SECTION VIII. ACCOUNTS AND BALANCES. 1. Invoices and Bills. A Tradesman's Bill is a list of goods bought with prices attached-which is presented for payment over the counter or sent in at fixed periods of the year to a customer who has an account with the tradesman--the term Account is used in the same sense as Bill when thus sent in. Invoices are memoranda of goods with prices sent to a buyer and always accompanying the goods. When the time for payment comes an account embodying these invoices is sent to the customer. Very frequently the details are not given but the goods are set down "as per Invoice" of a given date. If the items are given the account is a detailed account. Invoices are always detailed. An Account Sales is a written account of goods sold on commission, their price, expenses, and net valueafter deduction of the percentage. Account sales of 1000 boxes of tea per S.S. San Salvador on account of Messrs. Hare and Blackett, Canton. London, July 31st, 1892. R. S. Budgett & Co. EXAMPLES. 1. Construct appropriate invoices for these transactions. (1) 84 yds. silk at 3s. 101d. 91 yds. linen at 1s. 3d. 102 yds. flannelette at 3gd. 20 pairs of taffeta silk gloves at 3s. 7d. 50 dozen handkerchiefs at 5s. 7d. per dozen. (2) 30 lbs. flour at 31d. 84 bags oatmeal at 25s. 6d. 3 cwt. seeds at 10s. 7d. per cwt. (3) 18 lbs. bacon at 61d. 25 sultana cakes at 92d. 27 lbs. biscuits at 61d. (4) 150 yds. blue serge at 2s. 11d. 24 yds. silk at 4s. Îld. 10 doz. lengths cord at 1s. Od. 2. Make out account sales on these transactions. (1) at 3s. 4d. mille. 1000 lbs. of tea. 250 at 3s. 5d. 350 at 4s. 1d. 200 Commission 21 p.c. Charges 7 per (2) 1000 bags of rice each containing 23 cwts. 225 at 21d. 250 at 3 d. 500 at 23d. Remainder at 4d. Commission 5 p.c. Charges 2 per mille. (3) 8000 bags of maize. 2000 at 25s. 9d. 3000 at 32s. 6d. 1500 at 34s. 7d. 500 at 41s. 3d. Commission 4 p.c. Charges gp.c. (4) 7830 bales N. S. W. and Queensland wool at 1s. 1d. per lb. 2225 Victorian at 1s. 3d. per lb. 4963 New Zealand at 1s. 2 d. per lb. Book-keeping. 2. Book-keeping is the science of arranging commercial transactions in a series of books for the purpose of accounts. The books which a merchant theoretically requires are three in number, but practically he uses others to reduce labour and simplify his accounts. THE BOOKS EMPLOYED. The three essential books are 193 The Waste Book, a rough record of all transactions in order of time. 2. The Journal, a technical arrangement of these transactions for transfer to the ledger. 3. The Ledger, a classified arrangement of the journal into various accounts. Practically most merchants have separate books for all transactions of a similar character and use the journal to arrange only those transactions not included in the special subsidiary books. Such books are :— 4. Bought Book, a record of goods bought on credit. 5. Sales Book, a record of goods sold on credit. 6. Cash Book, a record of cash received and paid and discounts received and allowed. 7. Petty Cash Book, for small payments (subsidiary to the Cash Book). 8. Bill Book, a record of promises of payment to or by the merchant. The Ledger will contain an abstract of the foregoing books. The use of the Waste Book requires no explanation it is ruled for one money column. The use of the Journal is very important, it is ruled for two money columns-a debtor and creditor column-thus representing the two sides of an account in the ledger. Each transaction is at once assigned to two places, a personal account and some other. Example. I pay R. Brown £20. 15s. 4d. .. his account is debtor. Cash account is obviously creditor. I buy goods of S. Smith worth £15. 10s. Od. .. goods account is debtor. S. Smith's account is obviously creditor. The Ledger is the most important book of all, it is ruled on each page in two sections, representing debtor and creditor sides. It contains a large number of accounts of all kinds-personal, real and fictitious. Each entry is placed to two of these accounts at least, thus embodying the principle of double entry, the principle always employed where accuracy is desired. The most numerous accounts are the personal accounts. Besides these there are usually the cash, the goods, the profit and loss, the balance, and the capital accounts. Examples of these follow. |