Returns.—As it is necessary to record the goods purchased from suppliers it is equally advisable to collect, in convenient form, details of those goods which may be returned to the suppliers by reason of not being equal to sample—not of proper quality, not as per order—or for any other reason that may arise. In addition to this many wholesalers adopt the practice of charging the cases in the original invoice and allowing same when returned. These items should also find a place in the goods-returned book, which should be on similar lines to that suggested with regard to returns made by customers to the retailer, and in some instances it is the practice to use the same book for both sets of returns, one kind being placed at the beginning of the book and the other at the end.
The details of these returns would, of course, be debited to the suppliers' accounts in the personal or purchases ledger, the totals being carred at convenient periods to the credit of "returns off purchases account" in the nominal ledger. It would, of course, be quite correct to credit the nominal account of "purchases" with these items, but under a proper regulated system each channel of intake and outflow should be kept as distinct as possible, for many obvious reasons. So far, credit purchases alone have been dealt with, and there still remains to be considered the question of purchases which may be made for cash.
Cash Purchases.--The extent to which goods are purchased for ready money will depend very largely upon the nature of the particular business under review, but the principle of dealing with such items is precisely the same in all businesses, with the probable exception that sonic require more details than others, but these details do not affect the figures in any way. They may be said to be merely of a domestic character. It is not necessary in such cases to open an account in the personal ledger with the person front whom the goods are bought, because as the transaction is completed almost as soon Its it has been commenced there is no need for any such entry. All that is required is to carry to the debit of the nominal account of "cash purchases" every item of this character. This should be done in detail, direct from the petty cash book, or general cash book, or by means of analytical columns, to which reference will subsequently be made, when the total only need ap'pear in the nominal account. In any event, the principles of double-entry will be completely satisfied, because in each case "cash purchases account" is debited and the "cash account" is credited, thus preserving the equilibrium of the books.
Cash. Receipts and Payments —The next branch of a retailer's business which falls to be considered is the proper method of dealing with cash receipts and payments, including therein, of course, all transactions by means of the bank.
It might be thought that even if the trader is careless with regard to the proper entries of sale, and still more casual with regard to the proper recording of his liabilities, he would at least keep all matters relating to cash in perfect order ; but those best qualified to judge will bear witness to the fact that in this respect the average retailer falls very far short of that standard of excellence which it is not unreasonable to expect of him. In too many cases he looks upon his bank pass-book as his record of cash transac tions, and the part which this outside medium plays in his business may be grasped when it is said that it is not only his cash book, but in numerous cases his profit and loss account as well. This latter point will be considered in due course and in its proper place. There can be but little excuse for the trader whose record of cash transactions is loose or careless, because the method to be adopted is so extremely simple that even the excuse of ignor ance fails in this instance.
1 To deal, first of all, with broad outlines, all that is required is a book having two cash columns, one on either page, on the left-hand side of which he enters all cash received, and on the right-hand side all cash paid away. From such a record the details of either side could be carried to the various accounts affected, and so complete the necessary double entries. This method, however, involves rather a waste of time and labour in posting, and it is preferable therefore to split up the cash book into various columns, may be described as channels, through which flow all items of a specific character, each in its own column, or, to put the matter in another way, these analytical columns are used for the purpose of collecting all entries belonging to each particular tribe or family, so that the total thereof may be dealt with, in order to produce the same results as if the details had been treated separately, with, of course, a consequent saving of time and labour. A simple form of such cash book is given on p. 193.