The Providence news. (Providence [R.I.]) 1891-1906, 1897-08-23
Foy Delicacy,
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| book is used on alternate days. Thus
two books ara used; while one is in the
hands of tho bookkeepers the other is
being used by the entry clerk.
The contents of the entry book, upon it's
reaching the general Office aIo posted to
tho General Ledger under the heading of
sales account credit, and tho customers
accounts (Which arc the general sales)
are posted Co the customers ledger.
The entries on the entry book NAV
include both debts and credits, as in
some cases credits will bo recorded in
the shape of returns of merchandise.
This book, in fact covers the 1harge
department OF the shipping room.
While the system of all bookkeeping
should 10 rs simple as possible, involved
methods necessarily have to be adopted
for extensive concerns.
Tho tendency at one time was to develop
complicated methods. but lately there has
been much simplification accomplished,
the purpose of which has bOen to eCono-
miZo greatly on labor.
Aftor having dealt with the entry clerk
who is tho wedge to tho office record OF
matters we shall next consider the general
staff.
Obligations to our creditors are known
as liabilities; ie., all we owe for merchan-
disc, borrowded money, iutcrost on same
etc, etc.
Obligations TO ourselves arc classified as
assets; /. e, our capital. our outstanding
accounts. our Inventories. etc, otc.
The various transactions involving
these incomings and out guings of goods
and cash are the work of tho general staff
The transaction having been recorded
from the entry book 60 the sales Book or
journal is next taken in charge by the
ledger clork, who uosts it TO tho general
account of the individual.
the cash book also comes i'm as an inn
portant factor in tho handling of accounts
and from il transfers or pDstings are also
made To the ledger
Ledger entries arc SO varied In their
character depending as they DO upon tho
necessities of tho business concerned that
no set rule can be adopted, aside from
the fact that each entry In a ledger must
have proper debit or proper credit
We are assuming that double entry is
used, because nearly all largo or moderate
sized concerns use IL, NOWADAYS
DebitinR and creditng arc the two
cardinal points of bookkeeping
III not done correctly they may lead TO
misunderstandngs of serious character
With regard to the principles of book
Keeping, however the following points
must bs thoroughly understood. They
are simplined so as TO make them easily
understood by rho clerk or student
Thoy embrace tho science Of recording
business.
CAPITAL Is the term used 20 denote the funds
invested I'm the business.
stock ON hand, bills receivable and all prop-
erty duo tho person representing Capital
should be .made Dr. 20 Capital IN all the
separate accounts
Capital must DO made or. faT the aggregate
amount anu FOR all sums duo Co the concern.
Sales nre made Cr. ana purchases Dr.
Bills Receivable, which arc notes given for
merchandise supplied by yuu must be- made
Or
Bills payable must L. made Dr. to mcrchan-
disc or Whatever has been received for Them
All funds received should hc made DR. 10
the merchandise sold for such plymcnt
Incoming funds for which there /. notbiuc
going ont are made DR.. o. Profit and Loss.
For amounts paid out without ANYTHING being
received in return Profit and ] usi should bo
made Dr.
With the total 90 tho various itcns rnnlc
Or 10 Capital, 10 will De- seem that the ono
forming The aggregate which b, made Or. will
correspond.
This oxcmplifos the rrineiule ~ Double
Entry Bookkeeping, which DEL. that undpr this
system for ovcfy debit there must DO n cred.
10, and vice versa.
The ledger noxt 20 the trial balance
sheet Is the ultimate proof Of business
results.
(Io be continued next Monday.)