THE DAY BOOK AND LEDGER.

The following may be supposed to be a record of some of the transactions of Joseph Dame, a retail grocer at Andover, Mass.

From such a record as is shown by his Day Book (a book in which each day's transactions are entered) Joseph Dame or any one is able to tell who owes him and whom he owes, and how much he owes or is owed in each case.

Imagine yourself to be his clerk and see if by looking over this record you can answer the following questions, should he ask them. On what dates have goods been sold to James Cilley, and what is the total amount of sales to him, and how much has he paid? How do we stand with Henry Hoyt, Mrs. Mary Wheeler, Harry Goodwin, and William W. Garvin? Do we owe them, or they us?

From such a record as appears in the Day Book you could answer the questions, but where transactions are carried along for weeks or months with different persons, it would be a very slow way of getting at the facts. Hence for convenient reference, the transactions or accounts (abbreviated %) with the different persons are collected and arranged as they appear in the Ledger, so the main facts may be learned at a glance. The Ledger gives the summary.

For items or particulars, reference can be made to the Day Book (abbreviated D. B.), as the pages of the itemized charges in the D. B. are indicated in the left vertical column of the Ledger (abbreviated L.).

The items bought or sold on account mean that the goods were not paid for at the time, and "paid on account on account" means that money has been paid to reduce the debt.

A person who owes is called a Debtor (abbreviated Dr.).

A person who is owed is a Creditor (abbreviated Cr.).

The left side of the ledger page is the Dr. side; the right is the Cr. side.

When we charge one on %, we say we debit him.

When we enter a payment on %, we say we credit him.

Over the entry of each transaction of Dr. and Cr. we write the name of the party with whom it occurred, as will appear in both the D. B. and L. The name of the owner of the book should always appear on the cover or some other conspicuous place. It is not necessary therefore to write Joseph Dame's name with each account.

NOTE. -Book-keepers usually keep cash received or paid, unless on account, in a separate book called a cash book. In the following exercise it is kept in the D. B. on account of the limited cash transactions.