Wages and salaries require no explanation, except perhaps to say, in passing, that it is a convenient method in many cases to draw a cheque for the actual t of these charges, and enter the same in its proper column on the payment side of the cash book. The cheque is, of course, cashed, and the proceeds used to discharge the wages and salaries due to employees. In cases where the exact amount of wages and salaries is not known in sufficient time to enable the cheque to be drawn, the amount can be estimated, and any surplus can be returned to the being entered on the receipts side of the cash book in the sundries column, Nwhence it can be posted to the credit of "wages account" in the nominal ledger. Another alternative method is to pay the wages out of petty cash, and, with regard to this, consideration is deferred until the petty cash book itself conies under review.
It is generally convenient to provide a separate column for payments in the nature of carriage and cartage, but where these are not considerable they may be entered under general expenses, or under any composite heading which will be satisfactory to the trader.
The "petty cash" column, as its name implies, relates to those cheques which are drawn for round sums to be handed to the petty cashier, the record of which will be found to be dealt with below.
The sundries column, like its prototype on the receipt side of the cash book, may be used for emergency purposes, such as items drawn out of the business funds by the proprietor, or any payments of a special or private nature which require to be dealt with in detail. If the trader makes a practice of drawing a stated sum at stipulated periods, then it would be advisable to provide a separate column for the purpose of gathering these entries together, and the total of this column should be posted to the debit of the trader's " current account" in the private ledger.
The last column needs but little explanation, for it is a total of all the columns from No. 6 onward, and the trader is enabled to see at a glance the total amount which he has drawn on the bank, and the manner in which the same has been expended. The difference between the last column on either side of the cash book will indicate the balance in favour of, or against, the trader as far as the bank is concerned, allowing, of course, for any balance, one way or the other, which may have been in existence at the commencement of a given period. If it is desired to keep the bank balance a private matter, the totals of the bank column on either side of the cash book may be posted to an account headed "Bank" in the nominal or private ledger, mid the periodical bahnices brought down on that account instead of in the cash book.
In a large business it is not unusual to find all cash received recorded in a book, quite apart from that which deals with the payments, and, in each establishment where the cash desk principle is in force, an elaborate summary would be kept by the cashier of cash sales in such a manner that the transactions by each assistant would be known for any period, thus giving the trader a good idea as to the value of each of his employees as a selling agent. The cash summary would be, in the cash book proper,
merely in a daily total, and as its form differs in almost every business it would hardly be possible to consider the question in detail in this article. The general principles which have been indicated will, however, probably suffice.
On the same principle, customers' accounts which have been paid at the central cash desk would be recorded in a separate book or books, and the total only will appear in the general cash book. All these points are questions of convenience for the particular business under review, and the variations in the method of treatment do not affect the ultimate issue or general principles involved one bit.
Petty Cash.—Considering now the question of the secondary fund, which is called " Petty Cash," a convenient form of account book would run somP what on the following lines :- The items on the receipt side of this book will, of course, correspond with the entries made in the general cash book under the heading of petty cash, so that if the total cheques drawn in favour of the petty cashier for a month amount to, say, this same total will be found on the receipt side of the petty cash hook, and would remain to be accounted for by the person having charge of this fund. On the payment side the particular headings of the expenses columns must to a. very large extent be settled by the nature of each particular business. For instance, as has already been pointed out, if wages and salaries are paid by the petty cashier they should be passed through this book, and a separate column should be provided the purpose of keeping these entries clear and distinct from all other entries. Similar remarks apply to the question of carriar and cartage, and it may also be advisable to keep distinct " stamps" and " telegrams" and other charges of this nature, which, although small in themselves, are of such constant occurrence as to amount to a fairly respectable sum in a short time unless they are carefully watched. The idea of this columnar method of recording trading expenses is not only to avoid the inconvenience of posting a large number of detailed items, but also to afford a ready means of comparison at short notice. It need hardly be pointed out that the changes may be rung on the headings and number of columns as often, and so long, as desired. There is 110 limit as to the number, and whether one or fifty be employed, the question of effectiveness will not in any way be prejudiced.