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In this book are recorded all invoices received for things purchased, and also accounts for work done.

Each page of the example is ruled into five vertical divisions, and the use of each is Jenoted by its printed heading.

The invoices and accounts received are numbered consecutively and are preserved in a book-file or guard book (a) in order of date. The Date, Serial number, Name, and Amount of each invoice are entered in the respective columns of the Purchases Day Book (see example, page 29).

When a page is full the money column is added up and the total carried forward to the top of the following page, and so on from page to page until the end of the quarter.

Posting.–The Date, Serial No., and Amount of each entry are posted from the Purchases Day Book to the Cr. side of an account bearing the same name in the Purchases Ledger, and the folio of the Ledger is inserted in the column of the Purchases Day Book headed " Purchases Ledger folio."

At the end of the first quarter, March 31st, the entries in the example page 29 amount to a total of £4251 135. 7d., all of which have been regularly posted to the Cr. of the Purchases Ledger.

To carry out the principle of double-entry explained on page 8 (see also page 21) this total of the entries during the quarter is posted to the Dr. of the Private Ledger.

The Dr. and Cr. postings from the Purchases Day Book to the Ledgers are then equal.

Before posting the total to the Dr. of the Private Ledger it is necessary to find the precise account or accounts to which it belongs. According to the nature of the contents of each invoice its amount is classified under one of the following heads (6), viz:

(i.) Material and Manufacture. (ii.) Mill Furnishings and Repairs and Renewals to Machinery. (iii.) New Plant and Machinery.

(iv.) Incidental Expenses. After the classification is done the total of the entries for the quarter is posted, in several amounts, to the respective accounts in the Private Ledger represented by the heads above mentioned.

At the end of the second quarter, June 30th, the entries are classified and the total posted in like manner.

(a) The Guard Book, into which invoices are sometimes pasted, is often ruled with columns and used in lieu of a separate Purchases Day Book. This method, however, is not recommended owing to the cumbrous nature of the book. A separate book for recording the entries and a book-file for preserving the invoices are preferred by the author.

(1) This classification may be extended indefinitely according to the variety of purchases. In Set II., extra columns are provided for the classification.

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RETURNS AND CLAIMS (Purchases) DAY BOOK.

Goods purchased are occasionally returned and claims are made in respect of short weight, inferior quality and other matters. Frequent claims are also made upon Outworkers, such as Dyers and Finishers and others, for damage to goods by reason of imperfect workmanship. All such Returns and Claims are first noted on the invoice to which they relate (c). They are afterwards entered in a separate book (d), labelled Returns and Claims (Purchases) Day Book (see page 30), which is in the same form, and is kept on the same principle as the Purchases Day Book; the postings to the Ledger being of course reversed.

Posting.–Each individual entry is posted to the Dr. side of its respective account in the Purchases Ledger, and at the end of the quarter the total is classified and posted to the Cr. of the respective nominal accounts in the Private Ledger.

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In this book are recorded the particulars of goods sold.

Each page of the example is ruled into five vertical divisions and the use of each is denoted by its printed heading.

The first two invoices in the example, page 31, are entered in full, and represent piece goods, shewing the piece Nos., yards, total yards and prices in distinct columns. The succeeding invoices are set out in total only, as it would be impracticable within the limits of this work to give details.

The ruling of this book may be modified to suit the requirements of the business, but should be so arranged as to show the following essential particulars, viz., (i.) The Date (ii.) The Ledger folio (iii.) The name of the party to whom the goods are sold and the description of the goods (iv.) The quantity, weight, or measure (v.) The price (vi.) The money value of each item of the invoice (vii.) The sum total in money. of each invoice. Additional columns may be inserted for Stock Nos., Package Nos., Marks, Tare, Gross and Net Weights, and any special particulars.

Each entry should be an exact copy of the invoice sent out to the customer. It should be separated from that which follows by a red line drawn across the page as far as the first money column.

The month and the year are written in bold characters at the top

of each page.

(c) The person to whom goods are returned, or upon whom a claim is made, should be promptly informed thereof and requested to forward a credit note, or acknowledgement, which when received should be affixed to the invoice.

(d) It is usually sufficient to appropriate a few pages at the end of the Purchases Day Book for recording Returns and Claims in respect of purchases.

When a page is full the two nioney columns are added up and the totals carried forward to the top the following page, and so on to the end of the quarter. The totals of the two columns should be made to correspond. As the first column contains the items in detail, and the second column the sum total of each entry, the accuracy of the addition of every invoice is proved by the agreement in totals of the two columns. This is an important check against mistakes in casting up invoices, which are of frequent occurence.

Posting.–The Date, number of page of the Sales Day Book, and Amount of each individual invoice is posted to the Dr. side of an account in the Sales Ledger bearing the name of the party to whom the goods are sold, and the folio of the Ledger is inserted in the column of the Sales Day Book headed Ledger Folio.

At the end of the first quarter (e), March 31st, the entries in the example, page 31, amount to a total of £ 5,100 135. 8d., all of which have been regularly posted to the Dr. of the Sales Ledger. The total £ 5,100 135. 8d. is then posted to the Cr. of the Sales Account in the Private Ledger.

This done, the Dr. and Cr. postings from the Sales Day Book to the Ledgers are of course equal.

At the end of the second quarter, June 30th, the sum total of the entries in the Sales Day Book is posted to the Cr. of the Sales Account in like manner.

RETURNS AND ALLOWANCES (Sales) DAY BOOK.

Goods sold are occasionally returned, and allowances are made for returns of packing material, also for shorts, damages, inferior quality, and other matters. All such Returns and Allowances (f) are recorded in a separate book (8), labelled “ Returns and Allowances (Sales) Day Book" (see page 33), which is in the same form, and is kept on the same principle, as the Sales Day Book; the postings to the Ledger being of course reversed.

The first entry in the example is given in full and represents piece good returned ; the details are omitted from the remaining entries.

Posting.- Each entry is posted to the Cr. side of its respective account in the Sales Ledger.

At the end of the quarter, both money columns being cast up, the total is posted to the Dr. side of the Sales Account in the Private Ledger.

(e) It is preferred by some to post the totals of the Sales Day Book to the Sales Account every month, and there is no objection to so doing.

(1) The Credit Note received from the customer should be preserved for reference. In some houses the credit notes are pasted into a Guard Book, which is ruled with a cash column for extending the amounts. This guard book is made to serve in place of the Returns, &c., book, the amounts being posted therefrom to the Ledger. This method is regarded as inconvenient by the author and he recommends the use of a book-file for preserving the credit notes and a separate book for recording them.

(9) In a small business it is usually sufficient to appropriate a few pages at the end of the Sales Day Book for recording Returns and Allowances in respect of Sales.

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The labour of the book-keeper may be greatly economised by adapting the ruling of the Cash Book to the special requirements of the business in which it is employed ; hence the variety of forms in common use. For manufacturers, whose cash and bank accounts are both under the supervision of one person, the form adopted in the example on pages 34-37 is the most suitable.

Each left-hand page is ruled into six divisions, viz:

Column (i.) For the date.

(ii.) For the name, or other particulars of the amount received. (iii.) For the folio of the Ledger to which each entry is posted. (iv.) A money column for discounts allowed to parties from

whom moneys are received. (v.) A money column in which are entered those amounts

that are banked when received.

For example, a cheque for £1462 10s. Od. is received on Jan. 4th from Biggs & Willet, and it is forth with banked (i.e., deposited with the bank for collection): the amount is entered

in the Bank column. (vi.) A money column in which are entered all amounts that,

when received, are retained by the cashier to be applied in defraying current expenses (e.g. wages and incidentals) or otherwise. Amounts withdrawn from the bank by the cashier for this purpose are likewise entered in this column.

Each right-hand page is ruled into seven divisions, viz: Column (i.) For the date. (ii.) For the serial number of the voucher for the payment,

which is pasted in the Receipts' Guard Book. (iii.) For the name, or other particulars of the amount paid. (iv.) For the folio of the Ledger to which each entry is posted. (v.) A money column for discounts allowed by parties to

whom payments are made. (vi.) A money column in which are entered all payments by

cheque or order on the bank. Amounts paid by the bank to the cashier for current expenditure are likewise entered in this column, as also the amounts

paid by the bank in discharge of Bills. (vii.) A money column in which are entered all amounts paid

by the cashier out of cash in his hands.

Generally it may be said :

All amounts received by the Bank, or by the Cashier, are

entered in their respective columns on the left hand side. All amounts paid by the Bank, or by the Cashier, are entered

in their respective columns on the right hand side. No difficulty should be experienced in comprehending the working of this book after carefully considering each entry of the example in the light of the foregoing explanations as to the uses of the several columns. The only items which it may be desirable to further elucidate are the Cashier and Bank Contras. On January 30th, for instance, £335 is withdrawn from the Bank (h) to be disbursed by the Cashier in wages and other expenses.

In this transaction it is obvious, that :

(i.) The Bank pays out cash £335 (ii.) The Cashier receives cash £335 Consequently the amount is entered :-(i.) On the right hand side, in the Bank column, the payment

out of the Bank being described as Cashier, Contra." (ii.) On the left hand side, in the Cashier column, the amount

received by him being described as “ Bank, Contra."

This form of Cash Book is in reality a combination of two distinct book, viz: the Cash book, and the Bank book.

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A withdrawal of money, such as above described, requires simply a transfer from one book to the other,

we have it in the combined Cash and Bank book, a transfer from the Bank column to the Cashier column ().

(h) It is possible that an occasion might arise when it would be required to pay an amount into the Bank out of an accumulation of cash in hand. In such a case, the contra entry in the Cash book would be simply the reverse of that above described.

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(i) An objection to the form of Cash book adopted in the example may be suggested because of the apparent frequency of these “ Cashier and Bank contra entries, but in an ordinary manufacturing concern this item only occurs once every week or fortnight, and the seeming frequency arises from the necessary condensation of the other entries. Indeed, the compulsory limitation of the number of items in a work of this character renders it very difficult to set forth an adequate conception of a Cash book in actual practice. For instance, on the left hand side (see page 34) we have only one item as received in the month of January from accounts owing, viz:-Biggs Willet, £1462 10s. Od. and Discount, £37 15s. 9d., whereas, in actual business, this one entry would be represented by many items of smaller sums. These remarks apply equally to the accounts paid that are recorded on the right hand side. The following items also, which are repeated monthly, might occur as often as once a week, viz:- Mill Wages, Warehouse and Office Salaries, Crosland, A., Drawings, Traveller's Salary and Expenses.

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