81 FARM ACCOUNTING 



usefulness of the ledger in any way. Even with the n 

 hooks of original entry the ledger accounts receive all the 

 debits and credits ultimately, and hold tlu-m in permanent 

 form for use later. Likewise, the financial statements are 

 prepared in exactly the same way, whether books of orig- 

 inal entry are used or not. 



The five reasons for the use of books of oriijinnl M//T// 

 in connection with the ledger in commercial ac< -on n tiny 

 may be summarized as follows: 



1. To supply a chronological list of busimss tninstict 

 Occasions arise in which it is desirable to know in what 

 order transactions occurred. 



2. T-o present in one place in compact form both tin 

 df bits and credits involved in a transition nn<l 

 I>l<in<ition concerning it. When entries arc made direct to 

 the ledger account, it is often difficult to record all the 

 explanation that should be made concerning the transac- 

 tion, also at any later date it causes delay in finding out 

 what two or more accounts were afTected by tho transaction. 



3. To permit of division of labor , u'h< n tr<is<i< ti<i< 

 numerous. When several bookkeepers are needed to handle 

 the transactions, several books of original entry may he 

 used at the same time by different employees, the results 

 bring assembled afterwards into the ledger 



4. To assist in the prevention of errors, or in ////> ///'.<- 

 covcry. For example, if only the ledger is used, the book- 

 keeper might record the debit. Then while he is turning to 

 the page on which the credit is to be recorded he is int. -r- 

 rupted and forgets to make the credit entry. This would 

 throw his ledger out of balance and would be one of the 

 most difficult classes of error to discover, under the con- 

 ditions. With similar conditions when books of original 

 entry are used the unfinished entry would usually h.- no- 

 ticed at the time of recording tho next transaction. If it 

 were not, the error could easily be found by a scrutiny of 



