The chief books absolutely necessary for a small trader conducting a business of a simple nature would be as follows :—Journal, Debtor's Ledger, Bought Ledger, and Cash-book. These books will each be referred to sepa rately in special articles. For the present purpose it will be sufficient to allude to them generally.
The Journal could be one book so-named, or two—a sales and cash journal and a bought and paid journal. In the first should be entered all the orders taken, and also all cash paid by the customer. Each day should be headed separately with its own date, and the entries should be made as and when each of the sales and payments are made. The entries may be made either directly into the journal, or first of all into a rough waste-book. Where there are a number of persons continually taking orders and payments, the best course is for each of such persons to have two waste-books for him self—one, No. 1, for Mondays, 'Wednesdays, and Fridays ; the other, No. 2, for Tuesdays, Thursday's, and Saturdays. By means of this system the waste books can be fair copied into the journal on the following day. When orders are sent out, they should be entered in a delivery-book, and the carter should obtain the signature of the person to whom they are delivered, whether he be the customer himself, or a carrier through whom delivery is to he made. If the customer pays the carriage, the carrier is in law his agent, and consequently delivery to the carrier is good delivery to the customer. The advantage of this appears in many ways. Should, for example, the goods be lost or injured in transit, the damage falls upon the customer; should it be necessary to sue the customer who lives in Scotland while the seller lives in England, the action will lie in England, as delivery of the goods was effected to the customer in England, and the same rule would apply where seller and customer live in different parts of the country, and the seller wishes to sue in the County Court in his own neighbourhood ; should, again, delivery of the goods be disputed, it will be sufficient for the seller to prove receipt thereof by the carrier. The delivery-book is, there fore, a valuable adjunct to effective book-keeping.
At the time of consigning goods, an invoice should be forwarded. This should clearly state the quantity, price, and description of the goods, the channel of delivery, and the terms of payment. To merely state on the invoice that interest will be charged if the price is not paid at a certain date is not to cast a legal liability on the purchaser to pay it. He must either expressly accept the condition, or it must be made to him under such circum stances as to raise an implication that he has accepted it. In case of a dis
pute, the fact of not having sent an invoice would weigh heavily against the seller. And here the copy letter-book should be noticed. In business trans actions all correspondence should be on record. Press copies of letters sent should be taken, and the originals of those received preserved. In order to put in evidence a copy letter, notice must first be given to the other side to produce the original ; failing such production the copy will be evidence. It is not really sufficient to preserve the originals of those received, having first torn off the fly-leaves or other parts not written on. The law requires pro duction of the whole paper of a written document, and the opposite side might object that only part is in evidence. The principle of the Bought and Paid Journal is the same as the journal we have just considered ; it relates instead to purchases by the business man, and payments in respect thereof. Invoices when received should be checked with the goods, and either filed or pasted in a book. Such a book is generally called a Guard Book.
Debtor's Ledger.—Every entry in the journal must find its way into the ledger. To so in its turn enter up the ledger is called posting. Each customer has an account opened for him with his name at the head. On the debit side is entered the date and amount of the entry in the journal, the folio, or page of the latter, and usually the words "To Goods." The items of the journal entry are not usually carried into the ledger. On the credit side are placed all payments, with the date and folio of the journal from which they are taken. Every quarter or half-year, as the case may be, the account is ruled off and a balance struck and carried down, and with this balance is the new quarter or half-year commenced. When the balance is thus struck, it is the rule to send to the customer a statement showing how the balance is arrived at ; and in the case of complicated accounts it would be well to obtain from the customer an acknowledgment that he has ex amined the account and finds the balance correct as stated. Such an acknowledgment would constitute an ACOOUNT STATED, the advantages of which to the creditor appear in the article under that title. In the same way would the bought ledger be posted up, and balanced from time to time. The balances should then be taken out and totalled ; for these are necessary for the preparation of the general balance-sheet.