It may be alleged that there are many unnecessary entries, involving too much trouble and waste of time, in bringing out the above results ; but upon examination of the several accounts the great simplicity and utility of double entry is evident. For instance, " Cotton" account shows the actual result of the speculation per " Mary Jane ; " John Bevan and Co. s " account exhibits the whole transac tion with them, and how it was settled; "Bills Payable" account at once shows that the cotton bill is retired or paid ; and " Cash" account declares a balance of 851 in cashier s hands, being the actual profit on the cotton, as further shown in " Profit and Loss " account.
An infinity of examples might be given, but the above will be a sufficient illustration. A brief outline, however, of the principal books required in this system may be introduced.
1. The Cash Book.—In this most important book every cash, transaction must be entered of its proper date, and under its dis tinctive ledger heading, so as to give facility in journalizing ; any balance thereon must be cash in hand, and should agree with the balance on "Cash account" in the ledger.
2. The Day or Waste Book.—This book records the daily trans actions of every description in the rough, which, when properly arranged and classified, are written into the journal, and posted from thence to the ledgers.
3. The Journal.—This may be called the mainspring of the system, and is sometimes called the "posting medium," os in it every transaction of the business is properly recorded before being again distributed into the ledger. There are several forms of journal, but the simplest and best is that of which a specimen has been given, with the addition of a column for the insertion of ledger folios when posted. It will be observed that the debit entries are in one column and the credit entries in another ; if, therefore, the summations of these agree, and the entries therein embraced are correctly posted to the debit and credit of accounts in the ledger, the double entry is correct, and the books of the concern, no matter how multitudinous the entries may be, must come to a true balance.
4. The Ledgers. These are important books, as they are the final recipients of every transaction of the concern, branched out or distributed into certain heads or accounts which tell their own history ; and if unbalanced, must exhibit a difference either in favour of the business as an "Asset, "or against it as a "Liability." The usual plan is to have only one ledger, embracing every account, but in large concerns there are debit and credit ledgers, and generally a private ledger, which is accessible to partners only.
The advantages of double entry are many (1.) Unless the debit balances exactly correspond with the credits the books are wrong, and the error must be discovered by comparison ; (2.) The discovery of such errors is more easily accomplished than in any other system ; (3.) Accounts can be readily analyzed ; and (4.) The profit or loss on distinct transactions can be ascertained without difficulty. The disadvantages are (1.) More manual labour required in transcribing the journal and posting therefrom than in other systems ; and (2.) There is not the same privacy, as profits and losses can be .seen at a glance by any one having access to the ledger. Nevertheless, no other system as yet devised can at all compare with that by double entry.
III. Mixed Method.—This system is now extensively adopted by such companies and firms as begrudge the time expended in journalizing, and are of opinion that double entry is too elaborate, when the same results can be arrived at by a more direct and less laborious plan. There is this identity, however, between the systems, that every trans action must be recorded somewhere, and eventually twice posted, as in double entry, but without the medium of a journal; moreover, the entries are fewer, summations and not specific items being posted, and what would be the daily labour under one system is reserved under this for a monthly or perhaps longer period. There are only three books required for this system to which we need draw attention, and in doing so we will point out in what respect I they differ from those kept in single and double entries.