FARM ACCOUNTS. 3 



for the debit amounts. The abbreviation "Dr." is used to 

 signify debit. 



Since a debtor reduces the amount of his indebtedness by 

 such amounts as he returns or pays out in favor of the one 

 who credits him, it follows that "an account should be credited 

 with ichat it gives" When money is paid out the record 

 should be so made that payments will stand by themselves 

 in contrast to the amounts received. 



By custom the amounts of payments are placed in the 

 right hand money column. The abbreviation "Cr." is used 

 to signify credit. 



BALANCING. 



It is a business-like custom to go over a cash account at 

 stated times to determine its balance. This balance is the 

 difference between the debit and credit sides of the account, 

 and should be exactly equal to the amount of cash on hand. 

 In the affairs of a student it is good practice to balance the 

 cash account at the end of each month. The illustration 

 shows a correct entry for every transaction during October 

 in the first student's account, and the balance of cash left 

 over for his use in November. The illustration and the 

 memorandum of transactions for October should be care- 

 fully studied. The student should be able from this study 

 to tell readily in class what transactions should be debited 

 and what credited during the month of October. 



PRACTICE WORK. 



Rule a sheet according to the foregoing directions for rul- 

 ing. It will then resemble the illustration. Beginning with 



Note. Cash simply represents value, and is not necessarily a 

 value. It is a medium of exchange. All the cash you have should 

 therefore be held as in debt to you until you have paid it out. 



Note. A cash account shows the amount of cash received and 

 cash paid during a certain time. As it is impossible to pay more cash 

 than is received, it follows that if at any time the amount shows that 

 there is a difference between the total amount received and the total 

 amount paid, this difference should be equal to the amount of cash 

 on hand. It is customary to speak of this difference as a "balance." 



"The sorrow of today brings the smile of tomorrow." 



