called the Dr. side; the right hand page the Cr. side of the account; and the difference between the sums of the Dr. and Cr. sides is denominated the balance.
Accounts, in the ledger, are of three kinds, personal, real, and fictitious. Personal accounts are those opened for every person or company with whom the merchant has any dealings or credit; real accounts are those of property, such as ready money, goods, ships, houses, &c.; and fictitious accounts are stock, together with profit and loss, and its subsidiary accounts.
The stock account contains, on the Dr. side, the amounts of the debts due by the merchant when the books were opened; and on the Cr. the amount of money, goods, &c. belonging to him; consequently the balance shews the amount of his nett stock. Profit and loss account contains every article of gain on the Cr. and of loss on the Dr. side; therefore the balance is the nett gain or loss, which is posted on the proper side of the stock account above-mentioned.
Several subsidiary accounts are opened, to shorten and methodize that of profit and loss, such as interest account, proper expences, &c. These are used, or others invented, according to the nature and purposes of the business.
Accounts may be opened in the ledger, in the same order as they occur in the journal; or those of a similar kind may be placed together; the personal accounts in one part of the book, and the real accounts in another.
Besides the three principal, there are subsidiary books used by merchants of extensive connections and business. These are, the cash-book, book of charges of merchandize, book of house-expences, invoice-book, sales-book, bill-book, receipt-book, letter-book, and pocket-book. Some merchants also keep a memorandum-book; but the man of business cannot be restricted to these, as he will either use them, or invent others more conformable to the nature of his business.
In the year 1796, a patent was granted to Mr. Edward Thomas Jones, of Bristol, for his method or plan of detecting errors in accounts of all kinds, by which they may be adjusted in a regular and concise manner. This work is entitled, The English System of Book-keeping, which requires a day-book, or journal, an alphabet, and a ledger, ruled in the following manner: namely, the day-book has three columns on each page, for receiving the amount of the transactions; one column of which to receive the amount of the debits and credits, one column to receive the debits only, and another to receive the credits only; or it may be ruled with only two columns on each page, one to receive the amount of the debits, and the other the amount of the credits. There must also be on each page of the day-book, four other columns ruled, two on the left side, next the amount of the debits, and two on the right side next the amount of the credits, for receiving the letter or mark of posting, and the page of the ledger to which each amount is to be posted. The alphabet need not be ruled at all, but must contain the name of every account in the ledger, the letter that is annexed to it as a mark of posting, and the page of the ledger. The ledger must be
