CHAPTER XXVI

METHODS OF RECORDING SALES AND VARIOUS

LEDGER FORMS

The use of a bound sales book is no longer common in business. It necessitates too much copying and makes it difficult for more than one to work on the sales book at the same time. Various methods have come into use to take its place. The student should be familiar with the most important of these.

The Duplicate Charge System. In this system, an invoice is made out and at the same time a duplicate is made out. These may be made out as carbon copies in pencil, on the typewriter, or by the use of a duplicating pen. The original is sent to the customer and the duplicate filed in a binder. This binder of duplicate invoices is the sales book. The invoices may be in any form suitable to the particular business and the duplicate invoice may contain certain printed matter for record purposes that is not contained on the original invoice.

From the duplicate invoices, the accounts of customers are debited and the pages of the ledger accounts put on the duplicate invoices. This is all that is necessary until the end of the month. Then the total sales for the month must be found. The usual method of doing this is by the use of the Sales Recapitulation Sheet.

Sales Recapitulation Sheet. On this sheet are listed the invoices by number and amount. The total is found and Sales is credited from this sheet and Accounts Receivable debited. If freight is frequently prepaid for customers and charged to them, a separate column should be kept for Freight Out so that it will not be included in the total posted to Sales.

A modification of this system is used by many businesses. When an order comes in, it is entered on a special order blank containing the information necessary for making out the invoice and also various details for the records of the business. The order form contains all the information necessary for posting. It is bound in a binder and the orders numbered consecutively. This constitutes the sales book. The invoices are made out in the usual way and sent to the customers.

In this method the sales recapitulation sheet is made out the same as in the duplicate charge system. In both methods, it is best to file the sales recapitulation sheet in the binder on top of the last invoice or order included in it.

ORDER BLANK

ORDER

О

HIBBARD, SPENCER, BARTLETT & CO.
State Street Bridge, Chicago, Illinois

NO. 275 RECEIVED. Novell 19:
C. E. Loomis,

SOLD TO.

BILLED

Novells 10.

L. F.

Rockford Ill
LA Ray

SALESMAN.

Same
CB&QRR

1 5 doz Dexter Handsaw ticke

✓ 10 Steel Wheelbarrows Na172e

✓ 12 Counter Scales Naser 16 55 19860 12 doz. Jessey Vises Nous

19.

795 11 93 27378

Another modification of the Duplicate Charge system uses a blank sales sheet for the duplicate on which the invoices are made out in carbon, one below the other. These duplicate sales sheets are of the size of the ordinary sales book and are bound in a binder. These constitute the sales book. No sales recapitulation sheet is necessary as each sheet is forwarded to the next the same as in the bound sales book. This method cannot be used to advantage except when the billing is done on the typewriter.

The Sales Journal. Many firms do not like to post from the duplicate invoice or from the order blank, nor to use loose-leaf sheets for the total of sales. They prefer a more permanent record from which to post.

For this purpose, the sales journal is used. Either the orders are kept and filed or the duplicate invoices are filed as a record of the articles sold but no posting is done from them.

From the order blank or from the duplicate invoice, an entry is made in the sales journal. The entry should contain the following: date, folio, name of customer, address of customer, order or invoice number, terms of sale and amount. It may contain distributive columns

Retail Bill and Charge System. Many large retail stores use the Bill and Charge system. From the duplicate sales sheet made out by a clerk in pencil, the items are entered on the typewriter on a statement of account form and a duplicate made at the same time. These are attached to each other by a perforation and are kept in files arranged alphabetically until the end of the month. Then they are torn apart and the original sent to the customer. The duplicate is

kept in the files of the store. With this duplicate statement, a card ledger is usually kept in which the sales are entered each day in total and the payments posted to it from the cash book, as well as to the statement of account.

Various Ledger Forms. The ledgers that have been used in the practice work have been bound ledgers ruled in the ordinary way. In many businesses it is desirable to use loose-leaf or card ledgers. It is also of advantage in many businesses to use some other ruling than the ordinary ledger ruling. These ledgers will now be explained.

Loose-Leaf Ledgers. There are many advantages in favor of looseleaf ledgers especially for sales and purchase ledgers.

The first advantage is the ability to keep none but active accounts. in the ledger. As soon as an account is paid in full or closed, the ledger sheet is removed from the ledger and placed in a transfer binder. If the account becomes active again, the sheet is removed from the transfer binder and put back into the ledger binder. In this way, when a trial balance is taken, none but active accounts are to be

found in the ledger. Every account in the ledger then shows a balance.

Another advantage of loose-leaf ledgers is that they are self-indexing, as the ledger sheets are placed in the ledger after the proper index tabs, and no time need be spent in looking up the pages of the accounts to which the entries are to be posted. In posting from the books of entry a check mark should be used instead of the ledger page as when a bound ledger is used. This check mark should be placed in the folio column of the book of entry after the item has been posted to the ledger. Another advantage is that it is more suitable to a growing, expanding business than a bound ledger.

One invariable rule should be followed in opening up accounts in a loose-leaf ledger and that is that but one account should be opened up on a sheet. The size of the sheet may be changed to suit the individual business.

About the only disadvantage of loose-leaf ledgers lies in the use of a poor binder and poor paper. In that case the sheets may not hold and there is danger of losing the sheets and of losing some accounts. A loose-leaf ledger with a Balance column is illustrated here.

The Card Ledger. The card ledger is used largely by businesses that

have a large number of accounts, many of which run for but a short time. The principal advantages are the same as for loose-leaf ledgers. The active accounts are kept in a ledger file and when paid are transferred to a transfer file. The ledger is self-indexing, the ledger cards being placed in the file after the proper index cards.

Besides having the same advantage of being suitable to a growing, expanding business, it enables a number of persons to work on the accounts at the same time. It also enables the business to make use of inexperienced clerks to take the cards from the file and arrange them in the proper order for posting. They may also put them back into the ledger file and in that way save the time of the bookkeeper.

The card ledger also makes it possible to cross-index the cards for special purposes and to use tabs to indicate the accounts that are past due, those to which collection letters have been sent, etc.

The big disadvantage of the card ledger lies in the fact that cards may be taken out for reference and misplaced or lost.

Various forms of ledger ruling may be used with the bound ledger, the loose-leaf ledger, or the card ledger.

One of the most popular is the ledger that has a Balance column on one side or both. It enables the bookkeeper to find the balance of the account often and to record the balance, so that less work needs to be done at the end of the month. This has already been illustrated. This form is a very satisfactory one for a loose-leaf ledger for customer's accounts.

Ledger with Wide Detail Column. In some businesses it is desirable to have a special wide detail column in which the items charged may be detailed. Such a form is illustrated below.

The Center-Column Ledger. This form of ledger is preferred by some. It has the advantage of bringing the amount columns together. This makes it easier to compare debit and credit amounts and also makes ruling easier. The principal disadvantage is in the fact that the date, details, and folio on the credit side must be written right to left instead of in the usual way.