BOOKKEEPING 



hold. Of course, the books can be made com- 

 plicated, but they do not have to be. 



One valuable sen-ice of good bookkeeping 

 is the help it gives in planning for the future. 

 I it wise for the storekeeper to put in a larger 

 stock of overcoat* this winter, or to invest his 

 money in spring suite? Will it pay the farmer 

 to buy a gasoline tractor, or to continue using 

 hones? Can the man who owns a home af- 

 foid to buy new furniture now, or will he do 

 better to save his money toward future ex- 



BOOKKEEPING 



penses, such as painting the house? Will it 

 be worth while for the housekeeper to con- 

 tinue taking boarders, or would it be more 

 profitable for her to spend her extra time in 

 baking goods for sale? Does the manufac- 

 turer make more or less money by owning his 

 factory building than he could make if he 

 rented? All such questions can never be 

 properly answered by people who do not keep 

 accounts, or who keep them with little regard 

 to scientific principles. 



Single-Entry Bookkeeping 



Let us suppose you have written the follow- 

 ing in your diary: 



I sold Harry my old camera to-day. He will 

 pay me five dollars later. 



You have entered in your book a record of the 

 transaction, or, in bookkeeping language, have 

 made an entry. 



In the single-entry system of bookkeeping 

 just such a diary is kept, called a day book. 

 It usually contains two double columns at the 

 right of the page, for the figures representing 

 money, and a single checking column at the 

 left, the purpose of which will be explained 

 later. Sometimes the first of the two money 

 columns contains the figures for each item in 

 a list of goods bought or sold and the second 

 column shows only the total of the list. For 

 example, if you sold Harry both a fishing rod 

 and a camera, you might write this: 



This is seldom the best use to make of the 

 two columns, however. What will usually be 

 found a more satisfactory method is to write 

 in the first column the figures for merchandise 

 or money which people get from us, and in the 

 second column the figures for merchandise or 

 money which we get from others. The first 

 column is called the debit column; the sec- 

 ond, the credit column. Written in this fash- 

 ion, the entry for Harry would appear as 

 follows : 



Harry Wilson, sold 

 him 

 Camera 5.00 



Fishing rod 1.25 6 25 



Now suppose that after a time you wanted 

 to make out a bill of what Harry owes you. 

 He has bought several things from you, and 

 has made two or three small payments. If 

 you had to look through all the items in the 

 day book it would take you a long time. 

 That is why you keep a second book called 

 a ledger, in which all the items of business 

 with each person are gathered together on 

 one page. You should copy, or as bookkeep- 

 ers say, post your entries from the day book 

 into the ledger as soon as they are made, so 

 that your ledger will always be up to date. 

 Then when you want, to see how much any 

 person owes you, only a moment is needed. 



In a large ledger the right half of each page 

 is for credits, the left half for debits. In a 

 smaller ledger it is generally necessary to give 

 to each account two pages that face each 

 other. Each page or division of a page has 

 at the left a double column for the date, then 

 a space for the explanation, next a single col- 

 umn for checking (explained in the next para- 

 graph), and at the right a double column for 

 dollars and cents. If the day book has the 

 debit and credit columns, as advised above, 

 items with figures in the debit column are 

 posted to the debit half of a ledger account, 

 and those with figures in the credit column to 

 the credit half. If the columns in the day book 

 are not so employed, it is necessary to sep- 

 arate the debits from the credits at the time 

 of posting, a task apt to be troublesome. 



When a posting is made, the number of 

 the page in the day book from which it is 

 copied is written in the checking column; the 

 posting to Harry's account is then like this: 



Harry Wilson 



