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BOOK

BOO

00K-BINDING is the art of gathering together and sewing the sheets of a book, and covering it binding with a back, &c." It is performed thus: The leaves are first folded with a folding-stick, and laid over each other in the order of the fignature; then beaten on a stone with a hammer, to make them smooth and open well; and afterwards preffed. They are fewed upon bands, which are pieces of cord or packthread; fix bands to a folio book; five to a quarto, octavo, &c.; which is done by drawing a thread through the middle of each fheet, and giving it a turn round each band, beginning with the first and proceeding to the last. After this the books are glued, and the bands opened and fcraped, for the better fixing the pafteboards; the back is turned with a hammer, and the book fixed in a prefs between two boards, in order to make a groove for fixing the pafteboards; thefe being applied, holes are made for fixing them to the book, which is preffed a third time. Then the book is at laft put to the cutting prefs, betwixt two boards; the one lying even with the prefs, for the knife to run upon; the other above it, for the knife to run against: after which the pasteboards are squared.

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The next operation is the fprinkling the leaves of the book; which is done by dipping a brush into vermilion and fap-green, holding the bruth in one binding. hand, and spreading the hair with the other; by which motion the edges of the leaves are sprinkled in a regu lar manner, without any spots being bigger than the other.

Then remain the covers, which are either of calffkin or of sheep-fkin: these being moistened in water, are cut out to the size of the book; then smeared over with paste made of wheat flour; and afterwards stretched over the pafteboard on the outfide, and doubled over the edges withinfide; after having first taken off the four angles, and indented and platted the cover at the head-band: which done, the book is covered, and bound firmly between two bands, and then fet to dry. Afterwards it is washed over with a little paste and water, and then sprinkled with a fine brush, unless it fhould be marbled; when the spots are to be made larger by mixing the ink with vitriol. After this the book is glazed twice with the white of an egg beaten, and at laft polished with a polishing iron paffed hot over the glazed cover.

Book

keepang.

the art of recording mercantile tranfactions in a regular and systematic manner.

1. A merchant's books fhould contain every particular which relates to the affairs of the owner. They fhould exhibit the state of all the branches of his bufinefs, the connexion of the different parts, the amount and fuccefs of the whole. They fhould be fo full and fo well arranged, as to afford a ready information in every point for which they may be confulted.

The matter which the books fhould contain is comprehended under the three following heads: First, The debts which are owing to the owner, and the debts which he owes to others. Secondly, The goods and other articles of property which belonged to him; the quantity and value fold, or otherwife difpofed on; and the quantity and value which still remain in his poffeffon. Thirdly, The amount of his stock when the books were opened; the profits he has obtained, and VOL. IV. Part I.

the loffes he has fuffered, fince; and the amount of his ftock at prefent.

Book.

That method of book-keeping which anfwers thefe keeping. purposes most clearly and concifely, is the beft. The Italian method, by double entry, is generally preferred; at least, it is founded upon the most universal princi ples, and is the most convenient in extenfive and complicated bufinefs: and the accountant who understands it, will find little difficulty in following, or even in inventing, other methods that are better accommodated to any particular purpose.

The Italian method requires three principal books; the Wafte-Book, Journal, and Leger.

as they take place. It begins with an inventory of every thing belonging to the owner, a lift of the debts due to him, and of the debts he owes to others: It is carried on with a full relation of all the money he receives or pays; of all the goods he buys or fells; and of every other occurrence in his bufinefs. Each article should be entered as soon as the tranfaction takes place, and should be clearly expreffed in the plainest language. It should require no fupply from the accountant's memory, but should be fully intelligible to any perfon, however unacquainted with the bufinefs; at the fame time, it should be written with all convenient brevity; and, therefore, fometimes refers to invoices and other accounts, for particulars. The accountant's first care fhould be to have nothing defective or ambiguous; his fecond, to have nothing fuperfluous.

3. The date is written in text on the top of each page. The articles are feparated from each other by a line and the tranfactions of one day are feparated from thofe of another by a double line, in the middle of which there is left a blank space for inferting the day of the month. This book must be kept with the greater care, as it contains the materials from which the other books are compofed; and any error or defect will occafion a like one in the others. Befides, it is the book whose authority is trufted to, and which must be exhibited to judges, or arbiters, when an account is difputed. As the journal is filled up from the wastebook, the authority of the former is esteemed more authentic, unless there be an obvious mistake through hurry; and either of thefe books is depended on rather than the leger, which, from its form, is more liable to error, and may be more eafily vitiated by a fraudulent design.

4. As the wafte-book contains the whole fubstance of the business, it may be applied fo as to afford any information that can be wanted: but the labour of con

fulting it would be very great. For inftance, if it were required to know how much any perfon owes us, we must look over the book from the beginning, and mark down every article in which we have dealt with him; or, if it were required to know what quantity of goods we should have on hand, we muft look over the whole book, and mark down every article bought or fold. This operation would not only be found very tedious, but much expofed to the risk of omif fions. To prevent thefe inconveniences, another book is ufed in which the articles are arranged in a methodical order. This book is called the Leger, and we fhall confider it next; becaufe the journal, though it comes before it in the order of writing, cannot be well understood, till the nature of the leger be explained.

SECT. II. Of the LEGER.

5. In the leger, articles of the fame kind are collected together; and, for that purpofe, it is divided into many accounts, under which the different branches of bufinefs are arranged. Each account is introduced by a proper title, to explain the nature of the articles it contains; and articles of oppofite kinds, which belong

to the fame account, are placed on the oppofite pages Leger. of the fame folio: for inftance, money received on the one fide, and money paid on the other; or goods bought on the one fide, and goods fold on the other. The lefthand page is called the Debtor or Dr. fide of the account, and the right-hand page the Creditor or Cr. fide. The difference between the fums of the Dr. and Cr. fides is called the Balance.

Accounts in the leger are of three kinds, which anfwer to the three purposes of book-keeping mentioned § 1.

6. First, Perfonal Accounts. It is neceffary to open an account for every perfon or company with whom there are any dealings on credit. At opening the books, if they be indebted to the owner, the debt is entered on the Dr. ; but, if he be indebted to them, it is entered on the Cr. During the courfe of the bufinefs, goods fold on truft, money paid, and every thing for which they are accountable to him, is entered on the Dr.; but goods bought on truft, money received, and every thing for which he is accountable to them, is entered on the Cr. The balance fhows how muclr they owe him, when the Dr. fide is greatest: and how much he owes them, when the Cr. fide is greater.

7. Secondly, Real accounts. By this we understand accounts of property of whatever kind, fuch as ready money, goods, houfes, lands, fhips, fhares in public companies, and the like..

ved.

The account of ready money is entitled Cash. On the Dr. fide, the money on hand at opening the books is entered, and afterwards every article of money receiOn the Cr. fide, there is entered every article of money paid out; and the balance fhows how much ought to be on hand. The fum of the Dr. fide of this account is always greater than that of the Cr. fide.

8. Accounts of goods are generally ruled with inner columns for entering the quantities. When the books are opened, the goods on hand are entered on the Dr. fide of the refpective accounts; the quantities being placed in the inner, and the values in the outer column. Goods bought are entered in the fame manner, and goods fold are entered on the Cr. fide; the quantities and values being placed in the proper columns. Charges laid out on goods are entered on the Dr. fide; and, when an incidental advantage arifes from them, fuch as public bounty, it is entered on the Cr.

'If the fums of the inner columns on the oppofite fides be equal, it shows that the goods are all fold, and then the balance of the money-column fhows the gain or loss. If the Cr. fide be greater, it is gain: if the Dr. fide be greater, it is lofs. If the fum of the inner column be greater on the Dr. fide, it shows that part of the goods are on hand; and their value must be added to the fum of the Cr. fide, in order to determine the gain or lofs.

9. If there be two or more kinds of the fame fort of goods, they may be entered in the fame account, allowing as many inner columns as there are kinds, and entering the quantities of each kind in the inner column referved for it. This method exhibits the gain or lofs on the whole goods; but does not show how much of it arifes from each kind.

Or, a feparate account may be opened for each kind, diftinguithing the titles by the qualities, or by fome other mark. Thus, one account may be kept for fine linen, another for coarse linen; one for port-wine crop 1787, another for port-wine crop 1788; one for rum from Jamaica, another for rum from Barbadoes. This method fhows the gain or lofs on each kind.

When there are more kinds than can be conveniently introduced in the fame account, they may be divided into several claffes, each class being placed in a feparate account; and the particular kinds diftinguifhed in inner columns. Thus the account of fine linen may be divided into feveral columns, for different kinds, diftinguished by the number of threads in the breadth, or by any other convenient character.

10. Accounts of ships contain on the Dr. the value of the fhip when the books are opened, and all expences laid out thereon; on the Cr. all freights received. In like manner, accounts of houfes or lands have the va lue of the subject, and all repairs, or other charges, entered on the Dr. and all rents or other profits received on the Cr. If the subject be fold in whole or in part, the fale is entered on the Cr. And the balance after valuing the subject (if any) on hand, shows the gain or lofs.

Accounts of property in the public funds, or fhares in companies, public or private, contain the value, or money paid in, on the Dr. and the dividends received on the Cr. and are balanced as other real accounts.

Some perfons open accounts for household furniture, plate, jewels, books, or the like. The entries on thefe accounts are made in the fame manner.

In general, real accounts contain the value of the property, and all charges, on the Dr. and the fales and other returns on the Cr. When the account is to be balanced, if any property remains, the value thereof is placed on the Cr.; and then the balance fhows the lofs or gain, according as the Dr. or Cr. fide is great

eft.

11. Thirdly, Accounts of STOCK, PROFIT and Loss, and its fubfidiary accounts, which are fometimes called fictitious accounts.

The flock account contains on the Dr. the amount of the debts which the owner owes when the books are opened; and on the Cr. the amount of ready money, goods, debts, and property of every kind belonging to him: therefore the balance fhows what his nett ftock is; or, in cafe of bankruptcy, how much his debts exceed his effects. There is nothing further entered on this account till the books are balanced: and then, if the bufinefs has yielded profit, the nett gain is entered on the Cr.; if it has been unfuccefsful, the nett lofs is entered on the Dr: after which, the balance fhows the nett stock at the time the books are clofed.

12. The Profit and Lofs account contains every article of gain on the Cr. and every article of lofs on the Dr. The balance fhows the nett gain or lofs, and is transferred to the proper fide of the ftock-account, as mentioned above. This account is partly compofed of articles that occur while the books are running. For example, legacies received are entered on the Cr. goods deftroyed on the Dr. The reft of the articles are those

of gain and lofs, arifing from the real accounts, which Leger. are collected when the books are balanced.

13. It has been found convenient to open several fubfidiary accounts, in order to fhorten and methodize that of profit and lofs. These contain certain articles of gain or lofs, which may be reduced under diftinét heads. They are in effect fo many parts of the profit and lofs account, and their balances are entered on the proper fide of that account when the books are closed, The chief of these accounts are the following.

Intereft account, Which contains on the Dr. fums paid or incurred for intereft; and on the Cr. fums received, or become due for the fame.

Commiffion account, Which contains on the Cr. articles of gain received or owing us for our trouble in tranfacting bufinefs for others. There are seldom any

entries on the Dr.

Charges merchandife, Which contains on the Dr. all charges paid or incurred on the bufmefs, which do not belong to any particular account, as fhop-rent, public burdens for trade, clerks wages, poftages, and the like. If any of thefe fhould afterwards be charged to fome other account, the fum fo charged is entered on the Cr.

Proper expences, Which contains on the Dr. money or any thing else, withdrawn from the trade for our private ufe. There are feldom any entries on the Cr. The amount of this account, as well as the former, is not properly lofs; but as it has the fame effect in diminishing the stock, it is placed in the fame effect in diminishing the stock, it is placed in the fame manner to the Dr. of profit and lofs.

Lofs by bad debts, Which contains on the Dr. fuch debts as we reckon defperate; and on the Cr. any of these which may happen to be unexpectedly recovered.

Account of abatements, Which contains on the Dr. discounts allowed by us on payments received; on the Cr. discounts (if any) allowed to us on payments made. It is particularly useful in retail bufinefs, where difcounts are often given, to show how much they amount

to.

Infurance account, Which contains on the Cr. premiums received for making infurances; and, on the Dr. loffes fuftained on the fame. There may be feveral accounts of this kind, fuch as infurance against fea-hazard, which is the moft common; infurance againft fire; infurance of lives; and infurance of debts. The balance fhows the gain or lofs which arifes from being concerned in infurance.

More or fewer of thefe accounts may be ufed, according as the articles are frequent; and others may be invented to fuit the purposes of the bufinefs which the books are kept for.

14. Every fimple tranfaction in bufinefs belongs to two accounts, and must be entered on the Dr. of the on and on the Cr. of the other. Thus, when a per'fon becomes indebted to us, the article he owes muft be entered on the Dr. of his account; and, if it be for money paid him, it is alfo entered on the Cr. of cafh ; if for goods fold, it is entered on the Cr. of the account of goods; if for any thing delivered him by another perfon at our defire, it is entered on the Cr. of the deliverer's account; if for any wager or bargain, by which we are gainers, it is entered on the Cr. of profit and A 2

lofs.

lofs. Thus, in whatever way the debt arifes, it is entered on the Cr. of fome other account, as well as on the Dr. of the person's account who owes it.

In like manner, when we become indebted to any perfon, the article we owe must be entered on the Cr. of his account, If it be for money received, it is also entered on the Dr. of cafh; if for goods bought, it is entered on the Dr. of the account of goods; if for any thing delivered to another perfon at our defire, it is entered on the Dr. of the receiver's account; and if it be in confequence of a lofing bargain, it is entered on the Dr. of profit and lofs.

Again, when goods are received, the tranfaction is entered on the Dr. of the account of goods. If they be bought for ready money, it is alfo entered on the Cr. of cash; if on truft, it is entered on the Cr. of the feller; if they be exchanged for other goods, it is entered on the Cr. of the goods delivered; if they be obtained by fome profitable bufinefs, without any return, it is entered on the Cr. of profit and lofs.

When goods are delivered, the transaction is entered on the Cr. of the account of goods; and, if they be fold for ready money, it is alfo entered on the Dr. of cash; if on credit, it is entered on the Dr. of the purchafer; if exchanged for other goods, it is entered on the Dr. of the goods received; and, if they be given gratis, or deftroyed, it is entered on the Dr. of profit

and lofs.

Laftly, When any article of lofs occurs, the tranfaction is entered on the Dr. of profit and lofs; and as we muft either pay it in money or goods, or remain indebted to fome person for it, it must be entered on the Cr. of cash, or of goods delivered, or of the perfon entitled to receive it. And, when an article of gain occurs, it is entered on the Cr. of profit and lofs, and alfo on the Dr. of cafh or goods, if money or goods be received; and on the Dr. of the perfon accountable for it, if not immediately paid.

Thus, every article in any account, whether perfonal or real, or belonging to profit and lofs, correfponds to fome other article on the oppofite of a different account. The fame fum is entered on the Dr. of one account and on the Cr. of the other; and it follows

from this, that, If all the accounts in the leger be added, the amount of the fums of the Dr. will be equal to thofe of the Cr.

SECT. III. Of the JOURNAL.

15. THE journal is a fair record of all the tranfactions compiled from the wafte-book, in the fame order as they stand there; but expreffed in a technical style, that it may be transferred to the leger with more ease.

When we are to enter any article in the journal, we must confider which accounts in the leger it will require to be placed to, both on the Dr. and Cr. and write [the former account] Dr. to [the latter account]; then we annex an explanation of the article, and place the fum in the money-column.

Journal.) Cash Dr. to Linen. Sold 30 yards, at 3s. Journal. L.4 10

Here we confider, that the article must be entered on the Dr. of cash, because money is received; and on the Cr. of linen, because linen is delivered: Therefore we write Cafb Dr. to Linen, to which we annex the nature of the tranfaction. The article thus entered is called a journal-post; Cash is called the Dr.; Linen the Cr. ; the words "Cash Dr. to Linen," the Entry, and the following words the Narration.

The purpose of expreffing the article in this form, is to point out the accounts in the leger, to which it will require to be posted, and thereby enable the accountant to write the leger with more cafe than he could do if it were filled up immediately from the wafte-book.

The learner will be able, from this example, to en ter any fimple article in the journal, providing he knows the accounts to which it fhould be posted on the Dr. and Cr. of the leger. This must be collected from the defcription of the leger accounts already given § 6-13. and the nature and tendency of the article.

16. GENERAL RULES for the JOURNAL-ENTRIES.. I. Every thing received, or perfon accountable to us,

Dr.

is

Therefore, when money is received, Cafh is Dr. to the payer when goods are bought, the goods are Dr. to the feller. Thus, Wafte-book.) Received from Thomas Gay in full

Journal.) Cafb Dr. to Thomas Gay, re

ceived in full.

L.72

72 Waste-book)