CHAPTER IV. 



COMPLETE BUSINESS RECORD. 



The student has now learned that cash is debited when 

 it is received; that it is credited when it is paid out or 

 passes from cash. 



That a person is debited when he receives something of 

 value without at the time paying for it ; that he is credited 

 when he gives something of value without at the time re- 

 ceiving an equivalent. 



That an account with things such as Hogs, Poultry, 

 Sheep, and Cattle, is debited with its original cost (In- 

 ventory) and all other costs; that it is credited with what- 

 ever it brings into the business and finally with its present 

 value (Inventory); that an excess of the debit would then 

 show a loss and that an excess of the credit would show a 

 gain. 



Having learned these things thoroughly he is now ready 

 to take up the more complex matter of considering at one 

 time the two sides of a transaction. Every business trans- 

 action has two sides, a debit and a credit. Double entry 

 bookkeeping considers both of these sides. It thus pro- 

 duces an equality of debits and credits; that is, after a 

 transaction has been entered there are as many dollars and 

 cents on the debit side of the ledger card as on the credit 

 side. For example: If you were to receive cash $50.00, 

 it would have to come from some source. Cash must be 

 debited. Something must be credited. Credit the source 

 from which it came. If it was received from a man be- 

 cause he owed you, credit him. If you sold him a cow and 

 the cash was in payment, credit Cattle or such an account 



"Our troubles are the result of our own weakness." 



