SET VI. WHOLESALE GROCERY BUSINESS

The Object of this set is to illustrate in a brief way a system of bookkeeping adapted to a general wholesale business.

Special Features. Among the special features of the set are: 1. Introduction and use of:

a. Auxiliary ledgers.

b. Special-column cashbook.

c. Special-column journal.

d. Proprietors' private accounts.

2. Adjustment of interest in the Proprietors' accounts. 3. Suggestions bearing upon business correspondence.

The Books used are the cashbook, the sales book, the invoice book, the journal, the general ledger, the purchase ledger, the sales ledger, the bill book, and the check book.

The bill book and the check book are the same as in the preceding sets.

Sales Book. This book is treated in the same way as the one illustrated on page 64, except the posting. The amounts of the various sales are posted separately to the debit of the personal accounts in the sales ledger.

When the sales book is closed, the total sales are posted regularly to the debit of Accounts Receivable and to the credit of Merchandise in the general ledger.

The sales book of some large concerns is provided with an extra column for cash sales; the different amounts in this column are not posted to the sales ledger, but the total is entered in the cashbook daily, and credited to the Merchandise account at regular intervals. The general practice, however, is to treat all cash sales to regular customers in just the same way as sales on account, that is, the goods are charged to the customer from the sales book and his account is credited through the cashbook for the amount received. The latter practice is followed throughout the intermediate portion of this text. The chief arguments in favor of this plan are as follows:

1. In most wholesale houses cash is understood generally to mean payments that are made within five or ten days from the date of the bill.

2. Wholesale houses would not be justified in quoting the same terms to all customers; those who buy in large quantities can be given better terms than those who buy in small quantities. As a basis for determining the best possible terms, a customer's ledger account should be consulted. This account is incomplete, not furnishing full information, if the cash sales are not entered in the customer's account in the ledger.

3. In some instances a customer, for good business reasons, might call for a statement of all his transactions for a year, and it would be to any dealer's advantage to be able to furnish such a statement readily.

Cashbook. The cashbook used in this set is designed to illustrate the desirability of using special columns to meet the requirements of certain lines of business. The model cashbook on pages 88 and 89 is self-explanatory.

NOTE. Additional columns may be placed in the cashbook, when special columns are used, if their introduction will lessen the work and increase the value of the cashbook records.

The first two columns on the left are reserved for receipts from customers on account. These columns are similar to those illustrated in Set V, but in this set they are used for personal items only. The separate items in these columns are credited to the customers in the sales ledger. At the end of the month, or as often as may be found desirable, the total of the first column is posted to the debit of Merchandise Discounts and to the credit of Accounts Receivable in the general ledger. (See page 88.)

The total of the net proceeds column is posted to the credit of Accounts Receivable in the general ledger.

All receipts of cash, aside from the items from personal accounts, are entered in the General column on the left side of the cashbook, and these items are posted separately.