BOOK-KEEPING. 



Remarls on the Ledger and Subjliliary Boots, 



As intercft fhould be charjjed in the ledger upon every arti- 

 cle, or debt, from the time it becomes due to the period of lett le- 

 nient, the operation ouy;ht to take place before the general ba- 

 lance, and the difference between the interell of theZ);-.and6';-. 

 fides of each account of the ledger (liould becarriedback tothc 

 jonrnal, making " Sundries Dis. to Interell" for the balance 

 in favour of llock, and " Interell Dr. to Sundries" for the 

 balances on the other fide. Thefe entries (hould then be 

 polled to their refpeftive accounts in the ledger; and it is 

 common, at the fame time, to infert pollagc of letters, and 

 other fmall charges on merchandize. 



The manner of inferting the balance, and profit and lofs 

 accounts, in the ledger, varies in different counting-houlcs. 

 In fome they are placed as in the torjgoing fpecimen : i;i 

 others, the particulars of tliofe accounts are infcrtcd at the 

 end of the journal, and the fum total only of eacli tranf- 

 .ferred to its proper place in the ledger ; a method that is 

 found very convenient iu extenfive bulincis, where accounts 

 in the ledger may be thus clofed as the goods are fold off, 

 which greatly dnninilhcs tlie labour of the general balance. 



Befidcs the fiibfidiary books already explained, there are 

 various others peculiar to certain kinds of buiinefs; fuch as 

 Books of Infitrance, and Shipping Accounts. There are alfo 

 feveral, the titles of which are Ivifficiently explanatory of their 

 ufes ; fuch as the Order Bool, Letter Beck, Petty Cajh Book, 

 Diary, and Debenture Book. In fome houfej, a Stock Book is 

 kept, which fhevvs the quantity and price of each article 

 bought and fold ; thus ferving as a lubllilutc for real ac- 

 counts in the ledger ; a purpole which is fometimes effetled 

 by the Warehoufe Book. It fhould be obferved, that the 

 Account Current Book is univerfally neceffary, as it (hews the 

 ilate of each perfonal account in the ledger drawn out in a 

 detailed and fimpk fonn, in order to trai)Iiiut a copy or du- 



Vox.V. 



plicate of each pcrfon's account to him at the period of 

 fettlement. 



Factorage and Exchange Accounts. 



When a merchant and his agent or faftor refide in coun- 

 tries where different currencies are ufed, the faftor keeps his 

 employer's accounts in the currency of his own countn", and 

 the employer, that their buoks may agree, keeps the fame- 

 accounts in tiie fame currency ; but he alio allots an adjoin- 

 ing column in his ledger for the correfponding value in his 

 own money, by which he afeei tains what profits or lofTes 

 may arife from the fluftuation of exchange. 



In order to explain fuch an exchange account, the fol- 

 lowing has been feledled from the ledger of a London mer- 

 chant, who (as appears by the ftatem.ent) remitted bills to 

 his fador at Hamburgh, and drew upon him for his reim- 

 burfement or returns ; he therefore debits his factor for the 

 remittances, and credits him for the drafts; the different 

 amounts are firfl entered in the inner columns in banco 

 marks, and then in the outer columns in fterling, according 

 to tlie rate of exchange at which they were negotiated, and 

 hence arifes the profit or lofs : thus, if the merchant Luy* 

 the hills which he remits at a cheaper rate of exchange than 

 he fells the drafts which he draws on his fadlor, there is a 

 gain ; but if otherwife, a lofs. On the fame principle, if he 

 had paid debts which he owed, or received debts due to bira 

 at a more advantageous rate of exchange than th.ofc debts 

 were contraeled for, there would have been a oaiu, but a 

 lofs it the contrary. 



An exchange account is b.alanced by firft comparing the 

 inner columns ; and when they are equal, there is nothimr 

 due from one party to the other. The difference betv/een 

 the outer columns is profit and lofs ; but if the inner co- 

 lumns be unequal, the balance is « hat one party owes to the 

 Other, which mull he carried to the outer columu at the 

 ^ currcMi 



