In the following exercises it is required that the student write each draft, with such indorsements or acceptance as it should bear, on foolscap, and make his journal and cash book entries on a sheet of journal paper.

If the teacher deems it advisable, he may require the student to make the journal and cash book entries of all parties to these drafts.

JUNE 1.-Emmons, Hyde & Co., of Chicago, Ill., have agreed to accept your draft at sight for $600, favor of E. L. Martin. Write the draft and make the proper entry (see

rule 1, page 104).

JUNE 2.-Geo. C. Chase, Manchester, N. H., has agreed to accept your draft for $275 at 10 days' sight, in favor of Wm. Darling & Co. Write the draft and make the proper entry (see rule 1, page 104).

JUNE 3.—S. A. Dodge & Co., Millbury, Mass., have accepted your draft for $800 at 60 days after date, in favor of yourself. Write the acceptance and make the proper entry (see rule 6, page 107).

JUNE 4.-John Reynolds & Co., St. Louis, Mo., have agreed to accept your draft for $250 at sight. in favor of yourself. Place the draft in the bank and receive credit for its face. Write and correctly indorse the draft and make the proper cash book entry (see rule 6, page 107).

Flour, Northern Star

Brl.

4.08 4.10 4.12 4.14 4.16 4.18 4.20 4.22 4.24 4.26 4.28 4.30 4.32 4.60 4.58 4.56 4.54 4.52 4.50 4.48 4.46 4.44 4.42 4.40 4.38 4.36

2.85 2.90 2.95 3.00 2.86 2.91 2.96 3.01 2.87 2.92 2.97 3.02 2.88 3.25 3.20 3.15 3.10 3.24 3.19 3.14 3.09 3.23 3.18 3.13 3.08 3.22 4.35 4.30 4.25 4.20 4.34 4.29 4.24 4.19 4.33 4.28 4.23 4.18 4.32

3.49 3.54 3.59 3.64 3.50 3.55 3.60 3.65 3.51 3.56 3.61 3.66 3.52 5% 5% 6% 6% 5% 5% 6% 5% 6% 5% 63% 6% 534 67% 63% 5% 5% 6% 6% 5% 6% 56% 5% 5% 6% .85 1.10 .86 1.09 .87 1.08 .88 1.07 .89 1.06 .90 .98 .91 1.20 .95 1.19 .96 1.18 .97 1.17 .98 1.16 .99 1.15 1.07 1.14 .81 1.07 .82 1.06 .83 1.05 .84 1.04 .85 1.03 .86 1.02 .87 7.27 7.01 7.26 7.02 7.25 7.03 7.24 7.04 7.23 7.05 7.22 7.06 7.21

PRICE LIST FOR MAY AND JUNE (Continued).

lbs.

300

14 15 16 17 18 19 20 21 22 23 24 25

4.34 4.36 4.38 4.40 4.42 4.44 4.46 4.48 4.50 4.52 4.54 4.56 4.34 4.32 4.30 4.28 4.26 4.24 4.22 4.20 4.18 4.16 4.14 4.12 2.93 2.98 3.03 3.08 2.89 2.94 2.99 3.04 2.80 2.84 2.82 2.83 3.17 3.12 3.97 3.02 3.21 3.16 3.11 3.06 3.30 3.26 3.28 3.27 4.27 4.22 4.17 4.12 4.31 4.26 4.21 4.16 4.40 4.36 4.38 4.37

3.57 3.62 3.67 3.72 3.53 3.58 3.63 3.68 3.44 3.48 3.46 3.47

5% 5% 6% 5% 6% 5% 6% 5% 5% 5% 5% 6% 150 6% 6% 5% 6% 5% 63⁄4 53⁄4 63% 6% 6% 6% 5% 1.04 .92 1.03 .93 1.02 .94 1.01 .95 1.00 .96 .99 .97 1.01 1.13 1.02 1.12 1.03 1.II 1.04 1.10 1.05 1.09 1.06 1.08 1.01 .89 .99 .90 .98 .91 .97 .92 .96 .93 .95 .94 7.07 7.19 7.09 7.18 7.10 7.17 7.11 7.16 7.12 7.157.13 7.14

g

QUESTIONS.

1. Explain the use of the cash book?

2. Where should cash received be placed?

3. Where should cash paid out be placed?

4. What should the difference between the sides of the cash book show?

5. Why should the cash book be balanced frequently?

6. When should it be balanced daily?

7. What ledger account does the cash book enable us to dispense with?

8. How should you show the balance of cash in the trial balance?

9. Explain the use of the sales book.

10. To what account in the ledger, and to which side of the account, should the foot, of the sales book be carried?

II. In which money column of the sales book must all discounts and allowances appear?

12. What should be the first entry in the journal-daybook of any business?

13. Why are persons debited from the sales book for merchandise sold them for cash, d then credited from the cash book?

14. What is meant by indorsing a note?

15. What is bank discount?

16. For what length of time is bank discount always calculated?

17. How would you proceed to find the time of discount?

18. What entry should be made on the debit side of the cash book when a bill receivole is discounted?

19. What entry should be made when a bill payable is discounted?

20. What entry should be made on the credit side of the cash book in either case? 21. Define merchandise discount.

22. When is merchandise discount debited? When credited?

23. To which side of the ledger should amounts on the left-hand side of the cash book

è carried? To which side the amounts on the right-hand side?

24. How should the cash book posting be designated in the ledger?

25. Why should the terms of sale be shown in posting the sales book items to the dger?

26. Where should the footing of the sales book appear in the ledger?

27. What is a shipping receipt? Why are these receipts made in triplicate, and what done with each copy?

28. What care should be taken in writing a telegram?

29. How should figures be indicated in a telegram?

30. What is meant by repeating a message? What is a code?

31. Describe the method of entering C. O. D. sales in the sales book and in the ledger. 32. How should petty cash sales be entered?

33. In how many sections is the loss and gain statement closed?

34. What does the first section of the loss and gain statement show?

35. What does the second section of the loss and gain statement show?

36. If there are outside speculations, what further closing would be necessary?

37. In making a statement of resources and liabilities, where would you find the cash hand?

SPECIAL INSTRUCTIONS

The transactions for the month of June call for the handling of drafts, and the business of the month is a continuation of that of the month of May, with the addition of groceries to the tea, coffee and spices dealt in during that period. It is thought advisable to give space for a short discussion of the subject of drafts before the student is called upon to handle that form of commercial paper in his vouchers.

DRAFTS.

A draft is an order from one person or firm to another to pay a certain sum of money, unconditionally, to some person or firm named in the body of the draft, or to the order of that person or firm.

In the above draft Chas. Rand orders Wm. French to pay to the order of Adams & Baker $300. It is presumed that Wm. French owes Chas. Rand this amount, and that Chas. Rand is indebted to Adams & Baker, and gives them this order on Wm. French in payment of his indebtedness.

PARTIES TO A DRAFT.

Drawer.―This name is given to the person who writes or draws the draft. In the form of draft given above the drawer is Chas. Rand.

Payee. This name is given to the person or firm to whom the draft is made payable. In the form of draft given the payees are Adams & Baker.

Drawee. This name is given to the person or firm on whom the draft is drawn. In the preceding form Wm. French is the drawee.

COURSE OF PROCEDURE WHEN A DRAFT IS DRAWN.

Chas. Rand owes Adams & Baker and wishes to pay them $300 on account. Wm. French owes Chas. Rand and is willing to pay to him, or to his order, $300, therefore the