Considering this form in detail, it should first of all be remarked that, where the circumstances of business permit, all cash received should be paid into the bank without distinction of any kind whatever. The retailer will raise the objection that it is necessary to have a fund of cash in hand, ready for small payments of various accounts, but this contingency is provided for by a secondary fund called Petty Cash, which is obtained by drawing a cheque on the banking account, and keeping a separate account of the proceeds. This will be considered later.
Where the trader is too far away from his bank to make the plan suggested feasible, or where local circumstances have the same effect, then the form given will require to be altered by a column marked "Cash Paid to Bank" being placed on the payment side, and "Cheques Drawn on Bank" on the receipt side, The first four columns on the receipt side of the given form do not call for any particular connnent, because they are practically self-explanatory. Column No. 6 is intended to embrace all customers' accounts which have been paid, and the discount column marked No. 5 is to be used where an allowance of that character has been granted to the customer. It will be remembered that when dealing with Cash &des, it was pointed out that the till-sheet, or whatever rough record of the cash received was kept, would be so ruled as to distinguish between those which were on account of goods supplied on credit, and those which related to spot-cash transactions. Column No. 6 will therefore be entered from the till-sheets, and the items in this column, together with those in column No. 5, when posted to the ledger accounts affected, should effectually deal with the state of each customer's account.
Where postings are made direct from the till-sheets to customers' accounts in the personal ledger, the discount column in the cash book may still be used as indicated, the daily totals of the cash received in respect of customers' accounts being entered in column No. 6 instead of the details. Column No. 7, marked "cash sales," is, of course, the total taken from the till-sheet each day, and explanation has already been given of the points arising in connection therewith. The sundries column is merely by way of expediency ; for instance, it may be necessary for the proper conduct of his business for the trader to place further working ea: ital at its disposal. Any such items should be entered in the sundries column, and posted to the credit of the trader's " Capital Account" in the nominal or private ledger. Similarly, if a trader sublets a portion of his premises, there will be rent receivable, and entries of this nature should also find a place. in the sundries column, whence they can be posted to the credit of "Relit Receivable Account" in the nominal ledger. If items of this
character are likely to be numerous, then there would be no objection to the sundries column being divided into parts according to the nature of the entries required. The cash paid to bank has already been in some measure explained, but it may be added that the total of this column should agree with the totals of columns Nos. 6, 7, and 8; and at the end of any given period, therefore, the trader will be able to discover in a few moments the exact sum which he ought to have paid, and has paid, into his bank during that period, together with a clear indication of all the sources from which the money has been received.
With regard to the question of payments. Having in view an earlier axiom, it should be remembered that, in connection with this particular book, all payments therein recorded are to be made by cheque. As in the case of the receipt side of the cash book, columns Nos. 1 to 4, inclusive, explain themselves. Column No. 6 relates to all those cheques which are drawn in favour of suppliers having accounts in the personal or purchase ledger. These sums, together with the entries in column number 5, which are in the nature of discount, will be posted to the debit of the personal accounts affected. Column No. 7 will perhaps hardly be suitable for a very small business, because in such instances it would be rare for the trader to pay for such transactions by a cheque, but in larger businesses this is not unusual. The column headed " General Expenses" is in the nature of a general round-up of various items which it is necessary to keep distinct from purchases. Herein may be expected to be found such establishment charges as rent, rates, taxes, gas, water, electric light, insurance, and any other sundry expenses attached to the business. In moderate-sized concerns the trader would, perhaps, hardly be satisfied by gathering all such items together in one account, and it is therefore usual to split up the general expenses column into the component parts indicated, so that instead of the items being carried to the debit of one general account, they are transferred to accounts which are headed so as to show the nature of each expense separately. This plan has ninny advantages, inasmuch as it enables comparisons to be wade between the amount of expenses under the various headings arising in different periods. For instance, the trader will naturally be interested to see how the amount which he paid for rates in 1907 compares with the similar item for 1906, and it cannot be said that the plan involves greater expenditure of time or labour, because even under the general method each item would have to be included in the general expenses column, and it would take no longer to allocate it to its analytical column than it would do to enter it under the simpler form.