BOOKKEEPING 



827 



BOOKKEEPING 



from Farm Expense, and any vegetables, milk 

 or other products of the farm used at home 

 that could be sold should be charged to the 

 household and credited to the proper division 

 of the farm. Similarly, in order to learn the 

 cost of keeping cattle, any of their fodder 

 which is raised on the farm should be charged 

 to the cattle expense account just as though 

 it had been bought. To the accounts which 

 represent the products of the farm (correspond- 

 ing to the manufacturer's Merchandise account) 

 should be charged the labor, seed, fertilizers 

 and other elements of cost. This is explained 

 more fully under ACCOUNTING. 



At the end of a year, under such a system, 

 the books will show with considerable exact- 

 ness the profits of the farm. ' If to these are 

 added the household, personal and other ex- 

 penses which the farm has paid for the farmer, 

 and a reasonable amount for the rent of the 

 farmhouse, the resulting sum will be the actual 

 return to the farmer on his investment. If 

 this return is not as high a percentage as could 

 be secured through investment elsewhere, the 

 farmer may consider that he has lost money. 

 This applies to the man who rents his land 

 and owns only his machinery and stock, as 

 much as to the one who owns both. C.H.H. 



Labor-Saving Books 



Besides special books for unusual types of 

 business, there are in common use a number 

 of auxiliary books and variations of the simple 

 journal and ledger. One of them, a labor- 

 saving journal, has already been described. 



The Cash Book is a specialized journal. In 

 its usual form the left-hand page is for cash 

 received, the right-hand for cash paid out. ' 

 Every item on the left-hand page represents a 

 debit to cash and a credit to some other ac- 

 count. It is obvious, then, that the cash need 

 not be posted to the ledger until the foot of 

 the page is reached, when the total of all figures 

 can be debited to it. As a matter of fact it need 

 not be posted at all, but, since the other page 

 includes all the credits to the account, the 

 cash book can be taken to represent the cash 

 page in the ledger. In this case the cash book 

 is usually balanced every day, exactly as such 

 an account is balanced in the ledger when the 

 books are closed. The balance at any time 

 indicates the amount of cash which should be 

 on hand. 



A Sales Book, like a cash book, is a form 

 of journal. All sales of Merchandise are en- 

 tered in it. It is often made with two col- 



umns, one for cash sales, the other for sales 

 on account. At the end of a day the footing, 

 or total, of the cash column is entered in the 

 cash book. The sum of the two columns is 

 posted to the ledger as a credit to Merchandise, 

 the debits being posted singly to the proper 

 persons. 



A Sales Ledger, or Accounts Receivable 

 Ledger, is helpful to any firm which has a 

 large number of accounts. It contains an 

 account for each customer, to which entries are 

 posted instead of to similar accounts in the 

 general ledger. But in the latter there is a 

 controlling account called Accounts Receivable, 

 the balance of which should at any time repre- 

 sent the difference between the total debits 

 and the total credits in the sales ledger. There- 

 fore care must always be taken to see that 

 postings of a sale are made to both ledgers. To 

 effect this the usual method is to post the 

 footing of the On Account column in the sales 

 book to Accounts Receivable in the general 

 ledger, and the individual items to the accounts 

 in the sales ledger. 



Purchase Books and Purchase Ledgers are 

 similar in principle to sales books and ledgers. 



Bookkeeping for Children 



Many parents find it pleasant as well as 

 profitable, when a child has reached the age 

 of ten years, to instruct it in the simpler prin- 

 ciples of keeping accounts. Most children grow 

 up without learning even the rudiments of 

 bookkeeping, and when they have to face the 

 handling of their own affairs suddenly find 

 themselves helpless. Boys may acquire the 

 necessary knowledge after they enter business, 

 but girls ordinarily have no occasion to unless 



they are left alone in the world, in the very 

 situation in which they need it most. It is 

 easier to teach money-handling to a young 

 child than to an older one, because for the 

 former it can be made an interesting part of 

 play, but the latter is apt to regard the neces- 

 sary work as drudgery. 



The First Steps. Here is the method by 

 which one father taught his little girl the funda- 

 mentals of account-keeping. She was still in 



