instead of being passed through the Profit and Loss account; but the former method is the one generally adopted.

(14.)-Jauuary 10th and 11th. Expenses incident to the carrying on of business, actual losses of money, &c., are properly carried to the debit of « Profit and Loss," as being the account which provides for all those cases in which there is a deduction from income without a corresponding receipt of goods or other value. The remaining Journal entries will be explained in the next section.

It is customary to tick off the Waste Book entries as they are posted into the Journal, to show how far the work has proceeded.

Ledger Entries.-A separate account is opened in the Ledger for every item which appears under the form of Dr. or Cr. in the Journal. The left hand page is appropriated to Dr., and the right hand page opposite, to Cr. entries. Sufficient space is allotted to each head of account, to provide for all the transactions that will probably occur in that particulay branch of business during the currency of the book. The operation of posting the Ledger, is extremely simple, and may be readily understood from inspection of the first few accounts in the foregoing specimen. It is most convenient and regular to transfer the entries from the Journal in the order in which they stand in that book. As each new head of account is opened, the title should be registered in an Index prepared for that purpose, and the proper folio inserted. Reference should also be made in the Ledger to the page or folio of the Journal from which each Dr. or Cr. entry is transcribed. The column containing such reference is headed, «Fol. Journ.” as in the specimen above given. As soon as a Ledger entry is completed, the Journal should be marked on the left hand margin, as in the column titled, « Ledger Fol," with the number of the folio on which the Ledger entry, both for its Dr. and Cr side, is to be found. For better distinction it is usual to draw a small line under the Dr. folio of each Ledger post. A complete system of mutual reference is thus established between the various corresponding entries in the Journal and Ledger.

As an example of the mode of posting the Ledger, take the first Journal entry, «Sundries Dr. to Stock." Here, as the heading "Sundries" does not find a place in the Ledger, but is used merely as a collective term for particulars afterwards specified, we must construe this Journal entry as "Stock Cr. by Sundries," and having opened an account at the beginning of the Ledger under the title "Stock," insert on the Cr. side of it, the words « By Sundries," together with the date, the amount, and the Journal folio. We then mark in the margin of the Journal the folio of the account thus opened in the Ledger. The next Journal entry is "Cash Dr. to Stock." We allow a sufficient space in the Ledger for the Stock account, and immediately below it title an opening for Cash, on the Dr. side of which we write the entry "To Stock," adding the date, &c., as before. We proceed similarly as regards all other Journal entries, indexing each fresh account at the time of opening it, so that a repetition of the same heading may be avoided.

It will be seen that when we have posted into the Ledger, each under its proper title, all the sundry items which the Journal shows to be Dr. to Stock, we shall have on the Dr. side of these several openings a series of amounts, the total of which should equal the first entry on the Cr. side of Stock, namely, "Stock Cr. by Sundries, £3112 5s. 4d." A like correspondence or balance is true of every Ledger post, whether it consists of two or more opposite entries, and forms indeed the distinctive feature and chief excellence of this system of Book-keeping.

As soon as the Ledger has been posted up to the record of the last transaction taken from the Journal, that is, in the present case, up to the date of January 11th, a Trial Balance should be made. When the entries are so few and simple, it is hardly necessary to apply this test more than once before the closing of the books. The totals of the Dr. and Cr. sides agree, and it may be presumed that the accounts have been correctly posted.* An additional check is afforded by observing whether the totals of the Trial Balance agree, as they should do, with the sum of either the Dr. or Cr. column of the Journal for the same period.

We now proceed to balance the several unsettled accounts in the Ledger, and as a first step we write under the last entry in the Journal Sundries Dr. to Profit and Loss," followed by « Profit and Loss Dr. to Sundries," «Balance Dr. to Sundries," and « Sundries Dr. to Balance," leaving a sufficient interval between each for the reception of the requisite entries. If that which is termed «Sundries" should finally appear to consist of one entry only, the name of the single item can be substituted.

A Ledger account is balanced by subtracting the sum of the less side from that of the greater-a calculation which should always be made on a separate piece of paper-and then placing the difference or balance under the last entry on the smaller side, so that it may add in with that side and render both sides equal. Personal accounts, such as that of Moss & Co., page (376) are balanced at once in this manner, but real accounts as they are called, that is, accounts of goods of any kind, as sugar, wine, &c., require an additional entry, exhibiting the gain or loss that may have resulted from the several sales and purchases. In this case, the difference between the quantities of goods entered on the opposite sides of the account is first ascertained, the value of such remainder estimated at prime cost, and the amount both in goods and money set out under the preceding items of the same kind. (See the balancing of the Sugar account, page (375.) The Dr. and the Cr. money columns are then added up, and the difference placed under the smaller side. so much loss.

If this be the Dr. side, it represents so much gain; if the Cr. In actual business the value of goods on hand is arrived at by the operation of Stock-taking. The various articles of property are examined, their condition and quantity ascertained, and allowances made when necessary to compensate for any change occasioned by storage, leakage, &c., and a fall or rise of the market prices.

But where a set of imaginary accounts is drawn up simply for instruction, it is of course impossible to adopt this course, and the only expedient that can be resorted to is to suppose that the unsold goods remain unaffected in value, and to reckon their worth at the price originally given for them, or else to assume some arbitrary depreciation of the Stock, and to put down for it whatever price is thought fit. It is in fact immaterial on such occasions in what manner the question of value is treated, so long as the proper form of showing the balance is observed. If several lots of goods have been purchased at different prices, and only a portion is disposed of, an average rate may be taken in the valuation of the remainder.

When a positive loss of any of the articles is sustained, an entry to that effect, stating the quantity and the value, should be inserted on the Cr. side of the proper account, while Profit and Loss is debited in the same sum. In all cases, a total

* See remark on page (368.)

should be made of the goods both on the Dr. and Cr. side, so that it may be seen that the quantities balance.

It is plain that a balancing entry on the Cr. side of any account represents a sum due to or possessed by the merchant at the time of making up the books, in respect of the account under which it occurs; while a balance on the Dr. side indicates the sum owing by the merchant under that particular head. "Balance Cr." accordingly, expresses income or property, and « Balance Dr." debt or deficiency.

In proceeding to balance the various unsettled accounts, it is to be observed that the accounts for Stock, and Profit and Loss are to be kept open until all the others are closed.

On going over the accounts, as each item of « Balance Dr." or «Balance Cr. is inserted in order to equalize both sides, a corresponding entry must be made in the Journal under the head of "Balance Dr. to Sundries," or "Sundries Dr. to Balance," as the case may be. Also, when an item of Profit or Lose appears, the amount must be copied into the space titled in the Journal for that purpose, according as it is referable to the heading of "Sundries Dr. to Profit and Loss," or "Profit and Loss Dr. to Sundries." Of course, the amount by which «Sundries" is Dr. or Cr. cannot be set forward until the particulars are first ascertained and added together.

Having balanced all the accounts except those of Stock and Profit and Loss, let the sum which appears in the Journal opposite to the line "Sundries Dr. to Profit and Loss," be carried to the Cr. side of the opening in the Ledger for Profit and Loss. Then let the difference of the two sides be computed and placed under the smaller. If this balancing entry is required on the Dr. side, it shows a gain; if on the Cr. side a loss, on the total transactions. In the present instance, a gain of £55 2s. 6d. has been realised, and for this sum Profit and Loss is made Dr. to Stock. The two sides now balance, and the last entry is transferred to the proper space in the Journal, and also to the Cr. side of the Stock account. Had it been a loss it would have been carried to the Dr. side.

We next balance the Stock Account, and insert the difference of the two sides under the smaller, as « Stock Dr. to Balance" which sum exhibits the net capital possessed at the time of closing the books.

This last entry is then transcribed into the Journal under the head of "Sundries Dr. to Balance" where, if there have been no errors, it should make the totals of the columns, « Balance Dr. to Sundries," and "Sundries Dr. to Balance" exactly correspond. Thus a most useful check on the accuracy of the work is obtained by the coincidence or disagreement of the difference between the Dr. and Cr. side of the Balance account with the closing entry, independently ascertained, of the Stock account.

As a final step, the aggregates of the Balance Entries in the Journal, are copied into the Ledger, under the title of « Balance Dr.," and "Balance Cr." respectively.

By the plan adopted in these pages, the Journal is brought into conformity with the Ledger, and its importance and usefulness greatly enhanced, as the profits and losses which are found on striking the balances are passed through the Journal, so that each of the principal books is made to contain a complete register and summary of all the transactions that have taken place. According to the

method generally taught, but now seldom practised in business, the details of Balance account are entered in the Ledger instead of the Journal, while in closing the books, no entry is made in the Journal, in respect either of Profit and Loss or Balance.

The Balance account in the Journal (or Ledger) supplies the materials for a fresh inventory of the merchant's effects, in re-opening his accounts.

Application of the Principle of Double Entry to Collectors' Accounts.

The object of requiring from certain officers of the surveying department a proof that they possess some knowledge of the art of mercantile Book-keeping by double entry, is to ensure their being able to understand without difficulty the principle on which collectors' accounts are framed, and either to perform or superintend in an intelligent manner the duty of keeping those accounts.

Although the prescribed method of recording and balancing the various transactions of receipt and payment on behalf of the revenue differs considerably in point of detail and arrangement from the practice of ordinary Commercial Book-keeping, there is still a sufficient resemblance between the forms adopted in both cases to make the study of the latter system a useful, if not an indispensable, introduction to the business of a collector's office.

In the first chapter of this work a short description was given of the duties specially assigned to "Charging Officers," and of the particulars required to be entered by them in their survey books and periodical returns. It will there be seen that these books are simply registers of the result of the inspection of traders' premises and operations, showing in a brief, technical, manner, the state of the manufactory on each visit, and containing notes of the gauges or other estimations of quantity taken at the times best calculated to afford an accurate account of the goods, together with the amounts of duty thus ascertained and brought to charge at stated periods against the trader. Such books have no obvious relation to the peculiar features of the system of double entry. The proper mode of keeping them is laid down with all possible minuteness in the Board's orders and instructions, and is facilitated to a great extent by the use of printed headings; but it is not until the returns prepared from the charges of goods and duty set forward in the officers' survey books or ledgers come to be posted into the collector's account books, that anything like an application of the principle of double entry can be said to take place.

It would be impracticable in the limited space which is here available for the purpose, to furnish a detailed explanation of each of the numerous books kept in a collector's office, or to point out fully in what manner, and to what extent, the several forms of accounts are assimilated to the method pursued in mercantile affairs. To ensure a clear apprehension of the peculiarities of the revenue system it would be necessary to exhibit specimens of the various official books, and of the particulars recorded in them, as well as to trace the entries of a number of transactions from book to book, up to the formation of the final balance; and to do this on a scale sufficiently extensive to be of any service to the learner would be a task that cannot be properly attempted in the present publication. A good general notion, however, of the nature and mutual relation of collectors' accounts may, perhaps, be derived from the following sketch; while

the gaining of a complete and intimate acquaintance with the subject is left to that which is the only efficient means of instruction, namely, actual practice in the keeping of the books themselves.*

Traders' Ledger, and Cash Books.-The Waste Book and other subsidiary books of a merchant's office are represented in the Excise system, by what is called the "Traders' Ledger," together with a number of « Cash Books," each of which is appropriated to the reception of a particular class of entries relating to transactions of receipt or payment.

In the Traders' Ledger a separate account is opened under the name of every growing duty trader in the collection. The periodical charges of goods and duty made out by the surveying officers, and transmitted through the supervisor to the collector in the form of a "General Abstract," are posted to the debit of the respective traders; and when the duties are paid, the accounts are credited on the opposite side by the Cash received. At the close of the official year, each trader's account is balanced, and any duty uncollected is transferred to that trader's account in the Ledger, for the ensuing year.

A memorandum of all money received is entered daily in one of the "Cash Receipt Books." Of these there are two. No. 1, for Growing Duties and Receipts other than duties, and No. 2, for Licence duties. The name of the person by whom the money is paid must be inserted, except in the case of licence duties, as regards which all that need be recorded is the title of the station and the amount paid, the latter being placed in its proper column as shown by the printed heading for each description of duty.

Similarly, a memorandum of all money expended or disbursed is entered day by day in one of the various « Cash Payment Books." For greater convenience these are divided into « Advances on account of vote for charges of management.+ « Payments of Debentures and allowances." Payments on account of other departments and non-effectivet chargos, &c., &c." In addition to the Cash receipt and Cash payment books just mentioned, there are others for the entry of " Drainage advances repaid," « Officers' Income Tax," &c., &c.

Each of the foregoing books is added up daily, and the total carried into the "General Cash Book," which is provided with Dr. and Cr. sides, a separate space for each day's transaction, and a line and printed title for each head of account. Receipts are posted on the Dr., and Payments on the Cr. side. Both sides being cast up at the close of the day, and the less deducted from the greater, the difference should agree with the balance of Cash in the collector's hands, if the various sums have all been correctly entered, and no mistake has occurred in the receipt or disbursement of money. The General Cash Book, in fact, is kept in the same manner and serves the same purpose as the ordinary Cash Ledger of a * A detailed explanation of collectors' books and accounts is given in the Official Instructions to Collectors, page 19 et seg.

All charges incident to the collection or management of the revenue being now voted annually by Parliament, instead of being deducted and paid as formerly out of the gross receipts, are claimed in the Excise accounts under the head of "Advances for charges of Management recoverable out of votes of Parliament."

The term "Non-effective," is applied by way of distinction, to those charges which are incurred on account of Superannuation and Compensation Allowances, Pensions, &c., and do not form part of the expenditure necessary to the present collection of the revenue.