To begin with the Cash account, the Dr. and Cr. sides being summed up, and the less subtracted from the greater, the difference is placed on the less side to balance it, or make it even with or equal to the greater: the same is done with the next account for Bills receivable; but in that for Cloth, the whole quantity originally on hand being disposed of at an advanced price, the amount of the Creditor side is consequently greater than the Debtor side; the difference, therefore, is considered as the profit or gain on the article Cloth, which appears Dr. to Profit and Loss for the sum.

Had the amount of the Cr. side been less than that of Dr. side, a loss having been sustained by some accident or defect in the Cloth, the differenee would have appeared on the Cr. side,' Cloth then becoming Cr. by Profit and Loss for deficiency, as is the case in the transaction of the 23d of February, where William Brown being insolvent, a loss is sustained by a composition being agreed to, and only twelve shillings being received for every twenty shillings he owed.

When all accounts on which there has been either gain or loss are summed up, and the proper sums are posted in the Dr. and Cr. sides of the account of Profit and Loss, the difference between these two sides is entered in the Stock account of the Ledger, in this way; if the Cr. side be the greatest, then the merchant has gained, and Stock is charged Cr. by Profit and Loss for the amount; but had the Dr. side been greater than the Cr. side, then the merchant would have been on the whole a loser by his business, and Stock would have become Dr. for the amount; or, in other words, the merchant's stock would have been diminished by that amount. But supposing, as in the specimens of books here given, that the trader is on the whole of his concerns a gainer, Profit and Loss will be Dr. to Stock for his gains; and the same being entered

in the Cr. side of the Stock account, will, together with the other articles for the amount of his effects, make a certain sum, from which subtracting what stands on the Dr. side of the Stock account, the difference, or balance, will show the value of his effects at the closing of the books; and the same being entered in the Cr. side of the Balance account, ought, if no error be committed, to make it even with or equal to the Dr. side.

In conducting very large and complicated mercantile concerns, it is indispensible to simplify many accounts in the Ledger, by employing a number of subsidiary or assisting books, each of which is adapted to a particular branch of business; such as the Cash-Book, the Bill-Book, the Sales-Book, the Invoice-Book, &c. thereby forming parts of the Waste-Book, for such articles as belong to their respective subjects; so that the Waste-Book itself contains merely a general account of such transactions, with the particulars of such others only as do not come under the heads of these subsidiary books. By this method, and by balancing such lesser books at stated periods, as at the end of every month, the entries in the Ledger are greatly diminished in number; besides, that every importer or exporter of goods on commission must keep Invoice and Sales-Books, and Cash and Bill-Books are necessary in every branch of commerce.

The Cash-Book contains an account of all money matters, kept in the form of the Cash account in the foregoing specimen of a Ledger; the Dr. side shewing all monies received, and the Cr. side all monies expended or paid. The Cash-Book contains such payments and receipts as being merely temporary; such as small loans, accommodations, &c. need not appear in the Journal or Ledger.

The Bill-Book forms a register of all Bills of Exchange, whether payable or receivable, being divided into columns appropriated to the several particulars relating to each bill,

such

such as, when received, by whom drawn, on whom drawn, the date, to whom payable, the time when due, and the sum, &c.

The Invoice-Book contains copies of all invoices, or statements of goods sent off, or exported on commission, containing the name of the ship and the master, place of destination, and person to whom consigned then follows an account of the quantities and values of the several articles dispatched, to which are added, the shipping and other charges paid by the merchant, exporter, or factor; and upon the total of these sums the commission is reckoned.

The Sales-Book or Factory-Book, serves to point out the net proceeds upon any cargo or merchandise sold on consignment or commission. This is also called the Account of Sales, or commonly Account Sales, and is divided into two pages, like an account in the Ledger; having the title extending over both pages. On the left hand are entered all charges attending the transaction, such as those for freight, customs, landing, selling &c. with brokerage and factor's commission, both of which are reckoned on the gross amount of the sales. On the right hand are entered the quantity, price, and value of the goods sold, with the name of the buyer, and the time of payment; and the difference between the two pages of the account is the net proceeds, which being entered on the left hand, makes that page equal to the other: and for this article of net proceeds the factor gives his correspondent credit, transmitting to him a copy of the Account Sales, signed with his name, and certified to be correct, errors excepted.

BILLS OF EXCHANGE.

By Exchange is meant the paying of a sum of money in one country, or part of a country, for an equivalent sum

in another country, or part of a country; and this is done by means of Bills of Exchange, which are written orders, directing the payment of a certain sum of money at a given time. Bills are either inland or foreign; inland bills are those drawn and payable within the same country or state, and foreign bills are those drawn in one country or state, but payable in another.

The person who draws the bill is styled Drawer; the person on whom it is drawn, that is, to whom it is addressed, is the Drawee, and also the Acceptor, when he engages to pay the bill; and he to whom the money is to be paid is called the Payee. Besides these, other persons are frequently concerned with Bills of Exchange, such as the buyer or remitter, the seller or negotiator, and the holder or possessor of the bill.

When the holder parts with a bill he indorses it, that is, he writes his name on the back, and thus every indorser becomes liable, or a security, for the payment. The first indorser ought to be the payee, who, by a special indorsement, may direct the payment to be made to a third person, not named in the bill, who thus becomes the Indorsee. When a bill is presented to the drawee, and accepted by him, he writes his name at the bottom with the word accepted: but if the bill be refused acceptance, it is put into the hands of a notary public, to be noted for non-acceptance; and if a bill that has been accepted be refused payment when due, it is also noted or protested, and returned to the drawer, who, or any of the indorsers, becoines liable to pay the value of the bill, and all charges accruing on the business: no time should be lost in thus returning a protested bill, otherwise the holder can have no claim on any one but the acceptor.

The period when a bill is due, which is called its Term, varies according to the agreement made between the parties concerned in it, or to the practice of the countries where it is drawn and payable; some being drawn at sight, that is,

they

they must be paid as soon as presented; others are made payable at a certain time, as a number of days after sight, or after the date of the bill; and others are drawn at usance, which is the customary term allowed in different countries for a bill being paid; double usance is double this term, and half usance is half this term.

Besides this usual term of payment, a certain time is also allowed after the term is expired, before payment can be enforced; and this time consists of a number of days of grace, which, in these kingdoms, is three; but bills drawn at sight admit of no days of grace.

In exchanges two things are of importance to be ascertained, the par and the course of exchange: the par means the real value of coin of one country in proportion to that of another; but the course signifies the current value of such coins, as fixed between the two countries. If the coins of different states were subject to no alteration in respect of their several intrinsic proportions in quality and weight, the par would be easily ascertained; but as this is by no means the case, the par must be liable to frequent fluctu

ations.

By means of bills of exchange, debts may be discharged reciprocally in different places, without any real transmission of money: thus, if John of London owe £ 100 to James of Edinburgh, and Robert of Edinburgh owe an equal sum to Thomas of London, both debts may be discharged by a transfer of Debtor and Creditor in this way: James draws a bill on John, which Robert purchases and remits to his Creditor Thomas, who receives the payment from John. When the debts between two places are unequal, the difference must be remitted in money or bills; and on account of the risk attending remittances in specie, bilis are the most convenient medium of payment: but if many bills are required for remittance to any place, the number of purchasers will be increased, and consequently the price of such