The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-12-25
NIGHT SCHOOL COURSE.
xxr.-How TO DO DOUBLE ENTRY.
fContinued.

Continued.
The system of bookkeeping known as
double entry is device for detecting
omissions and errors. Every transaction
is entered twice-once as debit and once
as credit. The accounts are always
in balance-that is. the total debts at
any time are equal to the total credits.
The principal book is called the ledger;
all other books are auxiliary TO the
ledger. Very often the ledger is suhdivid-
ed into main ledger, cash book, petty
ledger, bill book etc. Making entries in
the ledger is called posting.
Every transaction shows both a debit
and a credit Debtor means receiver, one
who gets into debt. Creditor means
payer; one who parts with something
When we debit a man we charge him,
and an entry is made on the charge or
debit side of his account. When we credit
a man we give him credit and an entry
is made upon the credit fright hand SIDE
of his account. This general rule IS
worth remembering.
Debit the receiver for what Is received;
credit the giver for what is parted with.
Such accounts as expense, wages. loss
and gain, etc, are really branches of the
proprietor's own account When he pays
out cash for wages. for instance. he cred
its cash and charges himself, but for con-
venience the amount is placed in wages,
so that at the end of the year he may
know what the gross wages for the year
may amount to.
l. Had Charles Cameron's note for $500
discounted at our bank; the bank charg-
ed us "a discount dnterest) and paid US
the difference in cash.
Note-If we had sold goods we should
have credited the goods accounts we sell
bills receivable and we credit the bills re-
ceivable account with $500. We charge
the cash account with $780, just as though
4. n = f.lI Sf,tfvat
make the first two entries, crediting bills
receivable and debiting cash, just as
though there were no discount to be con-
sidered. Now, suppose that we take -
from our cash drawer and hand 1t to the
bank to pay the discount. We should then
credit our cash account with "a and for
the opposite entry we open new account
called Discount and interest" and charge
1t with 81 The bank will be obliged to
wait until the note falls due before they
can get their $500, so that the "a they
charge us is really interest.
g. Sold merchandise valued at 81. 026.35
to Paul Jones: drew on him at sight for
81 900 and at thirty days sight for $3.50,
balance on account Cloth drafts hon
ored).
Note-Charge Jones with the gross
amount of the sale and credit the rner-
chandise (goods) account. Credit Jones
with both drafts; the first draft you
charge to cash and the second to bills
receivable.
for $1,000 and at twenty days sight for
81 45O. Accepted both drafts, making them
payable at my bank
Note-Charge Anderson with the amount
of both drafts. The sight draft must be
credited to cash, because in accepting 1t
making 1t payable at the bank we are
really giving out car Swn n chsen pne
note and must be credited to bills payable.
4. Henry Brown failed to pay his note
due today today Our bank ,h had Il protested s
charged to our account including protest
Note~Credit cash with the face Of the
note and the protest fee and charge both
amounts to Brown.
s. Received from Henry Brown cash
500 to apply on overdue note and new
sixty-day note for the balance. including
the protest fee and $3.50 added for in
terest on the new note.
Note-Begin by charging Brown with
$50 interest and crediting the interest
and discount account Now credit Brown
with 500 cash and the full face value of
the new note. Charge cash with 500 and
bills receivable with the amount of the
note. The old note should be returned to
Brown.
6. At the end of the day you find your
cash drawer shows cash on hand $3.50 less
than the amount shown in the cash book.
How will you make your cash balance?
Notebook until you find the mistake
Il
pocket and put 1t into the till. If you
make good shortage yourself the same
rule should apply. when the cash Is over
and the money should go into your own
pocket This would be a very unwise and
unsafe rule. You should neither make
good losses nor apply overs to your own
use. IL you cannot make your cash bal
ance it is the business of your employer
to remove you and put some one more
competent In your place 1t is best per-
which cannot be Immediately discovered
to put slip In the cash drawer for a
day or two. You may think of something
the following day which will explain the
mistake. III the error cannot'be explained
open an account In your ledger which you
may call overs and shorts Charge this
account with shorts and credit ii with
lovers" making the corresponding en-
tries In your cash book.
T. You hold a note OF 81 900 upon which
interest $40 has accrued made by Brown.
You sell II to note broker for 81 obs.
What entries?
Note--Your bills receivable account IN
credited with $1,000, the face value of the
note, and your interest account is cred
tied with s45, the face amount of the in
terest due. Your cash account is charged
with <i.0lS. the actual cash. received and
the discount is charged with so. the
amount Of discount allowed. In some
books II ,nirl considered best to enter
1900 and also ~ on e: haree side e
side. This would simplify the posting.
You receive a check from Brown In
payment OF a ON ana You deposit IL with
other cash In your bank. A week later
your bank reports that Browns check
has been protested FOR n0npayment
What entries2
Note-Noufy Brown by telegraph or let
ter at once. Credit your cash with the
amount OF check and protest Zee (the
amount which your bank will charge to
your account and charge Brown In
some instances It Is considered better
TO open protested paper" account to
which all protest paper Is charged pend
Ing settlement
NNII.-HOM 70 DISTINGulsH Mnans