tration on page 219, does not differ from the usual form; but the back contains a statement of the bills for which the check is issued, so that when the check has been paid by the bank, it is a sufficient receipt for the items shown on the voucher. The following illustration shows the back of this check:

254. Filing the Vouchers.

The vouchers are filed in a vertical file in numerical order, and a card index is kept, showing the names of all the creditors and the numbers of the vouchers issued to each. This makes it easy to find any voucher in the file, if the number of the voucher or the name of the creditor is known. See page 236 for a discussion of filing systems.

NOTE. It is suggested that pupils be required to prepare forms for a voucher and a voucher register that might be used for the transactions of Exercise XIV. These transactions do not require as extended a classification as those of a manufacturing business, but they will serve to illustrate how the voucher method may be adapted to the needs of a retail business.

EXERCISE XVIII.

LOOSE LEAF BOOKKEEPING.

255. A Loose Leaf Book is one in which leaves may be inserted, or from which leaves may be removed at will. Such books have mechanical devices or binders which usually have several posts to hold the sheets in place, and when a leaf is inserted the posts pass through holes in the margin. The best forms of binders are equipped with expansion backs, which permit the addition of extra leaves, and they also have locking devices by means of which the leaves may be fastened as securely as in a bound book.

The illustration herewith shows very clearly the manner of removing or inserting leaves.

Loose leaf books possess many advantages over the usual bound books, and in consequence their use is being extended very rapidly. The most obvious of these advantages are the following:

256. A Loose Leaf Book is Perpetual. - Undoubtedly the greatest advantage of loose leaf books over bound books is in the fact that it is never necessary to open a new set of books. After a loose leaf system has been installed it is perpetual, and the number of records can be

increased or decreased, as the business demands, without changing the arrangement.

When a loose leaf ledger has been opened, the accounts need never be transferred to a new ledger. If an account is permanently closed for any reason, that leaf should be removed and filed in another book called a transfer ledger. This leaves only live accounts in the current ledger. If at any time a dead account should be reopened, the leaf would be taken from the transfer ledger and returned to its proper place in the current ledger.

Should a leaf in the current ledger become filled during a month, insert another leaf next to it, giving it the same heading but marking it, Sheet No. 2. After a trial balance has been taken at the end of the month, remove the filled leaf and place it in the corresponding place in the transfer ledger. As the transfer ledger is indexed in the same manner as the current ledger, it is always easy to refer to old records. In the transfer ledger all the sheets representing one account should be arranged in numerical order.

By this means all the items belonging in one account are kept together, no matter what length of time the account covers, and are not widely separated, as is often the case where an account has to be transferred from one place to another in a bound book.

257. Self-indexing. — The next great advantage is that no separate index need be maintained, as the records may be arranged in alphabetical order so that any particular record can be referred to instantly. In a loose leaf ledger, projecting, leather-tabbed index leaves may be arranged through the book, and the leaves containing the accounts may be arranged in each division as names are arranged in an ordinary city directory. This plan makes such a book self-indexing and results in a great saving of time.

Should it be desirable to use the state and town plan of indexing, the state index tabs may be arranged alphabetically, and under each state the ledger accounts may be arranged alphabetically by towns, as Aurora, Belvidere, Canton, Decatur, etc. Sometimes it may be an advantage to arrange customers' accounts alphabetically under each. state regardless of their towns.

258. Elasticity. With a loose leaf ledger it is not necessary or advisable to use as large a sheet as is customary with bound books, for the reason that, no matter how long an account may run or how much

space it may occupy, additional sheets can be provided as they are needed, and for short accounts the smaller sheets are preferable.

259. Adaptability. The first form of loose leaf book that came into general use was the ledger; but loose leaf books are being used for every conceivable purpose, and the fact that they are being adopted by the largest banks, corporations, and business houses proves that they possess many advantages over the ordinary bound books.

260. Charging and Billing. The new way of making out the bill and entering the charge at the same time, and posting directly from the carbon copy to the ledger, possesses decided advantages over the old way of entering the items in a sales book, making out a separate bill for the purchaser, and then posting from the sales book to the ledger. The old way is a waste of time and also offers more opportunities for errors, while the new way is economical, rapid, and accurate.

The bill heads are furnished in different lengths, and when a bill is to be make out, the proper size is selected and placed over one of the long transfer sheets with a carbon sheet between, and both the bill and the sales record are made at one writing. Some manufacturers use both sides of the sheet for this purpose.

By this method, only the amount of space necessary to copy the bill is used, and when another bill is made out, it is copied lower down on the same transfer sheet, and so on until the sheet is entirely filled. The transfer sheets are numbered in rotation and filed in a binder. posting is done direct from these transfer sheets.

The

The plain transfer sheet shown on page 226 measures 9 inches wide by 12 inches long, and is used in connection with the three different lengths of bill heads shown on page 227.

261. Monthly Bills. Many retail stores render itemized bills at stated periods, usually at the end of the month. For this purpose a double sheet may be used, folded at the right, and perforated for easy separation when the bill is to be sent to the customer. The under portion is about two inches wider than the upper, and is punched so that the whole may be filed in a loose leaf binder. A sheet of carbon paper is placed between the two leaves, and an exact copy of the bill is made with only one writing. The upper portion is sent to the customer at the end of the month, and the carbon copy is retained for