, that it be stamped by the bank upon which it is drawn, in a manner that 
will indicate its validity. 

When a check is certified, the bank immediately charges the amount to the 
drawer and sets aside the funds from which to pay the check when it is presented. 

A certified check is secured by the bank on which it is drawn, and it is good as 
long as the bank is solvent. 

SIGNIFICANCE OF CERTIFICATION 



i 



1. By certifying a check a bank declares in effect the following : 

a. That the signature is genuine. 

b. That the drawer's balance is good for the amount named. 

c. That it holds itself responsible for the payment of the check. 

2. Certification does not guarantee the following : 

a. That the indorsements, if any, are genuine. 

b. That the check was drawn in good form. If a check is so carelessly drawn 

that it can be raised easily, and is certified afterwards, a bank can be 
held for only the amount for which the check was first drawn. 



220 BOOKKEEPING 

Write a letter to D. W. Simpson & Co., inclosing the above check 
and ordering: 

50 bx. Sunlight Soap 6 cases, 100 sacks, P. P. Flour 

125 bx. Wool Soap 50 cases, 1000 sacks, C. P. Flour 

60 bx. Water LHy Soap 20 bbl., 1200 lb., 0. Crackers 

20 bbl, 1200 lb., C. S. Crackers 

Saturday, Sept. 22 

Pay by check David R. Warriner's sight draft on Arthur M. Black, 
*50, Form 15. 

Charge Black's private account. 

Monday, Sept. 24 

A telegraphic dispatch has been received from W. D. Greene, Dans- 
ville, ordering the following to be sent by express, C.O.D. : 

2 cases R. Baking Powder 3 bx., 150 lb., E. Apples 

Prepare the necessary papers and enter under C.O.D. Accounts in the sales book. 

The following orders were received in this morning's mail. 

1. From Williams, Harmon & Co., Troy : 

10 bbl. L. L. Salt 10 bbl. S. P. Flour 

10 half chests, 750 lb., C. J. Tea 5 bbl., 800 lb, L. Starch 
5 bbl., 1500 lb., Br. C Sugar 

Fill the order. Terms : 2/5, net 30 da. 

Prepare the bill of lading. Place the bill and the receipt in an envelope and hand 
it in. Do this with all similar orders. 

2. From T. B. Welch & Co., Medford: 

6 bbl., 300 gal., K O. Molasses 5 bbl., 1625 lb., F. G. Sugar 
6 bbl., 300 gal., P. E. Molasses 10 bags Ice-cream Salt 

Fill the order. Terms : 2/5, net 30 da. 

•The account of Fred W. ,Hill & Co., Rome, is 23 da. past due. Draw 
a sight draft on them in favor of your firm for |1200 and leave it with 
the bank for collection. 

Indorse the draft. No entry is required. Write a letter to Fred W. Hill & Co., 
telling them of the draft you have drawn. 

Take the note of F. Moore from the Unpaid Bills envelope and offer 
it for discount at your bank, Form 5. 

Indorse the note, make out a discount memorandum and pin it to the note. Place 
the note in the pass book ; take it to the bank, and receive credit for the proceeds. 



SET VI. WHOLESALE GROCERY 221 

Pay the balance due Bates, Aldrich & Co., less 5%, by a New York 
draft, Form 16. 

Buy the draft by check. Exchange, 50^. 

Indorse the draft and inclose it in a letter. 



POINTS TO BE OBSERVED IN WRITING A LETTER OF REMITTANCE 

1. State what is inclosed, — note, draft, etc. 

2. Give the amount of the inclosure. 

3. Generally write the amount of the inclosure in words and figures, thus : Twenty- 
four and ^26^ Dollars ($24.25). 

4. State how the amount inclosed is to be applied. 

5. Fold the inclosure within the letter properly. (See Form I, Appendix F.) 

Receive of F. W. Earl & Co., Weedsport, a New York draft for |950, 
in full for invoice of Aug. 24, Form 17. 

Receive of D. L. Hinman & Co. their check, in full of account, less 
2%, Form 18. 

The Enterprise Carting Co. has delivered to you the goods ordered of 
Walter Baker & Co. on Sept. 19, Form 19. 

A telegraphic order has just been received from W. L. Anderson, 
Perth Amboy, for : 

10 bbl. R. P. Flour 1500 lb. P. Tapioca 

25 cases C. Baking Powder 10 bbl., 1600 lb., G. G. Starch 

Fill the order. Terms : 2/5, net 30 da. 

Deposit the check and the New York draft on hand. 

Draw a cash check for office expenses, $25. 

Make no entry in the cashbook. Ask for $5 in change. 

Note. A daily statement shows the cash balance, a list of the journal entries, the sales, 
and the purchases. 

Prove the cash and make out a daily statement. Take all books to the 
instructor for criticism. Proceed to post as follows : 

1. Post the items in the Accounts Receivable section of the cashbook 
to the credit of the proper accounts in the sales ledger. 

2. Post the items in the General column on the left side of the cash- 
book to the credit of the various accounts in the general ledger. 

3. Post the items in the Accounts Payable section of the cashbook to 
the debit of the various accounts in the purchase ledger. 

4. Post the items in the General column on the right side of the cash- 
book to the debit of the various accounts in the general ledger. 



222 BOOKKEEPING 

5. Post the sales from the sales book to the debit of the different 
accounts in the sales ledger. 

6. Post the purchases from the invoice book to the credit of the dif- 
ferent accounts in the purchase ledger. 

7. Hand all books to the instructor for approval before proceeding 
with the next day's business. 

Tuesday, Sept. 25 

The following orders were received in this morning's mail : 

1. From L. P. Ross, Warsaw : 

12 bbl., 3900 lb., St. A Sugar 

25 half chests, 1750 lb., M. Y. H. Tea 

15 bbl., 4875 lb., F. O. Sugar 

10 pkg. S. Yeast Cakes 

You are not familiar with the financial standing of this firm, and so 
ship the goods to the order of The Union Bank, less 2%. 

\ ^v^-v ' The purchaser consents to this form of shipment. 

■A^_,<^1_-.^- — '^^Enter the amount in the sales book under C.O.D. Accounts. Draw a sight draft 
^ in favor of your firm, indorse it, and attach it to the bill of lading ; leave it with the 

bank for collection. 

2. From Clinton, Jones & Co., Allston : 

10 bbl., 3300 lb., Wh. C Sugar 15 pails No. 1 Mackerel 

5 bbl., 800 lb., L. Starch 25 pkg. G. Matches 
10 pkg. S. Yeast Cakes 5 bbl. C. R. Oatmeal 

15 cases Horse-radish 

A New York draft is inclosed in settlement of the bill, less 2%, 
Form 20. 

Write the invoice, and prepare a bill of lading in the regular way. Deduct the 
discount and receipt the bill. Only the proceeds are entered in the cashbook. 

3. From James K. Lusk, City : 

25 cases D. Salad Dressing 50 cans B. Cocoa 

6 cases, 120 sacks, C. P. Flour 250 lb. E. Chocolate Drops 

15 bbl., 750 gal., N. 0. Molasses 

Fill the order. Terms : 2/5, net 30 da. 

4. From F. E. Rogers, City : 

15 bx., 300 lb., L. L. Raisins 10 bx. P. Matches 

5 bbl., 250 gal., P. R. Molasses 10 bu. N. Y. Medium Beans 



SET VI. WHOLESALE GROCERY 223 

Fill the order. Terms: sight draft in 5 da. for the amount of the 
bill, less 2%. 

Draw the draft, dating it Oct. 1 (Sept. 30 will be Sunday), and place it in the 
Business Cash envelope. 

What is the custom in your state regarding paper that falls due on Sunday ? 

The old account of Williams, Harmon & Co., Troy, is several days 
past due. Draw a sight draft on them for $3126.30, and leave it with 
The Union Bank for collection. 

Write a letter to Williams, Harmon & Co., telling them of the sight draft you 
have drawn. 

The goods ordered of Smith, Perkins & Co. on Sept. 19 have been 
received, Form 21. 

Place the following orders over the telephone: 

1. With Geo. H. Buell & Co., City: 

240 bu. N. Y. Medium Beans 25 bx., 1250 lb., E. Apples 
200 lb. E. Raspberries 

2. With J. E. Seel & Co., City : 

50 bbl. L. L. Salt 25 pails M. C. Candy 

500 lb. S. M. Candy 

The note of A. J. Weaver & Co., payable at The Union Bank, the 
payment of which was assumed by your firm, is due to-day. 

Issue a check in payment. 

Receive of Frank Moore & Son, City, their note at 10 da. for 1745.69, 
to apply on account. Form 22. 

Receive a check of Salisbury, Gray & Co. in full for the invoice of 
Sept. 2, $260.51, Form 23. 

Receive a check of J. D. Manning in full for the invoice of Aug. 25, 
$600, Form 24. 

Pay by check the bill of R. O. Merrill & Co. for packing boxes, etc., 
$9.50, Form 25. 

Pay James Burrill cash for shoeing horses, $2.50. 

Deposit the checks and the New York draft on hand. The bank 
charges y^^% collection on the checks. 

Make out a daily statement. If it is correct, post the different books 
as instructed on Sept. 24. Post the journal entry. 

After the posting is finished, hand all books to the instructor for examination 
and approval. 



224 BOOKKEEPING 

Wednesday, Sept. 26 

Goods ordered yesterday, over the telephone, of Geo. PI. Buell & Co. 
have been dehvered, Form 26. 

Goods ordered of J. E. Seel & Co. have also been delivered, Form 27. 

Receive of T. B. Welch & Co. their check, in full for the invoice of 
Sept. 24, less 2%, Form 28. In the letter inclosing the check they order 
the following : 

25 bx. Wool Soap 5 bbl., 1650 lb., Wh. C Sugar 

25 bx. Water Lily Soap 5 bbl., 1625 lb., F. G. Sugar 

5 bbl., 1500 lb., Br. C Sugar 10 half chests, 600 lb., F. 0. Tea 

Fill the order. Terms : 2/5, net 30 da. 

Telegraph Walter L. Mann & Co., Boston, ordermg the following to 
be shipped by fast freight : 

50 bx. Mucilage 50 cases C. Baking Powder 

Limit the message to eleven words. Pay 50^ charges in cash. 

Leave the note of Walter L. Parker with The Union Bank for collec- 
tion, Form 6. 

The note is in the Unpaid Bills envelope. 
Make the proper memorandum in the bill book. 

Pay Walter Baker & Co.'s invoice of Sept. 22, less 3%, by a New 
York draft, which you buy by check at The Union Bank, Form 29. 
Exchange, 75(^. 

Write a letter and inclose the draft. 

Receive returns for the C.O.D. shipment to W. D. Greene, Dansville, 
on Sept. 24, Form 30. 

Receive of Williams, Harmon & Co. a New York draft for invoice of 
Sept. 24, less 2%, Form 31. 

W. D. Packard & Co., City, order : 

10 pails No. 1 Mackerel 20 1-lb. cans H. Cocoa 

3 cases C. Baking Powder 10 bags, 1250 lb., P. R. Coffee 

10 mats, 750 lb., F. J. Coffee 

Bill the above 3/5, net 60 da. 

This is a reliable firm, and you expect large orders from them frequently ; hence 
the above terms. 

The firm pays Geo. N. Cooper $125 by check for one carriage horse, 
to be charged to Student's private account. 



SET VI. WHOLESALE GROCERY 225 

Receive of Salisbury, Gray & Co. a sight draft, on J. E. Seel & Co., 
City, for |50, Form 32. Remit the draft by letter to J. E. Seel & 
Co., and make an entry in the journal. 

J. D. Manning, Albany, orders : 

10 bags, 1250 lb., P. R. Coffee 10 bales, 1500 lb., G. M. Cofeee 

20 mats, 1500 lb., F. J. Coffee 

Fill the order. Terms : 2/5, net 30 da. 

Deposit the money received from the C.O.D. shipment, and the check 
and the New York draft on hand. The bank charges 35(^ collection on 
the check. 

Be sure to deduct the collection on the deposit ticket. 

Make out a daily statement and have it corrected. Post as previously 
explained. 

Present all books to the instructor for approval. 

Thursday, Sept. 27 

The Enterprise Carting Co. has delivered to you the goods ordered 
of Stickney, Poor & Co. on Sept. 21, Form 33. 

Remit Gray, Dunkle & Co., Chicago, your note at 15 da., to apply on 
account, flOOO. 

Write a letter and inclose the note. 

Receive of W. L. Anderson his check for |400, to apply on account. 
Form 34. 

The following orders were received by mail to-day. 

1. From Fred W. Hill & Co., Rome : 

75 1-lb. cans H. Cocoa 50 lb. E. Raspberries 

3 bx., 120 lb., C. Codfish 10 bx., 240 lb., H. L. Chocolate 

Fill the order. Terms : 2/5, net 30 da. 

2. From D. L. Hinman & Co., City : 

10 half chests, 750 lb., C. J. Tea 3 bags Ice-cream Salt 

5 half chests, 300 lb., F. 0. Tea 3 bbl., 480 lb., H. W. Starch 

10 half chests, 700 lb., M. Y. H. Tea 

Fill the order. Terms : 2/5, net 30 da. 

Discount at The Union Bank Frank Moore & Son's note received on 
Sept. 25. The proceeds are placed to your credit. 

Make out a discount memorandum and pin it to the note. Place it in the pass 
book and hand it to the bank. 
Make the proper records. 



226 BOOKKEEPIXG 

Your bank informs you that the sight draft drawn on Ered W. Hill 
& Co., Rome, on Sept. 24 has been collected. Collection, y^%. 

Have the amount entered in the pass book, and make the proper records in the 
other books. 

Give A. W. Weet your check for $65 to be charged to the private 
account of Geo. H. Dobbin. 

Goods ordered of Gray, Dunkle & Co. on Sept. 21 have been de- 
livered. Form 35. 

Deposit the check on hand. No collection is charged. 

Make out a daily statement and have it examined, after which post 
the different books in the regular way. 

Hand all books to the instructor for approval. 

Friday, Sept. 28 

Receive of James K. Lusk, City, a letter inclosing a check, in pay- 
ment of the invoice of Sept. 25, less 2%, Form 36. He also orders the 
following items : 

10 bx. Sunlight Soap 50 lb. Pearl Tapioca 

3 bbl., 480 lb., G. G. Starch 

Fill the order. Terms : 2/5, net 30 da. 
Salisbury, Gray & Co., Rochester, order: 

15 bbl. R. P. Flour 4 bbl., 200 gal., K 0. Molasses 

10 bbl. L. L. Salt 20 bx. Wool Soap 
10 bbl., 3250 lb., St. A Sugar 5 bbl., 1500 lb, Br. C Sugar 

25 bx. P. Matches 10 bx. Butter Color 

5 pails No. 1 Mackerel 15 doz. pint cans Olives 
5 bx., 250 lb., C. Raisins 5 bbl. C. R. Oatmeal 

Fill the order. Terms : 3/5, net 30 da. 

The Enterprise Carting Co. has just delivered to you the goods 
ordered of Bates, Aldrich & Co. on Sept. 21, Form 37. 

Give Geo. H. Buell & Co. your note at 30 da., with interest at 6%, 
for the net amount of the invoice of Sept. 26. 

A telegraphic order has just been received from W. M. Beach, Pitts- 
field, for: 

3 half chests, 225 lb, C. J. Tea 50 lb. Flake Tapioca 

He requests that the goods be shipped by express, C.O.D. 
Fill the order. Terms: cash, less 1%. 



SET VL WHOLESALE GROCERY 227 

Goods ordered of D. W. Simpson & Co., Chicago, on Sept. 21 have 
been delivered, Form 38. 

Remit Bates, Aldrich & Co. a New York draft, in full for the goods 
received to-day, less 3%, Form 39. Buy the New York draft by check. 
Exchange, 75^. 

Indorse the draft and inclose it in a letter. 

Deposit the check on hand. 

Your bank informs you that the draft drawn on Williams, Harmon 
& Co. on Sept. 25 has been collected. Collection, y^%. 

Have the amount entered in the pass book, and make the proper entries in the 
other books. 

Make out a daily statement. Post. 
Hand all books to the instructor for approval. 

Saturday, Sept. 29 
Draw from the bank by a cash check for office expenses, $50. 
Ask for ten five-dollar bills. 

The following orders have been received by mail to-day. 

1. From W. D. Packard & Co., City : 

10 half chests, 750 lb., C. J. Tea 10 half chests, 600 lb., F. 0. Tea 
5 bbl., 800 lb., L. Starch 

They inclose check in payment of the invoice of Sept. 26, less 3%, 
Form 40. 

Fill the order. Terms : 2/10, net 60 da. 

2. From D. L. Hinman & Co., City : 

20 bags Ice-cream Salt 50 bbl. L. L. Salt 

10 bbl., 3250 lb., St. A Sugar 10 bbl., 3250 lb., F. G. Sugar 

10 bbl., 600 lb., O. Crackers 10 bbl., 600 lb., C. S. Crackers 

They inclose their note at 10 da. for $500, to apply on account. 
Form 41. 

Fill the order. Terms : 2/5, net 30 da. 

3. From Frank Moore & Son, City : 

6 bx., 300 lb., E. Apples 5 bx., 125 lb., E. Apricots 

15 bbl., 4875 lb., St. A Sugar 10 pails M. C. Candy 

500 lb. S. M. Candy 

kFill the order. Terms : 2/5, net 30 da. 
Pay John Harvey cash for cleaning the store, |5. Also pay salaries 



228 BOOKKEEPING 

Your bank informs you that the sight draft attached to the bill of 
lading and left with your bank for collection Sept. 25 has been paid. 
Collection, ^^^o- 

Have the amount entered in the pass book. 

Pay by check Enterprise Carting Co.'s bill for freight and drayage to 
date, 177.75, Form 42. 

Charge Merchandise. 

Pay William Jennings |15 by check for keeping and feeding horses 
to date. 

Make a journal entry crediting the Proprietors' private accounts with 
one-half month's salary for September. 

Charge Expense, and credit each proprietor for one half the monthly salary agreed 
upon in the articles of copartnership. 

Receive cash for subrental of a part of the store, |65. 

Get the cash at the office or of the instructor and credit Rent account. 

•Make out a daily statement and hand it in. 
Post as instructed for previous days. 



Closing the Work for September 

1. Study the explanation of the model cashbook illustrated on pages 
204 and 205. Close the cashbook, and follow all the details of the model 
very carefully. 

Note that the closing of the Discount column, on either side, is accomplished by 
a journal entry. 

The model does not show the total column under cash receipts, but this column 
will be found in your blank books. In closing the cash receipts carry all totals to 
this column. 

2. Post the summary of the cashbook to the general ledger. 

3. Study the illustration and the explanation of the sales book, page 
201. Make the proper entry to close it. Post the entry to the general 
ledger. 

4. Study the illustration and the explanation of the invoice book, 
page 206. Make the proper entry to close it. Post the entry to the 
general ledger. 

5. Study the illustration and the explanation of the journal, page 
208. Make the proper entry to close it. Post the entry to the general 
ledger. 



SET VI. WHOLESALE GROCERY 229 

6. Prove the sales ledger by an abstract similar to the following : 
Abstract of Sales Ledger, September 30, 19 — 





12 


Wm. B. Tenny & Co. 


920 










14 


D. M. McCarthy 


1291 


50 








16 


J. A. Merrill & Son 


9120 










16 


R. W. White & Son 


492 










20 


Baker, Hillis & Co. 


162 


50 








21 


J. E. Bender 


1250 










22 


Wm. A. Conway 


1120 










24 


Morgan, Wright & Co. 


962 


50 








25 


Kendall Mfg. Co. 


162 


90 








26 


F. E. Moore 


865 










29 


C. W. Gray 


120 










31 


G. H. Dunkle 


m 


25 








24 


Balance per Accts. Rec. in G. L. 






16532 


65 




16532 


65 


16532 


65 















7. Prove the purchase ledger by an abstract similar to the following 
Abstract of Purchase Ledger, September 30, 19 — 





18 


Jordan, Marsh & Co. 






6142 


50 




19 


Morgan, Traver & Co. 






3150 






21 


Gray, Salisbury & Co. 






1250 






24 


Williams & Rogers 






925 






26 


C. H. Lyman & Son 






2100 






27 


M. A. Weaver & Co. 






1650 






29 


J. E. King, Son & Co. 






1122 


10 




30 


M. F. Raymond 






4698 


20 




31 


E. R. Barnard & Co. 






162 


90 




46 


Balance per Accts. Pay, in G. L. 


21200 


76 








21200 


76 


21200 


76 















8. Have the abstracts approved by the instructor. If they are cor- 
rect, make a trial balance from the general ledger. 

9. Have the trial balance approved. 

10. Prove the bill book. 

11. Hand all books to the instructor for examination. 
Remember the monthly statement of your bank account. 



230 



BOOKKEEPING 



EXERCISE 60 

A Written Review 

The following review exercises are suggested. 

1. Make the usual statements from the following trial balance 



A. L. Persons, Prop. 




18000. 


Harry K. Leslie, Prop. 




7000. 


Cash 


$448.45 




Deposit in First National Bank 


2036.85 




Merchandise 


8090.55 




Real Estate 


3300.55 




Expense- 


203.20 




Taxes 


60.40 




Horse and Wagon 


280. 




Office Fixtures 


177.60 




Interest 


27.45 




Salaries 


324.90 




Accounts Receivable 


1258.25 




Accounts Payable 




2218.40 


Bills Receivable 


155.20 




B. & 0. R.R. Stock 


1800. 




Bills Payable 




1100. 


A. L. Persons, Priv. Acct. 


95. 




Harry K. Leslie, Priv. Acct. 


60. 




$18318.40 


$18318.40 


Inventories Resource 


LiahUlty 


Merchandise 


19150. 


$95.10 


Real Estate 


3250. 


60. 


Expense 


48.90 




Interest 


15.25 




20 shares of B. & 0. R.R. Stock at par 






Horse and Wagon at cost, less 10% 






Office Fixtures : 






Typewriter at cost, |70, less 10% 






Office Chairs at cost, $40, less 10% 






Office Desk at cost, |67.60 







2. Journalize the resources and the liabilities, and credit the proprietor 
for his net investment. Journalize the succeeding transactions, post all 
to the ledger, and take a trial balance. If the work is correct, all the 
personal accounts will balance. 



REVIEW EXERCISES 231 

April 1. Harold F. Carson began business with the following re- 
sources and liabilities: 

Resources 

Merchandise on hand |6925. 

Bills Receivable on hand 460. 

Interest on above 10.50 

Cash on hand 1940. 

W. F. Gordon on account 465.20 

A. W. Dunham on account 1444.50 

D. E. Sumner on account 750. 

Ware «&; Co. on account 341.75 

Liabilities 

R. W. Owens on account 1260. 

J. A. Hazard on account 1020. 

Howe & Co. on account 165.20 

Mercer & Co. on account . 250. 

Unpaid freight bill 104.25 

Unpaid taxes 250. 

Bills Payable outstanding 420. 
Interest on above 3. 

4. He drew a sight draft on A. W. Dunham for |1020, in favor of 
J. A. Hazard. 

8. He drew a sight draft on W. F. Gordon for |250, in favor of 
H. J. King, City Treasurer, in payment of taxes now due. 

10. He drew a 10-da. draft on W. F. Gordon for $165.20, in favor 
of Howe & Co. 

12. He drew a sight draft on D. E. Sumner for $250, in favor of 
Mercer & Co. 

15. He drew a sight draft on A. W. Dunham for $424.50, in favor 
of E. R. Maxon, in payment of his note and interest. Face of the note, 
$420 ; mterest, $4.50. 

19. R. H. Weller remitted a sight draft on R. W. Owens for $472.50, 
in payment of his note and the interest. Face of the note, $460 ; interest, 
$12.50. 

22. He drew a sight draft on D. E. Sumner for $500, in favor of 
R. W. Owens. 

24. He drew a sight draft on Ware & Co. for $104.25, in favor of 
Fred H. Kerns, Agt., for a freight bill now due. 

27. He drew a sight draft on W. F. Gordon for $50, in favor of 
R. W. Owens. 

30. He drew a 30-da. draft on Ware & Co. for $237.50, in favor of 
R. W. Owens. 



232 BOOKKEEPIKG 

Incoming Business Forms for October 

Before beginning the business practice for October, read the explanatory note 
preceding the Incoming Business Forms for September, page 209. 

Form 43. Note of Frank Moore & Son, City, dated Oct. 1, drawn in 
favor of your firm, with interest at 6%, payable in 60 da. 
at The Union Bank, $500. 
Form 44. Invoice of Walter L. Mann & Co., Boston, dated Sept. 29. 
Terms: 10 da. draft, less 1%. Items as follows: 
50 bx. Mucilage 50 cases C. Baking Powder 

Deduct the 1% discount. 

Form 45. Draft of Walter L. Mann & Co., Boston, dated Sept. 29, drawn 

on your firm, in their own favor, at 10 days' sight, for the 

net amount of the above invoice. 
Form 46. Draft at 10 days' sight, drawn by Smith, Perkins & Co., New 

York, Sept. 29, on your firm, in favor of themselves, for |750. 
Form 47. Check of Salisbury, Gray & Co., Rochester, dated Oct. 1, drawn 

on Traders National Bank, in favor of your firm, for |602.37. 
Form 48. Check of D. L. Hinman & Co., City, dated Oct. 2, drawn on 

Traders National Bank, in favor of your firm, for $632.05. 
Form 49. Invoice of Geo. H. Buell & Co., City, dated Oct. 3. Terms : a 

30-day note in 10 da., with interest at 6 %. Items as follows: 

100 bu. N. Y. Medium Beans 150 bx. E. Apples 

500 lb. E. Raspberries 

Form 50. Sight draft of D. W. Smith & Co., New York, dated Oct. 2, 

drawn on your firm, in favor of themselves, for |900, and 

indorsed by them to the First National Bank, New York. 

Transferred by the First National Bank to The Union Bank 

of your place, W. O. King, Cashier. 
Form 51. Draft of The Union Bank, City, on Chemical National Bank, 

New York, dated Oct. 3, drawn in favor of your firm, for 

$500, W. B. Frey, Cashier. 
Form 52. Check of Frank Moore & Son, City, dated Oct. 2, drawn on 

Traders National Bank, in favor of your firm, for $348.14. 
Form 53. Sight draft of T. B. Welch & Co., Medford, dated Oct. 2, on 

D. O. Mosher, City, drawn in favor of your firm, for $79.60. 
Form 54. Q. O.D. envelope. Data as follows : cash inclosed, $80.32. 

Goods were shipped by your firm to W. M. Beach, Pittsfield, 

Sept. 28. 

See note under Form 30, page 212. 



SET VI. WHOLESALE GROCERY 233 

Form 55. Draft of Traders National Bank, Albany, on Chemical National 

Bank, New York, dated Oct. 3, drawn in favor of J. D. 

Manning and transferred to your firm by full indorsement, 

for 1919.24, D. O. Morehouse, Cashier. 
Form 56. Invoice of Bates, Aldrich & Co., Boston, dated Oct. 3. Terms : 

3/5, net 30 da. Items as follows : 

200 l-lb. cans Huyler's Cocoa 100 bbl. S. P. Flour 

Form 57. Draft of The Union Bank, City, dated Oct. 4, drawn on Chemi- 
cal National Bank, New York, in favor of your firm, for 
$500, W. B. Frey, Cashier. 

Form 58. Sight draft of D. W. Smith & Co., New York, dated Oct. 3, on 
your firm, in favor of C. W. Mobray, City, for |300. 

Form 59. Invoice of Smith, Perkins & Co., New York, dated Oct. 3. 
Terms : 5/10, net 30 da. Items as follows : 

100 bags P. R. Coffee 100 half chests F. 0. Tea 

50 half chests C. J. Tea 

Form 60. Olney P. Davis & Co.'s draft, dated City, Oct. 5, at 1 day's sight, 

on Arthur M. Black, in favor of themselves, for $75.96. 
Form 61. Check of F. W. Earl & Co., Weedsport, dated Oct. 4, 

drawn on Traders National Bank, in favor of your firm, for 

$1605.48. 
Form 62. Invoice of Walter Baker & Co., New York, dated Oct. 4. 

Terms : 3/5, net 30 da. Items as follows : 

500 l-lb. cans Baker's Cocoa 100 bx. Baker's Chocolate 

Form 63. Invoice of Gray, Dunkle & Co., Chicago, dated Oct. 4. Terms : 
3/10, net 30 da. Items as follows: 

50 bbl. Br. C Sugar 100 bbl. Wh. C Sugar 

25 half chests M. Y. H. Tea 

Form 64. Draft of Traders National Bank, Dansville, on Chemical 
National Bank, New York, dated Oct. 5, drawn in favor of 
W. D. Greene and transferred to your firm by full indorse- 
ment, for $262.15, W. E. Traver, Cashier. 

Form 65. Check of W. D. Packard & Co., City, dated Oct. 6, drawn 
on Traders National Bank, in favor of your firm, for 
$586.53. 

Form 66. Sight draft of Salisbury, Gray & Co., Rochester, dated 
Oct. 5, drawn on J. E. Seel & Co., in favor of your firm, 
for $76.42. 



234 BOOKKEEPING 

Memoranda of Transactions for October • 
Monday, Oct. 1 

The following orders were received in this morning's mail. 

1. From F. W. Earl & Co., Weedsport : 

25 half chests F. 0. Tea 10 bx. W. L. Soap 

25 half chests C. J. Tea 10 bbl. F. G. Sugar 

Fill the order. Terms : 2/5, net 30 da. 

2. From J. D. Manning, Albany : 

10 bbl. St. A Sugar 10 bu. IST. Y. Medium Beans 

5 bbl. F. G. Sugar 10 bx. H. 0. Oatmeal 

25 doz. bottles M. Pickles 25 bx. H. L. Chocolate 

50 bx. L. L. Raisins 25 bx. E. Chocolate Drops 
5 bales G. M. Coffee 5 pails No. 1 Mackerel 

10 bx. E. Apples 10 bx. Butter Color 

Fill the order. Terms : 2/5, net 30 da. 

3. From R. D. Fowler & Co., City : 

5 bbl. S. P. Flour 3 bx. Butter Color 

5 bbl. R. P. Flour 3 bbl. C. R. Oatmeal 

20 bx. C. Codfish 

Fill the order. Terms: sight draft in 5 da. for the amount of the 
bill, less 2%. 

Draw a sight draft, date it ahead 5 da., and place it in the Business Cash envelope. 
Deduct the discount on the invoice and in the sales book. Do not count this draft 
in proving cash. 

The Union Bank informs you that the note of Walter L. Parker, 
left for collection on Sept. 26, has been credited to your account at its 
face value. 

Discount at The Union Bank Benton Bros. & Co.'s note, bought by 
your firm of A. J. Weaver & Co., and receive credit for the proceeds. 
Form 7. 

Receive of Frank Moore & Son their note, at 60 da., with interest at 
6%, for $500, Form 43. 

The Enterprise Carting Co. has just delivered to you the goods ordered 
of Walter L. Mann & Co. on Sept. 26. 

Look up the invoice. Form 44, and handle it in the regular way. Take 
the draft which they inclosed. Form 45, and accept it. Place the draft 
in an envelope, properly addressed, and hand it in. 



SET VI. WHOLESALE GROCERY 235 

An order has just been received from Clinton, Jones & Co., Allston, 
for the following : 

10 bx. Mucilage 10 half chests M. Y. H. Tea 

10 cases C. Baking Powder 10 bales G. M. Coffee 

10 bbl. St. A Sugar 10 bags P. R. Coffee 

Fill the order. Terms : 2/5, net 30 da. 

Write letters, ordermg the following goods : 

1. Of Walter Baker & Co., New York : 

500 1-lb. cans Baker's Cocoa 100 bx. Baker's Chocolate 

2. Of Smith, Perkins & Co., New York : 

100 bags P. R. Coffee 100 half chests F. 0. Tea 

50 half chests C. J. Tea 

In a communication received from Smith, Perkins & Co. this morning 
there was a draft at 10 days' sight on your firm, in favor of themselves, 
for $750, Form 46. Accept the draft and inclose it in the above letter. 

3. Of Gray, Dunkle &; Co., Chicago : 

50 bbl. Br. C Sugar 100 bbl. Wh. C Sugar 

25 half chests M. Y. H. Tea 

Inclose your check in payment of the invoice of Sept. 26, less 3%, 
and the proceeds of your note, in their favor, due Oct. 12. 

Deduct the discount from the face of the note, add the proceeds of the note to the 
net amount of the bill, and write a check to cover the total amount. Have the letter 
approved before inclosing the check. 

Write Bates, Aldrich & Co., Boston, ordering the following goods : 

200 1-lb. cans Huyler's Cocoa 100 bbl. S. P. Flour 

Telephone Geo. H. Buell & Co., City, the following order : 

100 bu. N. Y. Medium Beans 150 bx. E. Apples 

500 lb. E. Raspberries 

An order has just been received from Williams, Harmon & Co., 
Troy, for: 

200 1-lb. cans Baker's Cocoa 25 bx. Baker's Chocolate 

25 half chests F. 0. Tea 25 half chests C. J. Tea 

10 bbl. S. P. Flour 

Fill the order. Terms : 2/10, net 60 da. 

Give Smith, Perkins & Co. a check for the invoice of Sept. 10, less 
S%. The amount of the mvoice is 1947.60. 



236 BOOKKEEPING 

Take the draft drawn on F. E. Rogers on Sept. 25 from your Business 
Cash envelope, indorse it properly, and deposit it in the bank. 
Deposit all currency and the check on hand. 
Make out a daily statement and hand it in. Post. 

Hand all books to the instructor for approval. 

Tuesday, Oct. 2 

The following orders were received in this morning's mail. Fill each 
in the regular way. Terms : 2/5, net 30 da. 

1. From W. L. Anderson, Perth Amboy : 

25 half chests M. Y. H. Tea 10 bbl. Br. C Sugar 

10 bbl. Wh. C Sugar 10 bales G. M. Coffee 

10 bbl. S. P. Flour 

2. From W. D. Greene, Dansville : 

25 bx. E. Apples 50 bu. N. Y. Medium Beans 

250 lb. E. Easpberries 

Draw by a cash check for office expenses, |125. 
Ask for $5 in change. 

Pay cash for repairing the wagons, ^9- 

Pay D. W. Simpson & Co. by check for the invoice of Sept. 27, less 3%. 

Write a letter and inclose the check. 

Receive a check of Salisbury, Gray & Co., Rochester, in payment of 
the invoice of Sept. 28, less 3%, Form 47. 

A telegraphic order has just been received from W. C. Holbrook 
& Co., Resort, for: 

10 bags P. R. Coffee 10 bales G. M. Coffee 

20 half chests C. J. Tea 

Ship the above to the order of The Union Bank, less 2%. Deduct the discount on 
the bill and in the sales book- Enter in the sales book as a C.O.D. item. Draw a 
sight draft in favor of yourself, indorse it, attach to the bill of lading, and leave 
it with your bank for collection. 

Receive of D. L. Hinman & Co. their check, in payment of the invoice 
of Sept. 27, less 2%, Form 48. 

Engage W. O. Warner as traveling salesman at a salary of |125 per 
month and expenses. Give him a check for |100 to cover expenses on 
a trip through adjacent territory. 



SET VI. WHOLESALE GROCEKY 237 

Engage F. E. Ramsey, who has been assisting in the shipping room 
for several days, as general assistant, at a salary of |10.50 per week, 
beginning Oct. 1. Pay him cash for services to date, |4. 

Pay by check S. E. Waldorph for cooperage, $16.50. 

Deposit the checks on hand. Collection, J^% on the check of Salis- 
bury. Gray & Co. 

Make out a daily statement. Post. 

Hand all books to the instructor for approval. 

Wednesday, Oct. 3 

Goods ordered of Geo. H. Buell & Co. on Oct. 1 have been de- 
livered, Form 49. 

Pay a sight draft of D. W. Smith & Co., in favor of themselves, by 
check, |900, Form 50. The draft is presented to you by The Union 
Bank, and you make your check payable to that institution. 

Remit Walter L. Mann & Co., Boston, a New York draft, to apply 
on account, |500, Form 51. Buy the draft by check. Exchange, 25(^. 

Indorse the draft. 

A note in favor of Boyd, Evans & Co. is due to-day, payable at The 
Union Bank. 

Issue a check in payment. 

Receive of Frank Moore & Son, City, their check, in payment of the 
invoice of Sept. 29, less 2%, Form 52. 

The letter inclosing the above check contained the following order : 

100 1-lb. cans Huyler's Cocoa 15 bbl. S. P. Flour 

20 bx. E.. Apples 250 lb. E. Raspberries 

25 bu. N. Y. Medium Beans 10 bbl. Wh. C Sugar 

Fill the order. Terms : 2/5, net 30 da. 

Draw a sight draft on Fred W. Hill & Co., Rome, in favor of your 
firm, for $300. 

Place the draft in the Business Cash envelope, and write a letter to Fred W. Hill 
& Co., informing them of the draft drawn on them at sight through your bank. 

Credit Fred W. Hill & Co. in the cashbook, as they have agreed to 
honor the draft on presentation. 

Fill an order just received from Williams, Harmon & Co., Troy, for : 

15 bbl. L. L. Salt 15 bbl. S. P. Flour 

25 half chests C. J. Tea 10 bbl. Br. C Sugar 

Terms: 2/10, net 60 da. 



238 BOOKKEEPING 

T. B. Welch & Co., Medford, order: 

20 bbl. N. O. Molasses 20 bbl. P. K. Molasses 

10 bbl. F. G. Sugar 5 bbl. L. Starch 

Fill the order. Terms: 2/10, net 60 da. 

Inclosed in the above letter was a sight draft on D. O. Mosher, City, 
in your favor, for $79.60, to apply on account. Form 53. 

Credit T. B. Welch & Co. in the cashbook, as D. O. Mosher has 
agreed to honor the draft on presentation. 

Place the draft in the Business Cash envelope. 

Receive returns from the C.O.D. shipment to W. M. Beach, Pitts- 
field, Form 54. 

Deposit the sight draft of T. B. Welch & Co., the draft drawn on 
Fred W. Hill & Co., the check received from Frank Moore & Son, and 
the returns from the C.O.D. shipment to W. M. Beach. -J^^ collection 
on the draft on Fred W. Hill & Co. 

Make out a daily statement. Post. 

Hand all books to the instructor for approval. 

"Thursday, Oct. 4 

The following orders were received in this morning's mail. 

1. From John P. Kennedy & Co., City : 

2 half chests C. J. Tea 10 pails No. 1 Mackerel 

5 cases E,. Baking Powder 5 bbl. C. R. Oatmeal 

6 bx. H. L. Chocolate 10 bx. C. Raisins 

5 bu. N. Y. Medium Beans 5 bbl. N. 0. Molasses 

20 bx. C. Codfish 10 bx. Wool Soap 

The references are satisfactory and you fill the above order, quoting 
your regular terms : 2/5, net 30 da. 

2. From W. W. Williams, City: 

5 half chests F. 0. Tea 2 bbl. H. W. Starch 

10 bags Ice-cream Salt 25 pkg. N. Yeast Cakes 

5 bx. W. L. Soap 

The references are satisfactory and you fill the order. Terms: 2/5, 
net 30 da. 

Receive from J. D. Manning, Albany, a New York draft, in settlement 
of the invoice of Oct. l,.less 2%, Form 55. 

The Enterprise Carting Co. has delivered to you the goods ordered 
of Bates, Aldrich & Co. on Oct. 1, Form 56. 



SET VI. WHOLESALE GKOCERY 239 

Buy of The Union Bank a New York draft, by check, and remit it 
to D. W. Smith & Co., New York, to apply on account, $500, Form 57. 
Exchange, 25^. 

Remit Smith, Perkins & Co., New York, a check for the invoice of 
Sept. 24, less 5%. 

Deposit the New York draft received from J. D. Manning. 

Make out a daily statement. Post. 

Hand all books to the instructor for approval. 

Friday, Oct. 5 

Pay D. W. Smith & Co.'s sight draft, on you, in favor of C. W. 
Mobray, by check, $300, Form 58. 

The Enterprise Carting Co. has just delivered to you the goods ordered 
of Smith, Perkins &; Co. on Oct. 1, Form 59. 

The following orders were received this morning, and are to be filled 
in the regular way. Terms : 2/5, net 30 da. 

1. From Frank Moore & Son, City : 

10 bbl. 0. Crackers 10 bbl. C. S. Crackers 

5 bx. C. Codfish 10 bbl. R. P. Flour 

2 bbl. P. R. Molasses 

2. From F. E. Rogers, City : 

10 bbl. 0. Crackers 5 bbl. C. S. Crackers 

2 bags P. R. Coffee 2 bales G. M. Coffee 

10 bx. E. Chocolate Drops 

Accept, payable at The Union Bank, for the private account of Arthur 
M. Black, Olney P. Davis & Co.'s draft in favor of themselves, at 1 day's 
sight, for $75.96, Form 60. 

This draft is the outcome of some matter connected with the private business of 
Arthur M. Black, and the sum is charged directly to his private account. Enter in 
the journal and the bill book. 

A call has just come over the telephone from L. H. Pierson, City, for : 

3 bbl. 0. Crackers 10 bags Ice-cream Salt 
5 bbl. C. S. Crackers 5 bx. Wool Soap 

3 bbl. R. P. Flour 3 bbl. F. G. Sugar 

5 bx. Butter Color 3 mats F. J. Coffee 

He offers to accept your draft at 20 da. from date of the bill for the 
amount. 

Fill the order. 

Draw a draft at 20 da. from date, in favor of your j&rm, indorse it, and leave it 
with the bank for collection. 

Make the proper records in the journal and the bill book. 



240 BOOKKEEPmG 

Pay John Sampson cash, for carpenter work in making repairs in the 
store, $7.50. 

Pay Roby Real Estate Co. by check, for rent of the store for October, 

$300. 

Charge the Rent account in the cashbook. 

Pay Wm. Jennings by check, for keeping and feeding horses, |29. 
Receive a check from F. W. Earl & Co., Weedsport, in payment of 
the invoice of Oct. 1, less 2%, Form 61. 

Deposit the check just received. Collection, ^V %• 
Make out a daily statement. Post. 

Hand all books to the instructor for approval. 

Saturday, Oct. 6 

Your team has delivered the goods ordered of Walter Baker & Co. 
on Oct. 1, Form 62. 

The Enterprise Carting Co. has delivered the goods ordered of Gray, 
Dunkle & Co., Chicago, on Oct. 1, Form 63. 

Fred O. Wolven, City, telephones for the following goods : 

1 bbl. 0. Crackers 1 bbl. F. G. Sugar 
■ 1 half chest F. 0. Tea 

Because of some special dealing with Mr. Wolven, the goods are furnished to 
him at cost prices. Terms : on account. 

Receive a New York draft from W. D. Greene, Dansville, in payment 
of the bill of Oct. 2, less 2%, Form 64. 

Pay salaries for the week in cash as follows : 

Albert B. Curtis $25. 

Edward McDorman 10. 

F. E. Ramsey 10.50 

Receive a check from W. D. Packard & Co., City, in payment of the 
invoice of Sept. 29, less 2%, Form 65. 

The following orders, which were received in this morning's mail, are 
to be filled in the regular way. Terms : 2/5, net 30 da. 

1. From D. L. Hinman & Co., City : 

2 bags P. R. Coffee 5 bbl. S. Pastry Flour 
2 bales G. M. Coffee 5 bx. C. Codfish 

5 bbl. 0. Crackers 5 bbl. N. 0. Molasses 

5 bbl. C. S. Crackers 5 bbl. P. R. Molasses. 



SET VI. WHOLESALE GROCERY 241 

2. From James K. Lusk, City : 

15 bbl. 0. Crackers 6 bbl. C. S. Crackers 

3 bbl. St. A Sugar 6 bu. N. Y. Medium Beans 

1 bbl. H. W. Starch 5 pkg. S. Yeast Cakes 

3 half chests M. Y. H. Tea 

3. From Salisbury, Gray & Co., Rochester : 

8 bbl. St. A Sugar 15 bbl. C. Soda Crackers 

10 bbl. Br. C Sugar 

Salisbury, Gray & Co. inclose a sight draft in your favor, on J. E. 
Seel & Co., City, for $76.42, to apply on account. Form 66. 

Write a letter to J. E. Seel & Co., inclosing the above draft to apply 
on account. 

Pay for postage, etc., in cash, $7.50. 

The acceptance in favor of Olney P. Davis & Co. is due to-day, pay- 
able at The Union Bank. 

Issue a check in payment. 

Albert B. Curtis, your shipping clerk, has made application for a 
position with Perry, Mason & Co., Boston. The position with that firm 
promises to develop an excellent future for Mr. Curtis, and you have 
decided to aid him in securing the place. Write a letter of recommen- 
dation for Mr. Curtis, placing a high estimate on his integrity and 
general business ability. 

SUGGESTIONS BEARING UPON LETTERS OF RECOMMENDATION 

1. Avoid exaggerated expressions. They injure the one recommended. 

2. Be thoroughly acquainted with the qualities of which you speak. 

3. Recommend only those who are worthy of some praise. 

4. Be sincere ; do not entirely pass over defects when you know that they exist. 

5. Generally speaking, do not write a letter of recommendation addressed, To 
whom it may concern, as such a letter cannot give a specific commendation. 

6. Aim to be original in your expressions. 

7. A good letter of recommendation usually conforms with the following arrange- 
ment of thoughts : 

Paragraph No. 1 : Introduction. 

Paragraph No. 2 : General estimate of character and ability. 

Paragraph No. 3 : Brief summary and courteous closing. 

Give Geo. H. Dobbin a check, for private use, |25. 
Student withdraws by check, from the busmess for private use, |50. 
Deposit the check, the New York draft, the sight draft on R. D. 
Fowler & Co., and all the currency on hand. 



242 BOOKKEEPING 

Make out a daily statement and have it examined. Post. 
Proceed to adjust the interest on the Proprietors' accounts, preparatory 
to making the statements and closing the general ledger. 

HOW TO ADJUST INTEREST BETWEEN PARTNERS 

1. The investments were all paid on Sept. 15. Determine the exact number of 
days from that date to Oct. 6. Find the interest on each investment for this time. 

2. The private accounts were credited for salaries Sept. 29. Determine the exact 
number of days from that date to Oct. 6. Find the interest on each private account 
credit for this time. 

3. Find the total interest due the partners. 

4. Find the interest on each man's withdrawals from the time of such with- 
drawals to Oct. 6. 

5. Find the total interest due the business from the withdrawals of the partners. 

6. Find the difference between the two totals above. This sum is the net interest 
due the partners from the business. 

7. Next, find the difference between the total interest due each and the total 
interest to be charged to each. These sums represent the amounts to be credited to 
each partner and debited to Interest account. This interest does not properly belong 
to the regular Interest account, since that account is intended solely for interest 
arising from transactions with others. 

HOW INTEREST DUE ON THE PROPRIETORS' ACCOUNTS MAY BE KEPT 
OUT OF THE REGULAR INTEREST ACCOUNT 

In this set gains and losses are to be shared equally ; therefore one third of any 
sum placed in the Interest account will finally be transferred to the opposite of the 
proprietors' accounts when the proper shares of profits or losses are carried to these 
accounts. For example : Suppose the total interest due the partners is $60. Of this 
sum there is due A $17, B $21, and C $22. If this was entered on the books it 
would appear as follows : 

Interest $60 

A $17 

B 21 

C 22 

If the $60 interest was to be closed to Loss and Gain and then distributed to the 
partners as a cost to the business, each partner's gain would be decreased $20, or 
his loss increased $20. Then we should have : 

1. A's debit is $20, and his credit $17. He owes the business $3. 

2. B's debit is $20, and his credit $21. The business owes him $1. 

3. C's debit is $20, and his credit $22. The business owes him $2. 

Instead of this, one entry will adjust the interest between partners, as follows : 

A $3 

B $1 

C 2 



SET VI. WHOLESALE GROCERY 243 

On this basis of reasoning, make the proper entry to adjust the interest 
on the proprietors' accounts in the business. 

Have the entry approved before posting it to the ledger. 



Closing the Work for October 

1. Close the cashbook. Proceed carefully and study the model cash- 
book. Post the summary of the cashbook. 

2. Rule and foot the sales book and make the proper entry. Post 
the entry. 

3. Rule and foot the journal and make the proper entry. Post the 
entry. 

4. Rule and foot the invoice book and make the proper entry. Post 
the entry. 

5. Prove the sales ledger. (See model, page 229.) 

6. Prove the purchase ledger. (See model, page 229.) 

7. Have your abstracts approved by the instructor. 

8. Make a trial balance from the general ledger and have it approved. 

9. The following is a statement of the inventories. 

Inventories. October 6, 19 — 

Merchandise (Resource) : 

Per schedule on file $24057.59 



Merchandise (Liability) : 






Due Enterprise Carting Co. for freight 






and cartage to date 




$339.45 


Horse and Wagon : 






Cost 


$525. 




Depreciation 


5.25 


$519.75 


Rent: 






Due for subrentals 


■*15. 




Unexpired rent 


225. 


$240. 


Insurance : 






Unexpired premiimi 




$195. 


Office fixtures : 






Cost 


$1920. 




Depreciation 


192. 


$1728. 



244 



BOOKKEEPING 



Expense (Resource) : 










2 tons Coal 






*9. 




Stationery, etc. 






6.50 


$15.50 


Expense (Liability) : 










Unpaid gas bill 






*15.69 




Due proprietors on 


salary 




68.75 




Due traveling salesmen on 


salary 


31.50 




Due Bell Telephone 


5 Co. 




9.50 


$125.44 



10. Make a statement of losses and gains and have it approved. 
The following is suggestive of the form for the statement of losses 
and gains in this set. 



Statement of Losses and Gains, October 6, 19 — 







Mdse. bought of A. J. Weaver & Co, 

Mdse., regular purchases to Oct. 6 

Freight and drayage paid to date 120. 

Freight and drayage due to date, per inv. 390. 

Mdse. sales to date 

Mdse. on hand, per inv. 

Gain on Mdse., carried down 

Gain on Mdse., brought down 
Expense, total per ledger 790. 
Expense, unpaid items, per inv. 340. 
Expense, total outlay 1130. 
Expense, less items on hand, per inv. 120. 


14500 
21.500 

510 
4860 


90 
10 


24170 
17200 


90 
10 




41371 




41371 






1010 

270 

10 

50 
17 

120 

15 
160 

3207 


50 
50 

10 


4860 


10 




Mdse. Disc, on purchases 120. 
Mdse. Disc, on sales 390. 






Interest allowed to us 10. 
Interest allowed by us 20.50 






Insurance, paid premium 340. 
Insurance, unexpired premium 290. 






Coll. and Exch., total outlay 

Rent, paid to date 420. 

Rent, unexpired 250 

Rent, due for subrentals 50 300. 






Depreciation 

a. Horse and Wagon, on account of use 

b. Office Fixtures, on account of use 
Net gain of the firm 






4860 


10 


4860 


10 



11. Make a statement of resources and liabilities and have it approved. 
The following is suggestive of the form for the statement of resources 
and liabilities in this set. 



SET VI. WHOLESALE GROCERY 



245 



Statement of Resources and Liabilities, October 6, 19- 



Cash iu bank 

Properties classified as follows : 

Good Will, estimated value 

Mdse., per inv. 

Mdse., unpaid freight and cartage 

Horse and Wagon, cost 

Horse and Wagon, depreciation 

Office Fixtures, cost 

Office Fixtures, depreciation 
Expense, unpaid items, per iuv. 
Expense, per inv. 
Insurance, unexpired premium 
Rent, unexpired 
Rent, due from subrentals 
Accts. Receivable, per sales ledger 
Bills Receivable 

Accts. Payable, per purchase ledger 
Bills Payable 

Total resources 

Total liabilities 
Edw. S. Rose, Priv. Acct. 
H. A. Lester, Priv. Acct. 
Benj. F. Custer, Priv. Acct. 
Capital of the firm 
Net gain of the firm 



17200.10 
390. 



555. 
•15. 



1960. 
160. 



340. 
120. 



250. 
50. 



4357 

2000 

16810 

540 

1800 

290 

300 

7200 

200 



33497 
100 



33597 



10 



10 



10 



220 



9020 
750 



9990 

138 

261 

20000 

S207 



33597 



12. Make a statement proof and have it approved. 

13. Close the general ledger. Distribute the net gain or the net loss 
to the partners' private accounts. 

The firm account should not be closed. 

Bring down all inventories below the rulings under Oct. 8. 

14. Prove the bill book. 

15. Close all accounts in the sales ledger and the purchase ledger 
which balance. 

16. Hand in all books for examination and approval. 

This set will now be discontinued to afford the student additional practice along 
somewhat different lines of work. 

Draw a check in favor of the instructor for the amount to the credit 
of your firm in The Union Bank, and hand it in. Also hand in everything 
in the Personal Cash envelope. 

Remember the monthly statement of your bank account. 



246 BOOKKEEPING 

EXERCISE 61 
A Writtex Review 

The following review exercise is suggested : 

The following is the trial balance of an msolvent business in which 
the proprietors have equal investments : 

John H. Reader, Prop. $1250 

H. J. Cuiiy, Prop. 1250 

Cash $880.20 

Merchandise 3350, 

Accounts Receivable 2404. 

Bills Receivable 2065.80 

Furniture and Fixtures 850. 

Expense 2062.90 

Interest 26.10 

Accounts Payable 7400 

Bills Payable 1739 

$11639. $11639 

The following is a summary of the resource and liability inventories ; 



Furniture and Fixtures, > 


on hand 


$875. 


Expense, items on hand 




167.25 


Unpaid telephone bill 




21.70 


Merchandise, on hand 




1500. 


Unpaid freight bill 




67.25 


Interest accrued on Bills 


Pay. 


5.60 


Interest accrued on Bills Rec. 


7.80 



a. Make the usual statements and the proof. 

b. What will the business pay on the dollar, that is, what per cent ? 

EXERCISE 62 

SET H. CARPETS 

Directions. Record the following transactions in the journal, the cash- 
book, the sales book, and the purchase book ; post to one ledger ; take a 
trial balance ; make the two statements, using the forms given in Set VI ; 
close the ledger ; take a trial balance after closing. 

The mvestments of the partners are equal, and the losses or the gains 
are to be shared equally. The firm name is to be Student & Fox. 

Use loose sheets of journal paper and ledger paper for recordmg the 
transactions. Do not use special columns in the cashbook or the journal. 

Note. This set is to be finished without assistance from the instructor. 



A WRITTEN REVIEW 247 

May 1. Student and Henry I. Fox begin the Carpet business with the 
following resources and liabilities : 

Cash on hand, $1000 

Cash on deposit in The Union Bank, $750 

A. K. Johnson's note, $240 

Interest accrued on the above note, $10 

The following owe them on account : 

Reader & Co., $350 

Ray S. Baker, $525 

0. H. Barker, $225 
A note in favor of John F. Carrier, $485.50 
Interest accrued on the above note, $14.50. 

2. Buy of Howard S. Crane, on account, 2% 10 da. : 

300 yd. Moquette at $1.25 250 yd. Brussels at $1.10 

400 yd. Ingrain at 58^ 

2. Sell Donald & Son, for cash : 

100 yd. Moquette at $1.50 50 yd. Ingrain at 80^ 

Receive their check for the amount of the bill. 

4. Give A. G. Curry a check for $35.50, for office books and supplies. 

5. Draw a sight draft on Reader & Co., ui your own favor, for $250, 
and leave it at the bank for collection. 

6. Receive of Ray S. Baker his note at 10 da., with interest, for $200. 

8. Sell Frank S. Brady on account : 

100 yd. Brussels at $1.35 100 yd. Ingrain at 80^ 

9. Buy of David S. Wells on account : 

500 yd. Matting at 47(^ 

10. Pay Howard S. Crane by check, for the invoice of May 2, less 2% 

11. Sell Wm. H. Garland on account, 1% 10 da.: 

150 yd. Matting at 60^ 100 yd. Ingrain at 78^ 

12. Your bank reports the collection of the draft left on May 5. 
Collection, J^^^. 

12. Buy an office safe of the Howard Safe Co. for $90. Give them 
your sight draft on Ray S. Baker for the amount of the bill. 

13. Receive of Reader & Co. their note at 30 da. for $100. 

15. Give David S. Wells your sight draft on Ray S. Baker for the 
invoice of May 9. 

15. Receive of Frank S. Brady a sight draft on Meeker & Co. for $100, 
and his check for $115, for the invoice of May 8, 



248 . BOOKKEEPING 

May 16. Receive of Ray S. Baker a New York exchange for his note 
and the interest, due to-day. 

17. Sell Ford & Co. on account, 1% 10 da. : 

100 yd. Moquette at $1.50 100 yd. Matting at 60<^ 

18. Give each partner a check, for personal use, |50. 

19. Receive of Wm. H. Garland his check for the invoice of May 11, 
less 1%. 

20. Receive of A. K. Johnson cash, for his note and the interest, due 
to-day. Face of the note, $240 ; interest, $10.75. 

23. Draw a sight draft on O. H. Barker, in your own favor, for $225, 
and leave it at the bank for collection. 

24. Buy of Howard S. Crane on account, 2% 10 da.: 

100 yd. Moquette at $1.25 100 yd. Brussels at $1.10 

25. Give John F. Carrier your check for your note and the interest, 
due to-day. Face of the note, $485.50 ; interest, $16.45. 

25. Sell Frank S. Brady on account : 

50 yd. Moquette at $1.50 50 yd. Brussels at $1.35 

100 yd. Matting at 60<^ 

26. Sell Wm. H. Garland on account, 1% 10 da.: 

50 yd. Moquette at $1.55 100 yd. Brussels at $1.35 

26. Receive of Ford & Co. their sight draft on Henry F. Grady for 
the invoice of May 17, less 1%. 

27. Sell Ford & Co. on account, 1% 10 da. : 

100 yd. Matting at 60^ 

29. Your bank reports the collection of the draft left on May 23. 
Collection, ^-^^0- 

30. Buy of Henry W. Elson on account : 

100 yd. Matting at 47^ 

31. Give Harry S. Carmen a check for his monthly salary, $30. 

Inventories, May 31, 19 — 
Merchandise : 

100 yd. Moquette at $1.25 150 yd. Ingrain at 58^ 

100 yd. Brussels at $1.10 150 yd. Matting at 48^ 

Expense : 

Office Books and Stationery, $30 
Office Safe at cost, less %10. 



PART III. ADVANCED WORK 



SET VII. DRY-GOODS BUSINESS 

The Object of this set is to illustrate, as concisely as possible, a system 
of bookkeeping which, with slight modifications, may be adapted to the 
general routine of a wholesale or a jobbing dry-goods house. No at- 
tempt is made to enter into an explanation of the minor details of 
bookkeeping, which are different in all large dry-goods houses. 

Some of the special features of this set are : 

1. Suggestions bearing upon general business correspondence. 

2. The introduction and the use of the Cash Suspense account, and the 
significance of Protest as applied to commercial paper. 

3. A more complete explanation and illustration of special columns. 

4. The use of the Power of Attorney. 

5. A personal account closed into the Loss and Gain account. 

6. A classification of the Merchandise account. 

7. An illustration of goods returned, both a purchase and a sale. 

The following books are used : the cashbook, the sales book, the in- 
voice book, the journal, the general ledger, the sales ledger, the purchase 
ledger, and the bill book. 

The cashbook used in this set is essentially the same as the one explained and 
illustrated in Set VI, but several new special columns have been added. 

The Bills Receivable column on the left side of the cashbook is for 
the cash received for notes and acceptances paid or discounted. Only 
the total of this column is posted. Such a column may be used when 
a large number of notes are received on account. 

The Bills Payable column on the right side of the cashbook is for the 
cash paid for our notes and acceptances. Only the total of this column 
is posted. Such a column may be used when our notes and accept- 
ances are given frequently on account. 

Owing to the introduction of the classified Merchandise account, the 
totals of the Merchandise Discount columns, in the cashbook, are closed 
under the names Merchandise Sales and Merchandise Purchases^ and 
posted to the ledger accounts bearing these names. 

Make a careful study of the cashbook illustrated on pages 250 and 251. 

249 



250 



BOOKKEEPING 



Cash Receipts, November, 19- 











ACCTS. RECEIVABLE 






DATE 


F 


ACCOUNT CREDITED 


EXPLANATION 




BILLS 


















DISC. 




RECEIVABLE 












DR. 


NET CASH 






Nov. 


19 




Balance 


In bank 














5000 






20 


21 


F. Cole 


In full, less 3% 


100 


90 


3262 


57 












24 


16 


J. H. Miner 


On account 






900 














26 


\/ 


Bills Rec. 


J. Miner's note 










900 










26 


6 


Interest 


On above 














50 






27 


17 


C. B. Gray 


Inv. 11/16, 2% 


20 




980 














28 


v/ 


Bills Rec. 


Daniel's note 










500 










28 


s/ 


Bills Rec. 


Osborn's note 










250 










29 


18 


Green & Co. 


On account 






1210 














29 


19 


D. M. Snow 


Inv. 11/14, 2% 


10 




490 














30 


\/ 


Bills Rec. 


M. D. Cobb's note 










600 










30 


4 


Mdse. Sales, Dr. 


Total discount on sales 


130 


m 
















30 
30 


8 

8 


To Accts. Rec. 
Accts. Rec. 


Receipts 


130 


JO 










6842 










6842 


57 


57 




30 


6 


Bills Rec. 


Total paid 






■ 




2250 




2250 










/ 










1 






14142 


~E- 





























Special Columns in Sales Book and Invoice Book. The sales book used 
in many wholesale and jobbing dry-goods houses is provided with special 
columns for the several departments of the business. These columns are 
indispensable when a special Merchandise account is used for each depart- 
ment. When these departmental accounts are kept, the invoice book 
should be provided with special columns for the several departments. 



Note. When accounts with the several departments of a business are kept, they are 
debited with their approximate share of the general expenses of the concern. This, in 
most cases, means an additional number of special columns in the cashbook. The inven- 
tories belonging to each department will then be recorded separately, and the several 
departmental accounts closed separately into a general Merchandise account ; or directly 
into the Loss and Gain account, if there are no goods kept in stock except those covered 
by the different departments. 



SET VII. DRY GOODS 



251 











Cash Payments 


,N 


ovem 


ber, 


19 


















F 


ACCOUNT 
DEBITED 


EXPLANATION 


ACCTS. 


PAYABLE 


EXPENSE 


COLL. 
AND 
EXCH. 


BILLS 
PAYABLE 


GENERAL 


DATE 


DISC. 
CR. 


NET CASH 

1 


Nov. 


18 
19 
20 
21 
22 
23 
23 
24 
24 
24 
25 
25 
23 
28 
29 
29 
30 
30 
30 
30 
30 
30 
30 


s/ 

31 

30 

5 

2 

v' 

\f 
6 
29 

6 

V 

32 
34 

y/ 
4 
2 
4 
8 


Expense Stamps 
Expeuse Coal bill 
Mason & Co. Inv. 11/16, 2% 
Ely & Co. Inv. 11/19, 2% 
Salary For week 
Trav. Exp. W. Conway 
Coll. and Ex. On checks 
Bills Pay. Favor S. Lake 
Bills Pay. Favor H. May 
Interest On above 
iMay & Co. Inv. 11/18, 4% 
Coll. and Ex. On above 
Interest Daniel's note 
Bills Pay. Favor D. Keys 
Expense Gas bill 
W.K.Gay Private use 
Low & Co. On account 
Henry & Co. On account 
Coll. and Ex. On checks 
Accts. Pay. Total disc, on 
To Mdse. Purchases Cr. 
Accts. Pay. Payments 
Expense Total 


40 
38 

60 

138 
138 




1960 
1862 

1440 

220 
200 




10 
9 

17 


50 
50 


4 
1 


92 
75 

20 


1200 
200 

500 




140 
200 

10 

14 

100 

5682 
37 


10 








5682 












37 








30 
30 

30 


7 
3 


Coll. and Ex. Total 
Bills Pay. Total paid 
Balance In Bank 















6 


87 







6 
1900 
6052 


87 








1900 










60 




14142 


57 























Incoming Business Forms for November 

The student is requested to read the instructions given on page 209, 
preceding the hst of business forms for September. The instructions 
there given apply to the work for Set VII. A tablet of business forms 
containing all the incoming papers is prepared for Set VII, if business 
practice is used. If the tablet is not used, prepare the following forms : 

Form 1. Power of attorney by which A. J. Morley & Co. confer upon 
you the right to sign and indorse their notes, checks, other 
negotiable paper, etc. 
Use legal cap paper. (See Form VI, Appendix F.) 



252 



BOOKKEEPING 



Price List for November and December 



American Black Dress Silk 

Amazon Cloth 

Barjeon Cashmere . . . 
Black English Camel's Hair 
Black Wool Lansdowne 
Black Wool Cr^pon . . . 

Bengaline Silk 

Bone Buttons 

Boys' Heavy Cotton Hose . 
Black Chantilly Lace . . 

Corticelli Silk 

Cotton Surah Lining . . 

Duchesse Lace 

Feather Ticking .... 
Fancy Wool Cheviot . . 
Fine English Serge . . . 
Fancy Plaids, all wool . . 
Fancy Boucle Stripe . . . 
Fancy Black Ribbon . . . 
Fancy Gingham .... 

Gilt Buttons 

Gunner's Duck 

Grosgrain Ribbon .... 

Jet Buttons ...... 

Ladies' Cashmere Hose . . 
Linen Torchon Lace . . . 
Ladies' Kid Gloves . . . 
Men's Kid Gloves .... 

Marquise Lace 

Men's Balbriggan Half Hose 
Percale Shirting .... 

Scotch Cheviot 

Striped Denim .... 
Simpson Mourning Print . 

Taffeta Silk 

Thompson Thread . . . 
Venetian Crape Cloth . . 

Velvet Ribbon 

Wash Silk 

Wamsutta Cotton . . . 
Whalebones 



QUANTITY 



yd. 



gro. 

doz. 

pc. 

doz. spools 

yd. 

pc. 

yd. 



pc. 

yd. 

gro. 

yd. 

pc. 
gro. 
doz. 
doz. pc. 
doz. 



pc. 
doz. 



yd. 



doz. spools 

yd. 

pc. 

yd. 

doz. 



^1.00 
.98 
1.12^ 
1.50 
.52 
1.50 
.85 
.11 
1.00 
.66| 
.87^ 
.50 
2.25 

.05^ 

1.12^ 

1.37^ 

.32 

.12^ 

2.75 

.061 
1.87^ 
.14 
1.12^ 
2.40 
2.75 
.86 
7.50 
7.00 
1.75 
5.50 
.07^ 
.37^ 
.08 
.05^ 
.87^ 
.43 
• .871 
2.121 
.31 
.31 
.95 



SELLING PRICE 



$1.25 
1.25 
1.37^ 
1.87^ 

.68 
2.00 
1.10 

.14 
1.25 

.90 
1.05 

.62 
3.00 

.08 
1.35 
1.55 

.41 

.15 
3.50 

.08 
2.25 

.17^ 
1.50 
3.00 
3.50 
1.10 
9.50 
9.00 
2.20 
0.87^ 

.09^ 

.50 

.09^ 

.07 
1.00 

.50 
1.00 
2.871 

.39 

.39 
1.27 



SET VII. DRY GOODS 



253 



POWER OF ATTORNEY DEFINED 

A power of attorney is a written instrument by which one person appoints another 
to act for him along certain specified lines. It is frequently drawn up under seal ; 
indeed, when the authority conferred is to execute any instrument that must be 
recorded, the person signing the paper must go before a notary public or a similar 
officer and acknowledge that he, of his own free act and will, executed the same. 

Form 2. Cash check for $4834.44, dated City, Nov. 19, drawn by A. J. 

Morley & Co. on Traders National Bank. 
Form 3. Note of Green & Gregory, dated Clyde, Nov. 19, drawn at 3 mo., 

in favor of your firm, A. J. Morley & Co., for $188.44, payable 

at Briggs National Bank, Clyde. 
Form 4. Invoice of Jordan, Marsh & Co., Boston, dated Nov. 19. Terms : 

10-day draft, $500 ; balance 60 da. net. Items as follows : 

10 pc. (521, 40, 43, 45, 42, 47|, 46, 48, 49i, 50) Fancy Gingham 
10 pc. (441, 45, 46, 53, 41^, 47, 52, 48, 511, 50) Fancy Boucle Stripe - 
10 pc. (52, 41, 50, 49, 50, 56, 45, 53, 47, 50) Fancy Plaids, all wool 
10 pc. (52, 47, 421, 45, 48, 491, 47, 56, 52, 58) Fine English Serge 
150 doz. Boys' Heavy Cotton Hose 
50 gro. Gilt Buttons 
75 pc. Duchesse Lace 

The figures in parenthesis above indicate the number of yards in each piece. 
Observe the following form for such invoices. 

Follow this arrangement for all the invoicing in this set. 41^ is equal to 41^, 
45^ is equal to 45|. Fractions having a denominator other than 2 or 4 are written 
out in full. In finding the total number of yards in any number of pieces, do not 



Mew York,. 



^ 



C-rp-r^ ^C^, 



.I9j=l 



>^^^^. 



Bough of SIEGEL, COOPER ^ CO. 

Terms : ^//n,r^^^ / '«(^ r /^^ 



-<i^'g^. -^^ "g^^-g^^-Z^^ ^^' <^/7^ 



JLl ^< ^7A 



^cr^_=z 






2^r <p 



ZJ.. 



-gZ^i^.. 



'^^r:f^yL/L-'/>-rp-^ ^^^ 



f<^f 



2=2. 



£a 



2^1 



':^^:^.''-^ ^^ 



y^ 



/7>/: 



nA 



j:^ 



254 BOOKKEEPING 

copy the various items on another sheet, but add them horizontally as they stand. 
Add the fractions first and reduce them to their simplest form ; then add the integers 
and write the sum on the bill in the manner shown in the illustration. 

Note. Your firm's name is A. J. Morley & Co. 

Form 5. Draft of Jordan, Marsh & Co., Boston, dated Nov. 19, drawn on 
your firm, in favor of themselves, at 10 days' sight, for $500. 

Form 6. Draft of Traders National Bank, Batavia, on Chemical National 
Bank, New York, dated Nov. 19, drawn in favor of F. M. 
Reed & Co., and transferred by them to your firm by full 
indorsement, for 1 3 26 2. 5 7, W. D. Fain, Cashier. 

Form 7. Invoice of R. W. White & Co., New York, dated Nov. 19. 
Terms: 3/15, net 30 da. Items as follows: 

10 pc. (45, 52, 41, 50, 56, 62, 61, 50, 52, 58) Am. B. D. Silk 
10 pc. (42, 45, 52, 58, 61, 64, 52, 49, 51, 50) Barj eon Cashmere 
10 pc. (45, 52, 61i, 64|, 62, 50, 50f, 54, 51, 57) B. E. Camel's Hair 
100 doz. spools Corticelli Silk 

5 pc. (52, 41, 40, 47, 56) Feather Ticking 
50 pc. Marquise Lace 

10 pc. (421, 42, 47, 62, 56, 50, 58, 52, 57^, 54) Striped Denim 
20 doz. Men's Balbriggan Half Hose 

Form 8. Draft of F. R. Stearns & Co., Boston, dated Nov. 20, drawn on 
your firm, in favor of themselves, at 4 days' sight, for |630. 

Form 9. Bill of F. M. Upton & Co., City, dated Nov. 21, for 6 T. coal 
at $5.25. Terms: cash. 

Bill is receipted by C. O. M. for F. M. Upton & Co. 

Form 10. Invoice of the Ellsworth Mills, Detroit, dated Nov. 19. Terms: 
3/10, 1/30, net 60 da. Items as follows : 

25 doz. Ladies' Cashmere Hose 

10 pc. (52|, 51, 46, 42, 57, 52i, 56, 58, 57^, 59) V. C. Cloth 

6 pc. (52, 41, 52, 48, 52, 51i) Wash Silk 

10 pc. (42, 41, 46, 50, 49, 48, 49, 52, 47, 45) Taffeta Silk 

Form 11. Check of Knowlton & Beach, Rome, dated Nov. 20, drawn on 
Traders National Bank, in favor of your firm, for $275. 

Form 12. Bill of Fisher Bros., Tonawanda, dated Nov. 20, for 1 mahogany 
roll-top office desk, fl25. Terms: cash. 

Form 13. Invoice of Freeman Glove Co., City, dated Nov. 21. Terms : 
2/20, net 30 da. Items as follows : 

75 doz. Men's Kid Gloves 75 doz. Ladies' Kid Gloves 



SET VIL DRY GOODS 255 

Form 14. Sight draft of C. D. Washburn, Bedford, drawn on Freeman 

Glove Co., City, Nov. 20, in favor of your firm, for |56.25. 
Form 15. Check of Gardiner & Sprong, Rush, dated Nov. 21, drawn on 

Traders National Bank, in favor of your firm, for $300. 
Form 16. Sight draft of Fred S. Goodwin, Savannah, dated Nov. 21, drawn 

on Geo. R. Tillison, City, in favor of your firm, for |250. 
Form 17. Invoice of Ellis Mfg. Coi, Springfield, dated Nov. 21. Terms : 

3/10, net 30 da. Items as follows : 

50 gro. Bone Buttons 100 gro. Gilt Buttons 

100 gro. Jet Buttons 

Form 18. Receipted bill of Citizens Carting Co., City, dated Nov. 23. 
Terms : cash. Items as follows : 

Nov. 19, Cartage, $4.75 ; Freight, |69.54 

20, Cartage, 1.00 ; Freight, 24.50 

21, Cartage, 3.50 ; Freight, 62.50 

22, Cartage, 3.75 

Form 19. Note of B. N. Acker, Byron, dated Nov. 21, drawn at 30 da., 

with interest at 6%, in favor of your firm, payable at Alliance 

Bank of Byron, for flOOO. 
Form 20. Draft of J. V. Richardson & Co., Earlville, dated Nov. 22, on 

H. A. McDowell & Co., City, in favor of your firm, drawn 

at 10 da. from date, for |150. 
Form 21. Check of John B. Howard & Co., City, dated Nov. 22, drawn 

on Traders National Bank, in favor of your firm, for 

1600.47. 
Form 22. Invoice of C. O. Bond & Co., Philadelphia, dated Nov. 22. 

Terms: 10-day draft for |250; balance in 30 da., less 2%. 

Items as follows : 

10 pc. (521-, 50, 52, 56, 42, 48, 53f , 54, 56, 50) Gunner's Duck 
10 pc. (47, 45^, 47^, 46, 54, 56, 62, 50, 54, 51) S. M. Print 

5 pc. (471, 41, 48, 46^, 49) Scotch Cheviot 
25 pc. Duchesse Lace 
10 pc. (49, 42, 52, 47, 41, 46, 40, 54, 62, 60) B. E. Camel's Hair 

Form 23. Draft of C. O. Bond & Co., Philadelphia, dated Nov. 22, drawn 
in their own favor at 10 da. from date, on your firm, for |250. 

Form 24. Check of C. D. Washburn, Bedford, dated Nov. 22, drawn on 
Traders National Bank, in favor of your firm, for |605.19. 

Form 25. Check of Knowlton & Beach, Rome, dated Nov. 23, drawn on 
Traders National Bank, in favor of your firm, for $1200. 



256 BOOKKEEPING 

Form 26. Sight draft of Houghton, Button & Co., Chicago, dated Nov. 22, 
drawn on your firm, in favor of themselves, for $750, and 
indorsed by them to Merchants Bank, Chicago. Transferred 
by Merchants Bank to The Union Bank of your place, C. E. 
Rogers, Cashier. 

Form 27. Draft of Traders National Bank, Tonawanda, on Chemical 
National Bank, New York, dated Nov. 22, drawn in favor 
of D. E. Mosher, and transferred by him to your firm by full 
indorsement, for $392, S. H. Lyman, Cashier. 

Form 28. Notice of protest of note of J. N. Smith & Co., left at The Union 
Bank for collection. The notice is dated Nov. 25, W. E. King, 
Notary Public. The note is dated Sept. 26. 

If business practice is used and the Incoming Business Forms are not used, the 
notice of protest may be prepared by the student; be guided by Form VIII, Appendix F. 

Note. A notice of protest is generally partly printed and partly written, but this is 
not necessary. 

A notice of protest must include the following items of information : 

A full description of the paper. 

A statement to the effect that payment has been demanded and refused. 

A statement to the effect that the holder depends on the indorser for settlement. 

Form 29. Invoice of Eureka Mills, Little Falls, dated Nov. 24. Terms : 
5-day draft for $150; balance in 30 da., less 1%. Items as 
follows : 

10 pc. (52, 45, 40, 41, 42, 40, 52, 50, 52, 47) Taffeta Silk 

10 pc. (52, 51, 60, 60, 61, 60, 62, 61, 58, 53) Wamsutta Cotton 

50 doz. spools Thompson Thread 

25 doz. Whalebones 

12 pc. (42, 401, 45, 40, 45, 47f , 41i, 44, 47, 49, 50, 50) Wash Silk 

15 pc. (41, 52, 48, 62, 61, 47, 58, 57, 56, 52, 41, 42, 43|, 41, 42) 

Striped Denim 
10 pc. (48, 42, 53, 47, 49, 41, 48, 52, 52, 48) B. W. Crepon 
5 pc. (42, 48, 52, 58, 50) Fancy Wool Cheviot 

Form 30. Draft of Eureka Mills, Little Falls, dated Nov. 24, drawn on 

your firm, in favor of themselves, at 5 da. from date, for 

*150. 
Form 31. Note of Eaton & Co., Williamson, dated Nov. 26, drawn at 30 

da., in favor of your firm, with interest at 6%, payable at 

The Union Bank, for $750. 
Form 32. Check of J. N. Badger, City, dated Nov. 27, drawn on Traders 

National Bank in favor of your firm, for $313.35. 



SET VII. DRY GOODS 257 

Form 33. Sight draft of C. D. Washburn, Bedford, dated Nov. 27, drawn 
on Howard, Fitzsimmons & Co., City, in favor of your firm, 
for $150. 

Form 34. Draft of Traders National Bank, Rush, on Chemical National 
Bank, New York, dated Nov. 27, drawn payable to Gardiner 
& Sprong, and transferred by them to your firm by full in- 
dorsement, for 1596.33, C. O. Moran, Cashier. 

Form 35. Check of L. O. Sweetland, Buffalo, dated Nov. 27, drawn on 
Traders National Bank, in favor of your firm, for 1533.70. 

Form 36. Bill of Citizens Carting Co., City, dated Nov. 29. Terms : cash. 
Items as follows : 

Nov. 24, Cartage, |2.25; Freight,. $39.42 

25, Cartage, 1.75 

26, Cartage, 1.75 ; Freight, 42.69 

27, Cartage, 2.00 ; Freight, 16.20 

28, Cartage, 1.50 

29, Cartage, .75 

The bill is receipted for Citizens Carting Co. 

Form 37. Invoice of Freeman Glove Co., City, dated Nov. 28. Terms 
2/10, net 30 da. Items as follows : 

25 doz. Ladies' Kid Gloves 25 doz. Men's Kid Gloves 

Form 38. Invoice of Geo. A Wright & Co., Brooklyn, dated Nov. 28. 
Terms: 3/10, net 60 da. Items as follows: 

20 pc. Velvet Ribbon 

20 pc. Marquise Lace 

20 pc. Black Chantilly Lace 

10 pc. (42, 48, 52, 58, 62, 38, 49, 51, 54, 46) Percale Shirting 

10 pc. (58, 42, 49, 51, 54, 46, 58, 42, 57, 43) F. W. Cheviot 

10 pc. (47, 53, 64, 36, 52, 48, 49, 51, 48, 52) C. S. Lining 

6 pc. (47, 52, 62, 38, 45, 55) Amazon Cloth 

5 pc. (49|, 40^, 60f , 50^, 49) Barjeon Cashmere 

Form 39. Invoice of Clinton Mills, Syracuse, dated Nov. 28. Terms : 
3/10, net 60 da. Items as follows : 

10 pc. (49|, 50J, 52|, 471, 42^, 47^, 62, 48, 61, 39) B. W. Lansdowne 

5 pc. (47|, 521, 48^, 51f , 50) Scotch Cheviot 
20 pc. Grosgrain Ribbon 



258 



BOOKKEEPING 



Memoranda of Transactions iTor November 
Wednesday, Nov. 19 

In this set, the student will not be a member of the firm as in the pre- 
vious sets, but he will act as bookkeeper and confidential clerk for the 
wholesale dry-goods house of A. J. Morley & Co., located at 624 North 
Ave., City. 

The members of the firm have decided to give him a power of at- 
torney, in order that he may sign and indorse notes, checks, and all 
other negotiable paper of the firm. 

Take the power of attorney. Form 1, fold it properly, and in the upper 
right-hand corner write: 



Power of Attorney 

A. J. Morley & Co. 

to 

Student 

Nov. 19, 19 — 



Note. If the tablet of rncoming Business Forms is not used in the business practice, 
the power of attorney may be prepared by the student as suggested in Form 1. 

Your firm has decided to withdraw the balance on deposit in Traders 
National Bank, City, with whom they have heretofore done their banking 
business, and deposit it in The Union Bank. 

Take the check. Form 2, for $4834.44, indorse it, make out a deposit 
ticket, place both in the pass book, and open an account at The Union 
Bank. 

The firm name must be written as follows on all indorsements, etc., 

in this set : 

A. J. Morley & Co., 

by Student, Atty. 

In opening an account for the firm by whom you are employed as 
above, you may take with you to the bank your power of attorney, 
showing the right conferred upon you. 

Enter the amount of the check in the check book ; also, as a balance 
in the cashbook. Keep the bank account as in the previous sets. 

The student should bear in mind that he is not opening a set of books, but 
that he is taking up the work where another left it. 



SET VII. DRY GOODS 



259 



INSTRUCTIONS WHEN ASSUMING CHARGE OF A SET OF BOOKS 

1. Prove the cash. 

a. Xi it proves, balance the cashbook and post the items that are not already in 
the ledgers. 

h. If it does not prove, determine the date on which it did prove, and trace the 
errors if you can. If unable to find the errors, report to your employers and proceed 
as instructed by them. 

2. Post all the books to date, and take a trial balance from the general ledger. 
If unable to get a trial balance, find the last trial balance and compare it with the 
ledger items of that date. If there are no discrepancies in that sheet, proceed to 
trace the posting to the general ledger since the date of the trial balance which is 
correct. Report errors and discrepancies to your employers and proceed as instructed 
by them. 

3. In like manner, test the correctness of the sales ledger and the purchase ledger. 
If there are any errors, try t© locate them. 

After inspecting the books of your firm you find that everything is correct. 

The following is the trial balance of the general ledger : 
Trial Balance, A. J. Morley & Co., November 19, 





15 


Accts. Rec. 


16119 


10 




" 




32 


Mdse. General 


16142 


96 








33 


Bills Rec. 


4102 


50 








19 


Interest 


15 


62 








C.B. 


Cash 


4834 


44 








14 


Office Fixtures 


1750 










42 


Real Estate 


10500 










40 


Insurance 


150 










47 
52 
52 

1 
1 
1 


Expense 

Accts. Pay. 

Bills Pay. 

A. J. Morley & Co., Investment account 

A. J. Morley, Private account 

D. 0. Mills, Private account 


50 


60 


10302 
4260 

38750 
162 
150 


22 
50 




44 


Cash Suspense 






40 


50 




53665 


22 


53665 


22 















Your firm has decided to open new books. Enter the items of the 
trial balance in the general ledger. For the date and explanation, write : 
Nov. 19, per General Ledger A, and use the page of the old ledger as 
shown on the trial balance. Allow one third of a page for each account. 

Write the name of the firm and the names of the two proprietors on 
pagel. 



260 



BOOKKEEPING 



Write these names on page 2 : Merchandise General^ Merchandise Pur- 
chases, Merchandise Sales. 

The two accounts last named will be nsed when posting the work at the close 
of November. 

Prepare an index for each ledger, allowing a full page for each. 
An abstract of the sales ledger shows the following balances : 







Abstract of Sales Ledger, November 19, 


19— 










8 


Baker, Shaw & Co., Clifton Springs 


1250 










5 


C. D. Washburn, Bedford 


1300 










7 


F. M. Reed & Co., Batavia 


3363 


47 








8 


B, N. Acker, Byron 


1307 


44 








9 


Chas. H. Dean & Co., Northampton 


490 


25 








10 


F. 0. Saunders, Sodus 


275 










12 


Knowlton & Beach, Rome 


2363 


47 








16 


J. V. Richardson & Co., Earlville 


612 


25 








19 


D. E. Mosher, Tonawanda 


894 


09 








20 


Eaton & Co., Williamson 


1540 


71 








21 


Gardiner & Sprong, Rush 


1316 


70 








24 


Fred S. Goodwin, Savannah 


1028 


84 








27 


Green & Gregory, Clyde 


376 


88 








15 


Balance per Accts. Bee. in G. L. 






16119 


10 




16119 


10 


16119 


10 















Enter the above accounts in the sales ledger, four to the page. For 
the date and explanation, write : Nov. 19, per Sales Ledger A, and give 
the page of the old sales ledger indicated in the above abstract. Write the 
addresses of the firms in the ledger. 

An abstract of the purchase ledger shows the following balances : 



Abstract of Purchase Ledger, November 19, 19- 





24 


Jordan, Marsh & Co., Boston 






1807 


33 




27 


R. W. White & Co. , New York 






1556 


14 




29 


F. R. Stearns & Co., Boston 






3030 




' 


34 


Houghton, Dutton & Co., Chicago 






2014 


m 




35 


Eureka Mills, Little Falls 






681 


I'o 




36 


Ellis Mfg. Co., Springfield 






912 


34 




43 


McDowell, Cook & Co., Trenton 






75 


49 




45 


Ogden Mills, Akron 

Balance per Accts. Pay. in G. L. 


10302 


22 


224 


51 




10302 


22 


10302 


22 















I 



SET VII. DRY GOODS 261 

Enter the foregoing accounts in the purchase ledger, four to the page. 
For the date and the explanation, write : Nov. 19, per Purchase Ledger A, 
and give the page of the old purchase ledger indicated in the foregoing 
abstract. Write the addresses of the firms in the ledger. 

The bill book shows that the following notes, left at The Union Bank 
for collection at the close of yesterday's business, are unpaid. 

1. Note of J. E. King, dated Akron, Ohio, Oct. 24, payable at Alliance 
Banl^, Akron, Ohio, drawn at 30 da., in favor of A. J. Morley & Co., 
for tl02.50. 

2. Note of J. N. Smith & Co., dated City, Sept. 26, payable at The 
Union Bank, City, drawn at 60 da., with interest at 6%, in favor of 
A. J. Morley & Co., for $500. 

3. Note of C. W. Gray & Co., dated Bath, Oct. 27, payable at First 
National Bank of Bath, drawn at 30 da., with interest at 6%, in favor 
of A. J. Morley & Co., for $1500. 

4. Note of Jaggard & Co., dated Trenton, Oct. 29, payable at Mer- 
chants Bank, Trenton, drawn at SO da., in favor of A. J. Morley & Co., 
for $700. 

5. Note of S. C. Williams, Warsaw, dated Nov. 3, payable at Com- 
mercial Bank, Warsaw, drawn at 30 da., in favor of A. J. Morley & Co., 
for 11300. 

Enter the above notes in the bill book. They were all left at The 
Union Bank for collection on Nov. 18. 

The following outstanding notes are also shown in the bill book : 

1. Note in favor of D. N. Snow & Co., dated Nov. 3, payable at The 
Union Bank, drawn at 30 da., with interest at 6%, by A. J. Morley & Co., 
for $3000. 

2. Note in favor of Jones Mfg. Co., dated Oct. 31, payable at The 
Union Bank, drawn at 30 da., by A. J. Morley & Co., for |1260. 

Enter the above bills payable in the bill book. 

Note. It is assumed that the two bills payable are with The Union Bank for collec- 
tion. The student will therefore need to write both notes and hand them in. (See note, 
page 216.) 

Check carefully all the work in the new books. If everything is cor- 
rect, hand them in for examination. 

Thursday, Nov. 20 

The account of Green & Gregory, Clyde, cannot be collected in full, 
as the firm is financially involved, but they have effected a compromise 
with their creditors. 









262 BOOKKEEPING 

A Receive of them their note, at 3 mo. from Nov. 19, at the rate of 50(^ 
on the dollar, in full of account to date, $188.44, Form 3. 

Debit Bills Receivable and Loss and Gain, ai^d credit Green Sf Gregory. Post the 
entry and close the account of Green & Gregory. In the account, make two items of 
their credit as follows : Nov. 20, Bills Rec, $188.44 ; Nov. 20, Loss and Gain, $188.44. 
This is done so that the account on its face shows the loss resulting from the failure 
of the firm. 

The Citizens Carting Co. has delivered to you the goods ordered of 
Jordan, Marsh & Co., on Nov. 14, Form 4. 

Accept, payable at The Union Bank, their draft dated Nov. 19, at 
10 days' sight, for $500, Form 5. 

Drawji sight draft on Chas. H. Dean & Co., Northampton, in favor 
of your"^rm, for $300. 

Indorse it properly and leave it with the bank for collection. 

- — Receive of F. M. Reed & Co., Batavia, a New York draft, in full of 
account, less 3%, Form 6. 
---Draw a cash check for office use, $^50. 
Ask for $5 in change. 

Pay Geo. Ellis cash, for cleaning the store and tlie basement, $10. 
Make out a daily statement. Post. 
Submit all books to the instructor for approval. 

Friday, Nov. 21 

The Citizens Carting Co. has completed the delivery of the goods 
ordered of R. W. White & Co., on Nov. 15, Form 7. 

D. O. Mills and A. J. Morley each withdraw for private use cash, $50. 

Accept the draft of F. R. Stearns & Co., Boston, in favor of them- 
selves, dated Nov. 20. at 4 days' sight, payable at The Union Bank, for 
$630, Form 8. 

Pay F. M. Upton & Co.'s bill for coal, by check, $31.50, Form 9. 

Goods ordered of the Ellsworth Mills, Detroit, on Nov. 13, have been 
received to-day. Form 10. 

Receive of Knowlton & Beach, Rome, their check, to apply on account, 
for $275, Form 11. 

Receive of Fisher Bros., Tonawanda, a bill for 1 mahogany roll-top 
office desk, $125, Form 12. Pay the bill by a sight draft on D. E. Mosher, 
Tonawanda, as he has agreed to honor the draft on presentation. 

Enter in the journal. Debit Office Fixtures. 

Goods ordered of Freeman Glove Co., City, on Nov. 18, have been 
received, Form 13. 



SET VII. DRY GOODS 263 

Receive of C. D. Washburn, Bedford, a sight draft on Freeman Glove 
Co., City, in favor of your firm, for $56.25, Form 14. He also orders 
the following goods : 

5 pc. (42J, 40, 52, 53^, 49) Am. B. D. Silk 

3 pc. (47^, 48, 52^) Amazon Cloth 
25 doz. Boys' Heavy Cotton Hose 
15 gro. Bone Buttons 
15 doz. spools Corticelli Silk 
25 pc. Fancy Black Ribbon 

Fill the order. Terms : 2/10, 1/30, net 60 da. 

The box and goods when packed for shipment weigh 200 lb. Prepare the bill of 
lading in the regular way, but do not itemize the articles sent. The whole order 
may be described as follows : 

1 box Dry Goods 

Write a letter to Freeman Glove Co., inclosing C. D. Washburn's 
draft, to apply on account. 

Deposit the New York draft and the check on hand ; ^V % collection 
on the check. 

Make out a daily statement and have it approved. Post. 

Submit all books to the instructor for approval. 

Saturday, Nov. 22 

The following orders were received in this morning's mail. 

1. From F. O. Saunders, Sodus : 

5 doz. Ladies' Kid Gloves 2 pc. (50i, 42) Taffeta Silk 

15 doz. pc. L. Torchon Lace 5 doz. Men's Balbriggan Half Hose 

5 pc. (54|, 50, 47^, 48, 49) Striped Denim 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 175 lb. 

2. From Eaton & Co., Williamson : 

9 doz. Whalebones 5 doz. Men's Kid Gloves 

5 pc. Velvet Bibbon 5 pc. (42, 47, 52, 54, 49) P. Shirting 

4 pc. (52, 60, 49^, 50) Simpson Mourning Print 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 200 lb. 

3. From Gardiner & Sprong, Rush : 

5 pc. Duchesse Lace 4 pc. (47, 52, 45, 50) S. Cheviot 

5 doz. Men's Kid Gloves 3 pc. (49^, 47f , 49i) B. W. Crepon 

5 doz. spools Thompson Thread 3 pc. (51|, 52, 52|) V. C. Cloth 



264 BOOKKEEPING 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 200 lb. 

With the above order was a check, to apply on account, for |300, 
Form 15. 

-, Receive of Fred S. Goodwin, Savannah, a sight draft on Geo. R. Tilli- 
son. City, to apply on account, for |250, Form 16. 

Our firm is assured that the draft will be paid on presentation ; credit Goodwin 
for its face. Place the draft in the Business Cash envelope. 

Goods ordered of Ellis Manufacturing Co. on Nov. 17 have been de- 
livered by the Citizens Carting Co., Form 17. 

— Pay by check the bill of the Citizens Carting Co., for freight and cartage 
to date, $169.54, Form 18. 

Charge this to Merchandise Purchases account. 

Pay salaries for the week in cash, |135. 
Charge Salary. 

Write a letter to William J. Tenny, Albany, inclosing a check in 
payment of his November salary, |140. He is to start on Monday on a 
two weeks' vacation. 

Charge Traveling Expenses. (This is the salary of a traveling salesman.) 

Receive of B. N. Acker, Byron, his note, in favor of your firm, drawn 
at 30 da. from Nov. 21, with interest at 6%, payable at Alliance Bank 
of Byron, for flOOO, Form 19. 

Receive of J. V. Richardson & Co., Earlville, their draft, drawn at 
10 da. after date, on H. A. McDowell & Co., your city, in favor of your 
firm, to apply on account, for $150, Form 20. 

Take the above draft to your offices or to the instructor for acceptance. 

They also order the following goods : 

5 gro. Gilt Buttons 

5 pc. (45, 42, 54, 56, 55|) Fancy Gingham 

4 pc. (56, 621, 66|, 64) Cotton Surah Lining 

2 pc. (45|, 47) Black Wool Crepon 

5 pc. (451, 453^ u, 46, 45) Bengaline Silk 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 320 lb. 
_-^ John B. Howard & Co., City, order : 

5 pc. (471, 48, 52, 60, 57) Barjeon Cashmere 

3 pc. (42^, 44J, 46) Black English Camel's Hair 



SET VII. DRY GOODS 265 

They inclose their check in payment of the bill, less 2%, Form 21. 

Enter the foregoing in the sales book, deducting the 2% discount. Enter the 
check to the credit of John B. Howard & Co. in the cashbook. Place a small V in 
the folio columns of the sales book and the cashbook, opposite the firm name, to 
indicate that neither item should be posted. This illustrates how some business 
houses keep spot cash sales out of the sales ledger. 

,.^-— -D. O. Mills, who has been out of town several days, has just returned. 
In looking over the books he notices the Cash Suspense account of $40.50, 
and is reminded that on the day he left for Boston, Nov. 17, he sold 
Joseph L. Dillingham, City, for cash, 2 pc. (40, 41) Scotch cheviot ; 
the cash was put in the cash drawer, but no bill was rendered or 
memorandum made. 

' — Make the proper entries to adjust this blunder, proceeding as follows : 

.- — '1. Make an entry on the right side of the cashbook, debiting Cash Suspense, 

$40.50. (This sum has been carried as a cash-over item.) 

2. Enter in the sales book in the regular way. Check the amount V, so that it 
will not be posted. 

, 3. Credit Joseph L. Dillingham on the left side of the cashbook in the regular 
way. Check the amount V, so that it will not be posted. 

SUSPENSE ACCOUNT EXPLAINED 

^- The Suspense account, as it is sometimes used, contains the items of cash over or 
cash shortage. Sometimes when several persons handle the cash, money is taken in 
or paid out and no memorandum made ; and, again, sometimes a remittance is made 
in such a way as to fail to disclose the name of the person who made it. In such 
cases, proceed as follows : 

a. For cash over: debit Cash and credit Cash Suspense account. 

b. For cash shortage : debit Cash Suspense account and credit Cash. 

The Cash Suspense account may represent either a resource or a liability or a 
loss or a gain ; as, 

a. When items of suspense have been of long standing at the time of making a 
statement of the business, the balance is usually carried into loss or gain. 

b. When such items have not been of long standing, they are treated either as a 
resource or a liability. 

Give M. P. Keeler a check for the private account of D. O. Mills, 
$100. 

Give H. C. Benway a check for painting the store, $120. 

Charge Expense. 

Deposit the two checks and the sight draft on hand ; ^^ % collection 
on Gardiner & Sprong's check. 

Make out a daily statement and have it approved. Post. 

Submit all books to the instructor for approval. 



266 BOOKKEEPING 

Monday, Nov. 24 

— Discount at The Union Bank the note received of B. N. Acker on 
Nov. 22. 

HOW TO DISCOUNT AN INTEREST-BEARING NOTE 

1. Add the interest for the full time to the face of the note. 

2. Discount the amount of the note (the face plus the interest) for the time from 
the date of discount to the maturity of the note. 

3. Subtract the discount found from the amount of the note, and the difference is 
the sum for which you should receive credit. 

Credit Bills Receivable in the cashbook for the face of the note ; credit Interest for 
the total amount of the interest, and debit Interest for the discount. Make the proper 
record in the bill book. 

Goods ordered of C. O. Bond & Co., Philadelphia, on Nov. 17 have 
been received. Form 22. 

Accept, payable at The Union Bank, the draft which was inclosed 
with the above invoice, for |250, Form 23. The draft is dated Nov. 22 
and is payable in 10 da. 

A telegraphic order has been received from Evans, Hoyt & Co., Troy, 
ordering the following goods to be shipped by fast freight, subject to 
the order of the bank : 

6 pc. (45, 42, 45, 47f , 41i, 40) Bengaline Silk 

- 25 pc. Black Chantilly Lace 
5 doz. Whalebones 

5 pc. (47^, 45, 41, 45^, 47) Fancy Boucle Stripe 
5 pc. (47, 52, 60, 65, 67) Cotton Surah Lining 
5 pc. (42, 40, 41, 40, 54) Fine English Serge 

, . Ship to the order, of The Union Bank, less 2%. 



Remember to make out all the necessary papers, using an Order bill of lading. 
Indorse the draft, attach it to the bill of lading, and leave it at The Union Bank 
for collection. The box and goods weigh 350 lb. 

The following orders were received in this morning's mail. Fill them 
hi the regular way. Terms on the first: 2/10, 1/30, net 60 da.; on the 
second, 30-day note, with interest, in 10 da., less 1%. 
1. From F. M. Reed & Co., Batavia : 

10 pc. (47^, 51, 45, 48, 49, 51^, 46, 49, 53, 52) Gunner's Duck 
10 pc. Grosgrain Ribbon 
5 doz. Ladies' Cashmere Hose 
5 pc. Marquise Lace 

4 pc. (42^, 47^, 45, 50) Percale Shirting 
2 pc. (45, 46) Simpson Mourning Print 
The box and goods weigh 320 lb. 



SET VIL DRY GOODS 267 

2. From Berriman & Co., Syracuse : 

5 pc. Velvet Ribbon 3 pc. (52|, 50|, 42) Taffeta Silk 

2 pc. (42i, 45f ) Wash Silk 4 pc. (46^, 47^, 50, 52) S. Cheviot 
3 pc. (46^, 47, 41) Venetian Crape Cloth 

The box and goods weigh 230 lb. 

Pay the balance due Ogden Mills, Akron, by check, less 2%. 
Write a letter, inclosing the check. 

Receive of C. D.Washburn, Bedford, a check in payment of the invoice 
of Nov. 21, less 2%, Form 24. 

Write a letter to R. W. White & Co., New York, inclosing a check in 
payment of the invoice of Nov. 14, less 3%. Amount of the invoice, 
*950.50. 

Also, write a letter to Houghton, Dutton & Co., Chicago, inclosing a 
check in payment of the invoice of Nov. 15, less 2%. Amount of the 
mvoice, J|379.50. 

Deposit the check on hand. Collection, ^0%. 

Make out a daily statement and hand it in. Post. 

Submit all books to the instructor for approval. 

Tuesday, Nov. 25 

Your firm has received a letter from Williams, Howard & Co., Spring- 
field, asking for information with regard to the financial standing and 
general business equipment of Starr, Jordan & Co., of your city. You 
are asked to wire your reply. 

You confer with A. J. Morley, the senior member of your firm, and at 
his suggestion send a telegram, giving the following information : 

The firm of Starr, Jordan & Co. does not stand well financially in this section. 
They were losers to the extent of over $10,000 by the faikire of Smith, Jones & Co., 
Buffalo, who became insolvent about six months ago ; from this they have not 
fully recovered, and, in our opinion, will not recover for some time to come. The 
members of the firm are, however, men of sterling integrity, and their statements 
can be depended upon. 

Write the telegram and observe the following : 

1. Do not refer to the firm of Starr, Jordan & Co. by name, since^ 
your report is somewhat unfavorable. 

2. Limit your message to eighteen words. 

3. Do not prepay the charges. 

The following orders were received in this morning's mail. Fill each 
of them in the regular way. Terms : 2/10, 1/30, net 60 da. 



268 BOOKKEEPING 

1. From Gardiner & Sprong, Rush : 

5 pc. (40, 41, 42, 45, 46) Black Wool Lansdowne 
4 pc. (42, 41^, 45|, 46) Amazon Cloth 

3 pc. (47, 52, 64) Cotton Surah Lining 

4 pc. (52, 47, 48, 51) Fancy Wool Cheviot 

5 pc. (461, 47|, 52^, 56^, 50) Barjeon Cashmere 

5 gro. Gilt Buttons 
10 pc. Fancy Black Ribbon 
12 doz. spools Corticelli Silk 
10 doz. Boys' Heavy Cotton Hose 

2 doz. Men's Kid Gloves 

3 pc. (47, 421, 45) Simpson Mourning Print 

The above was shipped in two boxes weighing when packed 270 lb. and 190 lb. 
respectively. 

2. From L. O. Sweetland, Buffalo : 

3 pc. (42|, 41, 45) Simpson Mourning Print 
10 pc. Velvet Ribbon 
10 pc. (50, 42, 53, 47, 41, 40, 45, 48^, 47^, 50) Wash Silk 

3 pc. (42, 41, 45) Fancy Gingham 

3 pc. (47, 42, 45) Fine English Serge 

6 pc. (42^, 42^, 45, 48^, 45, 40) Fancy Plaids 
The box and goods weigh 390 lb. 

— Your bank informs you that the draft drawn on Chas. H. Dean & Co. 
on Nov. 20 has been collected. Collection, ^^q%. 

Receive of Knowlton & Beach, Rome, a check, to apply on account, 
for $1200, Form 25. 

Pay the sight draft of Houghton, Button & Co., Chicago, by check, 
*750, Form 26. 

Make the check in favor of The Union Bank, as the draft is presented by them. 

The draft in favor of F. R. Stearns & Co. is due to-day, payable at The 
Union Bank. 

Issue a check in payment, and receive the canceled acceptance. 

Receive of D. E. Mosher, Tonawanda, a New York draft, in settle- 
ment of the mvoice of Nov. 15, less 2%, for $392, Form 27. 
Find the face of the invoice. 

Deposit the check and the New York draft on hand. Collection on 
the check, iV%* 

Your bank notifies you that the note of J. E. King, left for collection, 
has been paid. No collection charged. 



SET VII. DRY GOODS 269 

Write a letter to Jordan, Marsh & Co., Boston, inclosing a check in 
payment of the invoice of Nov. 16, less 3%. Amount of the invoice, 
|;719.50. 

Make out a daily statement and hand it in. Post. 

Submit all books to the instructor for approval. 

Wednesday, Nov. 26 

^Receive from The Union Bank a notice of protest of J. N. Smith & 
Co.'s note, due yesterday. Form 28. Pay the protest fees in cash, |1. 

Write Protested in the Remarks column of the bill book, and debit Protest Fees 
in the cashbook for the notary's charge for protesting. 

^^^11 paper that goes to protest should be taken out of the Bills Receiv- 
able account, therefore make the following journal entry : Protested Paper 
to Bills Receivable. 

In the general ledger, open an account with Protested Paper. 

WHEN PROTEST IS NECESSARY 

1. When payment of a note or a draft has been formally demanded and refused, 
it should be protested. 

2. All foreign drafts must be protested, either for nonpayment or for non- 
acceptance, or the drawers or indorsers will be relieved of all responsibility. 

3. While it is quite unnecessary to protest a note on which there is no indorser, 
the majority of banks will protest all paper that is not paid at maturity, unless 
they are specifically instructed to the contrary. No protest is sometimes printed on 
a perforated slip at the end of a note or draft. These words may be left on or 
detached at the discretion of the indorser of the paper. 

VALUE OF PROTEST 

1. In a general way a protest aids in securing prompt attention on the part of 
the payer to all his maturing negotiable obligations payable at a bank. 
— 2. A protest in an indirect way aids the business man in the collection of over- 
due accounts. A debtor will give, in most cases, more serious attention to a sight 
draft drawn upon him, which may go to protest, than he will to the ordinary state- 
ment of an account or to a request for a remittance. 

METHOD OF PROTESTING 

1. The notary takes the bill and demands payment, which is refused. 

2. He writes a statement to the effect : 

a. That he has presented and demanded payment of the bill. 

h. That payment has been refused. 

c That he protests against the drawers and the indorsers. 

a. That due notice has been given to the indorsers, etc. 



270 BOOKKEEPING 

3. He affixes his name and seal to the paper. 

4. The protest is then attached to the note or the draft and is filed by the holder. 
(For Certificate of Protest, see Form VII, Appendix F.) 

W. E. Simpson, City, has telephoned for the following goods. He 
instructs you to draw on him at sight for the amount of the bill. 

5 pc. (421, 44|, 48, 51, 62) Feather Ticking 

2 pc. (42^, 45) Black Wool Crepon 

5 doz. Boys' Heavy Cotton Hose 

3 pc. (47, 45, 52) Bar j eon Cashmere 

4 pc. (45^, 46, 43, 41) Amazon Cloth 

3 pc. (48, 52, 40) Black English CamePs Hair 

Fill the order. Terms: sight draft, less 2%. 

Draw the draft and place it in the Business Cash envelope. Enter in the sales 
book and the cashbook. Check the items in each. 

J. N. Badger, City, has telephoned for the following goods : 

6 pc. (45, 42, 41, 40, 53, 49) Fancy Boucle Stripe 
25 pc. Fancy Black Ribbon 

5 doz. Ladies' Kid Gloves 
5 doz. Men's Kid Gloves 

2 pc. (42|, 41^) Taffeta Silk 
5 gro. Jet Buttons 

Fill the order. Terms : 2/10, 1/30, net 60 da. 

The Citizens Carting Co. has completed the delivery of the goods 
ordered of Eureka Mills on Nov. 18, Form 29. 

Accept, payable at The Union Bank, the draft hi favor of Eureka 
Mills, for $150, Form 30. 

Receive of Eaton & Co., Williamson, their note at 30 da., in favor of 
your firm, with interest at 6%, for $750, Form 31. 

Write a letter to Ogden Mills, Akron, ordering : 

10 pc. Am. Black Dress Silk 10 pc. Fancy Plaids 

10 pc. Black Wool Crepon 10 pc, Amazon Cloth 

100 doz. spools CorticelH Silk 10 pc. B. E. Camel's Hair 

10 pc. Velvet Ribbon 

Write a letter to Ellis Manufacturmg Co., inclosing a check in pay- 
ment of the invoice of Nov. 21, less 3%. 
Deposit the sight draft on hand. 
Make out a daily statement. Post. 

Submit all books to the instructor for approval. 



SET VII. DRY GOODS 271 

Thursday, Nov. 27 > 

Write a letter to McDowell, Cook & Co., Trenton, ordering : 

10 pc. Wamsutta Cotton 10 pc. Taffeta Silk 

10 pc. Wash Silk 7 pc. Striped Denim 

10 pc. Venetian Crape Cloth 7 pc. Scotch Cheviot 

Give A. J. Morley a check for private use, for ^50. 

Give S. M. Wells a check for the private account of D. O. Mills, for |50. 

Telegraph Houghton, Button & Co., Chicago, ordering : 

50 pc. Black Chantilly Lace 125 pc. Velvet Ribbon 

50 pc. Fancy Black Ribbon 60 pc. Duchesse Lace 

Pay the cost of the telegram in cash, |1.50. 

Fill the following orders, which were received in this morning's mail. 
Terms: 2/10, 1/30, net 60 da. 

1. From Jas. B. Stillman, Rochester: 

3 pc. (47, 42, 45) P. Shirting 2 pc. (52, 61) S. Denim 

4 doz. Men's B. Half Hose 2 gro. Jet Buttons 

3 doz. pc. L. Torchon Lace 3 pc. Grosgrain Ribbon 

The box and goods weigh 140 lb. 

2. From Earl & Sampson, Hopewell: 

2 pc. (42, 45) P. Shirting 2 pc. (42, 47) G. Duck 

2 pc. (45, 52) Fine English Serge 2 pc. (47, 45) S. Cheviot 

2 pc. (48, 411) Fancy Wool Cheviot 

The box and goods weigh 160 lb. 

Your bank notifies you that the note of C. W. Gray & Co., left for 
collection, has been paid. Face of the note, |1500. Interest to date, 
^7.50. Collection charged, |1.50. 

Receive a check of J. N. Badger in full for the bill of Nov. 26, less 
2%, Form 32. 

Deposit the check just received. 

Make out a daily statement. Post. 

Submit all books to the instructor for approval. 

Friday, Nov. 28 

Receive of C. D. Washburn, Bedford, a sight draft on Howard, Fitz- 
simmons & Co., City, to apply on account, for $150, Form 33. 

It has been agreed that the draft will be paid on presentation. Place it in your 
Business Cash envelope and credit C. D. Washburn in the cashbook. 



272 BOOKKEEPIKG 

Receive of Gardiner & Sprong, Rush, a New York draft in payment 
of the invoice of Nov. 22, less 2%, Form 34. 

Discount at The Union Bank the note received of Eaton & Co. on 
Nov. 26 and receive credit for the proceeds. 

Telephone Freeman Glove Co., City, ordering : 

25 doz. Ladies' Kid Gloves 25 doz. Men's Kid Gloves 

Write a letter to Jordan, Marsh & Co., Boston, ordering : 

25 pc. Bar j eon Cashmere 25 pc. Fancy Wool Cheviot 

10 pc. Amazon Cloth 25 pc. Black Wool Crepon 

Remit Freeman Glove Co., City, a check in payment of the balanj.* 
due on the invoice of Nov. 21, less 2%. 

Compute the 2% on the face of the invoice, then subtract the payment of Nov. 21 ; 
issue a check for the balance. 

Fill the following orders. Terms: 2/10, 1/30, net 60 da. 

1. From Benj. Tracy & Co., City : 

15 doz. Men's Kid Gloves 
15 doz. Ladies' Kid Gloves 
6 pc. (42, 411, 45|, 42^, 44^, 40) Fine English Serge 

6 pc. (421, 43^, 45, 47i, 48, 49) Fancy Plaids 
3 pc. (42^, 40, 44) Fancy Gingham 

2. From F. M. Reed & Co., Batavia: 

7 pc. (42, 41, 40|, 45, 47i, 42, 47) Am. Black Dress Silk 
5 pc. (42^, 46, 42, 43, 40) Amazon Cloth 

5 pc. (42^, 40, 42, 43i, 45) Black Wool Lansdowne 
5 doz. Ladies' Kid Gloves 
10 doz. Whalebones 
5 pc. Duchesse Lace 

The box and goods weigh 390 lb. 

Deposit the sight draft on hand, also the New York draft. Collection 
on the sight draft, yo%. 

Make out a daily statement. Post. 
Submit all books to the instructor for approval. 

Saturday, Nov. 29 

Your bank informs you that the sight draft attached to a bill of lading 
of Nov. 24 has been collected. Collection, yV^- 

Receive a check from L. O. Sweetland, Buffalo, in payment of the 
invoice of Nov. 25, less 2%, Form 35. 



SET VII. DRY GOODS 273 

Your acceptance in favor of Eureka Mills is due to-day, payable at 
The Union Bank. 

Issue a check in payment. 

Pay the bill of Citizens Carting Co. by check, for freight and cartage 
to date, $108.31, Form 36. 

Charge this to Merchandise Purche^ses account. 

Draw a cash check for ofhce expenses, |150. 
Pay salaries for the week in cash, |135. 

Goods ordered of Freeman Glove Co. on Nov. 28 have been delivQred, 
Form 37. 

Fill the following orders. Terms: 2/10, 1/30, net 60 da. 

1. From F. O. Saunders, Sodus : 

6 pc. (42, 45, 47, 42, 47, 48^) S. Denim 10 gro. Gilt Buttons 

4 pc. (52, 47, 531, 48) Taffeta Silk 10 doz. Boys' H. C. Hose 

7 pc. (45|, 42, 45, 46, 47|, 40, 42) Fancy Gingham 

The box and goods weigh 350 lb. 

2. From B. N. Acker, Byron : 

25 doz. spools Corticelli Silk 

25 gro. Bone Buttons 
5 pc. (421, 43, 45, 44^, 40) Bengaline Silk 
5 pc. (401, 42^, 40, 41, 42) Cotton Surah Lining 
5 pc. (42|, 45, 46, 42, 47) Feather Ticking 

The box and goods weigh 320 lb. 

Goods ordered of Geo. A. Wright & Co., Brooklyn, on Nov. 17, have 
been delivered. Form 38 ; also the goods ordered of Clinton Mills, 
Syracuse, on Nov. 16, Form 39. 

Deposit the check on hand ; no collection charged. 
/ — Your bank informs you that J. N. Smith & Co. have paid their note 
which was protested on Nov. 26, the interest to date, $5.33, and the 
notary fees, $1. 

—-An the cashbook credit the following : Protested Paper, $500 ; Interest, 
$5.33 ; Protest Fees, $1. 

Have the amount entered in the pass book. Record $506.33 as a deposit in the 
check book. 

Make out a daily statement. Post. 

Submit all books to the instructor for approval. 

Before closing the books for November give careful attention to the classifica- 
tion of the Merchandise account as explained on page 274. 



274 BOOKKEEPING 

CLASSIFICATION^ OF THE MERCHANDISE ACCOUNT 

In small lines of business it is the general custom to enter all trans- 
actions with merchandise in one account, the Merchandise account ; but 
in a large business the subdivision of this account is important as a means 
of setting forth the facts regarding the different transactions with the 
merchandise bought, sold, or exchanged. 

In this set, three accounts are opened with merchandise, as follows: 
Merchandise General^ which, as an open account, shows the merchandise 
inventory ; Merchandise Purchases^ which, as an open account, shows on 
the debit side all goods bought, and the freight and drayage, and on the 
credit side all discounts allowed and all goods returned, if any ; Mer- 
chandise Sales, which, as an open account, shows on the credit side all 
goods sold, and on the debit side all discounts allowed and all goods 
returned, if any. 

The manner of posting to these accounts is explained in Closing the Work for 
November. 

The closing of these accounts, when the books are closed on Dec. 6, is illustrated 
on page 292. 

Closing the Work for November 

1. Balance the cashbook and post the totals to the general ledger. 

Note. The footing of the Merchandise Discount columns is closed under the names 
Merclmndise Sales Dr., and Merchandise Purchases Cr., and posted to those accounts in 
the general ledger. 

2. Rule and foot the sales book. The following is the closing entry: 
Accounts Receivable to Merchandise Sales. Post these items to the 
general ledger. 

3. Rule and foot the invoice book. The following is the closing 
entry : Merchandise Purchases to Accounts Payable. Post these items to 
the general ledger. 

4. Rule and foot the journal ; make the proper entry for the total of the 
Purchase Ledger column and Sales Ledger column. Post to the general 
ledger. 

5. Prove the bill book. 

6. Make an abstract of the sales ledger and have it approved. 

7. Make an abstract of the purchase ledger and have it approved. 

8. Take a trial balance of the general ledger and have it approved. 

9. Compare the monthly bank statement with the check book. 
10. Hand all books to the instructor for approval. 



REVIEW EXERCISES 



275 



EXERCISE 63 ) 



A Written Review 



1. INIake the statements and the proof from the following trial balance 



John Hughes, Prop. 




$12000. 


Harrison F. Lee, Prop. ^ 




6000. 


Samuel S. Farmer, Prop. 




6000. 


Cash, in safe 


$248.80 




Deposit, 2d National Bank 


2537.32 




Expense 


974.30 




Salaries 


846.98 




Real Estate 


7325. 




Chattels 


250. 




Office Fixtures 


725. 




Horse and Wagon 


410. 




Loss and Gain 




377.80 


H. & F. Ry. Stock 


2000. 




M. & D. Ry. Stock 


1200. 




Interest 


89.45 




Merchandise General 


8835.65 




Merchandise Purchases 


2125.50 




Merchandise Sales 




8495.40 


Bills Receivable 


2169.90 




Bills Payable 




1545.20 


Accounts Receivable 


6400. 




Accounts Payable 




1880.40 


John Hughes, Priv. 


155.20 




Harrison F. Lee, Priv. 




78.35 


Samuel S. Farmer, Priv. 


84.05 






$36377.15 


$36377.15 


Inventories : 


Resource 


Liability 


Merchandise 


$4978.50 


$37.60 


Expense 


125. 


9.60 


Salaries 




50. 


Real Estate 


7200. 




Chattels 


150. 




Office Fixtures 


710. 




Horse and Wagon 


400. 




Interest 


26.50 


13.50 


20 shares H. & F. Ry. Stock at 98^ 






12 shares M. & D. Ry. Stock at 100 







276 BOOKKEEPING 

2. Enter all the accounts in the trial balance on ledger paper, four 
accounts to the page, and close the ledger. In the Loss and Gain 
account, distribute the net gain according to the investment of each 
partner; carry the net gain to the private accounts. 

Incoming Business Forms for December 

Form 40. Invoice of Ogden Mills, Akron, dated Nov. 29. Terms: 2/10, 
net 30 da. Items as follows : 

10 pc. (57^, 52, 49, 48, 46, 53^, 51, 56, 50^, 51) Am. Black Dress Silk 
10 pc. (52, 49, 52, 47, 56^, 51, 54^, 53, 57^, 59) Amazon Cloth 
10 pc. (52, 50, 46^, 471, 48, 52, 51, 50f , 54, 51) B. E. Camel's Hair 
10 pc. (52, 48, 46|, 47, 49, 61, 58, 53, 56^, 54) B. W. Crepon 
100 doz. spools Corticelli Silk 
10 pc. (54^, 53, 57, 56, 50, 48, 47, 49, 52i , 54) Fancy Plaids 
10 pc. Velvet Bibbon 

Form 41. Check of B. N. Acker, Byron, dated Nov. 29, drawn on Traders 

National Bank, in favor of your firm, for $403.14. 
Form 42. Sight draft of Earl & Sampson, Hopewell, dated Nov. 29, 

drawn on Williams, Seamans & Co., City, in favor of your 

firm, for |29.45. 
Form 43. Draft of Traders National Bank, Rochester, on Chemical National 

Bank, New York, dated Nov. 29, drawn in favor of Jas. B. 

Stillman, and transferred by him to your firm by full indorse- 
ment, for 163.47, C. C. Canan, Cashier. 
Form 44. Draft of The Union Bank, City, on Chemical National Bank, 

New York, dated Dec. 1, drawn in favor of your firm, for 

$718.27, W. B. Frey, Cashier. 
Form 45. Check of H. A. McDowell & Co., City, dated Dec. 2, drawn on ■ 

Traders National Bank, in favor of your firm, for $150. 
Form 46. Bill of Myers, Teeter & Co. Savannah, dated Nov. 29. Terms; 

cash. Items as follows : 

5 M 28-lb. M. Envelopes at $1.25 1 M R. B. Envelopes at $2 

25 lb. ^ Billheads at 12^(^ 25 lb. Statement Blanks at 140 

10 lb. Blotting Paper at 80 5 rm. L. T. Paper at $1.75 

Form 47. Check of Gardiner & Sprong, Rush, dated Dec. 1, drawn oi 
Traders National Bank, in favor of your firm, for $1155.67^ 

Form 48. Invoice of Houghton, Dutton & Co, Chicago, dated Dec. 
Terms : 2/15, net 60 da. Items as follows : 

50 pc. Fancy Black Ribbon 60 pc. Duchesse Lace 

50 pc. Black Chantilly Lace 125 pc. Velvet Ribbon 



SET VII. DRY GOODS 277 

Form 49. Check of Benj. Tracy & Co., City, dated Dec. 3, drawn on 
Traders National Bank, in favor of your firm, for |781.21. 

Form 50. Invoice of McDowell, Cook & Co., Trenton, dated Dec. 2. 
Terms: 2/10, net 60 da. Items as follows: 

10 pc. (47^, 45, 50, 51, 52^, 56, 54, 51, 56, 50|) Wamsutta Cotton 
10 pc. (47, 46, 52, 40, 42, 41, 40, 42, 42i, 40) Wash Silk 
10 pc. (42i, 46, 52, 47, 55, 31, 52, 47, 51i, 50) V. C. Cloth 
10 pc. (42, 50, 47, 50, 51, 52, 46, 52, 41, 50) Taffeta Silk 

7 pc. (48, 52, 57, 54, 56, 51, 503) Striped Denim 

7 pc. (47, 52, 49^, 47, 52, 46, 42) Scotch Cheviot 

Form 51. Sight draft of Chas. H. Dean & Co., Northampton, dated Dec. 3, 

drawn on N. P. Pond, City, in favor of your firm, for $29.32. 
Form 52. Check of W. F. Pratt, Utica, dated Dec. 8, drawn on Traders 

National Bank, in favor of your firm, for $321.57. 
Form 53. Check of Knowlton & Beach, Rome, dated Dec. 8, drawn on 

Traders National Bank, in favor of your firm, for |250. 
Form 54. Check of J. V. Richardson & Co., Earlville, dated Dec. 8, drawn 

on Traders National Bank, in favor of your firm, for $850. 
Form 55. Note of Berriman & Co., Syracuse, dated Dec. 1, drawn at 30 da., 

with interest at 6%, in favor of your firm, for $421.94. 
Form 56. Invoice of Jordan, Marsh & Co., Boston, dated Dec. 4. Terms : 

8/10, net 60 da. Items as follows : 

25 pc. (42, 41, 46, 52, 41, 50, 52, 48, 40, 41, 40, 50, 51, 52, 46, 42, 41i, 
48, 52, 40, 42, 47^, 48, 49, 51) Barjeon Cashmere 

10 pc. (47 1 , 50, 52, 61, 62, 48, 53, 57, 49, 54) Amazon Cloth 

25 pc. (47^, 48, 52, 49, 51, 48, 52, 49, 50-1, 52, 56, 52, 47, 50, 50i, 49, 
52|, 51^, 521, 56, 52, 56, 49, 42, 41) Black Wool Crepon 

25 pc. (47^, 49, 51, 48^, 47, 50, 41, 46, 52, 47i, 46, 52i, 56, 40, 41, 43, 
46, 44, 481, 49, 52, 52, 47, 48, 50^) Fancy Wool Cheviot 

Form 57. Draft of Traders National Bank, Auburn, dated Dec. 4, drawn 
on Chemical National Bank, New York, in favor of Hender- 
son & Everett, and transferred by them to your firm by full 
indorsement, $805.53, C. E. Denison, Cashier. 

Form 58. Sight draft of Eaton & Co., Williamson, dated Dec. 4, drawn 
on F. M. Everett, City, in favor of your firm, for $24.17. 

Form 59. Check of F. O. Saunders, Sodus, dated Dec. 4, drawn on Traders 
National Bank, in favor of your firm, for $279.97. 

Form 60. Draft of Traders National Bank, Albany, dated Dec. 4, drawn 
on Chemical National Bank, New York, in favor of Harlan & 
Wilson, and transferred by them to your firm by full indorse- 
ment, $786.23, D. O. Morehouse, Cashier. 



278 BOOKKEEPING 

Form 61. Sight draft of F. R. Stearns & Co., Boston, dated Dec. 4, drawn 
on your firm, in favor of themselves, for |500 ; indorsed by 
F. R. Stearns & Co. to Commercial Bank, Boston, and by 
Commercial Bank to The Union Bank, City. 

Form 62. Invoice of R. W. White & Co., New York, dated Dec. 5. 
Terms: 3/15, net 60 da. Items as follows : 

10 pc. (47^, 45, 56, 52, 49, 51, 52, 47, 49, 50) Am. Black Dress Silk 
10 pc. (421, 43, 44, 411, 46, 47, 49, 52, 44, 43) Bengaline Silk 
10 pc. (421, 46, 44, 42i, 45, 46, 45, 45, 50, 50) B. E. Camel's Hair 
12 pc. (44, 41, 42, 39, 62, 47, 52, 41, 46, 54, 61, 52^) Feather Ticking 
12 pc. (421, 47, 43, 45, 52, 57^, 59, 56, 54i, 54^, 50, 48) S. Denim 

5 doz. Men's Balbriggan Half Hose 
10 pc. Marquise Lace 

Form 63. Draft of Traders National Bank, Lynn, dated Dec. 4, drawn 
on Chemical National Bank, New York, in favor of Ellis & 
Farmer, and transferred by them to your firm, for |683.57, 
F. O. Simpson, Cashier. 

Form 64. Bill of the Citizens Carting Co., City, dated Dec. 6. Terms : 
cash. Items as follows : 

Dec. 1, Cartage, |3.75 ; Freight, $47.50 

2, Cartage, 1.50 

3, Cartage, 2.50 

4, Cartage, 3.00 ; Freight, 27.56 

5, Cartage, 4.00 ; Freight, 32.05 

6, Cartage, 1.00 

Form 65. Check of D. E. Mosher, Tonawanda, dated Dec. 5, drawn on 
Traders National Bank, in favor of your firm, for $150. 

Form 66. Invoice of Macy, Cooper & Co., New York, dated Dec. 5. 
Terms : 3/10, net 30 da. Items as follows : 

100 gro. Bone Buttons 100 gro. Gilt Buttons 

100 gro. Jet Buttons 25 doz. Whalebones 

Form 67. Draft of Traders National Bank, Rush, on Chemical National 
Bank, New York, dated Dec. 4, payable to Gardiner & Sprong, 
and transferred by them to your firm by full indorsement, for 
$1006.53, C. O. Moran, Cashier. 

Form 68. Draft of Traders National Bank, Savannah, on Chemical National 
Bank, New York, dated Dec. 5, payable to Fred S. Goodwin, 
indorsed to your firm for $1110.89, D. D. Sprague, Cashier. 

Form 69. Check of Benj. Tracy & Co., City, dated Dec. 6, drawn on 
Traders National Bank, in favor of your firm, for $1244.38. 



SET VII. DRY GOODS 279 

Monday, Dec. 1 

Draft in favor of Jordan, Marsh & Co., made payable at The Union 
Bank, was due yesterday (Sunday). 
Issue a check in payment. 

The bank also notifies you that the note of Jaggard & Co. has been 
credited to your account, less 75(^ collection. 

A note in favor of Jones Manufacturing Co. was due yesterday, payable 
at The Union Bank. 

Issue a check in payment. 

The Citizens Carting Co. has delivered to you the goods ordered of 
Ogden Mills on Nov. 26, Form 40. 

Receive of B. N. Acker, Byron, a check for the invoice of Nov. 29, 
less 2%, Form 41. 

Wm. J. Tenhy has resumed his work in eastern New Yo\'k after a 
vacation of two weeks. He sends you the following orders : 

1. Harlan & Wilson, Albany : 

5 pc. (45^, 40, 47, 52, 67) American Black Dress Silk 

8 pc. (47, 52, 613, 49, 63, 49, 59, 61) Black Wool Lansdowne 
12 doz. Boys' Heavy Cotton Hose 

12 doz. Ladies' Cashmere Hose 

9 pc. Marquise Lace 

8 pc. (49, 52, 54, 52|, 57^, 56, 49, 61|) Percale Shirting 
12 doz. spools Thompson Thread 

9 doz. Whalebones 

3 pc. (47, 45, 42) Wash Silk 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 420 lb. 

2. W. F. Pratt, Utica: 

6 pc. (49, 51|, 54, 56, 61, 68) Gunner's Duck 
25 pc. Grosgrain Ribbon 

7 gro. Jet Buttons 
3 gro. Gilt Buttons 

8 pc. (52, 47, 48^, 45 J, 47|, 49, 47^, 49J) Scotch Cheviot 
3 pc. (47^, 49|, 50^) Simpson Mourning Print 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
The box and goods weigh 320 lb. 

Send Wm. J. Tenny, at Albany, a check for traveling expenses, $100. 

In your letter ask him to visit, as soon as possible, Hall, Balliet & Co., Springfield, 

from whom you received an inquiry this morning. Give some general instructions. 



280 BOOKKEEPING 



SOME THINGS THAT CONTRIBUTE TO A GOOD BUSINESS LETTER 

1. The use of good materials, especially stationery. 

2. Good mechanical form, such as sufficient margins and correct paragraphing. 

3. The use of good English, — short, concise sentences; correct spelling; right 
capitalization ; careful punctuation. 

4. Completeness in all statements. 

5. In perplexing business letters, the general tone is of the greatest importance. 
One should aim to express 

a. Sincerity 

b. Frankness 

c. Fairness 

6. Use a complimentary close consistent with the salutation. 

The business letter is the expression of the firm that sends it, and it should, as 
far as possible, create a feeling of good will and confidence. 

Receive of Earl & Sampson, Hopewell, a sight draft on Williams, 
Seaman & Co., City, in favor of your firm, to apply on account, for 
$29.45, Form 42. 

Treat the draft as cash and place it in the Business Cash envelope. 

Receive of James B. Stillman, Rochester, a New York draft in full for 
the invoice of Nov. 27, less 2%, Form 43. 
He orders the following goods : 

5 pc. (45, 47, 52, 51, 47|) American Black Dress Silk 

6 pc. (49, 51, 56, 52, 62i, 67) Amazon Cloth 
10 doz. spools Corticelli Silk 

2 pc. (471, 49) Fancy Plaids 

Fill the order. Terms : 2/10, 1/30, net 60 da. 
The box and goods weigh 225 lb. 

Remit C. O. Bond & Co., Philadelphia, a New York draft for the 
balance due on the invoice of Nov. 22, less 2%, Form 44. Buy the draft 
by check. The bank charges 500 for exchange. 

Discount at The Union Bank the note received of Green & Gregory, 
on Nov. 20, and receive credit for the proceeds. 

Return to Geo. A. Wright & Co., Brooklyn, the 20 pc. Black Chan- 
tilly Lace received in the invoice of Nov. 28. These goods are returned, 
owing to a misunderstanding in regard to the quality. 

Compute the charge at the price named in the invoice. 

Make the following journal entry : Geo. A. Wright & Co. (Purchase Ledger Debits) 
to Mdse. Purchases (General Ledger Credits), 



SET VIL DRY GOODS 281 

Deposit the New York draft, the sight draft, and the check on hand. 
Collection on the check, 50(f. 

Make out a daily statement. Post. 
Submit all books to the instructor for approval. 

Tuesday, Dec. 2 
Write a letter to R. W. White & Co., New York, ordering : 

10 pc. Am. B. D. Silk 12 pc. Striped Denim 

10 pc. Bengaline Silk 5 doz. Men's B. Half Hose 

12 pc. Feather Ticking 10 pc. Marquise Lace 

10 pc. Black English Camel's Hair 

Inclose your note at 30 da. for $650, to apply on account. 
The following orders, received this morning, are to be filled in the 
regular way. Terms : 2/10, 1/30, net 60 da. 

1. From Knowlton & Beach, Rome : 

10 pc. (54, 52, 47|, 48, 56, 62, 50, 52^, 57, 59) Bengaline Silk 
4 pc. (42J, 45, 46, 49) Feather Ticking 

4 doz. Boys' Heavy Cotton Hose 
9 doz. Whalebones 

3 pc. (47|, 49, 56) Striped Denim 

The box and goods weigh 320 lb. 

2. From Fred S. Goodwin, Savannah : 

6 pc. (47^, 49|, 47, 52, 60i, 64) Black English Camel's Hair 
12 doz. Men's Kid Gloves 
12 doz. Ladies' Kid Gloves 

5 pc. (47^, 49, 51, 43|, 58) American Black Dress Silk 

The box and goods weigh 200 lb. 

Receive of H. A. McDowell & Co., City, their check, in payment of 
the draft on them due to-day, $150, Form 45. 

Stationery manufactured for your firm by Myers, Teeter & Co., Savan- 
nah, has been received. Form 46. Draw at sight on Fred S. Goodwin, 
Savannah, in favor of Myers, Teeter & Co., for $24.43, and remit the 
draft to them in settlement, as Goodwin has agreed to honor the draft. 

Enter in the journal. Charge Expense. 

Draft in favor of C. O. Bond & Co., Philadelphia, is due to-day, payable 
at The Union Bank. 
Issue a check in payment. 

Remit R. W. White & Co., New York, a check in payment of the 
invoice of Nov. 19, less 3%. 



282 BOOKKEEPING 

Remit Jordan, Marsh & Co., Boston, a check, in payment of the 
invoice of Oct. 30, $587.83. 

Receive of Gardiner & Sprong, Rush, a check, for the invoice of 
Nov. 25, less 2%, Form 47. 

Deposit the two checks on hand and |50 in currency. Collection 
charged on Gardiner & Sprong's check, -^^^o- 

Make out a daily statement. Post. 

Submit all books to the instructor for approval. 

Wednesday, Dec. 3 

The Citizens Carting Co. has delivered to your firm the goods ordered 
of Houghton, Dutton & Co., on Nov. 27, Form 48. 
— ^Traver, Stillman & Co., Penfield, order: 

8 pc. (47^, 48, 49, 50, 52^, 58, 59, 60) Gunner's Duck 
10 pc. Marquise Lace 
15 pc. Velvet Ribbon 

7 pc. Grosgrain Ribbon 

5 pc. (52, 57, 48|, 51, 50) Wash Silk 

7 pc. (48^, 49, 51, 521, 57, 48, 49) AVamsutta Cotton 

3 pc. (48^, 49, 50) Percale Shirting 

These men are entire strangers to you and instruct you to ship by 
freight, subject to the order of the bank, at once, as they are in need 
of the goods. 

Fill the order as they suggest, less 2%. 

Leave the draft attached to the bill of lading with The Union Bank for collection. 

The box and goods weigh 390 lb. 

As investigations regarding this firm are satisfactory, write a letter, thanking 
them for the order and express your willingness to open an account with them on 
your regular terms : 2/10, 1/30, net 60 da. 

Inclose the invoice in this letter. 

Fill the following order of Benj. Tracy & Co., City. Terms: 2/10, 
1/30, net 60 da. 

5 pc. (471 52i, 62, 60, 61) Bengaline Silk 

7 pc. (47^, 41, 46, 42^, 47^, 45, 46) Black Wool Crepon 

4 pc. (47^, 51, 50, 52) Black Wool Lansdowne 

3 pc. (471 45, 41) Barjeon Cashmere 

4 doz. Whalebones 

5 doz. spools Thompson Thread 

They inclose with the above order a check, in settlement of the invoice 
of Nov. 28, less 2%, Form 49. 



SET VII. DRY GOODS 283 

Note in favor of D. N. Snow & Co. is due to-day, payable at The 
Union Bank. Face of note, |3000 ; interest accrued, |15. 
Issue a check in payment. 

Deposit the check on hand. 

Make out a daily statement. Post. 

Submit all books to the instructor for approval. 

Thursday, Dec. 4 

Draw from the bank for office expenses, by a cash check, $150. 
You draw one half month's salary in cash, |50. 
Charge Salary account in the cashbook. 

Pay Chas. Denman cash for cleaning the basement, $4.50. 
Pay for sundry repairs about the store, cash, $5.50. 
Charge Expense for the above items. 

Pay for letter press and stand, cash, $10. 

Charge Office Fixtures. 

D. A. Delano, Sodus, writes, asking you to ship him by express, C.O.D. : 

15 doz. Ladies' Kid Gloves 15 doz. Men's Kid Gloves 

5 doz. Ladies' Cashmere Hose 

Fill the order as he suggests, less 2%. 

The Citizens Carting Co. has delivered the goods ordered of McDowell, 
Cook & Co., on Nov. 27, Form 50. 

Receive of Chas. H. Dean & Co., Northampton, a sight draft on N. P. 
Pond, City, for $29.32, Form 51. 

Leave the draft with The Union Bank for collection. 

D. O. Mills draws cash for private use, $50. 
Place the currency in the Personal Cash envelope. 

B. E. Valentine, Rose, writes asking you to ship him by express, C.O.D. : 

.3 pc. (47^, 41, 451) Am. Black Dress Silk 
3 pc. (45^, 411, 40) Wash Silk 
15 doz. Boys' Heavy Cotton Hose 
5 doz. Ladies' Cashmere Hose 

Fill the order as he suggests, less 2%. 

Receive of W. F. Pratt, Utica, a check, in payment of the invoice of 
Dec. 1, less .2%, Form 52. 

Receive of Knowlton & Beach, Rome, a check, to apply on account, 
for $250, Form 53. 



284 BOOKKEEPING 

Receive of J. V. Richardson & Co., Earlville, a check, to apply on 
account, for $350, Form 54. They order the following : 

7 pc. (47|, 48, 52, 51|, 48, 53, 50^) Am. Black Dress Silk 

3 pc. (491, 51, 48f ) Wamsutta Cotton 

3 pc. (471, 49, 42) Black Wool Crepon 

6 pc. (42, 47, 50, 51, 60, 47^) Simpson Mourning Print 

5 doz. spools Thompson Thread 

3 doz. Whalebones 

3 pc. Marquise Lace 

3 pc. Velvet Ribbon 

2 pc. (47, 49) Striped Denim 

2 pc. (42^, 47) Bengaline Silk 

Fill the order. Terms : 2/10, 1/30, net 60 da. 

The goods are shipped in two boxes weighing, when packed, 200 lb. and 225 lb 
respectively. 

Your bank informs you that the sight draft on N. P. Pond, City, left 
for collection, has been paid. 
Credit Chas. H. Dean & Co. 

Deposit the checks on hand ; collection, $1.25. 
Make out a daily statement. Post. 
Submit all books to the instructor for approval. 

Friday, Dec 5 

Receive of Berriman & Co., Syracuse, their note, at 30 da., with interest 
at 6%, in full for the invoice of Nov. 24, less 1%, Form 55. The note 
is dated Dec. 1. 

Charge the discount to Merchandise Sales. 

An inquiry has been received from Nester & Worden, retail dry-goods 
merchants, Geneva, relative to a general line of dry goods. They refer 
you to sevv^ral well-known houses, state that they are rated by Dun's 
and Bradstreet's agencies, and ask you to quote them your best terms. 

An investigation of their financial standing by your firm proves the desirability 
of securing this firm as regular customers, and you write them a courteous letter, 
thanking them for their inquiry and soliciting a share of their patronage. Call brief 
attention to your general facilities for doing business, and try to make them feel 
that it would be to their advantage to enter into business relations with your firm. 

Have the letter criticized before handing it in. 

Note. Dun's and Bradstreet's commercial agencies are two large corporations of the. 
United States engaged in the business of collecting information with regard to the finan- 
cial standing, the ability, and the rating of persons engaged in business enterprises, and 
sending it to subscribers to their service. 



I 



SET VII. DRY GOODS 285 

These two agencies have become extensive factors in modern commercial transactions 
by furnishing information to retail jobbers, wholesale merchants, etc. The prudent 
business man before selling to a stranger on credit should inform himself first, through 
these commercial agencies, of the financial standing of the prospective customer. 



SUGGESTIONS BEARING UPON LETTERS SOLICITING TRADE 

A very fruitful source of new business is the letter soliciting trade ; and since no 
accomplishment is of more importance to the business man than that of securing 
trade, all these letters should be handled diplomatically. The following points should 
receive consideration in the writing of such a letter. 

1. Follow up inquiries promptly and tactfully. 

2. If you are not satisfied with the references given you, be careful how you say so. 

3. Do not hesitate to show your unwillingness to fill orders when references are 
unsatisfactory. 

4. Avoid all extravagant claims for goods and facilities for doing business. 

5. Use good materials and write an attractive letter. The letters sent out, in 
most cases, stamp pretty accurately the kind of a house they represent. 

6. Do not beg for trade. 

7. Be brief. In letters similar to the foregoing, especially, do not say too much. 
Business men are not likely even to read long circular letters. 

Goods ordered of Jordan, Marsh & Co., on Nov. 28, have been delivered 
by the Citizens Carting Co., Form 56. 

You ship Sumner Bros., Union Springs, as per their instructions in a 
letter received this morning, the following goods by freight, subject to 
Ae order of the bank. 

12 pc. Black Chantilly Lace 

4 pc. (421, 42, 45|, 47) Bengaline Silk 

7 pc. (421, 471, 51, 50, 52J, 53, 54) Cotton Surah Lining 

3 pc. (471, 41|, 49) Fancy Plaids 

3 gro. Gilt Buttons 
10 pc. (47^, 49, 41, 47, 45, 52, 61i, 59|, 57^, 51^) Feather Ticking 

2 gro. Bone Buttons 

2 doz. spools Corticelli Silk 

3 pc. (47|, 48, 45) Fine English Serge 

You allow them a 2% discount on the bill. 

Handle this order in the usual way. Write a letter, quoting your regular terms, 
and inclose the invoice. 

These goods are shipped in two boxes, weighing, when packed, 200 lb. and 250 lb. 
respectively. 

J. V. Richardson & Co., Earlville, return the following goods, from 
the invoice sent to them on Dec. 4, owing to a slight damage in shipment : 

3 pc. Marquise Lace 3 pc. Velvet Eibbon 



286 BOOKKEEPING 

Compute the credit at the prices named in the invoice. 

Make the following journal entry : Mdse. Sales (General Ledger Debits) to J. V. 
Richardson & Co. (Sales Ledger Credits). 

Henderson & Everett, Auburn, to whom you quoted prices and terms 
Nov. 17, have sent the following order: 

3 pc. (521, 533^ 50) American Black Dress Silk 

2 pc. (47, 43) Amazon Cloth 

2 pc. (471, 42) Black English Camel's Hair 

2 pc. (47 J, 45) Fancy Wool Cheviot 
5 doz. Men's Kid Gloves 

10 doz. pc. Linen Torchon Lace 
10 doz. spools Thompson Thread 

3 pc. (521, 57, 52) Venetian Crape Cloth 

They inclose a New York draft, in payment of the above bill, less 2%, 
Form 57. 

Check the entry in each book. 
The box and goods weigh 190 lb. 

The following orders, received in this morning's mail, are to be filled 
in the regular way. Terms: 2/10, 1/30, net 60 da. 

1. Chas. H. Dean & Co., Northampton : 

10 pc. Fancy Black Kibbon 
3 pc. (47|, 41, 49) Fancy Gingham # 

5 pc. Marquise Lace 

7 pc. (47^, 41, 49, 52, 51|, 57, 56) Scotch Cheviot 
3 pc. (47^, 41, 49) Simpson Mourning Print 
7 gro. Jet Buttons 
3 pc. Grosgrain Ribbon 
5 doz. spools Thompson Thread 
5 doz. spools Corticelli Silk 
3 pc. (47|, 49, 52) Striped Denim 
3 doz. Whalebones 

The box and goods weigh 250 lb. 

2. Eaton & Co., Williamson : 

7 pc. (47^, 41, 40, 43, 45, 47^, 48) Fancy Boucle Stripe 

3 doz. spools Corticelli Silk 

4 gro. Bone Buttons 

10 pc. (521, 47^, 52, 51, 53i, 50, 54, 56, 59, 60^) Fancy Gingham 
10 pc. (521, 471, 52, 51, 53J, 50, 49, 56, 58, 59) Cotton Surah Lining 

7 doz. Ladies' Cashmere Hose 

7 doz. Boys' Heavy Cotton Hose 



SET VII. DRY GOODS 287 

These goods are shipped in two boxes weighing, when packed, 220 lb. and 210 lb. 
respectively. 

Eaton & Co. inclose a sight draft on F. M. Everett, City, to apply on 
account, for |24.17, Form 58. 

Enter the draft in the cashbook, as Everett has agreed to pay it on presen- 
tation. 

Receive of F. O. Saunders, Sodus, a check, in payment of the invoice 
of Nov. 29, less 2%, Form 59. 

Remit Houghton, Button & Co., by check, in full for the invoice of 
Dec. 1, less 2%. 

Your firm wishes to engage the services of a competent and experi- 
enced stenographer, and Mr. Morley has asked you to prepare an 
advertisement to be inserted in the Daily Morning Transcript. 

Write the advertisement, stating the qualifications necessary for a candidate who 
applies for the position. 

Fay for the advertisement in cash, 50(^. 

Receive of Harlan & Wilson, Albany, a New York draft, in payment 
of the invoice of Dec. 1, less 2%* Form 60. In their letter they order: 

25 doz. Men's Kid Gloves 25 doz. Ladies' Kid Gloves 

Fill the order. Terms: 2/10, 1/30, net 60 da. 
Remit Ogden Mills a check for the invoice of Nov. 29, less 2%. 
Pay by check a sight draft of F. R. Stearns & Co., Boston, on your 
firm, in favor of themselves, for $500, Form 61. 

"Write the check in favor of your bankers, who presented the draft for collection. 

Deposit the two New York drafts, the check, and the sight draft on 
hand; collection on check, ^^0%. 
Make out a daily statement. Post. 

Submit all books to the instructor for approval. 

Saturday, Dec. 6 

The balance due on the account of Baker, Shaw & Co., Clifton Springs, 
is over 60 da. past due. At maturity of their bills a statement of account 
was sent them. No attention was paid to this, and on Nov. 1 Mr. Morley 
wrote them a mild dunning letter, calling attention to their overdue 
balance and urging a prompt settlement. Nov. 8 a letter was received 
from them, stating their inability to pay then, but making a definite 
promise to settle in full by Nov. 25. No word has been received from 



288 BOOKKEEPING 

them since. At Mr. Morley's suggestion you write a letter, asking for 
an immediate settlement of the account. These points are set forth in 
your letter : 

1. The firm has the ability to pay its debts, you think. 

2. You want to continue to do business with them. 

3. You must have a settlement at once. 

SUGGESTIONS BEARING UPON DUNNING LETTERS 

1. Promptness and accuracy in the matter of sending statements and other 
reminders of overdue accounts are of the greatest importance in securing prompt 
settlements. 

2. When no attention is paid to statements of account, dunning letters generally 
follow. How soon they should follow depends upon circumstances. 

3. The tone of a dunning letter should be governed by existing conditions. No 
dunning letter should 

a. Lack in courtesy. 

b. Contain accusations of any sort. 

c. Show that the temper of the writer is overwrought. 

, (L Intimate court proceedings unless that seems to be the last resort. 

4. Dunning letters should 
a. Aim to make the tone of the appeal consistent with the facts of the case. 

For instance, the first of a series of dunning letters should be entirely 
different in tone from the second or the third letter. 
&. Be brief and to the point 

c. As far as possible show that the writer has confidence in his debtor and 

expects a prompt payment. 

d. Make proper reference to the amount of the account. 

e. Be fair and, as far as. consistent with good business management, lenient. 

f. Avoid the imperative form of statement. 

Goods ordered of R. W. White & Co., New York, on Dec. 2 have 
been delivered by the Citizens Carting Co., Form 62. 

Ellis & Farmer, Lynn, write, inclosing a New York draft. Form 63, in 
settlement for the following goods, which they wish sent at once : 

7 pc. (57, 52, 51, 52, 50, 52|, 52) Fancy Gingham 

7 pc. (47, 49, 50, 42, 44, 53, 48) Fine English Serge 

8 pc. (47, 48, 47, 42, 46, 42i, 43|, 42) Fancy Plaids 
5 doz. spools Corticelli Silk 

Fill the order. Terms: cash, less 2%. 
The box and goods weigh 420 lb. 

Discount at The Union Bank the note received of Berriman & Co. on 
Dec. 5, and receive credit for the proceeds. 
Remember that the note bears interest. 



SET VII. DRY GOODS 289 

Your bank informs you that the sight draft attached to the bill of 
lading on Dec. 3 has been collected ; collection, J^-% of the draft. Also 
that the note of S. C. Williams, left for collection Nov. 18, has been 
paid, and that the amount, less |1 for collection, has been placed to 
your credit. 

Pay by check the bill of the Citizens Carting Co., $122.86, Form 64. 

Charge this to Merchandise Purchases account. 

D. E. Mosher, Tonawanda, orders : 

3 doz. Boys' Heavy Cotton Hose 

2 pc. (47, 50) Cotton Surah Lining 
5 pc. Marquise Lace 

3 pc. (47^, 45, 41) Venetian Crape Cloth 
5 pc. Velvet Ribbon 

3 pc. (42, 47, 45) Wamsutta Cotton 

3 doz. Whalebones 

2 doz. Ladies' Kid Gloves 

Fill the order. Terras: 2/10, 1/30, net 60 da. 
The box and goods weigh 140 lb. 

In the above letter was a check on Traders National Bank, to apply 
on account, for $150, Form 65. 

Goods ordered of Macy, Cooper & Co., New York, on Nov. 16, to be 
delivered not later than Dec. 10, have been received. Form QQ. 

Remit Jordan, Marsh & Co., Boston, a check, in payment of the invoice 
of Dec. 4, less 3%. 

Receive the following remittances on account : 

1. Of Gardiner & Sprong, a New York draft, in full of account, less 
1%, Form 67. 

2. Of Fred S. Goodwin, Savannah, a New York draft, in payment of 
the invoice of Dec. 2, less 2%, Form 68. 

3. Of Benj. Tracy & Co., City, a check, in payment of the invoice of 
Dec. 3, less 2%, Form 69. 

Draw a cash check for office expenses, |50. 
Pay salaries for the week in cash, |135. 

Deposit the two checks, the three New York drafts, and all the cur- 
rency on hand. No collection charged. 
Make out a daily statement. Post. 
Submit all books to the instructor for approval. 



290 BOOKKEEPING 

Closing the Work for December 

1. Make a journal entry to adjust the interest on the proprietors' 
accounts. (See explanation, page 242.) Take into consideration the 
following : 

a. Interest was last adjusted Nov. 15. 

h. Morley's share of the capital stock is $20,000 ; Mills's share, 
118,750 ; these sums draw interest from Nov. 15 to date. (Count the 
exact number of days.) 

c. The credit of Morley's private account draws interest from Nov. 15 
to date ; also, the credit of Mills's private account draws interest from 
Nov. 15 to date. 

d. The withdrawals on each personal account are charged with interest 
from the date of withdrawal to Dec. 6. 

e. According to the articles of agreement, the gains and the losses are 
to be shared equally. 

Outline the entry on paper for the above adjustment of interest, and have it 
approved by the instructor before you make it in your books. 

2. Post the above entry. Rule and foot the journal and make the 
proper entry for the totals. Post the entry to the general ledger. 

Note. Before closing the cashbook, the sales book, and the purchase book, refer to 
the instructions given for closing the work in November, page 274. 

3. Balance the cashbook and post the items in the summary. 

4. Rule and foot the sales book and make the proper entry for the 
total. Post the entry to the general ledger. 

5. Rule and foot the invoice book and make the proper entry for the 
total. Post the entry to the general ledger. 

6. Prove the bill book. 

7. Make an abstract of the sales ledger and have it approved. 

8. Make an abstract of the purchase ledger and have it approved. 

9. Make a trial balance from the general ledger and have it approved. 

To THE Student. If the trial balance and abstracts do not prove, look for tlie errors 
systematically. Never verify portions of the work at random and expect to locate the 
discrepancies. Be sure that errors actually exist before you begin to look for them. 
Revise the additions of the trial balance and abstracts before looking for the error in the 
ledger or other books. Find the exact amount of the discrepancy and see if the sum is 
not some footing which has been improperly forwarded or posted, or the posting of this 
footing may have been omitted. Errors of one figure are usually mistakes in addition. 
Verify the additions of the ledgers and the various books from which totals are posted. 
If dollars have been written as cents, or vice versa, dividing the difference by 9, 99, or 
999 respectively will indicate a figure which has been misplaced one, two, or three orders 
to the right or left. 



SET VII. DRY GOODS 291 

10. The following is a statement of everything inventoried at this time : 

Inventories, December 6, 19 — 



Merchandise : 

Per schedule on file 


- 


$22569.44 


Office fixtures : 
Cost 
Depreciation 


$1885. 
188.50 


$1696.50 


Expense (Resource) : 
Stationery, etc. 
Coal 


*18. 
9.50 


$27.50 


Expense (Liability) : 

Due for telephone service 




$12.50 


Real Estate (Resource) : 
Cost 




$10500.00 


Real Estate (Liability) : 

Unpaid taxes on property 




$125.00 



Insurance : 

Unearned premium 



$126.50 



11. Make a statement of losses and gains and have it approved. 
Use the following form to find the gain on Merchandise Sales : 



Mdse. Sales, net 

Inv. Nov. 19 

Net purchases 

Total 

Inv. Dec. 6 
Cost of sales 
Gain on sales 

Gain on sales brought down 



6000 

8000 

14000 

4500 



9500 
2500 



12000 



12000 



12000 



2500 



Note. The remainder of this statement is to be made in the same form as the one 
given on page 244. 

12. Make a statement of resources and liabilities and have it approved. 

The private accounts of the proprietors are included in this statement. If the 
debit of any private account is the larger, it shows a resource ; if the credit is the 
larger, a liability. 



292 



BOOKKEEPINGl 



Note. Make a careful study of the following accounts before closing the general 
ledger. 

The Net Purchases, $8000, are transferred to the Merchandise General account, and 
then the total purchases appear on the debit side of that account. Enter the inventory, 
$4500, record the Cost of Sales, $9500 ; transfer this last item to the Merchandise Sales 
account. The balance of this account now shows the Gain on Sales ; record this amount 
and then transfer it to the Loss and Gain account. 



Merchandise Gteneral 



19- 








1 


19— 










— 


Nov. 


19 


Inv. 




6000 




Dec. 


6 


Inv. 




4500 




Dec. 


6 


Net Pur. 
Inv. 


4 


8000 






6 


Cost of Sales 


9 


9500 






14000 




14000 




Dec. 


8 




4500 
















Merchandise Purchases 




19— 












19- 












Nov. 


29 


Purchases 


1 


4438 


10 


Nov. 


29 


Dis. on Pur. 


6 


81 


10 




29 


Fr't and Dray. 


6 


170 




Dec. 


3 


Goods ret. 


5 


15 




Dec. 


6 


Purchases 


3 


3438 






6 


Dis. on Pur. 


6 


160 






6 


Fr't and Dray. 


8 


210 






6 


Net. Pur. 


2 


8000 






8256 


10 


8256 


10 








1^ 


1 

^ERCHAND 


ISE Sa 


LES 










19- 












19- 












Nov. 


29 


Dis. on Sales 


6 


142 


10 


Nov. 


29 


Sales 


4 


6211 


25 


Dec. 


5 
6 
6 
6 


Goods ret. 
Dis. on Sales 
Cost of Sales 
Gain on Sales 


5 
6 
2 

20 


16 

126 

9500 

2500 


20 
10 


Dec. 


6 


Sales 


7 


6073 


15 




12284 


40 


12284 


40 










Loss 


AX 


D Gai: 


V 






















19- 

Dec. 


6 


Gain on Sales 


9- 


2500 





I 



13. Close the general ledger accounts. Carry each partner's share of 
the net gain or the net loss to his private account. These accounts 
should always be closed by Balance, The firm account contains but one 
item in this instance, therefore it should not be closed. 

14. Draw a check in favor of the instructor for the credit balance of 
your firm at The Union Bank. Receive your monthly bank statement. 

15. Hand in all books to the instructor for approval. 



DEPRECIATION 293 



GENERAL REVIEW QUESTIONS 

1. What new features were introduced in the cash book for this set? 2. Explain 
the advantage of the special columns used in the journal. 3. Under what circum- 
stances would it be advisable to open special columns for different departments of 
merchandise in the sales book? If these special columns were opened in the sales 
book, what necessary changes would be made in the invoice book? 4. What is a 
power of attorney ? When must it be drawn up under seal ? 5. Briefly outline what 
should be done by a bookkeeper on assuming charge of a set of books. 6. Give an 
example of a personal account, showing a loss. 7. Under what circumstances should 
a suspense account be opened ? 8. To which of the two general classes of accounts 
does the suspense account belong? May it belong to either class? 9. What is 
meant by protest as applied to negotiable paper? When is it necessary? 10. State 
briefly the process of making a protest. 11. What is the general value of a protest? 
12. What is a notice of protest? What items of information must it always give? 
Who serves such a notice ? 13. Briefly outline some of the things that contribute 
to a good business letter. 14. State some of the essentials of a good letter soliciting 
trade. 15. State some of the things that should never be incorporated in a dunning 
letter. 16. State some of the things that help to make a strong dunning letter. 
17. Explain how the personal accounts with partners are usually closed. 18. To 
which of the two general classes of accounts do each of the following belong: 
(a) the proprietors' private accounts ; (b) the investment account or accounts of a 
business ; (c) C.O.D. accounts ? 19. Give an example of a cash account showing an 
overdraft.^ 20. Name the two leading mercantile agencies of the United States. 
What is their principal business ? 

HOW TEMPORARY OVERDRAFTS ARE TREATED 

1. The amount of the overdraft should be indicated in red ink in the check book. 

2. If there is no cash in the safe, the amount of the overdraft should equal the 
excess of the cash credits over the cash debits in the cashbook. 

3. If there is cash in the safe, the difference between the overdraft and the amount 
in the safe should equal the balance shown in the cashbook. 

DEPRECIATION 

The term depreciation, in bookkeeping, indicates a certain loss on prop- 
erty due to wearing out, deterioration, or disintegration. This loss applies 
to all forms of personal property, such as buildings, machinery, furniture 
and fixtures, such loss being due to the action of the elements, to wearing 
out by use, and to other causes which tend to lessen values. 

When property is first bought or comes into the possession of the busi- 
ness its value as an asset is the cost price, but as time goes on this property 

^ An overdraft is in reality a loan advanced by the bank. Not infrequently the de- 
positor leaves some security with the bank as a pledge in case an overdraft occurs. Over- 
drafts are not of vejy frequent occurrence in actual business, and when they do occur they 
are but temporary balances which are generally made good as soon as they are discovered. 



294 BOOKKEEPING 

as a machine or a building becomes through use or exposure in need of 
repair, and this is true even though repairs may not yet be imperative. 
This fact indicates clearly that the value has lessened. To illustrate : an 
automobile in regular use is constantly wearing out and its value de- 
creasing, but it must necessarily be some time before the wearing out 
reaches such a stage that repairs are needed, or that some parts must be 
replaced. This decrease in the value of the machine is depreciation. 

An ever-present question is how to show this depreciation in a way to 
approximate the loss without introducing difficult methods of bookkeep- 
ing. The importance of setting forth these facts depends somewhat on 
the kind of business under consideration, — whether it is an individual 
proprietorship, or a partnership managed by the owners, or a corporation 
which must give extended information to many stockholders who have 
nothing to do with the direct management or control of the business, 
but to whom definite reports must be given. 

A building in which a factory is situated is constantly wearing out, 
even though it may be repaired as often as repairs are needed. This 
lessening of the value is a cost of conducting the business and ought to 
go in with other losses in the financial showing. One of the simplest 
ways of showing that loss would be every year to calculate how much 
depreciation had gone on and charge that impairment to Loss and Grain 
•and credit Property/. For example : the property is a factory building 
listed on the balance sheet at |1 0,000 ; at the end of a year there is a 
5% depreciation calculated; this 5%, |500, should be charged to Loss 
and Gain, with the explanation that it is the depreciation on the building, 
and the amount should be credited to the Building Account; at the begin- 
ning of the next financial period the building must appear on the balance 
sheet at a valuation of only $9500. If any additions or improvements 
had been made on the building, that would be a separate matter and 
should be treated separately, based upon the facts ; the amount involved 
would be charged to Building Account and credited to Cash. 

Many accountants, especially when the business is large and the 
property complicated, have devised various schemes for equalizing depre- 
ciation. For instance: charges are made every month to loss and gain 
for 1/12 of the estimated annual amount for impairments, to be credited 
to the building or other property account. For example, referring to the 
previous illustration, the |500 might appear as a liability under some 
such name as reserve for depreciation, indicating, for the purpose of book- 
keeping, that the amount provided for depreciation on the liability side 
is to be subtracted from the original cost on the asset side, the difference 
being the true value. • 



A WRITTEN REVIEW 296 

The particular plan for showing the depreciation is secondary in im- 
portance to the fact that the property shown on the balance sheet should 
not be overvalued, under conditions that will tend to deceive those who 
examine it. It will be sufficient if the amount of the property to be 
written off is actually taken from the property account. 

What has been said about depreciation for buildings may be applied 
to all other property which tends to wear out, to waste, or to become less 
valuable as time passes on. Nothing, in short, should be carried at its 
full value when such value has been materially lessened. 



EXERCISE 64 
A Written Review 

The following review exercises are suggested : 

1. A, B, and C are partners, with investments of $6000, $4000, and 
$2000 respectively. After paying A a salary of |750, which was charged 
to expense, the net profit for the year is $2466.24. During the year A 
withdrew $750, in addition to his salary, B $600, and C $450. 

Required: the net gain of each, on the basis of the original invest- 
ment ; the present worth of each. 

2. D, E, and F invested equal amounts, and agreed to share all results 
equally. When the firm dissolved, the resources amounted to $9768.45, 
and the liabilities to $11,268.45. The net loss was $9000. 

Required ; the net insolvency of the business ; each partner's invest- 
ment. 

3. A and B engaged in business as partners, investing $8000 and 
$4000 respectively. They agreed to share all gains or losses in propor- 
tion to the investment. At dissolution the following were the resources 
and liabilities : 

Cash $2050 

Bills Rec. 4075 

Real Estate • 2050 

Merchandise 9655 

Accounts Rec. 2170 

Bills Pay. 2945 

Accounts Pay. 2788 

Of the Accounts Receivable 10% cannot be collected. 
If the partnership lasted 1 yr., and A drew out $500, and B drew out 
$300, what is the interest of each partner at closing ? 



296 BOOKKEEPING 

4. X, Y, and Z made equal investments in a total capital of $9000. 
During the year, on the same date, each partner added |1000 to his 
investment. 

At the end of one year the resources and liabilities were as follows : 



Cash 


$2864.75 


Keal Estate 


3850. 


Accounts Pay. 


1534.50 


Bills Rec. 


1675.25 


Bills Pay. 


1480. 


Office Fixtures 


264.20 


Horses and Wagons 


376.20 


Accounts Rec. 


2654.25 


Merchandise 


6329.85 



At the close of the year what was due each partner, gains or losses 
being shared equally ? 

In examples 2, 3, and 4, in addition to the necessary statements to find the 
results or the condition of the business, accounts may be opened on ledger paper 
with the proprietors and for the other items, and the present worth of each pro- 
prietor may be shown. 



OKGAKIZATIOK OF CORPORATIONS 297 

CORPORATIONS AND KINDRED ORGANIZATIONS 
COMBINATIONS OF CAPITAL 

Commercial interests of the present day require such large invest- 
ments as to make combinations of capital a necessity. Neither the 
individual nor the ordinary partnership can command sufficient funds 
to carry on the manufacturing or the transportation enterprises of to- 
day. The result is that corporations and kindred organizations have 
been formed generally throughout the country. 

The Partnership. A partnership ordinarily represents but a limited 
amount of capital, is formed by agreement, and may be dissolved by 
the action of any one partner. Each partner, except in the case of a 
limited partnership, is also liable for all of the debts of the business. 

The Joint-Stock Company. A joint-stock company is in reality a 
partnership, the affairs of the business being conducted by officers 
chosen by the stockholders. A larger number of investors may associate 
themselves under a joint-stock-company agreement than can work to- 
gether effectually as partners, and the action of one stockholder cannot 
dissolve a joint-stock company. In general, the liability of the stock- 
holders is the same as that of partners in a copartnership. 

Note. The statutes of most of the states provide for limited joint-stock companies, 
thereby limiting each stockholder's liability to the amount of stock owned. A limited 
joint-stock company may be known by the manner in which its name is written or printed ; 
for instance, "Walter Baker Company, Limited. 

The Corporation. A corporation is said to be an artificial person. It 
is composed of a number of persons endowed with the power to act as 
one individual. It is ordinarily organized under a general statute of 
any given state, but it may be organized under a special charter granted 
by the legislature. The liability of each stockholder is generally limited 
to the amount of stock owned. A corporation affords an opportunity for 
many persons of small means to unite in carrying on large enterprises 
under efficient management. 

ORGANIZATION OF CORPORATIONS 

Some details of the organization of corporations will be of interest to 
the student. The laws of the various states are very different regarding 
such organization. Persons who desire to form a corporation should 
employ an attorney to conduct every step, thus insuring a compliance 



298 BOOKKEEPING 

with the requirements of the statute of the state under whose laws the 
corporation is organized. 

How Formed. The following general statements apply to the forma- 
tion of corporations. 

1. The statute specifies the least number of persons who can form a 
corporation. These persons or a greater number unite in a written state- 
ment to the Secretary of State setting forth the following : 
a. The corporate name assumed. 
h. The purpose for which the corporation is formed. 

c. The place where it is to be established or located. 

d. The amount of capital stock. 

e. The par value and the number of shares of capital stock. 

Any other information which a particular statute may re- 
quire must be included. 
Fees. Certain fees are required by the state for issuing a charter, and 
for recording and filing certificates. 

Powers. The powers of a corporation may be stated as follows : 
a. To have succession. 
h. To sue or to be sued under its corporate name. 

c. To use a common seal. 

d. To purchase, to hold, and to convey lands and chattels. 

e. To elect officers and to appoint agents. 
/. To make by-laws. 

Board of Directors. After incorporation a meeting of the subscribers 
is held to determine the number of directors and to elect them. In the 
election of the board of directors each stockholder is entitled to a vote 
for each share of stock. 

Officers and Management. After the directors are chosen they elect 
from their number the necessary officers of the board. The general man- 
agement of a corporation is entirely in the hands of the board of directors. 

Capital Stock. The capital stock of a corporation is the amount of 
capital authorized by the charter, and represents the combined invested 
interests of all the stockholders. 

Classes of Stock. The varying conditions and limitations under which 
stock is issued to the stockholders of a corporation give rise in many 
states to several distinct classes of stock, among the more important of 
which are common stock, preferred stock, and treasury stock. 

Common Stock is stock upon which dividends are paid after certain 
dividends have been allowed on the preferred stock. 

Preferred Stock is stock upon which dividends are paid out of the accrued 
profits before any allowance is made for dividends on common stock. 



BOOKS PECULIAR TO CORPORATIONS 299 

Treasury Stock may be either common or preferred stock purchased 
from, or forfeited or donated by, the stockholders. 

Note. Sometimes the number of shares of stock of a corporation is increased without 
a corresponding increase of the property owned. This act is known as watering stock. 
Stock is sometimes watered in the reorganization of a railroad or the consolidation of 
different railway lines by fictitiously increasing the value of the franchise or property. 
To water stock Is deceptive, if not dishonest, and therefore is never justifiable. If the 
capital stock of a concern is not commensurate with the demands of the enterprise, it 
can be increased in a legitimate manner. 

The term watered stock is said to be derived from the action of some farmers in giving 
their live stock, just before weighing them for market, a plentiful supply of water as a 
means of increasing their weight. 

Certificates of Stock. As soon as a subscription is paid a certificate 
is issued to the subscriber. A stockholder may transfer his certificate by 
an instrument in writing signed by him, which is recorded in a book 
kept for that purpose. 

Liabilities of Stockholders. The liability of stockholders for the debts 
of a corporation differs widely under varying conditions. Ordinarily a 
stockholder is liable for a sum equal to the par value of the stock that 
stands in his name. 

Reports. In some states the corporation is required to file an annual 
report with the Secretary of State. 

Dividends. A dividend is a pro rata division of the profits, or some 
portion thereof, among the stockholders of a corporation. 

Franchise is a particular privilege granted by a government to a 
corporation. 

The right to use the streets of a city for laying railway tracks, for placing water 
mains underground, etc., are illustrations of franchises commonly granted. 

AUXILIARY BOOKS PECULIAR TO CORPORATIONS 

The principal books of record in a corporation do not differ materially 
from those used in any other business. Several special books, however, 
are necessary to facilitate the issue and transfer of stock. Among these 
are the following : 

Minute Book. This book contains a record of all the meetings of the 
stockholders or of the board of directors, and is usually kept by the 
secretary of the corporation. 

Installment Scrip Book. This is a book of blank receipts to be filled 
put and signed by the secretary and the treasurer as the installments are 
paid. Upon payment of the last installment the scrip is exchanged for 
certificates of stock. 



300 



BOOKKEEPING 



Stock Transfer Book. This book is used to record the transfer of 
stock and contains the permanent records, which are finally posted to 
the stock ledger. 

Form of Stock Transfer Book 



No. of 

Certificate 

canceled 



2- 



No. of New 

Certificate 

issued 



/ 2- 



Shares 
canceled 



/o 



New Shares 
issued 



/^ 



Ledger 
Folio 



7- 



^^^^^;^^ 



J 



TRANSFERRED BY 



TO 



For Value T^ece/uecfc^do hereby assign and 
transfer to ^ .^s j 

-"Z^-^'-Z^ Shares of the Capital Stock of 

*^Ae Union Whip Co., Springfield, t^ass. 
W'i7ne53^?»^2^ hand and seal, thia44^day 

of i4^^<?^-<£>^/ /f/Z^ 



Sealed and delivered 
presence of 



[L.S.] 



Subscription Book. This book contains the date of record, the names 
and the addresses of subscribers, the number of shares, and the amount 
subscribed for by each stockholder. 

Form of Subscription Book 

We, the undersigned, do hereby subscribe for and agree to take the number of shares of The 
Union Whip Company's stock set opposite our respective names 



DATE 


NAME OF STOCKHOLDER 


ADDRESS 


NO. OF 
SHARES 


AMOUNT 


Feb. 




J. W. Melton 
E. M. Williams 
Geo. Inman 
A. P. Zaner 
L. H. Messier 


Springfield, Mass. 

11 u 


50 
50 
50 
50 
50 


5000 
5000 
5000 
5000 
5000 






25000 





Note. If subscriptions are paid in installments, the subscription and installment 
records are usually combined in one book, an extra column being provided for the 
installment records. 

Dividend Book. This book contains information furnished by the state- 
ments of the business and shows the names of the stockholders, tlie 
number of sliares of stock, the par value of each share, the amount of 



OPENING ENTRIES FOR CORPORATIONS 



301 



dividend due each stockholder, and the date on which the dividend 
was paid. 

The stockholder sometimes receipts for dividends in the dividend book. When 
payment is by dividend check, this is, of course, unnecessary. 

Form of Dividend Book 

ist Semiannual Dividend, Aug. i, 1912, 3% 



STOCKHOLDER 


CERTIFI- 
CATE NO. 


NUMBER OF 
SHARES 


PAR VALUE 
PER SHARE 


AMOUNT OF 
DIVIDEND 


WHEN PAID 


SIGNATURE FOR 
PAYMENT 


J. W. Melton 


1 


50 


100 




150 




Aug. 


5 


J. W. Melton 


E. M. Williams 


2 


50 


100 




150 






5 


E. M. Williams 


Geo. Inman 


3 


50 


100 




150 






5 


Geo. Inman 


A. P. Zaner 


4 


50 


100 




1.50 






5 


A. P. Zaner 


L. H. Messier 


5 


50 


100 




150 






5 


L. H. Messier 



Stock Certificate Book. This book contains blank certificates, with 
stubs, to be filled out and signed, usually by the president and the secre- 
tary of the corporation. For convenience these certificates are numbered 
consecutively. The stockholder signs the stub as a receipt when the 
certificates are issued to him. 

A bill of sale in blank is always printed on the back of the certificate 
to facilitate the sale and transfer of stock. 

Stock Ledger. This book contains an account with capital stock, 
debited at par value, and with each stockholder, credited for his stock 
at par value. When stock is sold the seller is debited and the buyer 
credited, thus preserving the equality of the ledger. The stock ledger 
is similar in form to the ordinary ledger ; it is purely a private book, and 
is not referred to in making the business and financial statements. 



EXERCISE 65 
OPENING ENTRIES IN CORPORATION BOOKKEEPING ILLUSTRATED 

1. A corporation has been formed with a capital stock of |75,000. 
This sum has been fully paid in cash. Required, the necessary entry. 
The following entry should be made on the left side of the cashbook : 



Jan. 1 



Capital Stock 



Paid in capital 



75000 



Note. If it is desired to show the subscription account in the ledger, two entries 
should be made for the above transaction, as follows : 

1. Subscription, To Capital Stock, in the journal, for the investment decided upon. 

2. Cash, To Subscription, in the cashbook, for the capital stock paid in. 






HP" ^P 'IP' ^P '^P 'WfiUJ^ %W '*fP' **tSi> ^iir^ 





On 






N 



^ 
1 






^ 
^ 

^ 



O 





^ 






On 


4^ 








•v» 








1 








•&^ 








^^ 
















fe; 








1* 






"^ 


€ 






q 


^l; 














« 


i?^ 






9 










302 



OPENING ENTRIES .FOR CORPORATIONS 



303 



2. A corporation has been formed with a capital stock of $150,000. 
Of this sum |1 25,000 has been subscribed and paid ; the balance is to 
be held in reserve, unissued. Required, the necessary entries. 

The first entry should appear in the journal. 



Subscription 
Capital Stock 



Capital stock this day 
subscribed 



125000 



125000 



The second entry should appear on the left side of the cashbook. 



Jan. 1 



Subscription 



Subscribed capital 
stock paid 



125000 



3. A corporation has been formed with a capital stock of $100,000 : 
$75,000 has been subscribed ; of this sum $50,000 has been paid in 
cash ; the balance, $25,000, is to be paid in five equal monthly install- 
ments. The balance of the capital stock is to be held in reserve, unissued. 
Required, the necessary entries. 

The first entry should appear in the journal. 



Subscription 
Capital Stock 



Capital stock this day 
subscribed 



75000 



75000 



The second entry should appear on the left side of the cashbook. 



Jan. 2 



Subscription 



First payment on sub- 
scribed stock 



50000 



4. One month after the organization of the corporation the first pay- 
ment on installments was made. Required, the necessary entry. The 
entry should be made on the left side of the cashbook as follows : 



Feb. 1 



Subscription Installment No. 1 



5000 



304 



BOOKKEEPING 



Note. If it is desired to show the installment account in the ledger, Exercise 3 
would require the following entry : Cash and Installments debited, to Subscription credited. 
Should Exercise 3 be entered in this manner, the necessary entry for Exercise 4 would be 
Installments debited, and Cash credited. 

The first form of entry is preferable. 



5. J. W. Ball is the owner of a wagon 


manufactory located at 492 


Causeway St. A statement just made exhibits the 


resources and liabilities 


as follows : 






Resources 






Real Estate 




$5000 


Machinery 




6000 


Baw Material 




5000 


Patents 




2000 


Finished Products 




2000 


Accounts Beceivable 




3000 


Liabilities 






Accounts Payable 




$4000 


Mortgage Payable 




5000 



He decides to join with C. W. Henry, B. H. Bobbins, and W. E. Law 
in the formation of a corporation, under the name of The Ball Wagon 
Co. The capital stock is to be $68,000, divided mto 680 shares of $100 
each, of which each of the incorporators is to have 160 shares. J. W. 
Ball is to receive 160 shares of paid-up stock for his interest as above. 
The balance, 40 shares, is to be held in reserve, unissued. 

Note. The shares received by J. W. Ball represent not only the net resources of the 
business which he owned, but the Good Will also. 

The business is to be continued at the old location of J. W. Ball, and 
a new set of books opened. Required, the necessary entries. 

a. To close the old books of J. W. Ball, the followuig journal entyy 
should be made : 



J. W. Ball 
Mortgage Pay. 
Accts. Pay. 

Real Estate 

Machinery 

Raw Material 

Patents 

Accts. Rec. 

Finished Products 



For closing the accounts 
on the books of J. W. 
Ball 



14000 
5000 
4000 



5000 
6000 
5000 
2000 
3000 
2000 



OPENING ENTRIES FOR CORPORATIONS 



305 



h. The good will of the business of J. W. Ball is estimated at $2000. 
The journal entry to open the new books is as follows : 



Real Estate 
Machinery 
Raw material 
Patents 
Accts. Rec. 
Finished Products 
Good Will 
Subscription 

Mortgage Pay. 

Accts. Pay. 

Capital Stock 



Mill property 

Plant, tools, etc. 

On hand 

Held by corporation 

Due the corporation 

On hand 

Estimated value 

Stock subscribed for 

Mortgage on real estate 

Owed by the corporation 

Invested capital 



5000 
6000 
5000 
2000 
3000 
2000 
2000 
48000 



5000 

4000 

64000 



6. C. W. Henry, B. H. Robbins, and W. E. Law pay for their sub- 
scriptions in cash. Required, the necessary entry. The following entry 
should appear on the left side of the cashbook. 



Jan. 6 



Subscription C. W. Henry, 160 shares, 16000 
B. H. Robbins, 160 shares, 16000 
W. E. Law, 160 shares 16000 



48000 



7. Sell 10 shares of the unsold capital stock referred to in Exercise 5 
at $100 a share to A. B. Miller on his note at 30 da. Required, the 
necessary entry. 

The following entry should be made in the journal. 



Bills Rec. 
Capital Stock 



10 shares sold A. B. 
Miller on his note 
at 30 da. 



1000 



1000 



8. I. N. Salsbury, F. O. Gray, and E. W. Masten are associated as 
partners in a knitting mill under the firm name of Salsbury, Gray & Co. 
Their investments are as follows : 



I. N. Salsbury 
F. 0. Gray 
E. W. Masten 



$7400 
7200 
4900 



They decide to reorganize and incorporate their business. A capital 
stock of $30,000, consisting of 300 shares at |100 per share, is decided 



306 



BOOKKEEPING 



upon. The partners are to receive paid-up stock for their respective 
interests and the Good Will, as follows: 

I. N. Salsbury 80 shares 

F. 0. Gray 80 shares 

E. W. Hasten 65 shares 

Of the remaining capital D. E. Mosher subscribes for 25 shares ; M. P. 
Keeler, 15 shares ; R. Cronk, 10 shares. The balance of the capital stock, 
25 shares, is to be held in reserve, unissued. A statement of the present 
resources and liabilities has been submitted by the old partners and is 
accepted by the corporation. This statement is as follows : 



Resources 




Accounts Receivable 


14000 


Raw Material 


3000 


Plant 


3000 


Real Estate 


6000 


Cash 


2700 


Finished Product 


2900 


Liabilities 




Accounts Payable 


$1600 


Bills Payable 


500 



The books of the old firm will be used by the corporation. Required, 
the necessary entry to change the partnership accounts so that they will 
serve the purposes of a corporation. 

The following entry should be made in the journal. 



I. N. Salsbury 
F. O. Gray 
E. W. Hasten 
Subscription 
Good Will 
Capital Stock 



To close account 
To close account 
To close account 
Subscribed 
Estimated value 
Subscribed 



7400 
7200 
4900 
5000 
3000 



27500 



It should be noticed that the amount charged to the G-ood Will account 
is the difference between the net resources of the private partnership and 
the total stock to be received by Salsbury, Gray, and Hasten. 

After this entry is posted, the books are in condition to proceed with 
the records of the cor23oration. 



OPENING ENTRIES FOR CORPORATIONS 307 

EXERCISE 66 
OPENING ENTRIES IN CORPORATION BOOKKEEPING 

Directions. After studying the foregoing illustrations, take a sheet of 
journal paper and make the proper records for the following transactions : 

1. A corporation has been formed with a capital stock of $85,000. This 
sum has been subscribed and paid in cash. Make the necessary entry. 

2. A corporation has been formed with a capital stock of $75,000 ; 
♦50,000 has been subscribed and paid; the balance, |25,000, is to be 
held in reserve, unissued. Make the necessary entries. 

3. A corporation has been formed for the manufacture of paper-box 
machinery with a capital stock of $150,000. The owner of the patents 
is to receive 400 shares of stock, at |100 per share, for his inventions. 
Of the stock remaining, 800 shares have been subscribed and paid in full. 
The remainder of the stock, 300 shares, is to be held in reserve, unissued. 
Make the necessary entries to open the books of the corporation. 

4. A joint-stock company has been formed for the purpose of manu- 
facturing paper boxes. The capital stock is to be $50,000, divided into 
1000 shares of $50 each, 200 shares of which are preferred stock, and 
the remaining 800 shares common stock. The preferred stock has been 
subscribed and paid. Of the common stock 60% has been subscribed at 
par. Of this latter sum 40% has been paid in cash, and the balance is 
to be settled for in five equal monthly installments. The balance of the 
capital stock is to be held in reserve, unissued. Make the necessary 
entries to open the books of the joint-stock company. 

5. A corporation has been formed with a capital stock of $40,000, 
divided into 400 shares at $100 per share. Of the capital stock 75% has 
been subscribed at par, and full payment made in cash ; the remainder is 
to be held in reserve, unissued. Make the necessary opening entries. 

6. C. W. Williams is the sole owner of a manufacturing plant. He 
has resources and liabilities as follows : 



Resources 




Cash 


$5000 


Plant 


6000 


Real Estate 


5000 


Raw Material 


5000 


Accounts Receivable 


2000 


Liabilities 




Accounts Payable 


$2000 


Mortgage Payable 


5000 



308 BOOKKEEPING 

He decides to join with E. B. Monroe, H. L. Hinnan, and W. E. Rollins 
in the formation of a corporation. The capital stock is to be $70,000, 
divided into 700 shares at $100 each, of which each of the incorporators 
is to have 170 shares. The balance, 20 shares, is to be held in reserve, 
unissued. - The business is to be continued at the^ old location of C. W. 
Williams and a new set of books opened. Make the necessary entries 
to close the books of C. W. Williams and to open those of the corporation. 

Note. The difference between the resources and liabilities of C. W. Williams and 
the total stock credited to him is charged to the Good Will account. 

7. Sell to A. B. Miller, on his note at 30 da., 5 shares of the unsold 
capital stock referred to in Exercise 6, at par. Make the necessary entry. 

8. W. E. Frye, C. W. Gray, and E. O. Burrill are associated as part- 
ners in the manufacture of shoes, under the firm name of Frye & Gray. 
Their investments are as follows : 

W. E. Frye $14800 

C. W. Gray 14400 

. E. 0. Burrill 9800 

They decide to reorganize and incorporate their business. A capital 
stock of $60,000, consisting of 600 shares at $100 per share, is decided 
upon. The partners are to receive paid-up stock for their respective 
interests and the Good Will, as follows : 

W. E. Frye 160 shares 

C. W. Gray 160 shares 

E. 0. Burrill 130 shares 

Of the remaining capital C. H. Dean subscribes 50 shares; Fred 
Everitt, 30 shares ; Charles Baker, 10 shares. The balance of the capital 
stock, 60 shares, is to be held in reserve, unissued. A statement of the 
present resources and liabilities has been submitted by the old partner 
and is accepted by the corporation. This statement is as follows : 



Resources 


' 


Bills Receivable 


$8000 


Operating Products 


6000 


Plant 


3000 


Real Estate 


15000 


Cash 


5400 


Finished Products 


6800 


Liabilities 




Mortgage Payable 


$4200 



THE VOUCHER SYSTEM OF BOOKKEEPING 309 

The books of the old firm will be used by the corporation. Make the 
necessary entry to change the pa,rtnership accounts so that they will 
serve the purposes of the corporation. 

9. A corporation is organized with a capital stock of ^00,000 to 
work a gold mine in Alaska. C. L. Bender, who holds a deed to the 
mine, transfers it to the company in payment for 1000 shares of paid-up 
stock at a par value of |100 per share. Ninety per cent of the remainder 
of the stock has been subscribed and fully paid. The balance is to be 
held in reserve, unissued. Make the necessary opening entries. 

10. Ten shares of the above stock has been sold for cash at |100 per 
share. Make the necessary entry. 

THE VOUCHER SYSTEM OF BOOKKEEPING 

Among the many modern devices for economically systematizing 
accounts and properly distributing the various items of expenditure is 
what is- known as the voucher system. This system was primarily 
planned for, and is particularly adapted to, large industrial and manufac- 
turing enterprises, such as railroad companies, street-car plants, etc.; but 
the general principles of the system are so susceptible of modifications that 
they have been found well adapted to some other lines of business. 

The system derives its name from a special form of combined abstract 
of invoice and receipt known as a voucher^ which is issued for purchases 
and other expenditures of the business. Where the system is found in 
its highest stage of development it is characterized by approved methods 
for filing paid and unpaid bills and recording firm and corporate disburse- 
ments. The method of filing vouchers, the classification and the distribu- 
tion of amounts paid, etc., vary greatly in different lines of business. 

In the bookkeeping of large railroad concerns and kindred organiza- 
tions, vouchers are usually issued for absolutely everything in the way 
of expenditures connected with the business, the fundamental idea being 
to have every recorded transaction, as far as possible and practicable, 
evidenced by a paper or voucher filed in the office. Some houses use 
vouchers only in making payments for certain classes of goods, usually 
such articles as are used in manufacturing processes, etc., the cost of 
which it is generally desirable to enter in "separate accounts in the books 
of record. 

Manner of issuing Vouchers. Vouchers are issued for both paid and 
unpaid bills. As soon as any bill has been received and audited a 
voucher, conveniently numbered, is issued for the transaction. The 
voucher is simply an abstract of the bill or the invoice with the necessary 



310 



BOOKKEEPING 



Form of Combined Voucher and Check 

Voucher 5^o. / d^ Boston, Mass., -^^ / <?J 9 — 

Issued by 

^he y^^ion WhhCompany 

_______^ 7^-t7-z>^:^>;^;^-t.^^^^^g^. (!^ 



INV. NO. 



/^<^-^ 



7 



DESCRIPTION OF PURCHASE 









/fZ 



7 



Account verifiedL b 




Auditor 



Apnp^seed for payment 




resident 



Tieceived of ^he Union Whip Company |/^Z- 



( y7^^^/7^^.-y7^^^^ /f^^^^^ - 






"Doll 



ars 



In full for the above account 






Boston, Mass., ^?^' / i P, 19— d^o,lA^ 
traders d^ational ^ank 



V/^^ 



In full for Voucher tKp, /^4^ 



/ 



-f^^J-r^ 



IDoll 



ars 




:^ 



-^2<. 



^resident 



data for filing, etc. A record of every voucher is made on the stub of 
the voucher book. This record gives a condensed history of what is con- 
tained on the voucher. For convenience, the stub is printed with the 
names of the various accounts to be charged in the issuing of vouchers. 

When any bill is paid, the voucher representing it is detached from 
the stub and presented to some officer of the firm for approval and 
signature. The voucher is then sent, with a check, to the creditor. He 



THE VOUCHER SYSTEM OF BOOKKEEPING 



311 






§ i 



CO 



o 
o 





V 



>t 



&0 

•a 



be 






3:^ S 2^ S § 



l^ ^ cS 






<A Ql> ^ 



m 









^ .— I « a> 53 
OT 5P > '1^ "S tJ 

c *S rf .S ^ •?; 



.- < 



a 



^ 



03 2 2 fH ni f 
g^P»4 H P4 C» M 



,i3 
&0 



312 BOOKKEEPmG 

signs the receipt printed at the bottom of the voucher and returns it. 
This voucher, when returned, is filed for reference. 

For time purchases a voucher is made out at the time the goods are 
received and the bill is audited. It is not detached from the stub of the 
voucher book until the time of payment. When the bill becomes due 
the voucher is detached from the voucher stub in the regular way and 
presented to the proper officer for approval and signature. It is then 
sent away the same as the voucher used on a cash bill. 

Model Voucher Book. The model voucher book given on page 311 is 
seK-explanatory. The form of voucher given shows that the United 
States Whip Company, of Boston, Mass., has purchased of Bradley, 
Morgan & Co., of New York, goods as per invoice No. 74, amounting 
to $1269.40, for which a cash payment was made on Feb. 6, less 2%. 
The receipt at the bottom of the voucher shows that Bradley, Morgan 
& Co. received the remittance Feb. 7. The stub gives a complete history 
of everything connected with the voucher. 

Voucher Check. Payment for the voucher illustrated on page 311 
was made by check. Many houses print the voucher and the voucher 
check as one blank (see page 310), to insure an early return of the voucher. 
When this is done it is necessary that the voucher be returned with the 
check, through the bank, before payment can be received. Banks, how- 
ever, object to the handling of this form of check, and what is known 
as the voucher check is largely taking the place of the old form of 
attached voucher and check. The illustration following is suggestive 
of the usual form of a voucher check. 



Boston, Mass.r ^^ 9.^=i ^o. / 2-f 

United States Whip Company 

'Pay to the order n f ^-%^^^^^^ . >^^^^7-^,..^2>^ 

—V^yf/-eyC^/-^^^y(^ ^ ..^ ..^ r : ^ — — T>ollars 

It\ full for Voucher U^o. /Zf 

Vo Vhe Urjion Sank \ ^ ^ ^ ^y, /; , ^^^ 

-^ii^^-i^U/:y?f:^/^-g!.^L<d^ir?^, Manager 



SET VIII. MANUFACTURING BUSINESS 

Selling Price List 



NO. 


LENGTH 


QUALITY 


PRICE PER OOZ. 


30 


6 ft. 


Java 


$1.10 


37 


6 ft. 


Java 


1.40 


60 


6 ft. 
6 ft. 
6 ft. 
6 ft. 
6ift. 
• 8 ft. 
6 ft. 


Extra Java 


1.60 


102 


Extra Java 


2.00 


200 


Extra Java 


2 25 


279 


Rawhide 


3 00 


287 


Rawhide 


7 50 


312 


Rawhide 


9 00 


428 


Whalebone 


4.75 


455 


6ift. 


Whalebone 


6.60 


530 


6ift. 


Whalebone 


30.00 


617 


7 ft. 


Whalebone 


35.00 


688 


7 ft. 


Knotted Bone 


160.00 




English Crops 


18 00 


874 


3ift. 


Rawhide Extra Team 


5.76 


1017 


5 ft. 
12 ft. 


Horsehide Lasli 


1 50 


1079 


8-plat Buck Lash 


18 00 









The total amount of each invoice purchased will be given, and there- 
fore no buying price list is required. 

The Object of this set is to illustrate corporation bookkeeping, as 
applied to manufacturing interests, including the organization of a 
corporation, and the opening, the conducting, and the closing of a set of 
corporation books. 

The Special Features of this set are the classification of the Merchandise 
and Expense accounts. 

As the student has been given extensive work in business practice in 
the preceding sets and is now familiar with the various forms used in 
business, this set presents the theory of manufacturing bookkeeping. 

The voucher system is sometimes used in general corporation book- 
keeping. This set does not attempt to illustrate this system ; however, it 
is explained and illustrated in the preceding pages. Both the instructor 
and the student should give careful attention to this explanatory 
statement. 

313 



314 



BOOKKEEPIKG 



Manufacturing 







ACCOUNT 




SALES LEDGER 










TO BE CREDITED 




MDSE. 
DISC. DR. 


NET 
CASH 


ACCTS. 
REC. 






Feb. 


1 
5 


s/ 


Capital Stock 
Mdse. 


Investment 
C.W.Allen, 30 sh. 3000 
A.B.Curtis, 25" 2500 
B. E. Frey, 35 " 3500 
\ doz. # 346 














9 


50 


9000 






8 




E. W. Blaser 


Inv. 2/3, less 2% 


5 


60 


274 


40 


280 














12 


V 


Mdse. 


^ doz. #510 














7 


20 








16 




F. E. Simpson 


lnv.2/^^,]ess2% 


3 


52 


172 


38 


175 


90 












24 




W. W. Merrill 


Inv.2/^g,less2% 


5 


50 


269 


50 


275 














25 




Bills Rec. 


W. W. Snow's note 


















500 






25 


V 


Mdse. 


|doz. #60G 














8 


50 
















14 


62 


716 


28 


7.30 


90 


.~25" 


"20" 








28 




Accts. Rec. 


Total for month 


















730 


90 




28 




Mdse. Discounts 


Contra, on purchases 


















39 


97 




28 




Mdse. 


Petty cash sales 


















25 


20 








^^ 




















10296 


07 










' 























Invoice 



fNV. 
NO. 


DATE 


F 


NAME AND ADDRESS 


TERMS 


AMOUNT 


1 
2 
3 
4 
5 
6 
7 
8 
9 


Feb. 


1 
4 
4 
2 
5 
9 
12 
18 
17 


17 
18 
14 
13 
17 
12 
14 
15 
16 


Merrill & Co. New York 
Fleming & Deming Boston, Mass. 
Gray & Dunkle New York 
Brown & Son Boston, Mass. 
Merrill & Co. New York 
C. W. Hall New York 
Coates & Son Buffalo, N.Y. 
Bender & Hill Philadelphia 
C. H. Shaw Co. New York 

Accts. Pay. (Cr.) 

The posting of the special columns is indi- 
cated by the small figures in parenthesis. 


2/10, net 30 days 

2/10, net 60 days 

V30 

VlO 

2/10, net 30 days 

1/10, net 30 days 

1/10, net 30 days 

2/30, net 60 days 

Net 60 days 


125 

420 
325 
900 
725 
182 
72 
100 
462 


90 
40 
60 
10 

50 
50 

90 








10 


3314 


90 















SET VIII. MANUFACTURING 



315 



Cashbook 







F 


ACCOUNT 
TO BE DEBITED 


EXPLANATION 


PURCHASE LEDGER 








MDSE. 
DISG.CR. 


NET CASH 


ACCTS. 
PAY. 




Feb. 


3 
3 




Mdse. 

Whalebone 

Rawhide 

Trimmings 

Paints and Oils 

Agents' Salaries 

Insurance 


Finished stock bought 
Raw material bought 
Raw material bought 
Raw material bought 
Raw material bought 
Traveling exp. adv. 
2% prm. on pol. No. 791 














1200 
400 
750 
120 
150 
120 
75 


90 




7 




Mason & Co. 


Inv.2/2,less3% 


7 


20 


232 


80 


240 










12 




Simpson & Smith 


Inv. 2/5, less 3% 


21 




679 




700 










13 




Labor 


Pay roll 














430 






16 




Lapham & Snow 


Inv. 2/7, less 3% 


3 




97 




100 










19 




Bills Pay. 


Favor E. Wells 














240 






19 




Interest 


On above 














2 


43 




21 




C. B. Mayhew & Son 


Inv. 2/j^, less 1% 


1 


27 


125 


G3 


126 


90 








24 




Osgood & Bedell 


Inv.2/jj., less 2% 


1 


50 


73 


50 


75 










2G 




Expense 


Per petty cashbook 














10 


90 




27 




Simpson & Smith 


Inv. 2/2^, less 3% 


6 




194 




200 










27 




Expense 


Per petty cashbook 














12 


40 




39 


97 


1401 


93 


1441 


90 






28 




Accts. Pay. 


Total for month 














1441 


90 




28 




Mdse. Discounts 


Contra, on sales 














14 


62 




28 


= 


Balance 


In hank 




=r- 








= 


5321 


95 




lo?nfi 


07 















Register 





DISTRIBUTION 


' 










WHALE- 
BONE 


RAW- 
HIDE 


WOOD 
BUTTS 


REEDS 


THREAD 


TRIM- 
MINGS 


PAINTS 
AND 
OILS 


HARD- 
WARE 


LEATHER 

AND 
CLOTH 


PAID 


DIS- 
COUNT 


CASH 




























125 


90 










Feb. 


8 


2 


52 


123 


38 




420 


40 


725 




325 


60 


182 


50 


72 


50 


462 


90 






100 




900 


10 




12 

22 

14 
15 


8 
3 

14 


41 
26 

50 

73 


411 
322 

710 

71 


99 
34 

50 

77 




(4) 




(3) 




(6) 




(3) 




(9) 




(4) 




(5) 




(7) 




(8) 


















430 


40 


725 




325 


CO 


182 


50 


72 


50 


462 


90 


125 


90 


100 




900 


10 

































































316 BOOKKEEPING 

The Books used in tliis set are the journal, the cashbook, the petty 
cashbook, the invoice register, the sales book, the general ledger, the 
sales ledger, and the purchase ledger. With the exception of the cash- 
book, the petty cashbook, and the invoice register, the books are the 
same as those used in the preceding sets of this text. 

Cashbook. The cashbook is provided with special columns for accounts 
receivable, accounts payable, and merchandise. These columns are simi- 
lar to those of the cashbooks used in Sets VI and VII. In addition to 
columns for net cash and discount^ a column is provided for accounts re- 
ceivable and accounts payable. These columns record the amounts that 
are to be posted to the sales ledger and the purchase ledger respectively, 
and the totals of these columns indicate the amounts to be posted to the 
general ledger, when the books are closed. The special column for 
merchandise on the left side is for recording cash sales. Refer to the 
model cashbook, pages 314 and 315. 

A Controlling Account is an account kept in the general ledger for the purpose of 
proving the accuracy of some subsidiary record. 

Accounts Receivable and Accounts Payable are illustrations of controlling accounts, 
as they prove the correctness of the sales ledger and the purchase ledger. 

Petty Cashbook. This book is used for recording small expenditures 
of cash. The ruling of an ordinary journal page is a form of a petty 
cashbook. All receipts are to be placed in the first money column and 
all payments in the second money column. Special columns may be used 
if desired. The form of the petty cashbook is illustrated on page 321. 

Invoice Register. The invoice register is not essentially different 
from the purchase book Avith which the student is already familiar. In 
a manufacturing business it is desirable that the cost of the various 
manufacturing products be kept in separate accounts in the ledger. 
This necessitates the addition of a number of special columns in the 
invoice register for the proper distribution of all raw material bought. 
When an invoice is received it is audited and entered in the invoice 
register. The first part of the record is the same as that of the ordinary 
purchase book. After this part of the record is complete, the amount 
of the purchase is carried to the proper distributing column. In this 
set the purchasers are credited weekly for the amount of the invoice, 
and at the end of the month Accounts Payable is credited for the total 
of the amount column. Instead of debiting Merchandise, as is done when 
the ordmary purchase book is used, each of the articles used in manu- 
facturing should have a separate account under the names appearing at 
the heads of the several columns. Care should be taken to check prop- 
erly all items posted. (See model on pages 314 and 315.) 



SET VIIL MANUFACTURING 317 

Memoranda of Transactions 
February 1 

J. W. Melton, E. M. Williams, Geo. Inman, A. P. Zaner, and 
L. H. Messier, of Springfield, Mass., have decided to form a corporation, 
under the title of the Union Whip Co., for the purpose of manufacturing 
whips. Certificates of incorporation have this day been filed with the 
proper state official. The capital stock is to be 1 25,000, divided into 
250 shares of the par value of |100 each. Each of the incorporators 
has subscribed for 50 shares of stock. 

This corporation has been formed under the laws of the Common- 
wealth of Massachusetts. The stockholders named above are to con- 
stitute the board of directors for one year. The following officers have 
been elected : Geo. Inman, President ; L. H. Messier, Secretary ; J. W. 
Melton, Treasurer. 

To THE Student. The above memorandum is to be copied in the journal. 

The student has been chosen to act as bookkeeper for the corpora- 
tion, at a salary of |60 per month. 

Each stockholder has paid the following : J. W. Melton, for 50 shares, 
15000; E. M. Williams, for 50 shares, |5000; Geo. Inman, for 50 
shares, $5000 ; A. P. Zaner, for 50 shares, |5000 ; L. H. Messier, for 
50 shares, 15000. 

Make the proper entry in the cashbook for the investment. 

The Springfield Whip Co. has decided to go out of business and The 
Union Whip Co. has taken a lease of its factory for a term of three 
years, at a yearly rental of |1800, the rent to be paid monthly. 

Copy the above memorandum in the journal. 

Deposit in the First National Bank all the cash on hand except |50. 

Use a sheet of journal paper for recording all deposits made and all checks drawn. 
Use the first money column for recording the deposits and the second money column 
for recording the checks. 

The $50 kept on hand is to be entered as a balance in the petty cashbook. (See 
the first entry in the model petty cashbook, page 321.) 

February 3 

The following purchases are made of the Springfield Whip Co. : 
Machinery and equipment, $9500 ; raw material on hand, |2000 ; 
finished goods ready for market, |1500. 



318 BOOKKEEPING 

Give the Springfield Whip Co. a check for the above amounts. Enter 
in the cashbook, debiting the following accounts : 

Machinery for machinery and equipment. 

Merchandise for the amount of the finished goods. 

Each of the following accounts for the raw material : 
Whalebone, $200 Rawhide, |200 

Reeds, flOOO Thread, $250 

Sundries, $40 Trimtnings, $110 

Paints and Oils, $100 Hardware, $50 

Leather and Cloth, $50 

S. B. Hardy and F. M. Kinney have been employed as traveling 
salesmen, each to receive a salary of $100 per month and traveling 
expenses. 

Give each of the traveling salesmen a check for $150, and charge the 
amount to Agents'' Salaries. 

Extend into the General column in the cashbook. 

Mr. A. C. Parker, attorney, was the legal adviser of the company at 
the time of incorporation ; give him a check for $50 for his services. 

Charge Expense. 

The company has taken out an additional insurance policy with the 
Niagara Insurance Co. for $5000. Owing to the location of the factory 
and the combustible material used, the rate of insurance is $20 per 
thousand. 

Give the agent of the Niagara Insurance Co., Henry Lete, a check for the amount 
of the premium at the rate named. Charge Insurance. 

February 5 

Give Connor & Co. a check for $32.50 in payment of their bill for a 
set of office books. 
Charge Expense. 

Pay Tuller & Co. $7.85 in cash for office stationery. 

Enter this item in the petty cashbook under Expense. Refer to the model on 
page 321. 

Note. Items that are entered in the petty cashbook are not entered in the regular 
cashbook until the petty cashbook is closed. This will be explained at the end of the week. 

Buy $2 worth of postage stamps and pay cash for them. 
Enter in the petty cashbook. 



SET VIII. MANUFACTURING 319 

Pay Thos. Lottridge |2.80 in cash for carpenter work in repairing 
the office. 

Sell Wm. Lane for cash 1 doz. whips #287, |7.50. 
Enter in the main cashbook, crediting Merchandise. 

February 6 

The following goods have been received: Invoice of thread from 
Hasson & Son, Boston, Mass., dated Feb. 4. Terms : 1/10, net 30 da. 
Amount, |100. 

Invoice of trimmings from Fleming & Co., New York, dated Feb. 5. 
Terms: 2/10, net 30 da. Amount, |60. 

Invoice of reeds from Kellar & Co., New York, dated Feb. 3. Terms : 
1/10, net 30 da. Amount, |250. 

The preceding items are to be entered in the invoice register. Refer to the model 
on pages 314 and 315. Be sure that the amounts are extended into the proper columns. 

Note. In recording invoices the date of the invoice should be used, and not the date 
under which the student is working. 

The following orders have been received and filled. Terms: 2/10, 
net 30 da., F.O.B., Springfield, Mass. 

F. R. Pickles, Reading : 

6 doz. #30 12 doz. #37 

5 doz. #60 8 doz. #102 

10 doz. #200 
D. D. Miller, Moberly : 

12 doz. #279 10 doz. #428 

15 doz. #1017 1 doz. #312 

2 doz. #455 2 doz. #287 

H. S. Blower, Palmer : 

^ doz. #530 1 doz. #455 

\ doz. #617 \ doz. #688 

S. D. Merrill, Canton : 

10 doz. #200 10 doz. #37 

10 doz. #279 20 doz. #102 

20 doz. #60 2 doz. #287 

15 doz. #30 2 doz. #428 

A. C. Cotton, Albany : 

^ doz. #1079 ^ doz. #530 

10 doz. #1017 1 doz. English Crops 

D. M. Heath, Worcester : 

10 doz. #279 10 doz. #200 

2 doz. #874 
Enter these orders in the sales book. 



320 



BOOKKEEPING 



The names of the persons employed in the factory, and the weekly 
salary of each, are given below : 



Arthur Daley, foreman 


$18 


W. P. Nye 


*14 


David Brown, foreman 


18 


H. C. Wayne 


9 


John Sauter 


14 


Maurice Fox 


12 


Elmer Tierney 


11 


W. V. Young 


13 


Silas Willis 


9 


Daniel Gilbert 


10 


Theo. Nash 


12 


D. B. Hinman 


11 


Benj. Lever 


15 


Leon Craig 


14 


Wm. Kenney 


13 


E. M. Ward 


10 


Leslie Carton 


10 


T. B. Murray 


15 


0. H. Sidney 


12 


Jas. Brigham 


9 


Howard Goble 


11 


Alice Benton 


7 


Geo. Wirtz 


9 


Mary Anson 


6 


Wesley Kress 


12 


Susan Frye 


8 


Edward Short 


13 


Sarah Harum 


8 


Thos. Wallace 


11 


Ellen Steele 


6 


Jacob McVey 


10 


Jessie Day 


9 


Kichard Evans 


13 


Ida Bowers 


7 


Isaac Shaw 


15 


Cora Kellar 


7 


Henry Utz 


11 


Ada Weet 


8 


Erank Boler 


10 


Edith Noyes 


9 



Draw a cash check for the total amount of the pay roll. 

The Pay Roll. A form of pay roll is given below. These forms differ 
widely in different lines of business. Payments of employees are usually 
made by placmg in an envelope the amount to be paid. The amount 
due each employee is made up after the conclusion of a week's work, 
and payment is made as soon as the pay roll can be completed. The 
total amount that has been placed in these envelopes is drawn from 
the bank by a cash check. 

As no business forms are being used in this set the student will record simply 
the amount of the pay-roll check in the main cashbook, General column, under Labor. 



Time for Week ending- 



19- 



NAME 



TIME 



RATE PER AMOUNT PAID 
DAY $ CTS, 



RECEIVED PAYMENT 



SET VIII. MANUFACTURING 



321 



Close the petty cashbook in the manner indicated in the outline 
given below: 

Petty Cashbook 



Feb. 1 
5 
5 
5 
6 


n/ 
n/ 
n/ 


Balance Brought forward 
Expense Office stationery 
Expense Postage 
Expense Carpenter work 
Balance In safe 

Balance Brought down 


50 




7 

2 

2 

37 


85 

80 
35 




50 


00 


, 50 


00 


Feb. 8 




37 


35 







After closing the petty cashbook carry the sum of the three Expense 
items to the main cashbook. Record in the General column. Check all 
items transferred. This finishes the work of closing and transferring 
the items in the petty cashbook. 

None of the other books are to be closed, but the amounts are to be posted to 
the different ledgers. 

Space in the Different Ledgers. The first account in the general ledger 
is Capital Stock ; allow eight lines for this account, and the remainder 
of the page may be allowed for the Merchandise account. On page 2, 
allow one half the page for the Expense account ; and for each remaining 
account allow one fifth of a page in the main ledger. 

Allow one fifth of a page for each account in the purchase ledger and 
the sales ledger. 

Posting. Post all the items in the General column of the main cash- 
book to the general ledger ; post all the items from the sales book to the 
sales ledger; post all the items in the Amount column of the invoice 
register to the purchase ledger, credit side. This concludes the work 
for one week. 

February 8 

The following have been received: Invoice of paints and oils from 
Leland & Son, Boston, Mass., dated Feb. 6. Terms: 1/10, net 30 da. 
Amount, 154.20. 

Invoice of leather and cloth from Palmer and Brown, New York, dated 
Feb. 6. Terms: 1/10, net 30 da. Amount, |80.50. 

Give the Springfield Whip Co. a check for one month's rent. 

For the amount consult the memorandum in the journal. 
Enter in the cashbook under Fuel, Light, and Rent. 

Sell Geo. Provo 1 doz. #312, for cash. 
Enter in the main cashbook. 



322 BOOKKEEPIlSrG 

February 10 

Send each of the following persons a check in payment of the invoice 
named : 

Hasson & Son, for the invoice dated Feb. 4, less discount. 
Kellar & Co., for the invoice of Feb. 3, less discount. 

Enter each payment in the main cashbook. A reference to the model on page 315 
will give all needed suggestions. 

Pay 50(^ in cash for a telegram sent to S. B. Hardy, one of the traveling 
salesmen. 

Enter in the petty cashbook. 

Checks have been received from the following persons : 
F. R. Pickles, for the invoice of Feb. 6, less discount. 
H. S. Blower, for the invoice of Feb. 6, less discount. 
A. C. Cotton, for the invoice of Feb. 6, less discount. 

Enter each amount in the main cashbook. See the model on page 314. 

The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

E. T. Fuller, Leland : 

12 doz. #30 24 doz. #37 

10 doz. #60 16 doz. #102 

20 doz. #200 10 doz. #428 

1 
C. C. Dewey, Bristol : \ 

24 doz. #279 20 doz. #428 
30 doz. #1017 2 doz. #312 ; 

4 doz. #455 4 doz. #287 

Henry Lee, Norwich : 

1 doz. #530 2 doz. #455 

1 doz. #617 i doz. #688 



February 12 

The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

A. B. Smith, Hartford : 

20 doz. #200 20 doz. #37 

15 doz. #279 • 35 doz. #102 

25 doz. #60 4 doz. #287 

30 doz. #30 10 doz. #428 



SET VIII. MANUFACTURING 323 

Geo. H. Sanford, Lynn : 

1 doz. #1079 1 doz. #530 

20 doz. #1017 2 doz. English Crops 

Terms : subject to sight draft, for the following invoice : 

F. M. Caswell, City : 

25 doz. #279 20 doz. #200 

4 doz. #874 

February 13 

Send Fleming & Co. a check in payment of the invoice dated Feb. 5, 
less discount. 

D. D. Miller sends his check in payment of the invoice dated Feb. 6, 
less discount. 

H. C. Wayne and T. B. Murray have been absent the past week on 
account of sickness. Deduct the amount of their salaries from the total 
pay roll of last week. 

Draw a cash check for the amount of the weekly pay roll. 

Deposit all the checks on hand and the currency received from the 
cash sales on Feb. 5 and 8 ; collection on the checks, 85(f. 

Debit Expense for all collection charges in this set. Enter in the main cashbook, 
as this is not a currency item. 

Close the petty cashbook and carry the amounts to the main cashbook. 

Post the week's work. The items in the Accounts Receivable column 
of the main cashbook are to be posted to the sales ledger, and the items 
in the Accounts Payable column are to be posted to the purchase ledger. 
Open accounts with all new names that appear in the invoice register and 
the sales book. 

February 15 

Send each of the following a check in payment of the invoice named : 

Leland & Son, for the invoice of Feb. 6, less discount. 

Palmer & Brown, for the invoice of Feb. 6, less discount. 
Checks have been received from the following persons : 

S. D. Merrill, for the invoice of Feb. 6, less discount. 

D. M. Heath, for the invoice of Feb. 6, less discount. 
Pay cash for petty expense items, |2.50. 

The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

F. R. Pickles, Reading : 

8 doz. #1017 10 doz. #287 

6 doz. #428 10 doz. #455 



324 BOOKKEEPING 

D. D. Miller, Moberly : 

20doz. #30 18doz. #102 

15 doz. #37 14 doz. #200 

20 doz. #60 2 doz. #312 
H. S. Blower, Palmer : 

18 doz. #1017 20 doz. #200 

10 doz. #428 12 doz. #37 

6 doz. #279 5 doz. #287 

Draw a cash check for |16.50, and record the amount in the petty 
cashbook. 

February 16 

The following have been received: Invoice of whalebone from Ran- 
dall & Co., New York, dated Feb. 13. Terms: net 10 da. Amount, 
♦106.20. 

Invoice of rawhides from Stockwell & Co., Boston, Mass., dated 
Feb. 12. Terms: 2/10, net 30 da. Amount, $124.35. 

Invoice of wood butts from Eaton & Son, New York, dated Feb. 13. 
Terms: 1/10, net 30 da. Amount, $62.50. 

Advance the bookkeeper $20 in cash, to apply on his monthly salaiy. 

Enter in the petty cashbook under Salaries. 

February 17 

The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

A. C. Cotton, Albany : 

10 doz. #102 5 doz. #874 

20 doz. #1017 3 doz. #287 

4 doz. #455 20 doz. #60 
D. M. Heath, Worcester : 

22 doz. #30 5 doz. #287 

18 doz. #60 4 doz. #874 

12 doz. #1017 2 doz. #1079 

Pay J. K. Hart cash, for plumbing and other repairs, |8.75. 
Enter in the petty cashbook under Expense. 

February 18 

Give the Home Printing Co. a check in payment of a printing bill, 
$43.65. 

Enter in the main cashbook under Printing and Advertising. 



SET VIIL MANUFACTURING 325 

Checks have been received from the following persons : 

E. T. Fuller, for the invoice of Feb. 10, less discount. 

Henry Lee, for the invoice of Feb. 10, less discount. 

C. C. Dewey, for the invoice of Feb. 10, less discount. 

A. B. Smith, for the invoice of Feb. 12, less discount. 
Give Scott & Co. a check in payment of their bill for boxes, etc., 
*32.90. 

Enter in the main cashbook under Shipping. 

February 19 

The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

Horace M. Hatton, New York : 

50 doz. #102 100 doz. #1017 

20 doz. #312 100 doz. #30 

40 doz. #200 50 doz. #37 
D. K. Nelson, Boston : 

20 doz. #428 15 doz. #312 

10 doz. #455 40 doz. #102 

12 doz. #287 50 doz. #60 
A. C. Bruner, Providence : 

^ doz. #688 4 doz. #874 

2 doz. #1079 2 doz. #530 

1 doz. #617 25 doz. #279 

February 20 

Buy of Eureka Coal Co. 15 T. coal at |4.50 per ton. Give in pay- 
ment a sight draft on F. M. Caswell for the amount. 

Enter in the main cashbook as follows : on the right side, Fuel, Light, and Rent, 
and extend into the General column ; on the left side, F. M. Caswell, and extend into 
the Accounts Receivable and Net Cash columns. ^ 

Note. The above entry debits Expense and credits F. M. Caswell, which accomplishes 
the same end as a journal entry. As the same amount is entered on each side of the 
cashbook the balance of cash is not affected. 

February 20 

The following order has been received and filled. Terms: note at 
30 da., with interest. 

W. G. Cooper, Westfield : 

20 doz. #37 30 doz. #102 

20 doz. #60 20 doz. #1017 



326 BOOKKEEPING 

Enter the preceding item in the sales book in the regular way, and then make 
the required journal entry. (Credit Accounts Receivable.) 

Note. It is necessary to make a double posting of the credit in this entry, as follows : 
after crediting Accounts Receivable in the main ledger, credit W. G. Cooper in the sales 
ledger. 

Give a cash check for the weekly pay roll. All the help have been 
employed this week. Deposit all the checks on hand ; collection, |2. 
Close and post the petty cashbook. Post the week's work. 

February 24 

Checks have been received from the following persons : 

F. R. Pickles, for the invoice of Feb. 15, less discount. 
D. D. Miller, for the invoice of Feb. 15, less discount. 
H. S. Blower, for the invoice of Feb. 15, less discount. 
The following have been ^received : Invoice of thread from Hasson & 
Son, Boston, Mass., dated Feb. 23. Terms : 1/10, net 30 da. Amount, 
♦200. 

Invoice of trimmings from Fleming & Co., New York, dated Feb. 23. 
Terms: 2/10, net 30 da. Amount, |75. 

Invoice of paints and oils, |75 ; hardware, $50, from Leland & Son, 
Boston, Mass., dated Feb. 23. Terms: 1/10, net 30 da. 

Extend the sum of the two invoices into the Amount column in the invoice register, 
and then extend the separate amounts into the proper distributing columns. 

Invoice of leather and cloth from Palmer & Brown, New York, dated 
Feb. 21. Terms, 1/10, net 30 da. Amount, $64.35. 

Invoice of reeds from Kellar & Co., New York, dated Feb. 20. 
Terms: 1/10, net 30 da. Amount, $1160. 

Invoice of wood butts from Eaton & Son, New York, dated Feb. 23. 
Terms: 1/10, net 30 da. Amount, $43.25. 

Invoice of whalebone from Randall & Co., New York, dated Feb. 20. 
Terms : 10 da. Amount, $145. 

Invoice of rawhides from Stockwell & Co., Boston, Mass., dated 
Feb. 21. Terms: 2/10, net 30 da. Amount, $165.40. 

February 25 
The following orders have been received and filled. Terms: 2/10, 
net 30 da. 

C. C. Dewey, Boston : 

50 doz. #102 30 doz. #30 

40 doz. #60 12 doz. #874 



SET VIII. MANUFACTURmG 327 

A. B. Smith, Hartford : 

100 doz. #102 100 doz. #1017 

60 doz. #200 10 doz. #874 

25 doz. #279 20 doz. #428 

Geo. H. Sanford, Lynn : 

60 doz. #30 15 doz. #874 

80 doz. #60 5 doz. #312 

20 doz. #279 5 doz. #530 

F. M. Caswell, City : 

12 doz. #287 40 doz. #60 

20 doz. #428 20 doz. #37 

50 doz. #102 50 doz. #30 

Henry Lee, Norwich : 

70 doz. #30 100 doz. #1017 

50 doz. #60 40 doz. #200 

60 doz. #37 8 doz. #428 



February 27 

Received from C. C. Dewey a check in payment of the invoice of 
Feb. 25, less discount. 

February 27 

Checks have been issued in payment of the following : 

Student, balance on salary |40 

Chas. M. Bradburn, superintendent 100 

Enter these items in the main cashbook, under Salaries. 

Checks have been sent to the following : 

S. B. Hardy, traveling salesman $100 

F. M. Kinney, traveling salesman 100 

Enter these items in the main cashbook, under Agents' Salaries. 

Issue a cash check for the full amount of the pay roll. 
Give the Metropolitan Carting Co. a check for $135, in payment for 
freight and cartage for the month. 

Enter in the main cashbook under Freight and Cartage. 

Give the City Gas Co. $22.10 in cash, for bill to date. 
Enter in the petty cashbook under Fuel, Light, and Rent. 

Deposit all checks on hand; collection, $1.75. 



328 



BOOKKEEPING 



Statement of Losses and 



1531. 

5.80 



Mdse. finished goods purchased 

Materials : 

Whalebone 340 

Whalebone, inv. _120 220. 

Rawhide 320 

Rawhide, inv. ^120 200. 

Wood Butts ^85 

Wood Butts, inv. _^ 62. 

Reeds 1600 

Reeds, inv. ^810 790. 

Thread "365 

Thread, inv. 106 259. 

Material cost 

Less Mdse. Disc, on purchases 
In freight, 1/2 Fr't and Cartage 

Labor 

Balance carried down, gross profit on sales 

Manufacturing Expense : 

Fuel, Light, and Rent 210. 

Fuel, Light, and Rent, inv. 40. 

Official Salaries 

Insurance . 80. 

Insurance, inv. 68. 

Balance carried down 

Selling Expense : 

Printing and Advertising 39.50 

Printing and Advertising, inv. 9.25 

Agents' Salaries 

Shipping 24.10 

Shipping, inv. 8. 

Freight and Cartage, 1/2 

Balance carried down 

General Expense 
Net Gain 



1200 



1525 
41 

840 



170 
100 

12 



30 
250 

16 
41 



20 



25 



10 



3606 
846 



4452 



20 
40 



60 



282 
564 



846 



337 



564 



74 
152 



227 



40 



40 



35 

05 



40 



50 
55_ 
05 1 



Close the petty cashbook and carry the item to the main cashbook. 
Post the week's work. 



Present all books to the instructor for inspection. If they are approved by him, 
proceed to close the books as follows : 



SET VIII. MANUFACTURING 



329 



Gains, February 27, 19 — 



Mdse. sales 

Less Mdse. Disc, on sales 
Manufactured goods on hand 



3560. 
32.40 



Balance brought down, gross profit on sales 



Balance brought down 



Balance brought down 



3527 
925 



60 



4452 



4452 



846 



846 



564 



564 



227 



227 



60 



60 



40 



40 



40 



40 



05 



05 



Close the main cashbook. Consult the model cashbook on pages 314 
and 315. The discount columns are termed contra columns. The mean- 
ing is this : The discount on the left side of the cashbook is a debit ; but 
it is placed there for convenience. By this arrangement the discount, the 



330 BOOKKEEPlKa 

net cash, and the total of any invoice paid are shown together. The 
same explanation applies to the discount column on the right side of 
the cashbook. This column represents a credit. The footing of the dis- 
count column on the left side is carried to the summary on the right 
side. The footing of the column on the right side is carried to the 
summary on the left side. This places each footing in its proper place 
for posting. 

Post the summary of the cashbook to the main ledger. 

Close the sales book and make the following entry for the total foot- 
ing : Accounts Receivable to Merchandise. Post the entry. 

Close the invoice register. Consult the model on pages 314 and 315. 

From the invoice register post the footing of the Amount column to 
the credit of Accounts Payable in the main ledger, and debit the footing 
of each distributing column to its proper account in the general ledger. 
This completes the posting to the general ledger. 

As the sales book and the amount column of the invoice register have 
been posted to the sales ledger and the purchase ledger respectively, and 
the items from the accounts receivable and accounts payable columns 
of the mam cashbook have been posted at the end of each week, all 
posting is now completed. 

The student will now make a trial balance from the main ledger. 
Have it approved by the instructor. Make an abstract of the purchase 
ledger and prove it with the Accounts Payable in the general ledger. 
Make an abstract of the sales ledger and prove it with the Accounts 
Receivable in the general ledger. 

Make a statement of losses and gains, referring to the model given on 
pages 328 and 329. 

After giving careful attention to the illustration in the text, make the 
statement of losses and gains from the trial balance made from your 
own books. Divide the Freight and Cartage equally between material 
cost (in-freight) and selling expense. 

We divide Freight and Cartage because the carting of material from the freight 
station to the factory adds to the cost of the material bought, and the carting to the 
freight station of the manufactured goods sold adds to the expense of sales. 

Make a statement of resources and liabilities. 

The above statements are necessary in order that the board of directors 
may be informed regarding the condition of the business before declaring 
a dividend. The following outline will suggest the form of resource and 
liability statement to be used. The student will supply amounts from 
his own ledger. 



SET VIIL MANUFACTUKING- 



331 



Resources 

Cash, per cashbook 

Finished Goods, per inventory 

Raw Material, per inventory 

Incidentals, per inventory 

Accounts Eeceivable, due the business 

Machinery, per inventory 

Bills Receivable, on hand • 

Liabilities 
Capital Stock, par value 
Accounts Payable, due from the business 
Loss and Gain, per statement 



Closing Accounts eelating to Merchandise 

Raw Material. The classification of accounts with raw material has 
been explained and illustrated in connection with the invoice register on 
page 315. In closing the ledger these accounts are transferred to the 
Merchandise account. If all raw material had been consumed, there would 
be no inventories on hand. Therefore all inventories in these accounts 
repr.esent unconsumed raw material. In order that the Merchandise 
account may show just what it has cost, in raw material, to manufacture 
goods, these accounts are closed into the Merchandise account. 

Labor. The labor required for the production of finished goods also 
represents an element of cost in merchandise. Therefore this account 
is closed into the Merchandise account. 

Merchandise 



Feb. 


3 


C.B. 


13 


687 


50 


Feb. 


16 


C.B. 


12 


34 


20 




28 


Whalebone 


10 


127 


20 




28 


S. B. 


14 


1216 


40 




28 


Rawhide 


14 


62 


90 




28 


Inventory 


32 


347 


2S 




28 


Labor 


14 


285 


















28 


Expense 


16 


172 


75 
















28 


Loss and Gain 
Inventory 


28 


262 


50 
















1597 


85 


1597 


85 


Mar. 


1 




347 


2 J 













Whalebone 



Feb. 


4 

28 


C.B. 
LB. 

Inventory 


13 
14 


100 
142 


50 
60 


Feb. 


28 
28 


Inventory 
Mdse. 


32 
4 


115 

127 
242 


30 

20 




242 


50 


Mar. 


1 




115 


30 











332 



BOOKKEEPING 



Rawhide 



Eeb. 


2 

28 

1 


C. B. 
LB. 

Inventory 


13 
14 


110 
125 


40 

40 


Feb. 


28 
28 


Inventory 
Mdse. 


32 
4 


172 
62 


50 
90 




235 


235 


40 


Mar. 




172 


50 













Labor 



Feb. 


6 

28 


C. B. 
C. B. 


13 
14 


150 
135 




Feb. 


28 


Mdse. 


4 


285 






285 




285 





















The following is the list of the accounts to be closed into the Merchan- 
dise account, according to the model given herewith : 

Whalebone Thread Leather and Cloth 

Rawhide Trimmings Sundries 

Wood Butts Paints and Oils Labor 

Reeds Hardware Mdse. Discounts 

The following accounts have inventories : 



Whalebone 


1135.80 


Trimmings 


$64.20 


Rawhide 


148.75 


Paints and Oils 


66.70 


Wood Butts 


28.60 


Hardware 


35. 


Reeds 


1020. 


Leather and Cloth 


56.45 


Thread 


110. 


Sundries 


18.50 



In the accounts named above which have no inventory the full balance 
is closed into the Merchandise account. 

Do not close the Merchandise account at this point. 

Incidentals. A third element in the manufacture of goods is incidental 
expenses. As a matter of fact, all expenses are incurred as a means of 
carrying on the manufacturing interests, and all money paid out for 
incidental expenses simply adds to the cost of goods. These incidental 
items are of importance in closing the books, as showing what relation 
they bear to the total cost. These accounts are closed into the Expense 
account as a means of knowing what the total incidentals represent, and 
then the Expense account is closed into the Merchandise account. The 
inventories represent raw material on hand belonging to the incidental 
accounts. The manner of closing is indicated on page 338, 



k 



SET VIII. MANUFACTUKING 



333 













Expense 












Feb. 


2 


C.B. 


13 


30 




Feb. 


28) Mdse. 


^ 


172 


75 




5 


C.B. 


13 


15 


80 






/ 










20 


C.B. 


13 


1 


50 






/ 










28 


Print, and Ad. 


14 


16 


45 






/ 










28 


Salaries 


16 


95 








/ 










28 


Insurance 


19 


14 


- 






/ 










= 






172 


75 






^ 




172 


75 





















Printing and Advertising 



Feb. 


20 


C.B. 
Inventory 


13 


36 


45 


Feh. 


28 
28 


Inventory 
Expense 


32 
16 


20 
16 


45 




36 


45 


36 


45 


Mar. 


1 




20 

























Salaries 












Feb. 


20 
28 


C.B. 
C.B. 


13 
13 


10 

85 




Feh. 


28 


Expense 


16 


95 






95 




95 

























Insurance 



Feb. 


6 


Inventory 




72 


50 


Feh. 


28 
28 


Inventory 
Expense 


32 
16 


58 

U 

72 


50 




72 


50 


50 


Mar. 


1 


58 


50 











The following is the list of the accounts to be closed into the Expense 
account, according to the model given herewith : 

Printing and Advertising Insurance 

Freight and Cartage Fuel, Light, and Rent 

Agents' Salaries Salaries 
Shipping 

The following accounts have inventories : 

Printing and Advertising $10.25 Fuel, Light, and Rent $50. 

Shipping 



Insurance 



85. 



11.30 



In those accounts above which have no inventory the full balance is 
closed into the Expense account. 



334 BOOKKEEPING 

After the above accounts have been closed into the Expense account 
slose the Expense account into the Merchandise account. 

To THE Instructor. If you deem it preferable, the Expense account may be closed 
directly into the Loss and Gain account. If this is done, the Merchandise account must 
also be closed into the Loss and Gain account, without reference to the Expense account. 

The Merchandise Inventory, the finished goods on hand, is $1285.46. 

Closing the Merchandise Account. Enter the inventory in the Mer- 
chandise account, find the gain, and close the account as usual. 

The Machinery account is inventoried at cost. 
• Closing the Loss and Gain Account. In this set the closing of the Loss 
and Gain account is effected by a journal entry, as follows : 

Loss and Gain i|323.50 

To Dividend account |300. 

To Undivided Profits 23.50 

Dividends are usually declared quarterly, semiannually, or annually. 
In this set, in order that the student may have the work of closing the 
Loss and Gain account, a monthly dividend will be declared. 

At a meeting of the board of directors, a statement of the business 
having been presented, a dividend of 2% on the capital stock was de- 
clared. Compute the dividend and then make a journal entry similar to 
the one given. The net gain will be verified by the instructor. Open 
accounts with Dividends and Undivided Profits. Post the journal entry 
and close the Loss and Gain account. When the dividends are paid in 
cash to the stockholders, the Dividend account will then be closed. 

After closing the books, take a trial balance of the ledger. 

An Analysis of the Merchandise Account. The student will now turn 
to his ledger and follow carefully the statements given below : 



Total sales 






$6801.50 


Cost of manufacturing 




16070.23 




Eaw material 


13131.75 






Labor 


1732. 






Incidentals 


1166.10 






Mdse. Disc. 


40.38 






Goods on hand Feb. 1 




1500. 
17570.23 




Less inventory Feb. 27 




1285.46 




Cost of goods sold 






6284.77 


Gain 






$516.73 



The above analysis shows that the raw material cost, in even numbers, 
52% ; labor, 28% ; incidentals, 20%. 



APPENDIX A 

SINGLE ENTRY 

Object. This set is designed to illustrate in a simple and practical way the 
uses of that method of bookkeeping known as single entry. As the student 
is already familiar with double entry, a comparison. of the two methods will 
help him to understand single-entry bookkeeping. 

Single Entry and Double Entry may be compared as follows : 

The books used are very nearly the same for either method. The sales 
book, the purchase book, the journal, the cashbook, the bill book, and the ledger 
are the same in form. The general principles employed are identical. 

The statement of resources and liabilities is the same. 

The present worth and the net gain or the net loss of a business are 
shown by either method. 

Single Entry and Double Entry may be contrasted as follows : 

In double entry, the journal has both a debit and a credit record for each 
transaction ; in single eiitry, the journal has only a debit or a credit record 
for each transaction. (See model journal, page ii.) 

In double entry all items in the cashbook are posted ; in single entry only 
items that affect personal accounts are posted. In this set these items are 
recorded in the first column of the cashbook. (See model cashbook, pages ii 
and iii.) 

In a single-entry ledger only personal accounts are kept. 

An itemized statement of losses and gains cannot be made from a single- 
entry ledger, as loss and gain accounts are not kept in the ledger. 

In double entry the separate sources of loss and gain are clearly set forth, 
while single entry shows only total results and furnishes no detailed informa- 
tion regarding the channels through which these results were obtained. 

A double-entry ledger is in balance ; a trial balance cannot be taken from 
a single-entry ledger, because property and other accounts not personal are 
not in this ledger. 

Single Entry may be used to advantage in any small business, or where the 
business deals in few articles of purchase and sale, or where a classification 
of accounts relating to losses and gains is not wanted. 

If books are strictly single entry, only accounts with persons are kept in 
the ledger; if any other accounts appear in the ledger, the method is not 
strictly single entry. 

As the student is familiar with the various books of record, few explana- 
tions are given in this set. 

i 



u 



BOOKKEEPING 



Cash Receipts 



Jan. 1 


V 


D. H. Boone 


Investment 






2500 




3 


V 


Mdse. 


Cash sale 






64 




4 


2 


A. D. Brown 


On account 


132 


64 






10 


V 


Bills Rec. 


S. Coe's note 






275 




10 


v 


Interest 


On above 






6 


40 


20 


4 


C. C. Willis 


On account 


38 


50 






20 




Discount 
Personal accts. 


On our note 
Total 






2 
171 


35 


31 


171 


14 


14 








3018 


89 











Model Journal 

January 1, 19 — 



I, D. H. Boone, commenced business with the 
following resources : 



I). H. Boone 
Cash 

Ileal Estate 
Bills Kec. 



Cr. 



On hand 
Store and lot 
Per bill book 



A. S. Barnes Cr. 

Received his note at 30 da., to apply on account 

7 



Benjamin Harmon Dr. 

Gave my note at 60 da., with interest, in full of 
account 



2500 

2000 

300 



4800 



250 



300 



Model 
Bills 



NO. 



DATE 



DRAWER OR INDORSER 



DRAWEE OR MAKER 



IN WHOSE FAVOR 



FOR WHAT RECEIVED 






ocyoyi/^^GaJyci^n 














Bills 








NO. 


DATE 


DRAWER OR INDORSER 


DRAWEE OR MAKER 


IN WHOSE FAVOR 


FOR WHAT GIVEN 




/ 
2- 


iu 


■/2. 

V 













APPENDIX A 



m 



Cash Payments 



Jan. 2 


n/ 


5 


V 


6 


7 


9 


V 


20 


V 


24 


5 


31 


V 


31 









Expense 
Bills Pay. 
Amos Lees 
Expense 
Bills Pay. 
D. J. Bailey 
Personal accts. 
Balance 



Rent of store 
Note, favor N. Cass 
On account 
Office stationery 
Note, favor J. Reed 
In full of account 
Total 
On hand 



287 



175 



462 



50 



50 



100 




360 




12 


50 


260 




462 


50 


1823 


89 


3018 


89 



Cashbook. In the explanatory part of the text, at the beginning of this set, 
it was noted that the cashbook is very nearly the same in single entry as in 
double entry. The above form is easily understood. All items that are to be 
posted are placed in the first money column. 

Journal. The form on page ii is a single-entry journal. As the student 
is now familiar with the principles of debit and credit, this form will be 
readily understood. Just at the left of the first money column it is neces- 
sary to write either Dr. or Cr. as a means of determining how the item is to 
be posted. As only personal items are posted in single entry, only the names 
of persons appear in the journal. 

Bill Book. This book is used for recording all notes received or issued by 
the business. It is generally divided into two parts, one for bills receivable 
and the other for bills payable. A full description of all notes received or 
issued should be recorded in the bill book. All canceled notes should be 
marked paid in this book. 

The notes recorded in the model bill book are from the single-entry set. 



Bill Book 
Receivable 



WHERE PAYABLE 



TIME 



WHEN DUE 



AMOUNT 



WHEN AND HOW DISPOSED OF 









xj- 



3 o o 



2^ 












Payable 
















WHERE PAYABLE 


TIME 


WHEN DUE 


AMOUNT 






YEAR 


MONTH 


DAY 


WHEN AND HOW DISPOSED OF 










^ 
.^^ 


/ 




— 


(^^^ 


XZ- 


~^^^U^ 



iv BOOKKEEPING 

Memoranda of Transactions 
Directions and Suggestions. Observe the following directions and suggestions : 

1. David Easton is the proprietor. Student acts as bookkeeper and manager. 

2. No business forms are used. 

3. No days of grace are allowed on any notes. 

4. The business is general merchandise. 

Jan. 1. The following were the resources at the beginning of the business : 

Cash on hand, $2000 

Store and lot, valued at $4000 

(ieo. Wilson's note, dated Dec. 10, at 60 da., $500 

Enter the preceding items in the journal. Kefer to the model journal, page ii. 
Enter the cash in the cashbook, second column. Record the note in the bill book. 
Refer to the model bill book, pages ii and iii. 

2. Bought of W. R. Story for cash : 

40 bbl. Pork at $14 
Enter Mdse. in the cashbook, second column. 

2. Paid A. R. Deneen cash, for sundry repairs, $50. 

3. Bought of James Selden on account : 

50 bbl. Beef at $17 60 bbl. Salt at $1.50 

Enter in the purchase book. 

4. Sold Edward White for cash : 

20 bbl. Pork at $16 
Enter Mdse. in the cashbook, second column. 

5. Sold John Harrison on account : 

20 bbl. Beef at $18.50 10 bbl. Salt at $1.60 

Enter in the sales book. 

5. Paid J. D. Russell cash, for ofi&ce stationery, $12.25. 

6. Paid James Selden cash for one half the invoice of Jan. 3. 

Enter in the cashbook, first column. 

7. Sold Jesse Blaine on account : 

10 bbl. Pork at $16.50 10 bbl. Beef at $19 

10 bbl. Salt at $1.62 

8. Bought of William Edison on account : 

25 bbl. Pork at $13.50 30 bbl. Beef at $16.50 



APPENDIX A V 

Jan. 9. Discounted Geo. Wilson's note, and received cash for the proceeds. 

The term of discount is the time from the date of discount to the maturity of the note. 
Enter the face of the note on one side of the cashbook and the discount, under Interest^ 
on the other side, each item in the second column. 

10. Sold E. C. Bartlett on account : 

G bbl. Pork at $15 , 10 bbl. Beef at $18.25 

11. Sold Howard Stetson on account : 

12 bbl. Beef at $18.75 15 bbl. Salt at $1.65 

12. Gave James Selden a note at 10 da., with interest, for the balance of 
the invoice of Jan. 3. 

Enter the note in the journal and record it in the bill book. 

12. Paid Page & Co. cash, for an office safe, $85. 

13. Sold Henry White, one half cash, balance on account : 

12 bbl. Pork at $16.25 20 bbl. Salt at $1.70 

Enter the whole amount in the sales book, and then enter the cash received in the cash- 
book, first column. 

14. Bought of Samuel Jones, one half cash,"'balance on account : 

50 bbl. Beef at $16.50 100 bbl. Salt at $1.48 

Enter the whole amount in the purchase book, and then enter the cash paid in the cash- 
book, first column. 

15. Bought of H. C. Benton on account : 

60 bbl. Pork at $14.75 

15. Received John Harrison's note at 10 da., with interest, for $300, to 
apply on the invoice of Jan. 5. 

Record in the bill book. 

16. Received of Jesse Blaine cash, to apply on the invoice of Jan. 7, $250. 

17. Sold P. H. Williams on account : 

25 bbl. Pork at $16.75 

17. Gave W^illiam Edison a note at 15 da., with interest, for $500, and 
cash for the balance of the invoice of Jan. 8. 

Enter the note in the journal and record it in the bill book. Enter the cash in the cash- 
book, first column. 

18. Sold W. B. Emerson on account : 

25 bbl. Beef at $18.75 20 bbl. Salt at $1.70 

18. Bought of Williamson & Son on account : 

40 bbl. Flour at $5.25 



vi BOOKKEEPING 

Jan. 19. Received of Jesse Blaine cash, for balance of the invoice of Jan. 7. 

19. Received of E. ^. Bartlett his note at 15 da. for $200, and cash for the 
balance of the invoice of Jan. 10. 

20. Sold D. V. Negley on account : 

15 bbl. Flour at $6.50 

20. Received of Howard Stetson cash, for the invoice of Jan. 11. 

21. Sold Thomas Fleming on account : 

12 bbl. Pork at $16.90 15 bbl. Beef at $19 

21. Sold Warren Phelps, one half cash, balance on account : 

20 bbl. Pork at $16.80 18 bbl. Beef at $18.80 

30 bbl. Salt at $1.65 

22. Paid James Selden cash, for note and interest due to-day. 

Enter both the note and the interest in the cashbook, second column, and mark the 
note paid in the bill book. 

2S. Sold Jesse Blaine on account : 

12 bbl. Beef at $18.75 15 bbl. Flour at $6.50 

2S. Gave the proprietor a check for private use, $150. 
Enter in the cashbook, first column. 

24. Bought of William Edison on account : 

35 bbl. Pork at $14.25 

24. Gave H. C. Benton cash, on account, $625. 

24. Received of P. H. Williams cash, on account, $325. 

25. Bought of James Selden on account : 

40 bbl. Beef at $16.75 

25. Received of D. V. Negley cash, for the invoice sold him on Jan. 20. 
25. Paid Williamson & Son cash, for the invoice of Jan. 18. 

25. Received of John Harrison cash, for his note and interest due to-day. 

26. Received of Warren Phelps his note at 10 da., with interest for the 
balance of the invoice of Jan. 21. 

26. Sold John Harrison on account : 

12 bbl. Pork at $16 

26. Sold E. C. Bartlett on account : 

20 bbl. Beef at $18 

27. Bought of Williamson & Son on account : 

•25 bbl. Flour at $5.40 



I 



APPENDIX A VU 

Jan. 27. Sold Howard Stetson on account ; 

10 bbl. Flour at $6.50 10 bbl. Salt at $1.68 

27. Received of W. B. Emerson cash, on the invoice of Jan. 18, |400. 

28. Received of Thomas Fleming cash, on account, |250. 

28. Sold D. V. Negley on account : 

10 bbl. Pork at $16.20 

29. Sold Warren Phelps on account : 

12 bbl. Beef at $18.25 

30. Paid Bell Printing Co. cash, for advertising, $19.65. 

31. Paid Albert Force, a clerk, cash, for one month's salary, $32.50. 

Inventories, January 31, 19 — 

Merchandise : 

33 bbl. Pork $14. 

16 bbl. Beef 16.75 

45 bbl. Salt 1.50 

25 bbl. Flour 5.20 

Expense : 

Office Safe at cost $85. 

Real Estate : 

Store and Lot $4000. 

Closing the Work for Single Entry 

After recording all transactions, have them corrected by the instructor. 
Close the cashbook. (See model, pages ii and iii.) 
Posting. In posting, observe the following : 

1. Place three accounts on each page of the ledger. 

2. The Proprietor's account should be placed first. 

3. Open an account with each person whose name appears in the sales book 
or the purchase book. 

4. Debit each person whose name appears in the sales book. 

5. Credit each person whose name appears in the purchase book. 

6. Post from the journal. The debit or the credit of each item in the 
journal is indicated. 

7. Post from the cashbook. Each item in the first column on the left side 
of the cashbook should be posted as a credit ; each item in the first column 
of the cashbook on the right side should be posted as a debit. 

8. The above completes the posting. 

Note. Posting directly from the sales book, the cashbook, and the purchase book is a 
modification of the older methods of single entry, but the plan here suggested saves much 
time both in recording and in posting transactions. 



I 



viii BOOKKEEPING 

The Statement. Make a statement as follows : 

1. The total of the balances of all the accounts in the ledger in which the 
debit is the larger represents accounts receivable. 

2. The total of the balances of all the accounts, the Proprietor's account 
excepted, in which the credit is the larger represents accounts payable. 

3. The unpaid notes in the bill book are to be used in making the statement. 

Before making the statement of resources and liabilities, it is suggested that the 
student examine the records in the bill book to find out if each note issued or re- 
ceived has been recorded, and if all notes either paid or discounted have been so 
marked in the bill book. 

It is easier to avoid errors than to correct them. 

Resources : 

Accounts Receivable, per ledger 
Real Estate, per inventory 
Expense, per inventory 
Merchandise, per inventory 
Bills Receivable, per bill book 
Cash, per cashbook 

Liabilities : 

Accounts Payable, per ledger 
Bills Payable, per bill book 
The present worth equals the difference between the resources and the 
liabilities. 

The present worth minus the net credit equals the net gain. 
Enter the net gain in the journal as follows : 

David Easton ♦ , Cr 

Net gain, per statement 

Post the net gain to the Proprietor's account and show the present worth 
as in double entry. 

Changing to Double Entry. Change to double entry as follows : 

1. Debit each of the following accounts in the ledger with the amount 
appearing in the statement: 

Real Estate Expense 

Merchandise Bills Receivable 

2. Credit Bills Payable with the amount appearing in the statement. 

3. Take a trial balance from your ledger ; use the cash balance from the 
cashbook. 

Note. Some bookkeepers prefer to journalize the items which enter into the change of 
single entry to double entry. Various entries may be made to bring about the desired 
effect, but a record similar to the following is generally preferred, since by it all the 
resources and all the liabilities of the business are shown in a form convenient for transfer- 
ring to the ledger. 



APPENDIX A 



IX 



January 31, 19 — 



5 
3 
2 
3 
C.B. 
3 
V 



Accounts Receivable 

Real Estate 

Expense 

Mdse. 

Bills Receivable - 

Cash 
Bills Payable 
Accounts Payable 
C. D. Lewis, Prop. 



Per ledger 


2310 






Per inventory 


4000 






Per inventory 


50 






Per inventory 


920 






Per bill book 


428 






Per cashbook 


1650 






Per bill book 






365 


Per ledger 






2560 


Per ledger 






6433 



The items that are already in the ledger are marked sj so that they will not be posted. 
After the above entry has been posted, the accounts of the business are in double-entry 
form. 

A Double-Entry set of books may be changed to a single-entry set by leav- 
ing out of the ledger all accounts except personal accounts. 

The Use of Other Sets for Single Entry. If the instructor thinks it desirable 
to have additional work in single entry, it is suggested that any set in the 
Introductory portion of the textbook may be written in single-entry form. 
Journal paper and ledger paper may be used for this additional work. 

REVIEW EXERCISES 

The following review exercises are suggested : 

1. July 1 Frank Wilson and Chas. K. Peck began a Provision business with 
the following resources and liabilities : 



Resources 




Cash 


$1350 


Merchandise 


4250 


Office Fixtures 


240 


Horse and Wagon 


200 


Accounts Receivable 


850 


Liabilities 




Bills Payable 


$800 


Accounts Payable 


940 



The partners had an equal interest in the business. 
The books had been kept by single entry. 

October 1 the partners decided to change the books to double entry. The 
resources and the liabilities on that date were as follows : 



Resources 




Cash 


$925 


Merchandise 


4150 


Office Fixtures 


240 


Horse and Wagon 


200 



BOOKKEEPING 

Resources (continued) 
Accounts Receivable : 



A. H. Kern 


$150 


Thos. L. Fuller 


135 


E. R. Lakey 


165 


H. M. Hanna 


175 


Henry S. Arnold 


250 


Henry I. Brook 


110 


Liabilities 




Bills Payable 


#325 


Accounts Payable: 




H. J. Gould 


100 


Jas. L. Burgess 


140 


A. H. Francis 


200 


Geo. F. Hatfield 


85 



a. On a ledger sheet credit each partner with one half of the net resources 
on July 1. 

b. Make a statement showing the net gain on October 1. 

c. Credit each partner in the ledger with one half of the net gain, and 
show the present worth of each partner. 

d. Change the books to double entry by debiting in the ledger each re- 
source item, and crediting each liability item, on October 1. 

e. Take a trial balance of the ledger. 

Note. If the instructor so desires, the change to double entry may be accomplished 
by making the journal entry as illustrated on page ix. 

2. The following is a trial balance from a double-entry ledger. From this 
trial balance open a single-entry ledger, four accounts to the page. 



James L. Gary, prop. 






$3500 


Harvey A. Phelps, prop. 






3500 


Cash 




$1645 




Merchandise 




3256 




Real Estate 




1625 




Expense 




87 




Office Fixtures 




310 




Horse and Wagon 




250 




Bills Receivable 




195 




A. T. F. Ry. Stock 




1000 




Accounts Receivable : 




505 




S. M. Aker 


$150 






D. A. White 


85 






Roy & Co. 


45 






Edward Wise 


130 






John Gross 


95 






Bills Payable 






933 


Accounts Payable : 






940 


James Hyde 


230 






H. C. Alden 


50 






A. R. Waite 


115 






E. S. Dent 


175 






A. S. Flint 


120 






David R. Race 


250 








$8873 


$8873 



APPENDIX B 

DEFINITIONS AND EXPLANATIONS 

Bookkeeping is the art of making a systematic record of business transac- 
tions, enabling the proprietor to ascertain the condition of his business. 

A Business Transaction is an exchange of values. 

There are two methods of bookkeeping, Double Entry and Single Entry. 

In Double Entry, accounts are kept not only with persons but with all 
sources that affect the results or the condition of the business. 

In Single Entry, accounts are kept, usually, with persons only. 

There are two classes of accounts : 
Resource and liability accounts ; 
Loss and gain accounts. 

An Inventory is an itemized statement or schedule, in writing, showing the 
amount of certain assets owned by the business, or certain liabilities owed 
by the business. 

Allowances are made for the use of money, for the early payment of in- 
voices, etc. Interest and discount are allowances. 

Capital, at the beginning of business, usually is the amount invested; at 
other times it is the excess of resources over liabilities. 

Merchandise includes all commodities which are held for purposes of 
exchange. 

Expense is any expenditure to carry on the business. 

Interest is the compensation allowed by law or fixed by the parties for the 
use or forbearance or detention of money. — Huffcut. 

Discount is usually an allowance for early payment. 

Bills Receivable are the written promises of others to pay us. 

Bills Payable are our written promises to pay others. 

Posting is a process of transferring debit and credit items to their respective 
accounts in the ledger. 

Present Worth of the Proprietor's account : 
Is net credit plus net gain ; or 
Net credit minus net loss ; or 
The excess of resources over liabilities.. 

A Receipt is a written acknowledgment of money or other value received. 

A Voucher is a written statement proving that some transaction has 
occurred. 

When resources exceed liabilities a business is Solvent. 

When liabilities exceed resources a business is Insolvent. 

xi 



xii BOOKKEEPING 

A Statement of the business shows the results and the present condition of 
the business ; a Statement of a ledger account is an abstract of the account, 
and shows the balance remaining unpaid. 

The Journal is a book in which the debits and the credits of business 
transactions are arranged systematically ; the history of each transaction and 
the amount are included. 

The Ledger is a book containing the accounts of the business, the debits and 
the credits having been collected from other books of entry. 

A Book of Original Entry is a book in which entries are made first. 

An Auxiliary Book is subordinate to a book of original entry. 

A Bill Book contains an itemized record of all notes received or issued by 
the business. 

The term Charge, as used in bookkeeping, means debit. 

Red Ink is used for 
All rulings ; 

Recording inventories in ledger accounts , 
Entering item§ in the ledger that are to be transferred. 

In closing accounts, a single red line means that the items above it are to 
be added; double red lines mean that the account is closed, the items and 
the totals above this ruling are not to be used again. 

An Invoice is an itemized statement of goods bought or sold. It includes 
the names, the quantities, the prices, and the amounts. 



RULES FOR JOURNALIZING 

General Rule : 

Debit the account that stands for a value received, or for a person or a 

thing that causes value to go out. 
Credit the account that stands for a value given, or for a person or a 

thing that brings in value. 

Rule I. Proprietor's Account. The proprietor is debited : 
For withdrawals from the business for personal use ; 
For his liabilities assumed by the business ; 
For net loss when the books are closed. 

The proprietor is credited : 

For all investments in the business ; 

For net gain when the books are closed, i. 

Rule II. Property Accounts. Under its given name property is 
Debited when it comes into possession of the business ; 
Credited when the business parts with it. 

Property includes cash, merchandise, real estate, notes, etc. 

That the journalizing of bills receivable and bills payable may be more clearly under- 
stood, separate rules are given herewith. 



APPENDIX B xm 

Rule III. Bills Receivable. Under this title they are 

Debited when received by the business ; 

Credited when the business parts with them. 
Rule IV. Bills Payable. Under this title they are 

Debited when redeemed by the business ; 

Credited when issued by the business. 
Rule V. Accounts with Persons. Persons are debited : 

When they get into our debt ; 

When we get out of their debt. 
Persons are credited : 

When we get into their debt ; 

When they get out of our debt. 

Personal accounts are open accounts with individuals, firms, or corporations. Generally 
they are the result of buying or selling on account. 

Rule VI. Expense Account. This account is 

Debited for any expenditure to carry on the business ; 
Credited for the proceeds of the sale of any item previously charged to 
expense. 

Expense includes rent, salaries, insurance, and other like items. In a large business a 
separate account is kept with each of these items. 

Rule VII. Allowances. Under the given names these items are 
Debited when we allow them to others ; 
Credited when allowed by them to us. 



APPENDIX C 

LOOSE-LEAF METHODS AND FILING DEVICES 

Modern business men have adopted many inventions for saving time, 
reducing labor, and lessening expense. Many of these have been applied to 
bookkeeping and to general office work. 

At the very outset it ought to be noted that these devices have nothing whatever to 
do with the principles that govern bookkeeping ; debit and credit are unchanging factors, 
no matter what form of record may be made. 

Different kinds of business and different methods in the same business 
make various plans desirable and even necessary. This fact is responsible 
for the production of a multitude of devices for carrying on office work and 
Keeping accounts. 

So many systems are in use that only a brief reference can be made to them here. The 
character of the business and the manner of conducting it determine what devices may 
be used advantageously. The value of any of them depends on the volume of business 
transacted and the records required for giving necessary information concretely and in 
accessible form. 

Loose-Leaf Methods. Books equipped with locking devices so arranged that 
leaves may be inserted or removed at will are used generally and have many 
advantages. The suggestions here given apply particularly to a loose-leaf 
ledger, but they have a bearing on any one of the many books where loose 
leaves are used. 

As insertions or removals in any book may be made to conform to require- 
ments, smaller pages may be used than in a bound book. 

Pages containing accounts that are closed may be removed and filed in 
transfer covers or binders for subsequent reference, if such reference be- 
comes necessary. This keeps the ledger volume for current use free from 
dead accounts. It also obviates the necessity of opening new books, as only 
live accounts remain permanently in the ledger. 

By the use of projecting leather tabs, index leaves may be inserted, so the 
book is practically self-indexing, as the removal of a leaf or the insertion of 
a new one does not affect the index division. 

The ability to remove leaves from a book of account at will is open to the objection that 
it may suggest to an unreliable person the possibility of tampering with important records, 
as one leaf can be easily withdrawn and another substituted. For this reason some have 
maintained that this form of record should not be used in certain books,' such as the 
general ledger. 



APPENDIX C XV 

Card Systems. All are familiar with the card index found in a public library. 
This is illustrative of many card-index systems now in use in modern busi- 
ness offices. The following may be named as a special advantage : 

The readiness with which unused accounting or statistical material may 
be eliminated, and, correspondingly, new material may be inserted. 

The CARD LEDGER is a series of cards ruled in regular ledger form, filed in 
a box or a cabinet, and properly indexed with projecting guide cards. It is a 
substitute for a regular ledger. The following are its advantages : 

All closed accounts are readily eliminated and new accounts are as readily 
inserted. 

Monthly statements of customers' accounts may be made by several persons 
working on the ledger at the same time ; in a bound ledger only one person 
can thus work. 

Any account required for reference may be taken from the file, and the 
regular work of the bookkeeper on the ledger will not be interrupted. 

The use of projecting tabs affords an easy method of indexing. 

Duplicate Billing. By using carbon paper a duplicate or several duplicates 
of any writing may be made, either with the pen, or with a typewriter, or 
with a billing machine. For instance, instead of entering all sales in a sales 
book, a duplicate may be made, which insures a copy identical with the bill 
sent to the customer; the postings may be done from the carbon records, 
which, when bound, constitute the sales book. The saving of time and the 
avoidance of errors are real advantages. 

Carbon duplication may be used in a multitude of ways, and may be applied to many 
forms of record. 

Billing machines, and typewriters with billing attachments, afford ideal facilities for 
both original and duplicate work. 

Filing Devices. The vast accumulation of letters, documents, pamphlets, 
and the like, in a large business office, makes some system absolutely neces- 
sary, if material is to be readily available for use when needed. This is pro- 
vided for by modern filing systems, usually vertical for accessibility, which 
meet the two essential requirements of a modern business office, namely, 
classification of material and ready reference. So successfully are these 
requirements met by manufacturers that the production of filing systems 
has become a large industry. The following are special features : systems 
of indexing in any form that may be required, alphabetical, numerical, by 
subject, or otherwise ; provisions for classification and for elimination. 

The most common form of filing devices is a cabinet of drawers so arranged that the 
papers or documents may be filed in either a flat or a vertical position, and may be com- 
bined in various forms appropriate to the business to be served. 

Note. If deemed desirable, the instructor may secure a catalogue containing many 
illustrations of filing devices, and give some attention to the matter in his class. 



APPENDIX D 



COMMERCIAL TERMS DEFINED 



Acceptance. The name of an accepted 
draft ; an agreement, by signature, 
to the terms named in the draft. 

Account Current. An open or a running- 
account; a detailed statement of 
transactions between two persons 
or two firms. 

Account Sales. An itemized statement 
of sales and expenses, rendered by 
a commission merchant to his prin- 
cipal. 

Acknowledgment. A formal admission, 
made before a notary or other quali- 
fied officer, that the act described 
was done voluntarily; the officer's 
certificate of such admission. 

Affidavit. A written statement made 
under oath. 

Agent. One who acts for, or in place of, 
another, by authority from him ; a 
deputy. 

Assignee. One appointed by another to 
do some act or to enjoy some right ; 
generally, one to whom property is 
transferred for the benefit of the 
creditors. 

Attachment. A seizure or taking into 
custody by virtue of a legal process. 

Auditor. A person appointed to examine 
accounts. 

Bankrupt. Any person whose property 
becomes liable to administration 
under the bankruptcy laws. 

Bill of Lading. A receipt of a transpor- 
tation company, containing an ac- 
count of the goods shipped and the 
conditions of shipment. 

Bill of Sale. A writing given by the seller 
of personal property to the buyer. 



Board of Trade. In the United States, 
a voluntary organization of business 
men for the advancement of com- 
mercial interests. 

Bona Fide. In good faith. 

Bond. A written promise under seal, 
binding a person to do a certain 
thing or not to do it. 

Bonus. Something given in addition to 
what is strictly due the recipient. 

Broker. An agent between buyer and 
seller ; a dealer on the stock ex- 
change. 

Capital. The investment in a busi- 
ness. 

Cashier. One who has charge of money ; 
in banks, the financial officer. 

Certified Check. A check that has been 
accepted by the bank on which it is 
drawn, thereby making the bank 
security for its payment. 

Clearing House. An institution in a city 
where daily settlements are made 
between banks by the mutual ex- 
change of checks, drafts, etc., the 
difference between such exchanges 
being paid in cash. 

Collateral. A security additional to the 
personal obligation. 

Common Carrier. One who undertakes 
the office of carrying either goods 
or persons for hire. 

Copartnership. The voluntary associa- 
tion or joining of two or more per- 
sons in a business enterprise. The 
same as partnership. 

Copyright. A right of control granted 
by a government to an author oar 
a publisher. 



APPENDIX D 



xvii 



Coupon. A certificate of interest due, 
printed at the bottom of trans- 
ferable bonds, designed to be cut 
off and presented for payment when 
the interest is due. 

Credit Memorandum. A notice sent to 
a purchaser stating that an allow- 
ance has been made for goods re- 
turned, or for other causes. 

Deed. A contract under seal, usually 
transferring the title of real estate. 

Depreciation. A falling of value. 

Dishonor. A refusal to pay an obliga- 
tion when due, or to accept a draft 
when presented for acceptance. 

Dividend. The allotment to each stock- 
holder in the division of profits. 

Drayage. Charges for conveying goods 
from one place to another. 

Exchange. The method by which debts 
are discharged without the actual 
transference of money; the rate at 
which such exchange can be made. 

Extension. An allowance of further 
time for the payment of a debt. 

Fixtures. That part of the furnishings 
of a store or an office which is not 
movable. 

Footing. The adding of a column of fig- 
ures, or the result of such addition. 

Forgery. The writing of another's 
name, as a signature, with fraudu- 
lent intent, or the altering of a 
written document. 

Franchise. A certain right or privilege, 
granted by a government to indi- 
viduals or corporations. 

Freight. Compensation paid for the 
transport of goods or other property ; 
that with which anything is laden 
for transportation. 

Good Will. The value, in a business, of 
established reputation or patronage. 

Guaranty. An agreement by which one 
person promises to make another 
secure in the possession or enjoy- 
ment of something; a security 
against loss. 



Honor. To accept a draft, or to pay it 
when due. 

Income. The total amount of the earn- 
ings and the receipts of money from 
all sources. 

Index. An alphabetical table of contents. 

Indorse. To write one's name on the 
back of a note, a check, or a draft ; to 
record a partial payment on the back 
of a note. 

Installment. A sum of money paid in 
stated portions. 

Insurance. Indemnity against loss ; the 
premium paid for insuring. 

Jobber. A merchant who buys goods 
from importers and manufacturers, 
and sells to either wholesale or retail 
merchants. 

Liquidation. Act or process of settling 
debts. 

Lease. A contract, usually in writing, 
for the temporary possession of real 
estate or other property. 

Letter of Credit. A letter usually issued 
by a bank, addressed to banks in 
foreign cities, directing payment of 
a stated amount to the holder. 
Such letters are usually carried by 
travelers. 

Manifest. An invoice of a ship's cargo. 

Mercantile Agency. An institution which 
obtains and furnishes information 
regarding mercantile enterprises, 
their financial standing, their busi- 
ness reputation, etc. 

Money. Current coin; any circulating 
medium. 

Mortgage. A conditional transfer of the 
title to real estate or chattels as se- 
curity for the payment of a debt. 

Negotiate. To treat with another with 
a view to reaching an agreement ; 
to transfer for a valuable considera- 
tion. 

Net. Clear of all charges or deductions. 

Notary. A public officer who takes ac- 
knowledgments of legal documents 
and protests paper for nonpayment. 



XVlll 



BOOKKEEPING 



Open Account. A running or an unsettled 
account. 

Open Policy. An insurance policy cover- 
ing undefined risks and admitting 
of subsequent indorsements or ad- 
ditions. 

Outstanding Accounts. Book accounts 
remaining unpaid. 

Overdrawn. A term applied to a bank 
account when a check has been 
issued for an amount greater than 
one's credit balance. 

Patent. An exclusive right to an inven- 
tion, issued by a government. 

Pawnbroker. One who makes a business 
of lending money on personal prop- 
erty pledged and in his keeping. 

Power of Attorney. A legal authority to 
act for another. 

Premium. The consideration paid for a 
contract of insurance ; a sum or 
bonus in addition to the capital. 

Protest. A formal notice, issued by a 
notary to the indorser or the in- 
dorsers of a note or draft, of the 
nonpayment of a note or a draft, or 
the nonacceptance of a draft. 

Quotations. The published or current 
prices of stocks, bonds, or any com- 
modity. 

Rebate. An allowance for overcharge, for 
early payment, or for other reasons. 

Receiver. A person appointed by the 
court to hold in trust property which 



is the subject of litigation, pending 
the suit ; or one who is appointed 
to wind up the affairs of a partner- 
ship or a corporation on its dissolu- 
tion. 

Retail. To sell in small quantities. 

Short-extend. To enter individual 
amounts at the left of the money 
column, to be extended in total in 
the money column. 

Sinking Fund. A fund set apart for the 
redemption of bonds or for other 
specific uses. 

Sundries. Many different or small things. 

Syndicate. A combination of capitalists 
who unite their resources to advance 
some specific business enterprise. 

Tariff. A lawful rate of duty on imports. 

Terms. Conditions of sale or of agree- 
ment. 

Tickler. A book containing memoranda 
of all time paper, and arranged so 
as to serve for a reminder to pay or 
to collect. 

Trustee. One intrusted with property for 
another. 

Underwriter. One who insures. 

Valid. Binding in law. 

Void. Not binding in law. 

Way Bill. A document containing a de- 
scription and shipping directions of 
goods sent by railroad. 

Wholesale. Selling large quantities, usu- 
ally in unbroken packages. 



APPENDIX E 



ABBREVIATIONS AND GENERAL TERMS 



A America; American 

A I First class 

Acct. or acct. . . Account 

Acct. Cur. . . Account Current 

Acct. Sales . . Account of Sales 

Adv. or adv. . . Advertisement 

Agt Agent 

A.M Before noon ; Master 

of Arts 

Amt Amount 

App Appendix 

Asst Assistant 

Atty Attorney 

Av. or Ave. . • Avenue 

Bal Balance 

B.B Bill Book 

bbl Barrel 

bdl Bundle 

Bk Bank 

B/L Bill of Lading 

Bld*g .... Building 

bu Bushel 

bx Box 

^ . , . . . . Cent 

Cash Cashier 

Ck Check 

Co Company; County 

C.O.D Collect on Delivery 

Coll Collection; Collector 

Cr Credit; Creditor 

cwt Hundredweight 

da Day 

Dep't .... Department 

Dis Discount 

do The same 

doz Dozen 

Dr Debtor; Doctor 

E. & O.E. . . Errors and omissions 

excepted 



ea Each 

e.g For example 

Esq Esquire 

etc. or &c. . . And so forth 

Ex Example 

Exch Exchange 

fig Figure, Figures 

F.O.B. or f .o.b. . Free on board 

Fol Folio, or page 

ft Foot 

gal Gallon 

gr Grain 

gro Gross 

hhd Hogshead 

hund Hundred 

i.e That is 

in Inch 

Ins Insurance 

inst Instant ; the present 

month 

Int Interest 

Inv Invoice 

Jr Junior 

kg Keg 

lb Pound 

L.B Letter Book 

L.F Ledger Folio 

Ltd Limited 

M Thousand 

Mdse Merchandise 

Mem Memorandum 

Messrs. . . . Gentlemen; Sirs 

Mfg Manufacturing 

min Minute 

Mme Madam 

mo Month 

Mr Mister 

Mrs Mistress 

MS Manuscript 



XX 



BOOKKEEPING 



MSS Manuscripts 

N.A North America 

N.B Take notice 

No. or no. . . Number 

O.K All correct 

Oz. or oz. . . Ounce 

P Page 

Payt. or payt. . Payment 

pc Piece 

Pd Paid 

per By 

Per cent or per 

cent .... By the hundredths 

pk Peck 

pkg Package 

P.M Postmaster; After- 
noon 

P.O Post Office 

pp Pages 

pr Pair 

Pres President 

prox Proximo; of the next 

month 

pt Pint 

P.S Postscript 

qr Quire; Quarter 

qt Quart 

Rec'd .... Received 

Ret'd .... Returned 

Rev Reverend 

R.R Railroad 

Ry Railway 

Sec Secretary 

Shipt Shipment 

sq. ft Square feet 

Sr Senior 



St Street; Saint 

Str Steamer 

Sunds Sundries 

Supt Superintendent 

Tr Transpose 

Treas Treasurer 

Ult Ultimo; of the last 

month 

U.S.M. . . . United States Mail 

via By way of 

viz Namely; to wit 

vol Volume 

vs Against 

W/B .... WayBiU 

wk Week 

wt Weight 

Yd. or yd. . . Yard 

Yr. or yr. . . Year 

Arbitrary Signs 

a/c Account 

@ At or to 

c/o Care of 

i Cent 

\j Check mark 

% Dollar 

jjt Number, if written 

before a figure ; 
pounds, if written 
after a figure 

% Per cent 

I^ One and one fourth 

I^ One and two fourths 

I^ One and three fourths 

\ Feet 

M Inches 



APPENDIX F 

FORMS AND LEGAL DOCUMENTS 
Form I. Letter of Remittance 



VV. O. Weaver C. W. Frey W. D. Radcliffe 

Office of 

W. O. Weaver & Co. 

WHOLESALE GROCERS 



Boston, ^ass,, ^S^^..^/(7, 19 — 







xsd 



XXll 



BOOKKEEPING 
Form II. Notice of Dissolution of Partnership 



a^vati/yu^ {^&'{yw~&&rL (Xup£aZ X. cfryvCtA ayyui ^JvmZ&x^ €.. fa'yi&Q^; vauLea, 
tA& QXA^t& oj^ of^n^iXA V^ ^an&Q,, at of^iAAmxiii&tcL, TyioMyQx^i&A'UA^eXta', lo^ 
tAvO' cLoA^ cOia^yatv-&cC {yu yyiutAAA^^t ^o-noydA^t ; tkat tk& {>'%iQAyn &q^ vyi 
the^ yiLtuAy& w-ilZ 6^ (SxyyvdAMt&ci {yu thy& qxjuIxL (^A^&aZ&v H. fcyyv&a^, wAo- 
w-ilL jiUMf' OAui cLvQy&AaAxi& alt cL&6X^ am^cL Cia/>-vtttC&Qy^ ayyicL v&e^&uu-& 
a£t yyuyyieA^ ^^uiA^a/yte^ to- tA& oxuxi laZ& lOimv. 



[Siflrned] 






Form III. Circular announcing the Retirement of a Partner 



W. D. Martin 



Offict of 

Martin & Ward 



A. S. Ward 



Soston, Mass., Ciuc^. ^^, 19— 



din tk& 3/qZ vnoZ. tk& 



n&iAAlyJn kiXA&ito e^loZiyyic^ ^<5— 



tw'&e.'yi lA}-. cb-. TyioAjjyyi oi^^cL CL. of. WdvcL w-itt {y& cL'iQ^ata>-&cL (m^ 
"vyuiiXAUAL ^^(yyvQ.&nt. CLit&v tkaZ (£aZ& tk& 6-icQyt/yv&QyQy WA.tc 6-& n^an- 
ciu^t&ci (yu TVlv. IX^Oyui (yvL ki^ aw-n a^^/yumZ oavcL in kto^ aiAyyi na'my&. 
cJfv Qyati^itAyyva cl (S/>riLiymix^/yL&& of ifO^UAy v-Oytu&d '^aAAxyyia,a& i\}-& 
ciQyQA4.v& uo^ tJvoZ no- 'b&cUA^uyvv ^v-Ltt {>■& 'm(XcL& Ln tk& ^x^js^iZat ay 
tk& (yu/^uyi&QyQy , am^ci tAc\L cult iZ^ oA-iaLvO' wttt 6-& (?.oncUoeZ&cC w-vCk 
OQ^ av&at &piiy^&nM^ a^ tkaZ w-kteA uotv kcLV-^y e/pc/^&w&nS'&cl wyicL&v 
tk& ^&Q^emZ 'vyvam^cu^&'nv&nt. 



APPENDIX F 



XXUl 



Form IV. Contract of Sale and Purchase 



iSinoto all 0itn hv tljese presents 

that n^&, ^. 1/0^. lA^cnXAvyujLcyyi If (Px>-., o^ fSo^Xxyyi, iTlao^xMA'WQ.eXZay, 
in consideration of S^lj^&em' 3^k(yiiaxxrul 3w-o- /iftitulv&d Dollars 
paid hy cb. €.. lyO^vtlu^yfvO' V^ ^a., a^ oxMyci JSo^tan, the receipt 
iviiereof is hereby achnowledged, do hereby sell, transfer, and 
deliver unto the said ^. H. WHtCcuyn^ V^ ^., tA& (fao-cL w-itC, 

tac^eZkeA^ waXA alt otkeA^ cvoyo^eto^ oj^ tk& ox^icL jCvnt a^ (^. W". W^aitk- 
\yyiat(y}'u If €.0., vyiA't'wcLuyia a^tt tAa^& o/^&eA^i'i&cC vvu tA& Qy(S^h&cLti't& 
k&v&Co a/nm^&oc&cC a^ruL yyuAAJo&d^ *d. CLyvcL aoy a. '^a.vC o-^ tA& '^yuA^- 
eAa^&-'^vi^& tk&v&o^, tk& o^^uCcC 3. €. li^Lttiamm' If <^. heA^e/pu 
(M^Ai^yyv& oAici cup^& to- ^^um^, amx£ to- kotcC tA& ttn^yyv ot ^. lA)-. 
lAkyiXAiyyuj^xyyi If ^. kwunbteA^ tA&v&iuyyfL, tk& l^aAvtCtCe^ ot 
awicL tiA/yyL Q/^&&vit&cC 1/)^ tA& Q.€A&cOwt& keA^eAdrnto amm^£/?o&cl aruL 
yyuAAJoe^cl B. 

Co batoc anU to ()oHl, all and singular the said goods and chat- 
tels to the said ^. €,. WULioAn^ V^ (^., and tk&vv executors, ad- 
ministrators, and assigns forever. And w-& hereby covenant with 
the said vendee that w& ci\.& the lawful owners of the said goods 
and chattels, that they are free from all incumbrances, that u^& 
have good right to sell the same as aforesaid, and that w-& will 
Warrant anli liefenir the same against the lawful claiins and de- 
mands of all persons. 

3rn tDttne0fi( ta)()ereof, ^i^& koAye, hereunto set oaca^ hando. and sealo, 
this tw-e/ntAf-'I'iA/QZ day of (Z^i^^oQt in the year one thousand nine 
hundred and tw-eZv-e^. 

ISigned^ ^. ZO-. l/(^ovtki/yu^to^1. If €^. [seal] 



xxlv BOOKKEEPING 



Form V. Articles of Copartnership 



3ittiCltSi of COpatttTttSfi^ip made and entered into this first day of 
August, one thousand nine hundred and twelve, between Malcolm D. Gilbert, of the 
City of Boston, County of Suffolk, and Commonwealth of Massachusetts, and Chas. 
M. Wentworth, of said Boston : toitnejsjsetft : 

jFitfiit* This copartnership is formed for the purpose of carrying on in said City 
of Boston a Jobbing Furniture business under the firm name of M. D. Gilbert & Co., 
and shall continue for two years from the date hereof unless sooner dissolved by mutual 
consent. 

^etOtltl* As his contribution to the capital of the firm said Malcolm D. Gilbert 
hereby transfers to the said firm his business now located at No. 467 East Street, and 
said firm assumes and agrees to pay the outstanding liabilities of the said business. 
Said business is taken over at the net value of ^14,225, and is more particularly de- 
scribed in the Schedule of Assets and Liabilities hereto annexed. 

QLhittl* Said Chas. M. Wentworth contributes as his share of the capital as 
follows: cash, ^7000 ; stock of furniture, $1500 ; account with Foley Bros., $5735 ; 
total, $14,225. 

iFottttI). Bach partner shall, semi-annually, be credited on the books of the firm 
with interest at the rate of 6 per cent per annum on his share of the capital for the time 
being standing to his credit, before any division of profits is made, such interest charge 
to be treated as an expense of the business. 

jFiftf)* Each partner shall be credited with the sum of $100 per month as salary, 
and he may withdraw the same monthly, for services rendered, or, at his option, any 
balance remaining undrawn may be carried to such partner's capital account. Such 
salaries shall be charged as an expense of the business and not reckoned as profits. 

i^iTCt^* Profits and losses shall belong to, and be borne by, the said partners in 
equal shares. 

S^tbtntl)* Neither partner shall, for the benefit of any third pefrson, indorse any 
notes or negotiable paper, or become surety or guarantor or otherwise liable for the 
benefit of third parties, without the assent in writing of the other partner first obtained. 

^iff|)t()» An account of the stock and of the debts and liabilities of the firm shall 
be taken at least annually, and the profits or losses computed and credited or charged to 
each partner''s capital account. After such accounting, either party shall be at liberty 
to withdraw his share of any net profits of the firm, and any profits not so withdrawn 
shall be added to and deemed a part of the capital account of such copartner. 

if^liutl). Neither partner shall engage in any other business, but each shall devote 
his entire time and attention to and put forth his best efforts and energy for the further- 
ance of the business aforesaid. 

STtTltl)* Complete and accurate books of account shall be kept, used in common, 
and each partner shall, at all times, have access thereto. 

To the faithful performance of all the terms and conditions of these Articles of 
Copartnership, the undersigned partners hereby bind themselves each to the other, his 
heirs, executors, administrators, and assigns. 

3^n QlMttneSfiS ^\Wi)^tVtOf, the parties have hereto affixed their hands and seals, 
in duplicate, the day and year first above written. 



[Signed] 



^ ?yioiUx>tm. 3. ^M-eAt [SEAL] 
^ 0ha^. ?J1. W^&nt/iv-cyM. [seal] 



appe:n^dix f xxv 

Form VI. Power of Attorney 

linotD all itten \)v t|)ese presents 

that i4^&f ^' 1(^' Iflcyufcuyu oa^^cL Ro^yeAt Halt, e^noZvUiti/Kc^ tk& 
ICvm, oi IS. 10^. TJ^tcyufoyyi V ^o-., of the City of JSa^n, THcm^., 
have made, constituted, and appointed, and hy these Presents 
do rnahe, constitute, and appoint, ^kavt&o^ 771. RoAfvyvcyyicL, 
of the City of cAeAA^tan, THcma.., cyuA. true and law ful Attorney , 
for ua- and in (yuAy naine, place, and stead to- tvam^a^t 
(>^i(AAjyi&^A^ ouncL to- qamti amci vyiclxyi^& am.u o^ oLt oj^ tA& uote^, 
ike^k^, ctvO'ltoy, C&tZeAyQy, oyKcl all otkeAy irvoXAAiAyvemtoy ijyi waaXA'TicJ' 
ve^£AA)-&ci iyvL tk& eAM4A^& o-i ov ta^uAyyia i\xyyyv o^w (M4^\yyi&QA/ , ^ivin^ 
and hereby granting unto o^ov said Attorney full power and 
authority to qax^tv oavcL vyuioAA.& oAieA Im^XAAoyyuemZo^, oa^cL to- 
4i.eAAo\mv alt a'wcL ev-eAAf a<sZ iipkatQX)-aA}-£Ay ai^-awt tk& ^v&yyviAy&Oy 
as freely, fully, and effectually as w-e. could do if personally 
present, with full power of substitution and revocation, hereby 
ratifying and confirming all that o^ua, said Attorney or his 
substitute shall lawfully do or cause to be done by virtue hereof. 
5n ^itttCfiifli l^bcreof, w& have hereunto set o^ia hands and 
seals this Ult&eAM, day^ o^ jtXi^ in the year nineteen 
hundred ayyicL tuy&tv-e. 

Attorney's Signature Ro^£aZ ffaZt [seal] 



Commonwealth of Massachusetts) .^ r^ ^ r^^ n n . ^ i r^ . ^ 

County of Suffolk ) ' ' f r ' 

Then personally appeared the above-named Id. K^. TVlo^ufayyv 
ayyicL Ro6-eAt /ifall and acknowledged the foregoing instrument 
to be tk&iAy free act and deed. 

Before me, 

€. ^. mau 

Botarp public 



XXVI 



BOOKKEEPING 
Form VII. Certificate of Protest 



ContmontDealti) of JWassacfjusetts 



County of Suffolk 
City of Boston 



0. 



On the temtk day of ^&&&wA&v, in the year of our Lord one 
thousand nine hundred am^ Vw-&tv-&, 3* I'O^- ^' lX}ttleA^, 
JBotatp Pttblt(, duly admitted and sworn, and practicing in said 
Commonwealth, at the request of L&ic^lv /if. JSwvoxyyi, (JBfiSq., 
Casd^tcr of the (^awL^m^eAy^^iaZ c/taZuyymL Ba.'yb'h, went with the 
original 7iot&; which is hereunto annexed, the time therein 
limited having fully elapsed, and demanded payment thereof 
oL tk& Sx^s^&l^AyOV cyfatuyyuut Boyyik^, amAy w-oim/ a/yLo^ti^-eAy&ci iyu tk& 

The not& remaining unpaid, I duly and officially notified 

the {yyvcLo-VQy&vO' tAeA^&o^ at tk& j^oUxyw-in^ acLcCv&o^e^ : 

B. W^. f'foJ.em, V €a., cAtwlcyyi, THao^., 

{postage prepaid) of said . d&'^cMiit requiring payment. 
^berefore, /, the said iltiotarp, hy request as aforesaid, have pro- 
tested and hy these presents do solemnly protest, against the 
drawer of said ^ot&, the indorser, and all others concerned 
therein, for exchange, re-exchange, and all costs, charges, 
damages, and interest, suffered and sustained, or to he 
suffered and sustained, hy reason or in conse- 
quence of the non-payment thereof. 

^W. STCfilttinOTip ^^ZXttsi, I have hereunto set my hand and 
affixed my J^otarial Seal, the day and year first above written. 




Noting Non-Acceptance . . 

Postage 

Protesting for Non-Payment 
Postage 



f/.60 



Jlilotarp Pttblic 



APPENDIX F ^ XXVU 



Form VIII. Notice of Protest 



Commercial Rational ^ank 

Boston, Mass., ^&&, /O , /^ — 

Bear Sir a.: 

Yow are hereby notified that a not& 

for c4vyi& /lfi</yvcOi&d ^vxty j^ ^^^^-Dollars 

drawn by LeM^h&v, Buvv V €0. , cu^d indorsed by i^cyw, dated 

cfe/^. 10, 19 , payable tkv&& 'vyuyyith^ after date, has been 

protested by me for non-payment after due demand at tk& 
€oc^&U/io^ cAatuyyval fSamJo this day, and that you are held 
answerable for the amount, with all legal costs, interests, and 
damages in consequence of the non-payment thereof 

Respectfully yours 



INDEX 



Abbreviations xix 

Of purchase ledger . . . 229, 260 
Of sales ledger .... 229,260 

Acceptance, definition of .... 128 

Account, or accounts 

Apply on 10 

Classes of xi 

Classification of . . . . . 24, 26 

Closing, by balance 36 

Controlling 316 

Definition of 16 

How to open 17 

In full of 10 

Of sales 114 

Open 26 

Personal, definition of ... . xiii 
Personal, showing loss . . . 261 
Suspense 265 

Accounts payable, definition of . . 175 

Accounts receivable 175 

Allowances xi 

Assuming charge of books .... 259 

Auxiliary books xii 

Bank 

Definition of 67 

Opening account 67, 68 

Bill, definition of 42 

Bill book 

Definition of xii 

Models of ii, 140 

Bills of lading 

How drawn 161 

Kinds of 159 

Uniformity of 161 

With draft attached .... 171 

Bills payable, definition of . . . 12, xi 

Bills receivable, definition of . . 12, xi 

Book of original entry xii 

Bookkeeping 

Definition of xi 

Methods of xi 

Briefing 

Articles of partnership ... 181 
Power of attorney 258 

Business correspondence, suggestions 

for 125 

1 Business statements 

Definitions of 27, xii 

Forms of ... 4, 40, 177, 244, 328 

Business transactions, definition of . 7, xi 

Capital 

Combinations of 297 

Definitions of 27, xi 



PAGE 

Cash 

Definition of 8 

How proved 78 

Cashbook 

Description of 58 

Illustrations of . . ii, 64, 144, 204, 

250, 314 

Opening entry in 101 

Petty 316, 321 

Cash sales, how treated 203 

Charge, meaning of xii 

Check 

Certification of 219 

Definition of 43 

Significance of certification . . 219 
Check book 

How kept 72 

Model of 71 

Stubs of, compared with canceled 

checks 178 

C.O.D 161, 170, 171 

Collection and exchange, when 

charged 167 

Commercial agencies 284 

Commercial terms defined .... xvi 

Commission 115 

Commission merchant 114 

Condition of business 27 

Consignee 114 

Consignment 114 

Consignor 114 

Contract of sale xxiii 

Corporations 

Books of 299-301 

Capital stock of 298 

Compared with partnership and 
joint-stock companies . . . 297 

Definition of 297 

Fees of 298 

Officers and management . . . 298 
Opening entries for . . . 301, 307 

, Organization of 297 

Powers of 298 

Reports 299 

Stockholders' liability .... 299 

Credit 11, 15 

Creditor 11 

Daily cash proof 78 

Debit 11, 15 

Debtor 11 

Deposit tickets -. 68-70, 167 

Depositor, identification of ... . 67 

Deposits, how recorded 72 

Depreciation 293 



1 In the text these forms are also the loss and gain statements, 
xxix 



XXX 



BOOKKEEPING 



Discount ^A«^ 

Bank . 96 

Definition of xi 

Term of 97 

Dividend, definition of 299 

Double entry 

Changed to single entry ... ix 
Compared to single entry ... 
Contrasted with single entry . . 

Definition of x 

Opening entries for 136 

Principle of 27 

Drafts 

Analysis of 116 

Bank, definition of 123 

Commercial, definition of . . . 116 

Kinds of 117, 123, 128 

Manner of accepting . . . . 129 

Object of 116 

Parties to 116 

Questions on 134, 136 

Relation of parties 117 

Rules for journalizing . . . 120, 132 
With bill of lading attached . . 171 
Entry 

Compound 46, 98 

Simple 98 

Erasures, avoidance of 6 

Errors, correction of 38 

Exchange 123 

"Expense 

Definition of 8, xi 

How closed 32 

Illustrations of 8, 9 

Incidental, classification and clos- 
ing of 332, 333 

Inventory of 29 

Loss on, how found 29 

When credited 29 

1 Financial statements • 

Definition of 27 

Forms of 4, 40, 245 

Franchise, definition of 299 

Gains, how realized 27 

Goodwill 215 

Incoming business forms . 82, 91, 100, 
107, 151, 182, 209, 232, 251, 276 

Index for ledgers 175 

Indorsements, definitions and illustra- 
tions of 89, 90 

Insolvency 27, xi 

Insurance policy 156 

Interest 

Debit and credit of 46 

Definition of xi 

How adjusted between partners . 242 

How closed 54 

How computed 96 

Loss or gain on 47 

Rate of 96 

Interest and discount entries ... 97 
Inventory 

Definition of xi 

Expense, how found .... 29 



Inventory *AaB 

Explanation of 24, 25 

Liability 180 

Merchandise, how found ... 24 

Investment 14 

Invoice 

Checking of 83 

Definition of 42, xii 

Invoice book 

Explanation of 143 

Models of 142, 206 

Invoice register 

Explanation of 316 

Illustration of 314 

Joint-stock company, definition of . 297 

Journal 

Analysis of 15 

Definition of xii 

Forms of 2, 208, ii 

Journalizing 

Definition of 11 

Rules for 16, xii 

Ledger 

Analysis of 18 

Auxiliary, advantages of . . . 207 

Definition of 16, xii 

General 207 

How closed 30 

Purchase 207 

Sales 207 

Letters 

Announcing retirement of partner xxii 
Containing inclosure .... 158 

Dunning 288 

Of application 210 

Of recommendation 241 

Of remittance 221, xxi 

Ordering goods .... 126, 157 

Soliciting trade 285 

Suggestions on 280 

Liabilities, definition of ... . 26, 27 

Loose-leaf methods xiv 

Loss and Gain account, how closed . 32 

Losses, how sustained 27 

Merchandise 

Analysis of 334 

Classification of ... . 274, 331 
Classified accounts closed . 292, 331, 

332 

Definition of 8, xi 

Gain on, how found . . .25, 291 
How closed 30 

Merchandise discount . . . 109, 166 

Monthly statement 

Of depositor's account .... 72 
Of open ledger account ... xii 

Net gain 27 

Net loss 27 

Notes 

Charging to depositor's account . 169 
How discounted, with interest . 266 
How discounted, without interest 168 
Maturity of, how found ... 97 
Model explained 77 



1 In the text these forms are also the resource and liability statements. 



INDEX 



XXXI 



PAGE 

Opening-entries 

Exercises in . 45, 136, 197, 301, 307 
Models of 61, 137 

Overdrafts, how treated 293 

Partner's private accounts .... 218 

Partnership, or copartnership 

Articles of xxiv 

Definition of 297 

Dissolution of 195 

How formed ; illustrative entries . 198 

In Set IV, May 99 

In Set V, August 181 

Notice of dissolution .... xxii 

Pass book, how kept 72 

Payroll 320 

Personal account 

Definition of xiii 

When a liability 27 

When a resource 27 

Posting 

Definition of 16, xi 

Directions for 16,17 

Double 326 

Power of attorney 

Definition of 253 

Form of xxv 

Present worth 27, xi 

Price lists . 41, 51, 80, 98, 101, 146, 202, 

252, 313 

Principles, summary of . . . . 15, 16 

.Property xii 

Protest 

Certificate of xxvi 

Method of 269 

Notice of, explained .... 256 

Notice of, form xxvii 

Value of 269 

When necessary 269 

Purchase book 

Description of 58 

Forms of 63, 77 

_JB^al estate, definition of .... 57 

Receipt 

Definition of xi 

Forms of . . 9, 74 

Rechecking 19 

Red ink, uses of 36, xii 

Resources, definition of . . . . 26, 27 

Results, definition of 27 

Review exercises . . 28, 45, 54, 89, 95, 
106, 112, 179, 197, 230, 246, 275, 295, ix 

Review questions, . . .50, 122, 134. 136, 

196, 293 

Ruling, exercises in 13, 30 

Sales book 

Description of 58 

Form of 64 

Script illustrations 

Bank draft 123 

Bank statement, depositor's ac- 
count 73 

Bill book ii, lii 

Bill of lading 160 

Cash account closed by balance . 36 
Cash proof 78 



PAGE 

Script illustrations 

Cashbook 64, 65 

Cashbook, opening entry in . . 101 
Check book and stubs . . .71, 163 

Checks 43, 53, 123 

C.O.D 170, 171, 172 

Deposit ticket 70 

Discount memorandum . . . 168 
Drafts . 117, 119, 121, 128, 130, 131 
Drafts, entries for . . 118, 120, 121, 
124, 125, 129, 130, 131, 132 
Indorsements ... 87, 90, 119, 124 
Interest account closed ... 54 
Inventories, model for recording 6 

Invoice book 142, 206 

Invoices . . 42, 44, 75, 76, 83, 253 

Journal 2, 38, 51, 63 

Ledger . . . 3, 5, 24, 31, 36, 39, 66 

Letter 126, xxi 

Loss and Gain account .... 106 

Notes 12, 43, 52, 77, 86 

Purchase book 63, 77 

Receipts 9, 74 

Rechecking 19 

Reverse check stub 70 

Ruling an account 30 

Sales book 64, 65 

Signature card 68 

Statement of account, model . . 178 

Statements 4, 40 

Stock certificate 302 

Stock transfer book 300 

Trial balances 4, 65 

Voucher book 311 

Voucher check . . . .' . . 312 
Voucher and check combined . 310 

Shipper's order 161 

Signature card, use of 68 

Single entry 

Changing to double entry . . . viii 
Compared to double entry . . i 
Contrasted with double entry . i 

Definition of xi 

Solvency xi 

Statement proof, illustrations of . 4, 177 

Statements, forms of 39 

Stock, certificate of 299 

Stock, classes of 

Common 298 

Preferred 298 

Treasury 299 

Watered 299 

Telegram 

How to write 165 

Illustration of 164 

Terms on invoices 159 

Trade discount 163 

Trial balance 

Definition of 18, 27 

Forms of 4, 65 

Of balances 79 

To find errors in 79 

Value 7 

Voucher xi 

Voucher system of bookkeeping . . 309 



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