Bookkeeping

Record of pecuniary transactions in systematic manner. The principal methods are by single and double entry. The former is more simple and le perfect than the latter, and is usually confined to the le important kinds of busine . In single entry three books are used, day-book, cash-book and ledger. The most important book is the ledger, which contains accounts under the names of the persons with whom a trader deals. Goods or moneys received from any one are entered on one side of the account, and goods sold or money paid to that person on the opposite side. In double entry the ledger accounts are of two kinds, personal accounts, like those described, and book accounts, in which the commodities are made the subjects of separate accounts, which have a debit and credit side like personal accounts. Thus, if a trader purchases 100 bushels of wheat from A, the account of the ledger headed A is credited with 100 bushels of wheat, while the account headed wheat is debited with the same quantity and amount. Should the trader sell 10 bushels to C, the account headed C is debited with 10 bushels at a certain price and the account headed wheat credited. In this way every transaction is entered in the ledger, on the credit side of one account and on the debtor side of another. Double entry books vary in number and arrangement with the nature of the busine in which they are used. Daily transactions are generally recorded in various books. as the stock-book, cash-book, bill-book, invoice-book and sales-book. On these are based the journal and ledger. The former contains a periodical abstract of all transactions recorded in the subordinate books, cla ified into debits and credits, and the latter an abstract of all the entries made in the former, cla ified under the heads of their respective ac counts.