Accounting Every Business Man Should Know

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1919. Excerpt: ... CHAPTER II THE TRANSITION TO MODEEN METHODS PROBABLY the first attempt to make a balancing list of account balances, or trial balance from the now complete doubleentry ledger, discovered some errors in the work of the period. If the period was a long one and the accounts and transactions considerable in number, the task of finding and correcting these errors was a heavy one. This experience led to the custom of monthly trial balances purely for the purpose of checking up the correctness of the posting more frequently. These monthly trial balances, however, soon became instruments of enlightenment to the thoughtful manager, in many ways, some of which we shall consider in the proper place. At present our concern is with the mechanical side. Most of these errors--and one cent in a single case will throw a double-entry ledger out of balance--arose in the copying from the book of original entry into the ledger. For example, a charge to a customer for the sale of goods was entered correctly on the debit side of his account, but was not entered on the credit side of the balancing account, which we will call merchandise sales account. Or it may have been entered incorrectly, or even on the wrong side. This error was found not to be altogether inexcusable, perhaps, because of the great pressure of work on the man who had charge of the posting. Furthermore the entry in the daybook may have been made hastily, during rush of business. At any rate, whatever the cause, the idea occurred to some one of using an intermediate book into which each entry should be carefully copied, in correct form for posting to the ledger, thus obviating the necessity of analysing each transaction simultaneously with carrying its two sides to the two or more ledger accounts concerned. It ...