labor in locating errors, as each separate ledger can be proved independently of the others.

Questions.

1. What are the advantages of books with special columns ?

2. What are the reasons for keeping separate accounts with the different classes of merchandise?

3. In what way does the bookkeeper gain by subdividing the ledger?

4. Explain how the sales ledger may be proved.

5. In posting from your sales book in this exercise each transaction was posted to the debit of the person to whom the goods were sold, and the footing of the sales book was posted to the debit of Sales Ledger account and to the credit of Merchandise account, therefore each amount was posted three times. Why was your ledger not put out of balance?

6. Why keep a private account for a partner?

7. Why should an entry be made for the renewal of a note?

8. In opening your new ledger as directed on page 174, why should the entry in Sales Ledger account be on the debit side and the entry in Purchase Ledger account on the credit side?

9. What is the effect of accepting a draft?

10. Explain the use of a draft to collect a bill.

11. Why do you charge freight and cartage to Merchandise account instead of Expense account?

12. Why would you charge salaries to a separate account instead of to Expense account?

13. What is a credit memorandum?

14. Explain the use and advantages of a purchase book.

EXERCISE XV.

SINGLE ENTRY BOOKKEEPING.

219. The Main Features of single entry bookkeeping are: 1. Only personal accounts are absolutely necessary in a single entry ledger, although a cash book which is really a cash account should be kept, and other property accounts may be kept if it is desired.

2. Single entry does not require equal debits and credits for each entry, therefore a trial balance cannot be taken to test the accuracy of the ledger.

3. Since the property and other accounts necessary to show the losses and gains are not kept in a single entry ledger, it is impossible to prepare an itemized statement of losses and gains.

4. The single entry method does provide the necessary information for a statement of resources and liabilities from which the present worth can be found, and when the present worth is known, the net loss or gain can be found by comparing this present worth with the present worth at the time of the last statement.

220. Books. If a person has only a few transactions to record, a ledger might be the most convenient book for his purpose. In this he can keep such accounts as he needs after the manner illustrated in the introductory part of this book.

The simplest set of books for single entry bookkeeping consists of a journal, cash book, and ledger, but a sales book, purchase book, and bill book may be used with equal advantage in both single and double entry. The use of the journal and cash book differs somewhat from their use in double entry, but the other books are used in practically the same way by either method.

221. The Single Entry Cash Book. Sometimes the single-page form of the cash book, similar to the one shown on page 10, is kept in

single entry; but the double-page form is to be preferred, because it completely separates receipts from disbursements and thus saves many errors. As only personal items are to be posted, it will be a convenience to separate such items by entering the amounts of these transactions. in the first money column on each side and all other amounts in the second column. On this and the opposite page you will find an illustration of a single entry cash book. In this illustration the items that are not to be posted have been checked.

222. The Single Entry Journal. Since single entry does not require a debit and a credit for each transaction, it is necessary to indicate for each entry whether the account is to be debited or credited. In single entry the first money column in the journal is used for the items, and the totals are carried into the second column. On page 196 you will find an illustration of a single entry journal.

223. Rules. There are no new rules to be learned for single entry bookkeeping, but the following suggestions will help you : 1. Only personal accounts are to be kept in your ledger.

2. Any transaction that would be debited or credited to a personal account by the double entry method will be debited or credited to the same account by single entry.

3. Determine for each transaction whether a personal account is affected by it, and, if so, which account.

1 This item has been checked because it is included in the investment entry in the journal, and is not to be posted from the cash book. Any entry in your cash book or sales book that is not to be posted should be checked.

4. Determine whether that account is to be debited or credited. 5. Determine in which book or books the transaction should be

entered.

224. Directions. In this exercise you are to act as the proprietor. You will use a journal, cash book, sales book, bill book, and ledger. The sales book and bill book will be like those used in previous exercises, but you will need to study the journal and cash book before beginning this work.

Oct.

Transactions.

1. Begin the retail grain and produce business with the following resources Store and lot at 79 Washington St., valued at $3000; merchandise on hand per inventory, $667.50; cash on hand, $332.50.

2. Sell Chas. F. Lewis on account, 10 bu. potatoes @ 74, 5 lb. butter @ 29, and 2 bbl. flour @ $5.25.

3. Sell Jas. C. Holmes 3 bbl. apples @ $1.75, 1500 lb. hay @ $17.50 a ton, and 500 lb. straw @ $8.75 a ton, and receive cash for one half of the bill.

Cash sales $39.75.

4. Buy of Henry T. Mills on account at 30 days, 10 tons hay @

$14.75.

5. Sell James Ford on account, 5 bu. potatoes @ 74, 1 bbl. flour

@$5.25, and bbl. apples @ $1.75.