It is also to be noted that there is a wide difference between a finished accountant and many of the so-called “business systematizers." A man, to be capable of designing the best system of accounts, must be a thoroughly competent accountant and auditor, a master of classification and business routine, and the possessor of original and inventive ideas as well.

§ 85. (c) The Scientifically Designed System.

The custom formerly prevailing of ascertaining the condition of the affairs of a business and the results from its operations, only when an inventory was taken, seldom more often than semi-annually and in many cases yearly, has become obsolete. The progressive business man finds it necessary to have this information at least monthly, together with other details and statistics which the records must be capable of giving accurately and consistently as needed.

It becomes necessary, therefore, in any large business, to devise an accounting method that will meet the requirements of the particular business and this oftentimes calls for a very elaborate system. After its adoption the success of this system will depend largely upon the co-operation of the departmental heads. The most scientifically designed accounting system cannot be successfully operated unless it is properly supported and the data essential to its conduct is forthcoming in accurate and consistent form. Good systems have been known to fail, but such failures rarely result from any fault of the system as designed. A scientifically designed system, like a scientifically constructed machine, will do its work if properly conducted.

CHAPTER XI.

THE FINANCIAL RECORDS.

§ 86. Record of Receipts.

In retail establishments it is usually advisable to have the financial day end at the close of the business day. In other establishments it will be found convenient to end the financial day at one o'clock. This enables the cashier-who in the smaller corporations will probably be the treasurer to make up the deposit and include all moneys received from one o'clock of the previous day. Moneys received after that hour would be entered under the following date.

The entire receipts, whether in currency, checks or money orders, should be properly listed and deposited. If remittances are received in the form of postage stamps, these stamps should be exchanged for currency from the petty cash drawer. This currency replaces the stamps in the daily receipts, but the transaction is treated otherwise as though the stamps were purchased from the post-office. The deposit slip should be made up in duplicate and the total should agree with the total receipts for the financial day as shown by the cash receipts book.

Incoming mail should always be opened by someone outside the bookkeeping department. If the cashier does the posting to the customers' accounts, it is a good plan to have the person who opens the mail also list the remittances in a book provided for that purpose. An ordinary three-hundredpage journal serves the purpose very well. The remittances received each financial day should be recorded in the mail

clerk's book in the following order,-customer's name, kind of remittance ("c" for checks, "m" for currency, "mo" for money order, etc.), and amount. If cash sales are made, each salesman should keep a separate record of his cash sales. The total cash sales should be arrived at from these records and the amount be entered in the mail clerk's book, which then becomes a general record of incoming moneys.

The total amount listed by the mail clerk during a financial day should agree with the duplicate deposit slip prepared by the cashier. Any difference should be investigated and reconciled by the mail clerk, who should then O K the duplicate deposit slip and file it in chronological order, or attach it to the top of the proper page of his book.

All remittances and cash received during the financial day should be delivered to the cashier who should record them in the cash receipts book. Columns should be provided to meet the special requirements of the business. In businesses where a very large number of daily remittances are received to be credited to accounts calling for periodical instalments, it is advisable to keep two cash receipts books-one for even and one for odd days. This plan enables the ledger clerks to do their work without interfering with the cashier.

It is always advisable to have the posting done by some one other than the cashier. If this plan is not found practical, it is well to have some one outside the bookkeeping department occasionally compare the monthly statements with the customers' ledger accounts, and then see that all statements are properly mailed.

§ 87. Cash Receipts Book.

The form of cash receipts book illustrated by Cut No. I will meet the need of businesses in which the majority of receipts are to be credited to the customers' accounts. According to its arrangement, the amount with which the customer's account is entitled to be credited should be entered in the

"Accounts Receivable" column. If a discount is allowed, the amount should be entered in the "Discount" column. The amount of daily cash sales should be entered in the "Cash Sales" column. Any receipts other than from customers, or for cash sales, should be entered in the "Miscellaneous column.

At the close of each financial day the sum of the daily totals of the first three columns less the daily total of the "Discount" column should be extended in the "Net Receipts column. The items in the "Miscellaneous" column should be Cut No. 1. Cash Receipts Book. (Size of Original, 121⁄2 x 16 inches.)

separately posted. The items in the "Accounts Receivable column should be separately posted to the credit of the proper customers' accounts.

At the close of each month the footings of the "Accounts Receivable" and "Cash Sales" columns should be credited to the general ledger accounts correspondingly headed; and the footings of the "Discount" and "Net Receipts" columns should be posted to the debit of "Discounts" and " and "Cash" accounts, respectively, in the general ledger.

$88. Record of Disbursements.

An "Imprest," or ready money fund should be established, adequate to meet the demands for currency disburse

ments, exclusive of pay roll, for say a month. The pay roll should be provided for by means of a special check which should be drawn and cashed, its amount being charged to Pay Roll" account.

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Assuming that two hundred dollars will be sufficient for the imprest fund, a check should be drawn for that amount and converted into currency. An entry should be made charging "Imprest Fund" account in the general ledger with the amount of this check. Payments should always be made by check whenever possible, the imprest fund being used only for such disbursements as are unavoidably payable in currency.

Each currency disbursement from the imprest fund should be supported by a voucher and be recorded in the petty cash book. At the close of each month, or when the fund requires replenishing, a check should be drawn for an amount equal to the disbursements and converted into currency. This will bring the fund up to the original amount. Whenever the fund is replenished an entry should be made charging the proper accounts as shown by a summarized analysis of the disbursements, made up from the petty cash book. The vouchers should be filed numerically, according to the months.

§ 89. Cash Disbursements Book.

All payments, save from imprest fund, should be made. by check. In recording disbursements it is necessary in many cases to provide in the cash disbursements book (See Cut No. 2) the following columns; viz., "Miscellaneous," "Accounts Payable," "Discount" and "Net Disbursements." Other columns may be added according to the requirements of the business. When a voucher register1 is used, the first column. may be omitted, and no detail postings will be made from the "Accounts Payable" column. When accounts are kept with creditors, however, it will be necessary to post the items in that column separately to the debit of the proper accounts in

1 See § 100, "The Voucher System."