to Cash and Merchandise as the same as 

 though each item had been posted separately. 



As we have shown only two debits to Cash 

 and two credits to Merchandise in the above 

 examples not much labor in posting has been 

 saved, but if in the course of a day's business 

 there were several dozen of each there would 

 be an enormous gain in time to the book- 

 keeper. It will be noticed, too, that we have 

 been able to make adequate explanations with 

 a dozen fewer words than in the older form. 

 Other advantages of the special column jour- 

 nal will occur to anyone who uses it, as, 

 for instance, that the proprietor can tell almost 

 at a glance how much cash has come in dur- 

 ing the day and how much merchandise has 

 been sold. Further modifications of this form 

 of journal are found in the cash book and 

 sales book explained below, and in many 

 special books devised for unusual forms of 

 business. In deciding what special columns 

 to have for any particular journal it should 

 be remembered that unless items of one sort 

 are frequent an extra column for them will 

 add to labor rather than reduce it. 



How to Open a Set of Books. To open books 

 means to start recording the affairs of a per- 

 son or business which has not previously kept 

 accounts. The first step in the process is 

 always to list the assets and liabilities; the 

 second, to journalize them. 



For illustration let us make the entries 



necessary to open the books of two partners 

 who are starting a small factory. The first, 

 A. J. Steele, is to invest $5,000 in the business. 

 The second, W. F. Gordon, puts in some 

 machinery worth $8,000 which he owns, and 

 a note in his favor dated November 7, 1916, 

 for $2,500 and bearing interest at six per cent 

 per annum. The firm is to assume responsi- 

 bility for a debt of $633.14 which Gordon 

 owes on the machinery, and he will furnish 

 the amount of cash necessary to bring his 

 total investment to $10,000. The two com- 

 mence business on May 3, 1917. 



As the note has been bearing interest it is 

 worth more than its face value (see NOTE; 

 f INTEREST) . Therefore to find how much cash 

 Gordon must invest we must first calculate 

 the amount of the interest which has been 

 earned. Then we make our first entries in 

 the journal, as shown on the opposite page. 



The entry which concerns Steele scarcely 

 needs explanation. He has conferred a bene- 

 fit on the business, therefore is credited, while 

 the account which accepts responsibility is 

 debited. The description Capital Account is 

 adopted to distinguish the invested funds from 

 the money which the partners will draw out of 

 the business from time to time for personal 

 use. 



Machinery is an asset which will not be sold, 

 like merchandise, nor used up, like coal and 

 other items of expense. Though it will wear 



