BOOKKEEPING FOR GRAIN ELEVATORS. 7 
chandise purchases and local retail sales, have been combined into 
one form. 
This form differs from ordinary books of first entry in that both the 
debits and credits arising from transactions must of necessity be 
entered on it before it can be balanced.- 
The fundamental principle of double-entry bookkeeping is here 
illustrated; in every transaction two or more accounts are always 
affected and in opposite ways, these opposite effects being designated 
in accounting as debit and credit. That is, if value has been received 
or given it is necessary not only to show what account received, or 
cost value, but it is also necessary to show what account produced or 
surrendered that value. The debit and credit effects will be equal. 
For example, when merchandise is sold, the merchandise account 
obviously surrendered value, hence that account will be credited. 
In order to complete the entry, however, it is necessary to show what 
account or accounts have received an equivalent value, which in this 
case will be either the cash account or the accounts receivable ac- 
count, which must be debited. Similarly, when a note with accrued 
interest is paid, the Cash account surrenders value equivalent to the 
sum of the note and interest, hence a credit to the Cash account. 
Again it is necessary to show what account or accounts have received, 
or cost value. In this case the Notes payable and the Interest 
accounts are involved. They will be debited respectively with the 
face value of the note and with the interest paid. Every transaction 
must be analyzed in a similar manner and an entry made showing the 
effect of the transaction on all accounts involved. 
A column captioned Items is provided between the debit and the 
credit sides of the Cash Journal, in which are written the names 
of the ledger accounts to be debited or credited, and in each case an 
explanation of the transaction. Complete explanation must always 
be made in order that one unfamiliar with the transaction can under- 
stand it readily. The amount or amounts are then extended on 
the debit and credit sides under the proper headings. (See sample 
entries, p. 48.) 
The debit columns, to the left of the Items column, are captioned, 
Date, Folio, Cash, Bank deposits, General ledger, Accounts receiv- 
able, Hard coal (lbs., amount), Soft coal (lbs., amount). 
The credit columns, to the right of the Items column, are : Check 
number, Folio, Bank withdrawals, General ledger, Accounts receiv- 
able, Sales ticket number, Hard coal (lbs., amount), Soft coal (lbs., 
amount) . 
Blank columns are also provided on both sides to be used as de- 
sired. 
