place a diversity of threads of yarn in their proper position. Formulas and rules afford very little guidance in such matters, which can only be made intelligible through a primary experimental acquaintance with the details of actual practice.

Following the text books, most teachers of book-keeping have ineffectually conveyed confused ideas of abstract theory to the minds. of their students, who in the majority of cases, have promptly forgotten them. It is, therefore, not surprising that so many traders, thus taught at school, should regard double-entry book-keeping with prejudice and disfavour (a).

Although the principle of double-entry book-keeping is said to be deduced from the mathematical axiom, that "the whole is equal to the sum of the parts," in my opinion the invention of the system is to be ascribed rather to induction than to deduction. Book-keeping was practised long before its formulas and rules were even thought of ancient traders did not wait until a scientific system had been constructed to record their business transactions. The science was evolved out of, and was organised after, practice, and it is only in this order that it can be taught. Herbert Spencer remarks that, "Every science is evolved out of its corresponding art: there must be practice and accruing experience before there can be science." And it will be found that this natural principle is followed in the succeeding pages. Details, and the practical application of the art, receive paramount attention, and progress is made by easy gradations from the simple to the complex. Nevertheless, the functions and importance of the science are recognised, and it is fully explained at the outset, in order to help the memory and assist the reason whilst the student is step by step acquiring a mastery over the details of the art.

The reader will doubtless be familiar with the phrase, "Bookkeeping by Single-entry," and may possibly have conceived a bias in favour of a practice bearing so attractive a title. To offer any explanation of what is generally understood by "single-entry," would

(a) The want of thorough teaching on this subject is becoming more strongly felt by trading communities, and, to supply the want, several large educational establishments have sought professional assistance.

Moreover, apart from its practical application in after life, I venture to submit that double-entry book-keeping is deserving of more attention as a means of elementary intellectual discipline. Much of the training given in the abstract sciences loses its hold upon the mind, which is occupied by the symbols used. and often fails to grasp what those symbols stand for. In book-keeping the necessities of numerical relation are demonstrated by illustrations sufficiently interesting to make a lasting impression upon the mind; and how far the practice of book-keeping produces analytical and synthetical habits of mind will be gathered from a careful perusal of these pages.

serve no useful purpose to those for whom this treatise is written. The term bears the same relation to double-entry that chaos does to order, and comprises every style of book-keeping that is imperfect, and unreliable. As a matter of fact, there is not in actual practice, any book-keeping, where a ledger is kept, that is carried on by single-entry.

It may be well here to point out some of the disadvantages of imperfect book-keeping, and to cite a few illustrations from my own experience. In one instance, accounts collected by a partner were systematically embezzled by him, either wholly or in part; the frauds being covered by the manipulation of a rough cash book. Many thousands of pounds were thus abstracted from the partnership funds. Unintentional mis-statements of partners' accounts are very frequent, and in one case a single error of nearly £2,000 was brought to light by subsequent investigation. Payment of the same accounts twice over, and omissions in posting sales to the ledger, are errors of common occurrence. Accounts are often posted wrongly, and, although called over, are still passed without notice (e.g., £15: 10:0 may be posted as 15s. 10d., called over as fifteen ten, and passed as correct). In ruling off settled ledger accounts, the line is sometimes drawn beneath items not paid for in the settlement, which are consequently overlooked. The adjustment of the Capital Account, especially in partnership cases, is a very fruitful field for blunders, and I have discovered errors, in some instances, involving thousands of pounds.

extent.

Most of the errors above-mentioned would have been prevented by applying the system of double-entry; but it should be understood that the principles of double-entry afford protection only to a limited Serious mistakes often occur in accounts where the system is imperfectly adapted, and in many cases of fraud, where the books have been carefully balanced by double-entry, the system has been so applied, that, instead of revealing, it has concealed the falsification of the accounts. In an extraordinary instance, while investigating the books of a manufacturing firm, balanced by double-entry, an item of more than £1,000, for the sale of disused machinery, was found entered in the Sales Day book, which had been carried forward and counted as income.

It would be quite easy to adduce many similar cases, from the books of business men, who in other respects are models of forethought and ability.

The amount of money lost, and the frequency of errors that are allowed to pass without ever being observed, solely because of imperfect book-keeping, would astonish any but those who have had considerable experience as auditors. Where the transactions of a business are at all numerous errors will occur more or less frequently, though the book-keeper be ever so skilful.

It is essential, therefore, that the books employed should not only be kept by double-entry, but that they should be well devised, and thoroughly adapted to the particular trade. A clumsy adaptation of double-entry may prove quite as unreliable as single-entry.

In manufacturing concerns, especially, it is of the utmost importance to obtain the very best skill in arranging, adapting, and keeping the books; a fact which is gradually gaining fuller recognition. In the face of daily increasing competition the utmost vigilance is required, and the manufacturer must be able to compare periodically the expenditure and income arising out of each department of his business. The time has gone by for the large margin between the cost and selling prices, when any blunderer with capital could make a profit. Cæteris paribus, he whose books promptly disclose pertinent information concerning the leading features of his business, will undoubtedly be the most successful. The modern captain of a well-provided vessel does not possess greater advantages over the ancient star-directed mariner, than the manufacturer, with his unfailing scientific system of book-keeping, possesses over his neighbours who are guided by crude and old-world methods. It is equal folly, in either case, to venture both fortune and prospects and court shipwreck, while disregarding the excellent directing appliances provided by modern invention.

After having had ample opportunities for forming a correct judgment, I have no hesitation in affirming that the practice of imperfect book-keeping is the main cause of many failures. It is, moreover, fruitful of much moral evil, both inviting and concealing embezzlement and fraud.

The oft-repeated objection, that double-entry is too intricate for ordinary business men to understand, is solely the outcome of cumbersome and absurd applications of the system. The services of a skilled accountant in opening the books of a new firm, or in remodelling those of an existing business, will be found very helpful, and a specialist in the particular branch of trade should be consulted where convenient.

The principal advantages to be derived from well organised doubleentry book-keeping may be briefly summarised as follows, viz :

I.

2.

4.

5.

The correctness of the book-keeping is tested with absolute
certainty.

The state of the personal accounts, of both Debtors and
Creditors, can be ascertained instantly.

Accounts of Goods bought and sold, of Revenue and Expend-
iture, of Stock, and other property, are accurately kept.
A Balance Sheet, and accounts shewing the working details of
the trading, and also of profit and loss resulting therefrom,
both as a whole and in departments, are readily prepared.
Accounts of partners are kept in such a manner as will prevent
fraud, and even the cause for suspicion that frequently
exists without foundation in fact.

6. The possibility of fraud by book-keepers and cashiers is reduced, owing to the ample means furnished for scrutiny and detection.

CHAPTER I.

ELEMENTARY PRINCIPLES.

The books of every trader ought to show,

I.

The value of his trading property as a whole,

2. The value of the several parts thereof.

By way of illustration, assume that on January 1st B is possessed of property valued at £6,000, consisting of Wool £5,000, and Cash £1,000.

To record his position, three distinct accounts are opened in his books, viz:

(i.) CAPITAL ACCOUNT, which is credited with £6,000, the value of B's property as a whole.

(ii.) WOOL ACCOUNT, which is debited with the value of one part, viz. £5,000.

(iii.) CASH ACCOUNT, which is debited with the value of the other part, viz. £1,000.

On January 20th, B purchases more wool, and pays for it in cash £500. This transaction affects the two parts of B's property, and requires, therefore, to be twice recorded.

In the early days of book-keeping the accounts in B's books might have appeared as follows:

It will be observed that B's Capital, or property as a whole, is the same both before, and after, the purchase of wool on January 20th; the transaction being merely an exchange of parts of his property.

Assume further, that because of a fall in the market, on January