The

all the transactions of each day in the order in which they occur. person with whom the transaction is entered into is named in full, with the term debtor or creditor annexed, according as to whether you sell goods to him or buy goods from him, &c., somewhat after the following

And so on from day to day, entering also cash receipts and payments. However, the day-book is generally divided into the following:

INVOICE-BOOK, for goods bought on credit.

DAY-BOOK, for goods sold on credit.

CASH-BOOK, for all cash received and paid.

BILL-BOOK, for all bills receivable and payable.

A STOCK-BOOK, for all goods on hand when stock is taken and books balanced, is sometimes added.

The LEDGER collects together the dispersed account of each person in the above books under one entry.

The following shows the nature of the entries in the

NOTE.-Enter in like manner all goods bought, omitting the word "Cr."

NOTE.-Enter in like manner all goods sold, omitting the word "Dr."

Cash Book.

This book, as we said before, contains a record of all money received and paid. Sums received are entered on the left hand or debtor side, and sums paid on the right hand or creditor side. It begins with cash in hand at commencement of business.

Of course the balance of this account must always be on debtor side, because it is impossible to pay more than is received. We now come

to the

Bill Book.

This book contains a record of all bills of exchange receivable by, i.e., payable to, a mercantile house, and also all bills accepted by, and therefore payable by, the same mercantile house, with the dates, terms of payment and other particulars, in the following form:

NOTE. It will be remembered that days of grace are allowed for paying a bill, which will account for a bill due on the 1st not being payable until the 4th of the month.

The Ledger.

This book, as we have before stated, is an abstract of the entries contained in the other books, collected together and arranged in the order of their dates under the names of the various persons to which they belong. The copying of these entries into the ledger is termed posting the ledger. It is usual, in posting the ledger, to merely say "By goods" or "To

goods," and not enter the particulars of the transaction.

the form of the ledger :

The following is

This account is ascertained by taking stock. The goods on hand are valued at cost price, or, if necessary, at a percentage below cost price to allow for bad stock, or depreciation in value, &c. The amount for goods sold is then added to the stock on hand, the goods bought are then deducted, and the difference shows the gross profit or loss, without reference to bad debts, trading expenses or other charges, which are collected in the

Profit and Loss Account.

This account is formed by entering on the debtor side the losses, as bad debts, trading expenses, discounts, &c. ; and on the creditor side the profits, if any, shown by the stock account, the discounts allowed to you, &c. The balance or difference between the two sides will give the net profit or loss. The following illustrates the above :

This is a summary of the several balances (except those of the stock and profit and loss accounts) dispersed throughout the ledger. On the creditor side are entered all balances owing to you, to which are added the cash in hand, as shown by balancing the cash book, and the value of unsold goods, which may be obtained from the stock account. On the debtor side are entered your capital at commencement and all balances owing by you. The assets and liabilities of the concern are thus exhibited at one view, and their difference will give the net profit or loss within the given period. If the accounts have been properly kept this difference will correspond with the balance of the profit and loss account.

Independently of its other advantages, the balance-sheet enables the tradesman or merchant, in connection with the ledger, to ascertain his real worth by two distinct processes:

Thus we have traced a history of the method of book-keeping by single entry.

A digest of all the Examiners' questions on this branch, with answers, will be found at the end of this work.

ᏢᎪᎡᎢ III.

CHAPTER I.

PROCEEDINGS TO BE TAKEN PREVIOUS TO EXAMINATION.

WE will now suppose the student to have completed his studies and to be desirous of offering himself for final (a) examination. We now, therefore, detail the proceedings that are necessary to be taken by him for this purpose, giving also the necessary forms.

We may premise that no person can be admitted and enrolled an attorney, unless he has duly served his term of clerkship, and on this point the 2nd section of the 22 & 23 Vict. c. 127, repeals sect. 7 of 6 & 7 Vict. c. 73, and substitutes the following:

"And any person having taken the degree of bachelor of arts or bachelor of laws in the University of Oxford, Cambridge, Dublin, Durham, or London, or in the Queen's University in Ireland, or the degree of bachelor of arts, master of arts, bachelor of laws, or doctor of laws, in any of the Universities of Scotland, none of such degrees being honorary degrees, and who at any time after having taken such degree, and either before or after the passing of this Act, has been bound by and has duly served under articles of clerkship to a practising attorney or solicitor for the term of three years, and has been examined and sworn in manner directed by the first herein before-mentioned Act and by this Act, may be admitted and enrolled as an attorney or solicitor, and service for any part of the said term not exceeding one year with the London Agent of such attorney or solicitor in the business, practice, or employment of an attorney or solicitor, either by virtue of any stipulation in such articles, or with the permission of such attorney or solicitor, shall be and be deemed to have been good service under such articles for such part of the said term; and where any person has before the passing of this Act, and at any time after having taken such degree, been bound as aforesaid for five years, he may, after having duly served three years of such term in such manner as would have been required if he had been bound for three years only, and having been examined and sworn as aforesaid, and with the consent in writing (endorsed on his articles of clerkship) of the attorney or solicitor to whom he may be bound, to the immediate determination of his articles of clerkship, be admitted and enrolled as an attorney or solicitor; and where such consent is given as aforesaid, and acted upon under this provision by the person hereby made eligible to be admitted and enrolled as aforesaid, the articles of clerkship shall be deemed to have determined as if they had determined by effluxion of time."

(a) As to what the candidate must do previously to offering himself for the preliminary or intermediate examination see ante, pp. 5 and 9.