BOOKKEEPING 



817 



BOOKKEEPING 



just as easy to record a transaction in the 

 journalized form as in the cruder day book 

 style. That is why the day book has prac- 

 tically ceased to exist. Anyone keeping books 

 for the first time would be wise to make 

 simple memorandums of each transaction in 

 order to have plenty of time to reason out 

 the proper form for the journal entries, but 

 if the following distinctions be kept in mind, it 

 soon becomes as natural to think of trans- 

 actions in journalized form as to put words 

 into sentences: 

 To debit an account means: 



(1) The account assumes responsibility to the 



business ; or 



(2) The account has taken something from the 



business. 

 To credit an account means: 



(1) The account is released from responsibility 



to the business ; or 



(2) The account has conferred a benefit on the 



business. 



If any debits and credits have been wrongly 

 made, they should never be crossed out or 

 erased, but corrected by a reversing entry. 

 That is, if Cash has been credited and Mer- 

 chandise debited for a sale, an entry of the 

 same amount debiting Cash and crediting 

 Merchandise will offset the error and the 

 proper entry can then be made. The explana- 

 tion of the reversing entry should be written 

 with it, and the word error added to the entry 

 which needs correction. The most important 

 reason for not making erasures in books is that 

 the latter may some day be used as legal -evi- 

 dence, and erasures would give the impression 

 that the bookkeeper had attempted to conceal 

 facts. 



Posting. The instructions given for single- 

 entry posting, including the careful use of the 

 checking column, apply to double-entry also. 

 The first item in our journal is a debit to Mrs. 

 Ericsson, which will be posted exactly like 

 those to Mr. Smith in the single-entry ex- 

 amples. 



The next posting is to the Merchandise 

 account, and as it is a credit, it goes on the 

 right side. It is not necessary to write in the 

 explanation column, for we shall probably 

 never care to know anything more about the 

 Merchandise account than the total figures 

 for the year. The date and journal page num- 

 ber must -of course be put in as usual. For 

 the debit cash posting, immediately following, 

 explanations are also unnecessary. When we 

 post the credit to Hiram Watts' account we 

 can write the word Cash in the explanation 

 column, if desired, but as most of our cus- 

 52 



tomers will pay their bills with money it is 

 just as clear to assume that all unexplained 

 postings on the credit side of a personal 

 account represent cash. In the credit posting 

 to George Henderson that follows, which is 

 not cash, we shall write: 



A Labor-Saving Journal. Every one of the 

 entries we have so far made involves at least 

 one of the accounts, Cash and Merchandise. 

 In country storekeeping this will be true, with 

 very few exceptions, of all the records of the 

 year's dealings, and in all businesses these 

 two or similar items are constantly occurring. 

 In the course of a day a firm might have 

 hundreds of postings to Cash, each without 

 any explanation. If you have in mind the 

 precept that bookkeeping should give the 

 maximum of explanation with the minimum 

 of labor you will wonder if there is not some 

 way in which this huge number of postings can 

 be combined into one. 



The answer to your question is found in a 

 special column journal. In such a book the 

 debit columns are placed at the left of the 

 page, the description of the entry in the cen- 

 ter, the credit columns at the right. For each 

 account occurring often, there is a special 

 column. 



In the store from which we have been taking 

 examples the commonest debit posting will be 

 for receipts of cash and the most frequent 

 credit for sales of merchandise. Therefore a 

 special debit column for cash and a special 

 credit column for merchandise will save us 

 much time. In journalizing the first of the 

 entries given above, we shall put the debit 

 figure in the general column at the left, the 

 credit figure in the special merchandise column 

 at the right. The first we post as before, 

 but not the second. In the checking column 

 opposite it we make a check (V) so that it 

 will not appear that a posting has been neg- 

 lected. At the end of a day the figures in 

 the special column are added and the total 

 posted to Merchandise account in the ledger. 

 The cash items are treated similarly, and our 

 entries in the journal will look as shown at 

 the top of the next page. 



When the special columns are added, it will 

 be seen, the totals are transferred into the 

 general columns. If the last then have equal 

 sums we have proof that the amounts posted 



