656 



THE HOME, FARM AND BUSINESS CYCLOPAEDIA. 



now be seen that the " Interest Payable account " indicates a liability, 

 being the interest we owe for up to the end of the year therefore is not 

 carried to the " Loss & Gain account," but is allowed to stand on our 

 books the same as the " Bills Payable account." The loss on interest we 

 have to pay for is carried to the Interest account at the time we credit 

 Interest Payable, as indicated above. 



ACCOUNTS WITH PERSONS TO WHOM WE SELL GOODS 

 OR LOAN MONEY. 



164. Debit, at commencement of 

 business, for amount they owe us. 



165. Debit for all merchandise 

 we sell to them on account. 



166. Debit for all cash we loan 

 to them on account, and take no 

 note therefor. 



167. Credit for all cash they pay 

 us on account. 



168. Credit for all merchandise 

 they return to us on account. 



169. Credit for all checks, bank 

 drafts, sight drafts, money orders, 

 etc., etc. (called cash), they give to 

 us on account. 



170. Credit for all drafts we 

 draw on them at sight, on demand, 

 or at one, three or five days' sight, 

 they pay. (See 143.) 



171. Credit for all notes they 

 give to us on account, made by them- 

 selves payable to us. (See 108 and 

 113.) 



173. Credit for all time drafts 

 we draw on other parties they ac- 

 cept. (See 114, 115 and 142.) 



173. EXPLANATION. When we first enter into business, we open ac- 

 counts with all persons who are owing us, and debit all such persons for 

 the amounts they owe us. 'Whenever we sell a person goods and do not 

 receive payment therefor, or whenever we loan money to a person and do 

 not take a note for the amount of that loan, we debit the person ; and 

 when these persons to whom we sell the goods or loan the money pay us 

 in any way, or give us a note^or accept a time draft which we draw on 

 them, we credit them. (For remarks on balancing this account at the end 

 of the year see 208 and 321.) 



