BOOK-KEEPING. 



Jahn Smith owes me - - j^'. 40 

 Jam« Tavlor ov»ts me - - - 15 

 I li»»e ill Ca(h . ... - 40 

 I have uafolJioyardiof cluth,') 



at I ^*. per \ ard (the prime > 1 5 



cottj 3 



1 10 The net of my edate. 

 too Stock beginning. 



£• 10 gain. 



Hence I have cleared lol. by the falc of 60 yards of cloth 

 Bt a profit of js. 4d. per yai-d. 



Remnrtt onjingl; Entry. 



By fingle Entry I cannot tell wliat goods are unfold, or 

 my profits or lolTes by my bonks on!)-, except when the 

 tranfaclions are but few, as in the foregoing examples. For 

 as the ledger here contains only tlie accounts of perfons 

 deal'ng on credit, it affords no other knowledge to the 

 owner, than what debts are due to him, and what he owes. 



But if he wifli to know what goods are undifpofed of, 

 and what he has gained or loft by the whole or anv part of 

 his dealings, he cannot obtain this knowledge by fingle entry, 

 without " taking llock j" that is, he muft weigh or meafure 

 what goods he has unfold ; and their value, added to the 

 cafh in hand, and the balance of debts, will fhew the net of 

 his cllate, and this, compared with his original ftock, will 

 fticw his profit or lofs. 



Hence book-keeping by fingle entry is effentially defedive, 

 as it affords no method of afceitaining the Hate of a mer- 

 chant's affairs, without taking ftock ; a talk which is both 

 laborious and liable to error, and which at bell affords no 

 adequate means of preventing embezzlement or^letefting 

 fraud ; but thefe objefts are attained by double entiy, per- 

 haps as effectually as human ingenuity can dtvife. 

 Double Entry. 



In double entr)', three principal books are required ; the 

 •wiijlc hook, joumnl, and ledger. 



The 'o.mjle book gives a regular detail of the tranfaftions 

 of bufinefi, fct down in the order of time in which they take 

 place, and ftated in a clear, fimple, and circunillantial manner. 



The journal records the fame tranfaclions as the wafte 

 book,^ bnt they are differently expreffed ; for herejhe Drs. 

 and Crt. of the various accounts are afcertained, in order to 

 transfer them with more cafe to the ledger. 



The manner of afcertaining the Dr. and Cr. of each 



tranfDaion here is the fame, in effed, as in fingle entry ; 



but m double entr)-, things, as well as perfons, are made 



Drj. and Crt. ; and one thing or perfon ii made Dr. to an- 



'other thing or peil'on. 



Thus, if I fell cloth to A. B. on credit, I enter it in the 

 journal, A. B. Dr. to Cloth. If I hnv doth of C. D. on 

 credit, I journalize it, Cloth Dr. to C. D. ; and if I biiv or 

 tell for ready money, or barter one kind of goods for ano- 

 ther, the following general rule mull be obferved : 



" What I receive is Dr. to what I give or part v-ith." 



For inllance, if I buy cloth for ready money, the journal 

 entry is "Cloth Dr. to Calh ;" and if I {A\ it for ready 

 money, " Cafti Dr. to Cloth ;" always fpecifying the quan- 

 tity, price, and a:nount. 



When two or more perfons or things are included in the 

 fame accnunt, they are expreffed by the term " Sundries," 

 or " Sundry Accounts :' thus, if I feU cloth for part mo- 

 ney, and the reil ci, :..dit. 1 journalize it, •' Sundries Drs. 

 to Cloth ; and then tpecify the particulars. 



The following rules for d.ftinguifhing Dr. and Cr. wiU 

 apply m all cafes : 



The perfon to whort, or for whofc account I pay, or 

 farnilh the means of payment, is debtor. 



The perfon from whom, or for whofe account, I receive, 

 or who iurnilhes me with the means of payment, is creditor. 



Every thing which comes into my pofleffion, or under my 

 dire£liou, is debtor. 



Every thing which pafTes out of my poircfTian, or from 

 under my direction, is creditor. 



The word I doc is fometimes uftd to aflifl the memory as 

 being compofed of the initials of the rule — In Debtor., Out 

 Creditor. 



The following lines may' likewife affift the memory ia 

 journalizing : 



■ By journal laws, what I receive. 



Is debtor made to what I give ; * ^ 



Stock for my debts mufl debtor be. 



And creditor by property ; 



Profit and lofs accounts are plaiH, 



I debit lofs, and credit gain. 



The ledger colletls the fcattered items, articles, or tran- 

 fadions, from the journal, and places them under their ref- 

 peftive heads, oppofing the Drs. and Crs. of each, on the 

 fame principle as in fingle entry ; but here accounts are 

 opened for goods as well as for perfons, and every account is 

 entered twice, whence this method is called "double entry." 



The accounts of the ledger are diftiiiguillied into three 

 kinds, perfonal, \iA, and fittitiov.s. 



Perfonal accounts are the fame in double as in fingle entry; 

 and every perfon is debited or credited as he ftands Dr. or . 

 Cr. in the journal. 



Hence ever)- perfonal account, fuppofe that of A.B., con- 

 tains on the Dr. fide all items or articles, by which he be- 

 comes indebted to me, and on the Cr. fide all items or arti- . 

 cles, by which I become indebted to him; 



Real accounts are thofe opened for merchandize, or any 

 other fptcies of property, fuch as cafii, bill?, fiiips, houfes, 

 &c. Here, as in all other accounts, each tranfattion is entered 

 on the Dr. or Cr. fide, as it ilands in the journal. Thus, 

 goods bought are entered on the Dr. fide ; and when thefe 

 or any part of them are fold, they are entered on the Cr. 

 fide ; by which the quantity on hand, and the profit or lofs 

 on each article may be, at any time, alcertained. 



Ficlitious accounts art thofe of llock, and profit and lofs. 



Stock is a term ufcd to reprefent the r.ame of the mer- 

 chant or owner of the books. On the Dr. fide is entered 

 the amount of the debts which he owed when the books 

 were opened ; and on the Cr. the amount of the caib, goods, 

 debts, andany other property then belonging to him." The 

 difference between the Dr. and Cr. fides Ihews his net ftock, 

 at that time. 



Profit and lofs is a general term ufed for either gai 

 lofs, fuch as may arife from trade, intercft, com:niffion. 

 On the Dr. fide are entered all tranladions of loffes ; and 

 on t.ie Cr. fide thofe of gain— the difference fiiews the net 

 gam or lofs. 



^ Piort Example of Double Entry. 



in or 

 &c. 



I'/J.STE BOOK. 



;^LoNDON, Jan. I, I^OJ 



as per old Ac- 



John Smith owes nie, 



count in Ledger yf, 



^^ Jan. 2 



Bought of Joiin Smith, 80 yards 



Cloth, at 15s. per yard, on account 



Sold James Taylor 6n credit, 60 yard; 

 of Cloth, at i8s. 4d. per yard - . 

 4- 



Recei-.'ed of James Taylor, in part - 



• £■ 



:oo 

 60 



55 

 40 



JOUR. 



