BOOKKEEPING 



813 



BOOKKEEPING 



This number serves as an index if it is ever 

 necessary to refer to the original entry. Im- 

 mediately after the posting is made, the num- 

 ber of the ledger page is written in the day 

 book, in the column at the left of the page. 

 This, too, serves as an index, and also shows 



speaking of accounts in the ledger. Thus, in 

 the Harry Wilson account below shown, the 

 amount $2.25 (the difference between $6.25+ 

 $1.00 and $2.00+ $3.00) is the balance; it is 

 called a debit balance, because the debit fig- 

 ures have the larger total: 



HARRY WILSON 



the bookkeeper that he has completed his 

 posting. For this reason great care should be 

 taken always to check an item the moment the 

 posting is finished, but never sooner. Other- 

 wise, if the bookkeeper were interrupted an 

 item might accidentally be posted twice, or 

 not at all. 



The Cash Book. The day book and the 

 ledger are the only two books necessary in 

 single-entry bookkeeping, but others are often 

 helpful. The commonest of these auxiliary 

 books is the cash book. It is really a day 

 book for transactions in which cash is con- 

 cerned. Sometimes it is made subordinate to 

 the day book ; that is, its items must be posted 

 to the day book. Except in special circum- 

 stances, however, this is a waste of time, and 

 the cash book may be considered as a part of 

 the day book; that is, its items may be posted 

 directly to the ledger. 



The cash book may confuse a beginner in 

 bookkeeping, for its left-hand column is for 

 receipts of cash, which must be credited to 

 people, and its right-hand column for dis- 

 bursements, which must be debited to people 

 just the opposite of the day book. This is a 

 feature copied from double-entry bookkeep- 

 ing, and aside from custom there is no reason 

 why it should be adopted in single-entry. But 

 it is always wise to follow custom in such 

 matters, so that accounts can be understood 

 by other people than the bookkeeper. 



The advantage of -the cash book is ease in 

 balancing the cash. If the sum of the column 

 for receipts is $3.00 greater than the sum of 

 the column for disbursements, this amount is 

 said to be the balance. It should exactly equal 

 the cash on hand. All receipts or payments 

 of money should therefore be recorded in the 

 cash book, even if, because no accounts with 

 persons are affected, they will not be posted 

 to the ledger. The word balance really stands 

 for the sum necessary to balance, or make 

 equal, the two columns. It is also used in 



It will be noticed that the amounts $2.00, $1.00 

 and $3.00 have been written with the zeros 

 omitted. It is never necessary to write zeros 

 in the column for cents when the sum is in 

 even dollars, but of course five cents must be 

 written 05, and fifty cents 50, in the cents 

 column. 



Determining Profits. To find out, in single- 

 entry bookkeeping, how much money a busi- 

 ness has made in the course of a year, it is 

 necessary to find the sum of all balances owed 

 to the business, the sum of all balances owed 

 by it, the value of property which it owns 

 and the amount of cash on hand. Suppose 

 the state of a small merchant's affairs to be 

 as shown below: 



Due from customers $ 326.15 



Merchandise on hand 1540.94 



Cash on hand. . 74.80 



Total $1941.89 



Due to others $237.82 



The figure $1941.89 represents total assets. 

 The figure $237.82 is for liabilities, and if it is 

 subtracted from the other the difference is 

 the merchant's net werth, or the amount of 

 property he would have after paying his debts. 

 The difference between the present net worth 

 and that of a year ago will in a general way 

 show the profits for the period, as follows: 



Total assets $1941.89 



Liabilities . 237.82 



Net worth (by subtraction) 1704.07 



Net worth a year ago. 1000.00 



Profit for the year (by subtraction)... 704.07 



Practice Examples. Single-entry bookkeep- 

 ing is no longer employed except in very 

 simple accounts or by people who have not 

 learned the more efficient double-entry system. 



Here are ten items such as a boy might 

 have to record if he were keeping single-entry 

 books for himself. After studying the explana- 

 tions given above anyone should be able to 



