When a page is full each of the three money columns (both left and right) are added up, and their totals are carried forward to the top of the following page, and so on to the end of the quarter (j).

Posting. The Date, Folio of the Cash Book, and Amount (k) of each entry on the left-hand side are posted to the Cr. side of its respective account in one of the Ledgers (1).

The Date, Folio of the Cash book, and Amount (k) of each entry on the right-hand side are posted to the Dr. side of its respective account in one of the Ledgers (1).

The folio of the Ledger to which each entry is posted is inserted (m) in the column of the Cash book (whether left or right) headed Ledger folio.

At the end of the first quarter, March 31st, the entries on left-hand side of the example page 34 amount to the following totals, viz:

Discounts column
Bank column ...

:

Cashier column

s. d. 65 11 6 3966 o

5

Less balance of Cash in hand Jan. 1st.

1065 0 0

Total... £5096 11 11

Individually, all these entries have been regularly posted to the Cr. side of the Ledgers (see note at foot of the example, page 34), and to carry out the principle of double-entry the totals are posted respectively to the Dr. of the Discounts, Bank, and Cash accounts in the Private Ledger. The Dr. and Cr. postings from the left-hand side of the Cash Book to the Ledger are thus equalised.

(j) By means of its several columns this form of Cash book takes the place, and discharges the distinct functions, of six separate books of entry.

:

The left-hand pages answer the purpose of three Day Books for recording:

(i.) Discounts allowed on amounts received.

(ii) Amounts received which are Banked.

(iii.) Amounts received which are retained by the Cashier.

The right-hand pages likewise serve instead of three Day Books for recording:(i.) Discounts allowed on amounts paid. (ii.) Amounts paid out of the Bank. (iii.) Amounts paid by the Cashier.

(k) The amount of discount allowed is posted to the Ledger, as well as the amount in the Cash or Bank column.

(1) Excepting the Cash and Bank balances on January 1st and April 1st, which are not posted.

(m) The respective Ledger to which each item should be posted is indicated in the descriptions of the Ledgers.

Again, at the end of the first quarter, March 31st, the entries on the right-hand side of the example (page 35) amount to the following totals, viz:

Individually, all these entries have been posted regularly to the Dr. side of the Ledgers (see note at foot of the example, page 35), and the totals are posted respectively to the Cr. of the Discounts, Bank, and Cash Accounts in the Private Ledger. The Dr. and Cr. postings from the right-hand side of the Cash Book to the Ledger are thus equalised.

At the end of the second quarter the totals are posted in exactly the same manner.

Up to this point it should be observed that we have proceeded on precisely similar lines in the explanations of the workings of the several separate books.

We have seen that from the Purchases Day Book, the Returns and Claims (Purchases) Day Book, the Sales Day Book, the Returns and Allowances (Sales) Day Book, and also from the Cash Book all the entries are posted individually to the Ledgers from day to day, and the principle of double-entry is carried out by posting the totals at the end of the quarter to the reverse side of the Ledger.

It remains now to explain a useful function of the Cash book wherein it essentially differs from the other separate books of entry.

By a simple operation we can at any moment verify :

(i.) The balance of Cash in the hands of the Cashier (n).
(ii.) The balance owing to or by the Bank (n).

The balance of cash is ascertained by adding the Cashier columns, on both the left and right hand pages, and subtracting one total from the other, the difference representing the amount of cash in hand, (see example pages 34 and 35).

(n) The Cash balance should be tested at frequent intervals, and daily where the transactions are numerous.

The Bank balance should be tested by comparing it with the Banker's Pass book, say once every week.

It frequently happens that certain cheques, entered in the Bank columns of the Cash book, are not presented until some time after the date of issue, and it is necessary to take these into account when comparing the balance appearing in the Cash book with that in the Banker's Pass book.

The cashier should always keep a slip of paper in his Cash box shewing the last adjustment of his Cash book, setting out in detail cash, notes, cheques, &c., in hand. The unpresented cheques should likewise be recorded to show how the Banker's Pass book has been reconciled with the Bank columns of the Cash book.

The balance at the Bank is likewise ascertained by adding the Bank columns, on both the left and right hand pages, and subtracting one total from the other.

The simplicity of this device for ascertaining the Cash and Bank balances, at any moment, is a special feature of the form of Cash book given in the example. To enable this to be done the balances at the commencement of the period are necessarily inserted in their respective columns, and, in fact, the Cash book is made to serve as a complete Ledger account of bank and cash transactions. Nevertheless, it is needful to bear in mind that this is only an expedient for readily ascertaining the cash and bank balances, and it does not affect the essential character of the Cash book as a separate book of entry. The total entries (exclusive of the balances at the commencement), like those of all other separate books, require to be posted quarterly (0) as above stated, in order that the Ledgers may be complete in themselves, and the Dr. and Cr. postings thereto equalised.

It is only necessary, as in our example, to rule off the Cash book and bring down the balances at the end of each quarter, as the state of the cash and bank accounts can as readily be ascertained when the totals are carried forward as when the Cash book is continually ruled off and balances brought down. It will be observed later on that the bringing down of balances at intervals in the quarter entails more labor in balancing the books.

There are three books required as auxiliaries to the Cash Book, viz:

I.

2.

3.

WAGES BOOK, in which are recorded the details of wages paid, the totals only being conveyed to the Cash book on each pay day (p).

PETTY CASH OR PETTY

EXPENSES

BOOK in

which are recorded sundry small disbursements. The total of this book may be entered in the general Cash Book either monthly or at other convenient periods.

For

RECEIPTS BOOK-FILE OR GUARD BOOK.
every payment entered in the Cash Book a voucher should be
obtained, and fastened in a book-file or Guard Book and
numbered consecutively. The consecutive number is inserted
in the column of the Cash book headed Voucher Serial No. If
an acknowledgement is written on the invoice itself, then the
invoice number (with the initial "I" for invoice) is inserted in
the voucher column. A separate receipt should, however, be
obtained in every case (q).

(0) In using the word quarterly it is assumed that the books are balanced quarterly. Were the balancing done every month, the word monthly would be substituted for quarterly.

(p) In subsequent remarks on the subject of Wages, the wages books are fully explained.

(q) Partners may conveniently vouch their withdrawals by writing their initials in the voucher column against the entries of amounts paid to them. See example A.C. for A. Crosland,

The folio of the Wages Book or Petty Cash Book, on which the total entered in the Cash Book is to be found, is likewise

inserted in the Voucher column (see example, W.B.2 and P.C.3, &c., page 35).

While dealing with the subject of vouchers, it may be recommended that acknowledgements for moneys received by the firm should be given only on special printed forms having counterfoils, and it is well to intimate thereon that no other receipt will be recognised.

In concluding his remarks on this most important book, the author would urge the necessity for exercising care and precision in wording the entries, so that they may be intelligible to others at a future date.

THE LEDGER.

In the list of books employed in the example given on page 28, it will be observed that the Ledger is in four divisions () and on page 25 it is explained that the various accounts contained in the Balance Sheet of January 1st, 1884, are supposed to be transferred from old Ledgers to new ones (s).

Before proceeding to describe the divisions seriatim it may be well to state certain general characteristics which apply equally to every division of the Ledger.

The Ledgers (t) are used for collecting transactions already entered in the separate books of entry, and arranging them under appropriate headings so as to exhibit each person's account, and accounts of each division of Property, Capital, Income or Expenditure in a concise form.

The process of transcribing the entries from the separate books into the Ledgers is termed Posting.

The Ledgers are for POSTINGS ONLY and no entries (u) are made therein. Every transaction must first be entered in one of the separate books of entry and afterwards posted to the Ledger. This rule must not be disregarded, however small the item, otherwise the books will not balance.

When a personal account is opened in the Ledger, the person's name (surname preceding) and address are written in bold characters

(r) If the concern be small the "Purchases" and "Sales" divisions may be comprised in one book.

(s) It is not essential that new Ledgers should be obtained when adapting this system to books already commenced. It is sufficient that the totals on either side (subsequent to the last ruling off) of accounts in the existing Ledgers are distinctly shewn.

(t) The plural Ledgers is used to signify the several divisions of the Ledger. (u) The following are exceptions to the rule above stated:

(i.) In the case of Bills (see description of Bills Ledger).

(ii.) When bringing down the balance of an account, which should be done in red ink.

(iii.) In closing the Ledger when preparing the Trading Account.

on the headline of the folio selected. Property and Nominal accounts are opened in a similar manner by writing the description on the headline.

At the same time that an account is opened the number of the folio selected should be inserted in the Alphabetical Index to the Ledger; (for description and specimen of Index on the Vowel System, see Appendix).

When it is expected that the transactions appertaining to an account will be numerous it is well to reserve for it two or three folios succeeding the one on which the account is opened.

When a folio is full the entries on both the Dr. and Cr. sides (subsequent to the last ruling off) are added up and the totals carried to the folio on which the account is continued. The number of the new folio is mentioned on both sides of the old folio, and vice versa. The new folio is headed in the same manner as the old, and the new folio number is also entered in the Alphabetical Index.

The practice of opening more than one account on the same folio should be avoided, but it will be readily perceived that the limits of this work will not allow a page to each account. In the examples the spaces allotted are intended to represent distinct folios, and are numbered at the right or left hand top corner of each account, as in the case of an ordinary ledger.

When the Dr. and Cr. sides of an account up to a certain date are equalised (e.g. when an amount has been received or paid in settlement of a statement rendered) the account is ruled off (see examples) (v).

THE PURCHASES LEDGER.

Each folio of the Purchases Ledger is ruled into eight divisions. (see example page 38).

Dr. Cr.

side. side.

Columns I and 5.

2 6.

3

7.

For the date of each posting.

For a brief description of each posting.

For the folio of the separate book where the original entry is to be found, or the serial number of the invoice.

, 4, 8 A money column for the amount of each posting.

The Purchases Ledger is used in contradistinction to the Sales Ledger and its folios are appropriated exclusively for personal accounts with firms from whom goods or other requisites are procured, usually on credit.

Hence the ordinary postings on the Cr. side of accounts in the Purchases Ledger are all transcribed from the Purchases Day Book. (see Purchases Day Book, page 29, and see also page 57). The ordinary postings on the Dr. side of accounts in the Purchases Ledger

(v) In order that the account may be neatly ruled off a line should be left between the postings of transactions payable at different dates.