OF THE

There is no part of an accountant's duty that requires greater skill or more deliberate forethought than that involved in the management of a set of books during changes and settlements in Partnership. A clear and comprehensive knowledge of the science is imperative on account of the great variety of changes and varied conditions of things existing in business. There is usually but little trouble in arriving at a correct solution when the books have been kept by Double Entry, but when they have been kept by Single Entry, or in an irregular and unsystematic manner the case is far different.

One of the most important questions connected with a settlement between partners, is the determination of the Losses and Gains of the business.

When the Assets and Liabilities are taken at their nominal valuation, and the books have been kept by Double Entry, all that is required is to close the books, and the balances of the partner's accounts will show how they respectively stand with the firm. However, to effect an equitable adjustment between partners, a variety of circumstances may have to be taken into consideration.

Some Assets and Liabilities may be over due and some may be short due, while there are always some bad or doubtful accounts for which allowances must be made. The basis of all such settlements is of course the original article or contract between the partners.

Within the last ten years the conversion of private partnerships into Joint Stock Companies has become very general, the object being to extend their trade by the introduction of new capital which could not be obtained on the principles of the ordinary partnership.

In opening the books of a mercantile or partnership business we have only positive values to deal with, whilst in opening the books of Stock Companies, we are compelled to resort to values of another kind; viz:-positive, nominal and fictitious, and it is in the creation and disposition of these fictitious and nominal values that difficulties seem to arise.

A book-keeper whose knowledge and experience does not extend beyond the affairs of ordinary business certainly is not competent to conduct the accounts of a corporation.

I have found in my experience of fifteen years, that there are few book-keepers who can correctly adjust the affairs of a partnership and incorporate into a Joint Stock Company.

The adjustment of the varied conditions of things existing in business, requires on the part of the accountant, a level head, skill in accounts, master of practical mathematics, and a thorough knowledge of mercantile law, business customs and commercial ethics.

Having been called upon frequently to adjust the books kept by those whose knowledge and experience has not gone beyond that of an ordinary business, has led me to believe that there is a long fet and universal want of practical instruction in Stock Company accounting, and to supply this want these lessons have been prepared.

The transactions in these lessons are not imaginary, but they have all been met in my experience in adjusting and auditing the books of some of the most extensive, wholesale, retail and manufacturing establishments, in the United States. These transactions are difficult, and as they are presented with numerous conditions and propositions it is guaranteed that any one mastering them need never fear any that may arise in business.

The introduction of each subject will be fully illustrated and explained, and when each lesson has been completed to the best of your ability, compare your work with the key shown on pages 486 to 499. This will enable you to find your mistakes, if any, and to give you a thorough understanding of every point, as this work is Master d arranged for home study as well as a book of reference. this work and you will be competent to keep or audit any set of books.

Miscellaneous Journal Entries.

It is universally conceded by accountants that the most important and difficult part of book-keeping is in making the Journal Entries. When transactions are correctly journalized, mistakes should not occur in the Ledger, as posting is merely mechanical work, requiring, however, the greatest care and accuracy.

These miscellaneous entries will be found of great variety, and to contain all the principles or rules for journalizing any transaction that may occur in business.

Note. Journalize each transaction and perform all your work

just as you would in practical book-keeping. By these entries it is not meant that cash, merchandise, etc., are to be journalized in business. This form is shown, to give you a thorough understanding of journalizing by making the fewest entries. In practical business there would be a separate book kept for merchandise, cash, bills payable, etc. Some systems require a great many books, but the principle of journalizing is always the same.

Rules for Journalizing.

The DEBITS and CREDITS arising out of every transaction must,in amount, be equal.

Proprietors' or Partners' Accounts. Credit for all investments and gains. Debit for all withdrawals and losses.

General Rule. Debit whatever you receive, or costs value. Credit whatever you part with, or produces value.

Cash. When is cash debited and credited? Debit cash when you receive Coin, Currency, Bank Drafts, Certificates of Deposit, Checks or Sight Drafts in your favor. Credit when you part with or pay any of these.

Personal Accounts. When is a personal account debited? When he gets into my debt or I get out of his debt, he is Dr. for the amount. When is a personal account credited? When he gets out of my debt or I get into his debt, he is Cr. for the amount.

Property. When is a property account debited and credited? When property becomes mine, it is Dr. for the cost or value, and when it costs anything afterwards, it is Dr. for the cost. It is Cr. for what it produces, and for its value, or what is received for it when sold.

Notes and Drafts. Whenever you draw on a person, either at sight or time, credit the person drawn on. Whenever a person draws on you either at sight or time, Dr. the drawer. Whenever you give your own note or accept a time draft Cr. Bills Payable. Whenever you pay your own note or time draft Dr. Bills Payable. you receive another person's note or time draft, Dr. Bills Receivable. Whenever you collect or otherwise dispose of another person's Note or time Draft. Cr. Bills Receivable.

Whenever

NOTE-The names or titles, expressive of causes and effects which incur expenditure or produce value, become subject to the terms Dr. and Cr., because they owe us for the value we expend on them, and we owe them for the value they produce or give us. By this simple and just method of viewing and treating the common affairs of business, a most complete and admirable balancing system of keeping accounts has been invented; one which constantly preserves an even balance between the Dr. and Cr. values, and presents to our sight and understanding all we may desire to know regarding our assets and liabilities and our losses and gains.

$100.00

Time Draft.

At ten days' sight pay to R. H. Pond...... One hundred .....

Cleveland, Ohio, Dec. 31, 1893.

..or order . Dollars

value received, and charge the same to account of

To P. J. Twiggs,

H. H. Smith,

Cincinnati, Ohio.

1222 Euclid Ave.

PAYEE'S ENTRY.

R. H. Pond (the Payee) Dr's. Bills Receivable to H. H Smith, (the Drawer).

DRAWER'S ENTRY.

H. H. Smith (the Drawer) Dr's. R. H. Pond (the Payee) to P. J. Twiggs (the Drawee).

DRAWEE'S ENTRY.

P. J. Twiggs (the Drawee) Dr's. H. H. Smith (the Drawer) to Bills Payable.

Sight Draft.

$500.00

Cleveland, Ohio, Dec. 16, 1893.

At sight, pay J. D. Hammond..

...or order ..Dollars

J. G. Hower.

Five hundred.....

value received, and charge the same to account of

To H. B. Wright,

104, 5th Ave., Pittsburg.

PAYEE'S ENTRY.

J. D. Hammond (the Payee) Dr's. Cash to J. G. Hower (the Drawer).

DRAWER'S ENTRY.

J. G. Hower (the Drawer) Dr's. J. D. Hammond (the Payee) to H. B. Wright (the Drawee).

DRAWEE'S ENTRY.

H. B. Wright (the Drawee) Dr's. J. G. Hower (the Drawer) to Cash.

Interest and Discount. Debit when you pay interest. Credit when you receive interest.

Expense. Debit expense for all it costs to conduct business. The expense account is usually divided into different accounts, such as, Salaries, Insurance, Rent, etc. Credit expense for anything that might be sold or returned, not used.

Required, the Journal Entries for the following

Ex. 1. Received in days at 6%.

Transactions.

Sold to J. H. Brown Merchandise amounting to $2560. payment S. C. Robbin's Note with Interest accrued 62 Face of Note $1290. Balance on account 30 days net. Bought of J. M. Howard, Merchandise as per invoice Gave in Payment Jno. Smith's Note for $450 at 22% discount. Draft at ten days sight on H. J. Harris for $200 and my Note at 60 days to balance. Paid Freight $8.90.

Ex. 2.

$1050.

Ex. 3. T. J. Smith failed, as endorser on his Note for $550, I paid it with protest fee $2.00.

Ex. 4.

Bought invoice of Merchandise from A. R. Boyd amounting to $1920. Paid him W. M. Britt's acceptance for $2500 short due 30 days, at its Present worth. Interest 6%.

$300 and had the balance placed to my credit.

Received a check for

Ex. 5. Bought 200 shares L. S. & M. S. R. R. Stock for $100 per share. Paid cash $15,000, gave my Note, 6 months with interest 6% for the balar.ce.

Ex. 6. T. B. Wood draws on me at sight favor Union National Bank for $2000 with exchange 4 of 1%. I accepted.

Ex. 7. Discounted my 30 day Note at State National Bank for

$3000. Discount 8%. Proceeds placed to my credit.

Ex. 8. Sold for cash to H. T. Hand, my Draft at sight on A. K. Hudson for $1000 at 2 of 1% discount.

Ex. 9. Sold Slade & Potter invoice of Hardware $800. Received in payment my note to The Bingham Co. $500, with interest accrued 63 days 5% and for the balance, including interest on the Note their Sight Draft on J. E. French which he has accepted in my favor.

Ex. 10. Received from the Liverpool and London and Globe Insurance Co., their sight draft on the American Exchange National Bank for $1575.50. Our claim for loss on their policy No. 1748797.

Ex. 11. Received from the L. S. & M. S. R'y Co. their check for $400 for a 2% quarterly dividend on 200 shares of stock (par value $100).