26 FARM ACCOUNTING 



opportunities for errors in the operations. Under the cor- 

 rect method of creating accounts, the deduction is expressed 

 by placing the amount on the opposite side of the account. 

 Immediately after making the correct entries for this trans- 

 action, the two accounts involved would appear as follows: 



Cash 



1916 



Mar. 1 On hand $1,000 



1916 



Mar. 30 Note payable 



redeemed . . . $300 

 Notes Payable 



1916 1916 



Mar. 30 Cash paid to re- 

 deem $300 



Mar. 1 First Nat'l Bk. 



(90 days)... $300 



In this illustration the only items entered as a result 

 of this transaction are the credit to Cash and the debit to 

 Notes Payable, the others having been made on March 1, 

 at the time of opening the books. 



No deductions are made on the face of the account. At 

 the close of a month or year, or at some other special time 

 the sum of the debit and the sum of the credit sides are 

 found separately, and the difference between the two sums 

 calculated in pencil to find the balance of the account 



An Account in Balance. In the last illustration above, 

 the Notes Payable account having a debit and credit of 

 equal amounts is said to be in balance. The horizontal 

 lines are used to indicate that fact. 



No Subtractions in Accounts. From the discussion of 

 the accounts as brought out by this transaction, we can 



