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ARTS, SCIENCES, AND MISCELLANEOUS
ENLARGED AND IMPROVED.
THE FOURTH EDITION.
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Book-binding is the art of gathering together and sewing the sheets of a book, and covering it tezdint: with a back, &c." It is performed thus: The leaves are 'first folded with a folding-slick, and laid over each other in the order of the signature; then beaten on a stone with a hammer, to make them smooth and open well} and afterwards pressed. They are sewed upon bands, which are pieces of cord or packthread; six bands to a folio book; five to a quarto, octavo, ike; which is done by drawing a thread through the middle of e,ach sheet, 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 scraped, for the better fixing the pasteboards; the back is turned with a hammer, and the book fixed in a press between two boards, in order to make a groove for fixing the pasteboards; these being applied, holes are made for fixing them to the book, which is pressed a third time. Then the book is at last put to the cutting press, betwixt two boards; the one lying even with the press, for the knife to run upon; the other above it, for the knife to run against: after which the pasteboards are squared.
The next operation is the sprinkling the leaves of the book; which is done by dipping a brush into Boolvermilion and sap-green, holding the brush in one bindinghand, and spreading the hair with the other; by which "v~~" motion the edges of the leaves are sprinkled in a regular manner, without any spots being bigger than the other.
Then remain the covers, which are either of calfskin or of sheep-skin: 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 pasteboard on the outside, 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 fiimly between two bands, and then set to dry. Afterwards it is washed over with a little paste and water, and then sprinkled with a fine brush, unless it stiould 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 last polished with a polishing iron" passed hot over the glazed cover.
TS the art of recording mercantile transactions in a Book. regular and systematic manner. ^"J- 1. A merchant's books should contain every parti""V"» cular which relates to the affairs of the owner. They should exhibit the state of all the branches of his business, the connexion of the different parts, the amount and success of the whole. They should be so full and so well arranged, as to afford a ready information in every point for which they may be consulted.
The matter which the books should 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 lold, or otherwise disposed on; and the quantity and value which still remain in his possession. Thirdly, The amount of his stock when the books were opened; the profits he has obtained, and Vol. IV. Part I.
the losses he has suffered, since; and the amount of his stock at present. BookThat method of book-keeping which answers these kprping:. purposes most clearly and concisely, is the best. The ^^—y""TM' Italian method, by double entry, is generally preferred; at least, it is founded upon the most universal principles, and is the most convenient in extensive and complicated business: 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 Waste-Book, Journal, and Leger.
Sect. I. Of the Waste-book.
2. The waste-book, or day-book, contains an exact register of all occurrences in bulinels in the fame order as they take place. It begins with an inventory of every thing belonging to the owner, a lilt 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 business. Each article Ihould b« entered as soon us the transaction takes place, and should be clearly exprelTed in the plainest language. It should require no supply from the accountant's memory, but should be fully intelligible to any person, however unacquainted with the business; at the fame time, it (hould be written with all convenient brevity; and, therefore, sometimes refers to invoices and other accounts, for particulars. The accountant's first care should be to have nothing defective or ambiguous j his second, to have nothing superfluous.
3. The date is written in text on the top of each page. The articles are separated from each other by a line: aaid the transactions of one day are separated from those of another by a double line, in the middle of which there is left a blank space for inserting the day of the month. This book mufi be kept with the greater care, as it contains the materials from which the other books are composed", and any error or defect will occasion a like one in the others. Besides, it is the book whose authority is trusted to, and which must be exhibited to judges, or arbiters, when an account is disputed. 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 these books is depended on rather than the leger, which, from its form, is more liable to error, and may be more easily vitiated by a fraudulent design.
4. As the waste-book contains the whole substance of the business, it may be applied so as to afford any information that can be wanted: but the labour of consulting it would be very great. For instance, if it were required to know how much any person 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 mould have on hand, we must look over the whole book, and mark down every article bought or fold. This operation would not only be found very tedious, but much exposed to the risk of omissions. To prevent these inconveniences, another book is used in which the articles are arranged in a methodical order. This book is called the Leger, and we shall consider it next > because 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 purpose, it is divided into many accounts, under which the different branches of business are arranged. Each account is introduced by a proper title, to explain the nature of the articles it contains j and articles of opposite kinds, wliich belong
to the fame account, are placed on the opposite pages of the fame folio: for instance, money received on the one side, and money paid on the other; or goods bought on the one side, 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. side. The difference between the sums ot the Dr. and Cr. sides is called the Balance.
Accounts in the leger are of three kinds, which answer to the three purposes of book-keeping mentioned $ 1.
6. First, Personal Accounts. It is necessary to open an account for every person 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 course of the business, goods (bid on trust, moriey paid, and every thing for which they are accountable to him, is entered 011 the Dr.; but goods bought on trust, money received, and every thing for which he is accountable to them, is entered on the Cr. The balance (hows how much they owe him, when the Dr. side is greatest: and how much he owes them, when the Cr. side is greater.
7. Secondly, Real accounts. JBy this we understand accounts of property of whatever kind, such as ready money, goods, houses, lands, ships, shares in public companies, and the like..
The account of ready money is entitled Cash. On the Dr. side, the money on hand at opening the books is entered, and afterwards every article of money received. On the Cr. side, there is entered every article of money paid out j and the balance shows how much ought to be on hand. The sum of the Dr. side of this account is always greater than that of the Cr. side.
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 respective 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. side; the quantities and values being placed in the proper columns. Charges laid out on goods are entered on the Dr. side; and, when an incidental advantage arises from them, such as public bounty, it is entered on the Cr.
If the sums of the inner columns on the opposite sides be equal, it mows that the goods are all fold, and then the balance ef the money-column shows the gain or loss. If the Cr. side be greater, it is gain: if the Dr. side be greater, it is loss. If the sum of the inner column be greater on the Dr. side, it shows that part of the goods are on hand; and their value must be added to the sum of the Cr. side, in order to determine the gain or loss.
9. If there be two or more kinds of the fame soft 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 reserved for it. This method exhibits the gain or loss on the whole goods; but does not (how how much of it arises from each kind.
Or, a separate account may be opened for each kind, 'distinguishing the titles by the qualities, or by some other mark. Thus, one account may be kept for fine linen, another for coarse linen j one for port-wine crop 1787, another for port-wine crop 1788; one for rum from Jamaica, another for rum from Barbadoes. This method (hows the gain or loss on each kind.
When there are more kinds than can be conveniently introduced in the fame account, they may be divided into several classes, each class being placed in a separate account; and the particular kinds distinguistied in inner columns. Thus the account of fine linen may be divided into several columns, for different kinds, distinguished by the number of threads in the breadth, or by any other convenient character.
10. Accounts of (hips contain on the Dr. the value of the ship when the books are opened, and all expences laid out thereon; on the Cr. all freights received. In like manner, accounts of houses or lands have the value 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 sold in whole or in part, the sale is entered on the Cr. And the balance after valuing the subject (if any) on hand, (hows the gain or loss.
Accounts of property in the public funds, or shares 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 persons open accounts for household furniture, plate, jewels, books, or the like. The entries on these 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 sales 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 (hows the loss or gain, according as the Dr. or Cr. side is greatest.
11. Thirdly, Accounts of Stock, Profit and Loss, and its subsidiary accounts, which are sometimes called fiBitious accounts.
The stock 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 (hows what his nett stock 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 business has yielded profit, the nett gain is entered on the Cr.; if it has been unsuccessful, the nett loss is entered on the Dr: after which, the balance (hows the nett stock at the time the books are closed.
12. The Profit and Loss account contains every article of gain on the Cr. and every article of loss on the Dr. The balance (hows the nett gain or loss, and is transferred to the proper side of the stock-account, as mentioned above. This account is partly composed of articles that occur while the books are running. For example, legacies received are entered on the Cr. goods destroyed on the Dr. The rest of the articles are those
of gain and loss, arising from the real accounts, which are collected when the books are balanced.
13. It has been found convenient to open several subsidiary accounts, in order to shorten and methodize that of profit and loss. These contain certain article* of gain or loss, which may be reduced under distinct heads. They are in effect so many paits of the profit and loss account, and their balances are entered on th« proper side of that account when the books are closedi The chief of these accounts are the following.
Interest account, Which contains on the Dr. sums paid or incurred for interest; and on the Cr. sums received, or become due for the fame,
CommlJJion account, Which contains on the Cr. articles of gain received or owing us for our trouble in transacting business for others. There are seldom any entries on the Dr.
Charges merchandise, Which contains on the Dr. all charges paid or incurred on the busittess, which do not belong to any particular account, as shop-rent, public burdens for trade, clerks wages, postages, and the like. If any of these stiould afterwards be charged to some other account, the sum so 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 use. There are seldom any entries on the Cr. The amount of this account, as well as the former, is not properly loss; but as it has the fame effect in diminishing the stock, it is placed in the fame effect in di-' minifhing the stock, it is placed in the fame manner to the Dr. of profit and loss.
Loss by had debts, Which contains on the Dr. such debts as we reckon desperate j 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 business, where discounts are often given, to (how how much they amount to.
Insurance account, Which contains on the Cr. premiums received for making insurances ; and, on the Dr. losses sustained on the fame. There may be several accounts of this kind, such as insurance against sea-hazard, which is the most common; insurance against fire; insurance of lives; and insurance of debts. The balance sliows the gain or loss which arises from being concerned in insurance.
More or fewer of these accounts may be used, according as the articles are frequent; and others may be invented to suit the purposes of the business which the books are kept for.
14. Every simple transaction in business 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'son becomes indebted to us, the article he owes must be entered on the Dr. of his account; and, if it be for money paid him, it is also entered on the Cr. of cash; if for goods sold, it is entered on the Cr. of the account of goods j if for any thing delivered Jiim by another person at our desire, it is entered on the Cr. of the deliverer's account; if for any wager or bargain, by which we arc gainers, it is entered on the Cr. of profit and A 2 loss.