This illustration of the use of a column for freight will serve to indicate the advantages resulting from the use of columns for accounts other than con trolling accounts. Any account to which frequent debits and credits are made can be handled effectively by the use of columns, and by means of this method one can avoid posting each individual transaction.
Again, in the illustration it appears that on March 29, a maturing bank loan was paid; the total sum was $5,050, of which $5,000 was princi pal and $50 was interest. The total payment is en tered in the net-cash column as a credit to cash; and "bank loans payable" and "interest on bank loans" are charged in the sundries column. These accounts do not occur frequently enough- to warrant providing special columns for them.
12. Posting the credit page.—When posting time comes, all the columns are footed and the equilibrium of the credit page is tested, in this case also, by making certain that the total debits equal the total credits. At varying times during the month, the individual amounts are posted in the sundries column to the ac counts named in the accounts-debited column.
More frequently, however, the individual amounts in the accounts-payable column are posted to the in dividual accounts that are found in the subsidiary ledger. The footings of the special columns are posted to the general-ledger accounts named at their respective heads ; i.e., $21,995 to the credit of "cash"; $260 to the credit of "discount on purchases"; $740 to the debit of "freight," and $11,465, to the debit of "accounts payable." To the debit of sundry ac counts $10,050 was posted during the month and this posting need not be repeated.
13. Variety of forms possible.—There is no stand ard book form which can be applied in every account ing system. The number of columns, the accounts to be covered, and the kinds of information required are some of the elements that will vary with the individual concern. It is not even necessary that special books be made up, since columnarized books with columns ranging from two to twenty-five may be purchased.
These books can be readily adapted to nearly every kind of business.
Moreover, there is no limit, other than the optical, to the number of columns that may be placed in any one book. This optical, limit is explained by the
fact that a bookkeeper can follow with ease only that line which is short enough to enable him to see it all without moving his eye far down the page. The av erage bookkeeper, if he has a book with 25 or 30 columns, is quite liable, in any event, to make errors in entering the amounts in the columns. Conse quently, it is never advisable to include so many col umns on a page that the bookkeeper cannot easily see them all at the same time. Rather than do this, it is better to post the less frequent amounts indi vidually.
14. Method of recording notes and drafts.—The use of columnarized books is not confined to the regular accounting records; it may be extended to a memo book as well. In many firms, the books that are commonly known as memo books become books of preparatory entry or subsidiary journals. For example, the method to be pursued in keeping a record of notes or drafts, received or given, will depend very largely upon the number of transactions of this char acter. When but few drafts or notes are received or given, it is unnecessary to keep any special record of them except that in the general-ledger account for notes receivable or notes payable.
To illustrate: the receipt of a note would be indi cated in the general journal by a charge to the notes receivable account in the general ledger, and a credit both to the controlling account for customers and to the individual account of the customer who gave the note. When no other record is kept, it will be advisable to enter the date of the receipt of the note, the name of the maker and the due date, as well as the rate of interest, in the explanation column in the ledger account. When the note is paid, "cash" will of course be debited, and the notes receivable account will be credited. At the same time the record of the note itself, in the explanation column of the ledger account, will be checked off so that, at any time, all unchecked items in that account will represent the notes unpaid or the notes that the proprietor has in his safe.