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the right-hand page is for "Cash Creditor," or for cash paid out. All sums of money received are written on the left-hand page with the date of the receipt, the name of the person or source from which the money is received, and the amounts are entered on a line with the names in the first column of the page. All sums paid out are entered on the right-hand page with the date of the payment, and the name of the person or purpose by whom or for which the money is paid, and the amounts are entered in the first column of the page on the line with the names to which they belong.

In effect, in keeping accounts, "Cash" is treated precisely as if it were a person. It is debited, or charged, with all money paid in, and credited with all money paid out. For example, let us suppose that John Smith pays the merchant $200. This sum must be placed to the credit of John Smith, because he has paid it in. "Cash" has received it, and therefore "Cash" must be charged with it. It is entered on the debit side of the "Cash Book" as a charge against "Cash." The entry is made in the name of John Smith, and shows that he has paid that sum to "Cash." Thus this entry is at the same time a debit to "Cash" and a credit to John Smith, as it shows that "Cash" has had that much money from John Smith, and that John Smith is the creditor of "Cash" to that amount.

Again, we will suppose that Thomas Brown, David Lee, and Asa Hart have each paid the merchant $200, making $600 in all. These amounts are received by "Cash," and are entered on the debit or left-hand page, in three separate entries, each with the name of the person paying the money, and the date of the payment. At the end of the month, when the "Cash Book" is posted, these amounts are carried to the Ledger to the credit of the parties, that is $200 is credited to each. The aggregate $600 is then posted to the debit of "Cash" in the Ledger; and thus the debit of $600 to "Cash" balances the three credits of $200 each to Thomas Brown, David Lee, and Asa Hart.

The same principle applies to payments made by the merchant. Let us suppose he pays to Martin, Frazier & Co. $500; to Holmes Bros. $600; and to Jenkins & Son $300. Here we have $1400 paid out. Each of these amounts is entered with the date of payment on the right hand or credit side of the "Cash Book." In other words, "Cash" is credited with these sums because they have been taken from "Cash" and paid to the parties named. In posting the "Cash Book" at the end of the month, these entries are carried to the debit of the accounts of the proper persons in the Ledger. Martin, Frazier & Co. are debited or charged with $500; Holmes Bros. with $600; and Jenkins & Son with $300. These persons have received the above sums, and are therefore properly debited or charged with them. The aggregate amount, $1400, is entered on the Ledger to the credit of "Cash," because "Cash" has paid them, and must receive credit for such payments. Thus the single entry of $1400 to the credit of "Cash" balances the three charges against the persons to whom the sums were paid.

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But suppose the merchant receives from Henry Holt the sum of $200; from Richard Jones $300; and from Edward White $300, making $800 received. These sums are entered on the "Cash Book as debits against "Cash;" the entries being at the same time credits to the parties making the payment. The merchant pays out the following sums: to Walter Hyde $100; to Peter Wright $125; and to Lyle & Co. $100, making in all $325 paid out, which is less than the amount he received. These payments are entered on the "Cash Book" to the credit of "Cash," and are at the same time separate debits or charges against the persons to whom the money is paid. In order to ascertain how much money is on hand after making these payments, the "Cash Book" must be balanced. To do this, add the amounts in the first column of the debit side, and write down the amount, $800, in the second column on a line with the last entry, and also at the bottom of that column. Then add the amounts in the first column on the credit page, and write the amount, $325, in the second column of that page on a line with the last entry on that page. Then subtract the $325 paid out from the $800 received, doing this on a separate slip of paper. This leaves a remainder of $475, which is the balance of cash in hand. Now write with red ink on the credit page, below the last entry on that page, the amount $475, in the second column of that page, preceded by the word "Balance." This "balance" added to the amount of payments will give $800, the amount received and entered on the debit page. This amount must be written at the bottom of the second column on the credit page, and on a line with the bottom figures on the debit page. The "Cash Book" is now said to be balanced.

The "Cash Book" should be balanced every day in order to ascertain the amount of money on hand at the close of the day's transactions.

The "Cash Book" should be posted once a month. That is, the entries in it should be transferred to the Ledger, and entered there each in its proper account. As these transfers are made, the folio (or number of the page) of the Ledger to which the entry is posted, should be written in the "Cash Book" in the column ruled for that purpose, which is immediately on the left of the dollars and cents columns. This insures accuracy in referring from the “Cash Book" to the Ledger. The " Cash Book" is now said to be closed, that is, ali the entries for the month have been transferred to their proper places in the Ledger; and the book-keeper is ready to commence the record of the transactions of the next month.

In the example given above, the merchant had a balance of $475 of cash in hand at the end of the month. The reader will naturally ask, "What must be done with this balance?" It must be borne in mind that the book-keeper must treat the cash transactions of each month as a separate account. When the "Cash Book" is closed for January, he must begin a new cash account for February, and so on through the year. He turns to a new debtor page and opens a new account on the first of the month. In the case under consideration, he

carries forward the balance of $475, and enters it in red ink in the second column of the debit page, preceding it with the date (the first of the month) in its proper column, and the word "Balance" in its proper place. This shows that "Cash" has begun the new month with $475 in hand. “Cash" is, therefore, properly charged with it.

Now suppose the merchant receives from various persons during the month money to the amount of $525, and pays out to sundry parties money to the amount of $350. The receipts are all entered, each with its proper date and the name of the person making the payment, on the debit page of the "Cash Book," the amounts being written in the first dollars and cents column; the sums paid out are entered in the same way on the credit side of the "Cash Book," the amounts being written in the first dollars and cents column of that page. In closing the "Cash Book" at the end of the second month, the book-keeper must add the amount of the debits, which as we have seen is $525, and write this aggregate in the second column on a line with the last entry in the first column. This will place it under the "balance" of $475 remaining from the first month, which, as we have seen, was written at the top of the second dollars and cents column of the debit page. These two amounts are then added, and give a total of $1000, which must be written at the bottom of the second column. This shows the total amount of the debits or charges against "Cash" during the month. The book-keeper now turns to the credit page, and adds the amounts of the money paid out. The total as we have seen is $350. He writes this amount in the second column of the credit page on a line with the last entry of money paid out. He then subtracts the amount of the credits from the amount of the debits, and finds a remainder of $650, which is the amount left to the debit of "Cash," or the balance of Cash in hand at the end of the month. He writes with red ink the amount, $650, preceded by the word "Balance” in the second column of the credit page under the total of the credits. These two sums are then added and give a total of $1000, and this amount is written at the bottom of the second column of the credit page, and balances the $1000 at the bottom of the debit page. The amounts are then transferred to their respective accounts in the Ledger, and the "Cash Book" is closed for the second month. The balance, of $650, is then carried as before to the top of a new debit page, and the "Cash Book" is in readiness for the record of the transactions of the third month.

These explanations will show the reader the uses of and the manner of keeping the "Cash Book." We would earnestly recommend him to commence practising a system of book-keeping, beginning with the "Cash Book." He should obtain a blank book, and rule it himself in order to become familiar with the form of the pages. Each page should be ruled as follows: on the left-hand side rule a column for dates, and on the right-hand side rule a column for the numbers of the Ledger folios to which the entries are to be posted, and on the right of this rule two sets of columns for dollars and cents. The wide space in

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NOTE. In the above specimen the words "Date," "Name of Ledger Account," and " Ledger Folio," are inserted for the guidance of the reader. They are not used in actual account books.

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NOTE.-In the above specimen the words "Date," "Name of Ledger Account," and "Ledger Folio,” arc inserted for the guidance of the reader. They are not used in actual account books.

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