Where this form of book is used it is advisable to have loose-leaf sheets numbered consecutively and to bind them up after the records are made. Type writers or billing machines will do this work mechan ically and at the same time insure a legible copy. Ac curate records and a great saving of time are the ad vantages of this method.
13. Voucher register every business it is desirable to have a complete record of the amount owed to creditors. As a means to this end individual accounts are carried in the ledgers with every credi tor. If the number of transactions is large, these accounts will be carried in a subsidiary ledger and the total only shown in the general ledger.
As debts are paid regularly the creditor's account records a series of purchases which are paid within a short time. This means that each account for each transaction is debited within a short period of time. Any method which will avoid such "in and out" en tries will naturally save time.
It is becoming more and more the modern tendency to pay cash at the time of purchase or shortly there after, and to take the discounts whenever they are of fered. If this is not done a settlement will frequently be made by a note which runs for a definite period and thus reduces all liabilities to definite dates of payment. Other firms follow the practice of settling monthly for all liabilities irrespective of discount allowances.
The work of posting these debits and credits is a decided nuisance. The voucher register system af fords a means of eliminating the accounts entirely. The purchase book becomes the record and the cash payments are posted to that instead of to the ledger account. Thus, an entry in the purchase book which is not marked "paid" indicates an amount owing at the time the examination is made. At the end of the month the total amount due for the month is repre sented by the unchecked accounts in the purchase books.
Of course the credit from the purchase book would be made to an "accounts-payable," or "vouchers-pay able" account. Cash payments would be posted in detail to the voucher register or purchase book, and in total to the general ledger account. The balance of the general ledger account naturally is the amount of bills unpaid. The individual bills in the purchase book should equal the balance in this account.
14. Memorandum books as posting ordinary memorandum books as we have already seen, are bill books, note books, check books, and the like. 'Whenever the data going into these books becomes at all large, it may be advisable to transform the book into a posting medium and omit other records of such transactions. 'We have already described the work ing of a note book, and the same principles apply to a mortgage register.
For example, a bank, trust company, or real es tate house, which handles many mortgages will 'keep a detailed record of these mortgages, as received. If this detailed record is properly columnarized, the book itself may be a book of original entry from which post ings will be made to the various ledger accounts.
15. Special features of far we have discussed loose-leaf records chiefly as applying to ledgers. Providing the legal features are satisfactorily overcome, loose-leaf books may be applied to every accounting record. We may classify journal entries without altering their time-honored form. Each frequently occurring entry may be as signed to a separate page, and additional pages may be inserted if needed.
Thus, if interest is charged on personal accounts, we could assign one page of our journal to records of these interest charges. The page would be headed, "Sundries Dr. to Interest." As each interest entry is made it should be entered on this page. The post ings of the debits to individual accounts is kept up day by day. As the pages fill up others are inserted and additions are made continuously up to the end of the month. At that time the total amount is credited to interest.
In the same way if we have any other frequently occurring transactions, we can assign individual pages to them and post in total. The miscellaneous entries occurring infrequently would naturally be recorded chronologically on separate pages.
16. Side method by which post ings from the journal are made easier, is known as side posting. We use an ordinary journal with two money columns using the left-hand pages only as journal records. The right-hand page will be de voted to analysis of the entries. The two columns on the right must be supplemented by two more columns so that we can have two columns for the analysis of debts and two for the analysis of credits.