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EXPLANATORY INTRODUCTION. The present system is composed of three principal books, viz. :-Day Book, or Bill Book, Cash Book and Ledger, and of certain necessary subsidiary books, such as Diaries, Petty Cash Book, Cash Memoranda Book, and Clerks' Disbursement Books. Also some others of minor importance, which will be noticed.

Only the Day Book and Ledger require an index.

DAY BOOK, OR BILL BOOK. Paper, ruled to pattern, either of quarto or foolscap size, as may be preferred, is obtained, and sewn, from time to time, in sufficient quantity, along with an index, in a strong leather cover.

In the index the clients' names are entered, and reference is made to the particular page or pages where the charges for business done are entered. The pages, or sheets, are numbered as required, and the charges are made from the previous short notes thereof in the Diary. The items composing any particular bill are not entered so fully as that they can be considered complete. They are generally entered in outline only at first, and settled when the bill is made out for delivery or taxation. In other words, they form the original entries of the draft bills, which are afterwards, when completed, fair copied for delivery to the parties, or for the purpose of taxation.

When a particular business is completed and the bill relating thereto is required, the sheet or sheets on which the charges are entered, as shown by the index, is or are cut out, and (if more than one) fastened together in the corner, and finally settled and copied, and the copy delivered to the client, or otherwise disposed of, and the amount entered in the Ledger to the debit of the client.

The original drafts of the bills, so cut out, settled and copied, are then tied up in a bundle, alphabetically, and labelled “Bills sent and not paid.” Those that are paid from time to time are afterwards put into a separate bundle, and labelled, “ Bills paid from 18— to 184" or in some other suitable manner.

Those who have agency business to transact should have a separate Day Book, ruled with double money columns to suit, and an appropriate index.

Indeed, in some houses of extensive agency business, I have known a totally separate set of books kept for agency matters ; but this must be seldom necessary.

A few instances are shown, in the following Day Book, of the mode in which it is used ; but for con ciseness' sake, several leaves are supposed to be shown on one page.

Where several different kinds of business, or various matters, are transacted for any particular client, the heads or names of those different matters, would, of course, have to be shown in the index, under the client's name, for the purpose of reference to the appropriate pages of the Day Book, where the different businesses are entered. This would apply to the cases of “Messrs. Baber, Brothers & Co." and “The Estate of Sir John Corbet, Bart.” For shortness' sake, the titles of the different businesses supposed to be transacted are omitted in the index.

The index to the Day Book is supposed to show the names of all the different clients for whom business is conducted, and whose names will be found occurring in the Cash Book and Ledger. It is hoped, however, that the few instances given of the mode of keeping the Day Book will be sufficient, without going through all the names in the index.

The above mode of entering up the charges and making out bills will save a vast deal of time.

CASH BOOK. In this book all cash transactions, both of receipts and payments, are entered, including bankers' drafts and cheques. It is better, however, not to enter drafts or orders for payment of money until they are actually due, and to enter them in the meantime in “ the Cash Memoranda Book,” after mentioned, being one of the subsidiary books.

The receipts are entered on the left hand, or Dr. side, and the payments on the right hand, or Cr. side.

Some parties make the heading “ Cash, Dr. Per Contra, Cr.” Others, more simply, “ Cash received, Cash Paid.” That point, however, is not of much consequence.

The Cash Book should be balanced at the end of every week, and the balance carried forward to the following week. That need not, however, be done at the time, but as soon as convenient.

A short statement should also be made out, as afterwards shown, in connection with the Petty Cash Book), in proof of the correctness of the weekly balance, and showing its agreement with the bankers book. The statement is formed by adding together all the sums paid into the bankers during the week, and deducting therefrom the amount of cheques drawn during the same period. The balance should, of course, agree with the Bankers Book, and by adding to such balance, the petty cash in hand, as shown by the Petty Cash Book, the amount should be the same as the balance of the Cash Book. This is called “ The Weekly Statement.” Such a statement as that now referred to gives to book-keeping by single entry a proof of correctness equal to double entry, so far as regards the Cash Book, and in a far more simple manner. The “ statement” is a perpetual check on the accounts.

The language of the Cash Book is expressed in the third person. The size should be such as to suit the requisitions of business.

A form of the Cash Book is herewith given, extending to four weeks, which, it is believed, will be sufficient to show the mode in which it should be kept. The items are such as might be considered to occur throughout the course of a year.

The cheques for petty cash are not entered in the Cash Book, but only in the Petty Cash Book. The sums paid out of petty cash are to be daily entered into the Cash Book, as it is considered far preferable to have every payment, as well as every receipt, entered therein, instead of having to refer to Disbursement Books for a portion of those payments; and where several Disbursement Books are kept by different clerks, all the payments entered therein should be daily entered up into the Cash Book. In houses of very extensive practice this plan is not adhered to, and the cheques drawn for petty cash are entered on the" Paid" side of the Cash Book, instead of the payments made thereout, the payments being only entered in the Disbursement Books. The cheques for petty cash are handed to the clerk who keeps the Petty Cash Book, who debits himself therewith, and, on the other hand, enters to his credit all the payments made thereout, either to the other clerks, or in any other manner, and the total of the balances, in the hands of each, forms the “Petty Cash in hand” shown in the “ Weekly Statements."

The clients' names, and headings of the different businesses, are written somewhat larger than the rest of the items, in order to be more readily noticed, and the other portion of the items are written in an inner margin, for the same reason.

The Cash Book contains a special column in which are shown the folios of the Ledger, in which the Ledger items are entered.

Every item, excepting those contained in the bills of costs, should be entered in the Ledger. Moneys paid into the bankers to a separate account should be entered both in the Cash Book and Ledger.

When numerous rents are received at stated times, in accordance with a rental, they need not be entered in extenso in the Cash Book. It is sufficient to enter the total amount received, in the Cash Book, and Ledger, adding the words “ as per rental,” or “ Rental Book.”

LEDGER. The Ledger is the principal book, showing, when the books are entered* up, the state of every client's account. In this book should be entered up, from the Cash Book, all the sums received, under their proper heads, to the credit of the different clients and businesses, and, to their debit, all the chief payments, or, in fact, every item that is not included in the bills of costs. When a bill is completed and sent in to the client, it is to be entered to his debit, and, when paid, the amount is entered on the debit side of the Cash Book, and to the credit of the client's account in the Ledger.

In Ledger accounts all the receipts are entered on the right hand, or creditor side of the particular account, and all payments on the left hand, or debtor side. In other words, the entries are the reverse of those in the Cash Book.

Ledger accounts are expressed in the second person. The word “ To,” is prefixed to items on the Dr. side, and the word “ By,” to those on the Cr. side.

In a Solicitor's Ledger (which had better be of a folio size), each page may be ruled with double columns, for debtor and creditor, to keep the accounts more compact.

mu The mercantile term is posted.

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