SECTIONAL BALANCING.--In all but the smallest concerns several bookkeepers are necessary in order to keep pace with time record of trans actions ; this involves a corresponding multiplication of ledgers if the work is to proceed smoothly, so that all may be simultaneously suitably employed, and in these cases it is decidedly a convenience if each one of a set of ledgers is capable of being balanced independently of its fellows. Among many other circumstances where such an advantage would be convenient, may be mentioned the case where a ledger is devoted to the district covered by each traveller, and it is desired to know at very short notice the outstanding balances of that ledger, or the extent to which the representative's collections arc coming in ; the great advantage is, however, kcility of control.
The sectional balancing of ledgers is effected in the following manner :— The ordinary subsidiary books, such as day-book, returns book, cash book, &c., are so ruled as to relate to each particular ledger (or group of ledgers), and to show, in the case of a sales day-book, for instance, not only the ordinary amount column, but in addition a set of analytical columns corresponding to the number of ledgers or sets of ledgers, which it is desired to render self-controlling. By adopting similar methods with regard to the returns book, cash book, bill book, journal, &c., all the items relating to each ledger are kept in clear and distinctive channels, and at any time the sum of the debits or credits in each ledger (or group of ledgers) may be arrived at by referring to and summarising the totals of the columns relating thereto in the subsidiary books mentioned.
Form A., on the opposite page, shows a sales day-book ruled on the lines mentioned.
Where the volume of business done is large, it is more satisfactory to provide separate subsidiary books for each ledger, rather than separate columns in one book, owing to the greater facilities thereby Abided for dividing clerical labour. It would perhaps hardly be practicable to multiply all the books of account so as to keep distinct the entries relating to each particular ledger ; this plan might be followed so far as the sales day books, returns books, and cash books are concerned, but journals and bill books would be more easily handled if framed with analytical columns.
When the slip system is in use, sectional balancing presents no practical difficulties of application,; but, whatever nrecise method be employed, the ultimate object is always the same—to be able to readily arrive at periodical totals of each class of transaction recorded in each separate ledger. This being assured, it becomes a simple matter to complete the double-entry in each ledger by opening (a) in each departmental ledger an account to N.:Ilia' must be posted in total all entries necessary to complete the double-entry of that ledger within itself; (h) in the principal ledger a distinct account for each departmental ledger, to which are posted in total all transactions recorded in detail in that departmental ledger. In this country these accounts arc usually called "adjustment accounts," in the United States they are styled "control accounts." It is clear that if the balances which are taken out in detail from the sales ledger do not agree in total with the balance of the adjustment account, some mistake has been made either in the posting, casting, or bringing down of balances in that ledger, or that the totals of the subsidiary books or analytical columns have been incorrectly made. The same processes of reasoning are applied to all classes of ledgers, whether they are sales ledgers or purchase ledgers, or of any other nature, the adjustment account, of course, changing to meet the altered circumstances. For instance, the pur chase ledger adjustment account in the principal ledger would commence on the credit side with the amount due to creditors at the commencement of the period, the goods purchased since would follow, together with interest, trans fers, and any other items of a similar character ; while on the debit side would appear the cash and cheques paid during the period, the discOunts and allowances received, the goods returned to suppliers, bills payable, transfers, and other debits, the balance agreeing with the total of the detailed balances on the accounts in the ledger under review.