and against use by any but the owner by the signature plan of identification. The value of these checks in foreign money is printed on their face, that of a $10 check being, This value, however, is subject to very slight changes, as the rates of exchange between the countries vary from day to day. Exercises and Applications 284. 1. What must be paid in Memphis for a draft on Chicago for $5250, exchange being 1% premium? 2. Find the cost of a bank draft for $300, when the exchange is at % premium and the bank charges % for its labor. 3. When exchange was at 3% discount, I bought a bank draft for $50, the bank charging 15¢ for making out the draft. What did the draft cost me? 4. Find the cost of a New York draft for $800, exchange being % premium and local bank charges being 1%. 5. Find the cost of a sight draft on Paris for 1500 francs, exchange being at 5.18. (This means 5.18 francs to the dollar.) 6. Find the cost of a demand draft on London for £50, exchange being 4.8525. ($4.8525 for £1.) 7. Find the cost of a 60-day draft on Berlin for 500 marks, exchange being 941. (4 marks for $.945.) Note. Foreign exchange is quoted as follows: England, Cost of £ 1. France, Number of francs to the dollar. 8. A man in New York bought a bill of exchange for 1000 francs and sent it to his family in Geneva, exchange being 5.183. What did the bill cost him? 9. Find the cost of $1000 in American Express checks, at% premium. 10. Find the cost of a sight draft on London for £25 10s., exchange at 4.86. 11. Mr. Smith buys farm implements listed for $2500 with discounts of 30 % and 10 %, and pays by a draft at 1% premium. What does the draft cost him? 12. What will a draft for $2750 cost, exchange at a premium of 40 per $1000 ? 13. Smith and Jones draw on John Doe & Co. for $750. The bank charges .1% for collection. What are the net proceeds? 14. How large a demand draft on Paris will $ 125 buy, exchange being 5.20? 15. A telegraphic money order costs twice the regular rate for a ten-word message plus 1% pre mium on the order. What will it cost to send my friend in Syracuse $50 by a telegraphic money order from New York, the ten-word message rate being 25¢? SUMMARY The forms for keeping accounts vary according to the extent and character of the business. In all forms, the title of the account is debit to what it receives and credit by what it gives. The single-book and single-page form with adjacent columns for debit and credit entries of dollars and cents, and a common column for entry of items, is the simplest form, and is adapted to a very small business. The two-book form, using a daybook and a ledger, is adapted to a slightly larger business. Other books may be added for special purposes in large lines of business. Double entry forms are used in large firms for more complete records. A bill is a written statement of the items of an account, made in form to render to a debtor. A statement is a written summary of an account, arranged in form to render to one interested. A receipt is a written acknowledgment of something received. Receipts and bills are often combined by receipting the bill when it is paid. Printed blank forms are generally used for receipts, bills, statements, etc. Banks are institutions established by law for the purpose of doing a certain line of business which is outlined in their charter. The two main lines of banks may be classed as commercial or discount banks and savings banks. Commercial banks receive money for safe keeping, pay out money of deposit upon order by checks from the depositors, discount notes, and perform many other business functions. Savings banks receive money for investment and pay dividends or interest to their depositors. Trust companies combine something of the functions of the commercial and the savings bank, and also act as trustees for estates, etc. Bank discount is interest charged in advance on money loaned or advanced on commercial paper. Bank discount is reckoned at a certain per cent per annum on the maturity value of the paper discounted. The proceeds is the amount at maturity less the bank discount. True discount is the difference between the maturity value and the present worth. The present worth is the sum which, put at simple interest, will amount to the maturity value in the given time. A corporation or company is an organization formed by law for doing business. Its business is managed by directors or officers elected by its stockholders. Certificates of stock showing the number of shares and the par value of each share are issued by corporations. These may be bought or sold. The frequent changes in the market value of these certificates lead to a great amount of speculation in the stock market for "active stocks." Dividends are profits shared by the stockholders. Par value means the face value of the stock. Bonds are legally secured certificates payable at a fixed time, and bearing a fixed rate of interest upon their par value. A broker is an agent who deals in stocks or bonds upon a commission. Profit and loss is usually named in business in terms of per cent on the cost or the money invested. Partnership is an association formed by two or more persons for doing business as a "firm" or a "house," and sharing the profits and losses in accord with the investments and terms of agreement. Exchange is the system of making payments at a distance by means of commercial paper. Domestic exchange is exchange in the same country. The most common forms of domestic exchange are checks, bank drafts, commercial drafts, and postal, express, and telegraphic money orders. |