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12   BOO KiEEPIt1'G

  1. In John Simpson's account we see that the debtor side is greater than the creditor side by $25, therefore he is a debtor for that amount, and the balance is an asset.

  2. Make the small pin-head totals with a hard lead pencil.

(d) Remarks on February Ledger :

  1. John Simpson has received on account $591.25, and has given on account $566.50; therefore he owes $24.75. We balance his account by placing the $24.75 on the smaller side in red ink, indicating the red ink by an asterisk (*), when using a pencil or black ink. We then bring this balance down below the ruling in black ink on the debtor side for the next month's business. The red ink indicates that the balance is on its wrong side, being placed there simply to balance the account ; the black ink indicates that the balance is now on its right side, since it is a debtor balance.

  2. In the page column in Section 16 (b), " 11 " is the Journal page from which the item came; the last two 11's are Ledger pages and show in the red ink where the balance was transferred to, and in the black ink where the balance came from. The latter paging is used when the balance has to be transferred to a new page.

  3. Personal Accounts should be balanced and ruled up, only when settled, or when the page is filled and the account has to be transferred to a new page. This is true of all Asset and Liability accounts, excepting Cash and Bank accounts, which are balanced at least monthly as a check against mistakes in handling the cash.

EXERCISES ON PERSONAL, ACCOUNTS.

Exercise No. 1.

Journalize ; post M. Peters' account, leaving room both in the Journal and the Ledger account to continue with Exercise No. 2. On March 30, is M. Peters a debtor or a creditor? Is the balance an asset or a liability?

Ottawa, March 1, 19-. Sold M. Peters on account, Merchandise (goods) $230. 5. Bought from M. Peters on account, Merchandise $150.

9. M. Peters paid on account, cash $70.

13. Bought from M. Peters on account, Merchandise (Mdse.) $130. 16 Paid M. Peters on account, cash $50.

18. Sold M. Peters on account, Mdse. $100.

20. M. Peters paid on account, cash $20.

25. Bought from M. Peters on account, Mdse. $60.

30. Sold M. Peters on account, Mdse. $90.

Exercise No. 2.

Journalize ; post, balance, and close M. Peters' account, making it a continuation of his account in Ex. 1. Is he a debtor or a creditor ? Is the balance an asset or a liability ? Why ?

Ottawa, April 1, 19-. Bought from M. Peters on account, Mdse. $280. 3. Sold M. Peters on account, Mdse. $150. 6. Paid M. Peters on account, cash $30.

11. Sold M. Peters on account, Mdse. $370.

15. Received from M. Peters on account, cash $50. 20. Bought from M. Peters on account, Mdse. $70.


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