Bookkeeping/Single-Entry Bookkeeping/Journal-Ledger
From Wikisource
| ←Business Forms | Bookkeeping: Single-Entry Bookkeeping Journal-Ledger |
Model Set→ |
Contents |
[edit] Journal-Ledger
The Journal-Ledger is a combination of a Journal and a Ledger, in the Journal form of ruling. All debits and credits to an account are entered, in an itemized form, directly in this book.
To open an account, the name of the person is written at the top of the page and the abbreviations Dr. and Cr. over their proper columns; the left-hand column is always debtor and the right-hand column is always creditor. All transactions with the persons are entered in the manner shown in Fig. 9.
In actual work, the Dr. and Cr. are frequently omitted. They are used here to thoroughly familiarize the student with the use of the different columns. The vertical black line in the center of the explaination column appears in all Journal ruling. It is not made use of in this case, but will be in the next Section.
In the account shown, the party with whom we are dealing is B. S. Johns. His name, address, and the debit and credit abbbreviations appear in their proper places. The two left-hand columns are for the dates, the year being placed above the month, which is in the first and wider column; the day of the month is in the second and narrower column. Both debit and credit transactions are itemized in the explaination column, which is the wide space between the date columns and the money columns, the credit items being preceded by the word "By". The debit amounts are entered in the first money column and the credit amounts in the second money column.
The difference between footings of these columns is the balance of the account. If the debit side is the larger, there is a debit balance, and the party owes you that amount; if the credit side is the larger, there is a credit balance, and you owe the party that amount. When an account is settled, we say that it balances. It is then ruled up as shown in Fig. 9. If an account does not balance by being settled before it reaches the bottom of the page, it is balanced in red ink, as shown, so that the amount due may be carried to another page and the account continued as before. The reason for making this balancing entry in red ink is that the entry is not an actual transaction, but is made for convience and does not affect the account, for the amount due after the entry is made is the same as it was before the account was balanced. In the balancing entry is given the number of the page on which the new account is opened, and in the opening entry of the new account is given the number of the page conatining the old account.
[edit] Cash Account
The Cash Account is a record of all cash received and paid out. Any transaction in which cash appears must be entered in the Cash Account. If the transaction affects a personal account, then an entry must be made in the personal account as well as in the Cash Account. In the form of Cash Accounts shown in Fig. 10, the dates of the transactions are entered on the left-hand side of the page, and a brief explanation of each transaction is written in the explanation column. The first, or left-hand, money column is for the debits, or cash received; the right-hand column is for the credits, or cash paid out. Entering an amount in the debit column debits cash, and entering an amount in the credit column credits cash. The difference between the amounts entered in the columns is called the \emph{balance}.
We can never pay out more cash than is received; therefore, if there is a difference between the columns, the debit column must always be the larger. The balance should agree with the amount of cash on hand.
The entries are made in the order of their occurrence, no matter whether debit or credit. When a page has been filled, the account should be footed, the footings carried forward to another page, and the work continued as before. Frequent tests should be made to see whether or not the cash on hand agrees with the balance shown by the cash account. At the end of the month the account should be balanced and ruled, as shown in Fig. 10.
Modern bookkeepers do not use ditto marks under dates, it being understood that the entries are of the same date until changed.
In amounts where there are no cents, it is good practice to place a dash in the cents column, as shown in the illustration. A dash is more quickly made than two ciphers and is more easily passed over in adding. If the cents column is left blank, there is nothing to show that it is intentional and not an error.
[edit] Ruling Up Accounts
In order that the pages shall present a neat appearance when accounts are balanced and ruled up, special care should be taken to have all lines begin and end at the desired points, as shown in Fig. 11.
To get lines of a uniform width, the pen must not be overloaded or used until the ink gives out in the middle of a line, making it necessary to retrace. If, however, this must be done, care should be exercised not to increase the width of the line by ruling a little to one side of it.
[edit] Statement of Personal Accounts
It is customary with business men, at the end of each month, to go through the Journal-Ledger and draw off a Statement of Personal Accounts. Such a statement is shown in Fig. 12. This is done that they may have, at regular intervals, an itemized statement showing who owes them and how much, and also who and how much they owe.
