Net Capital and Net Insolvency.
The Proprietor's Capital Account may be considered as an Asset and Liability Account. If, after transferring the Net Gain or the Net loss to the Proprietor's Capital Account, the Cr. side be the greater, the excess is called his Net Capital and is a liability of the business, since the business owes him this amount; if the Dr. side be the greater, the excess is called his Net Insolvency and is an asset to the business, since he must pay this amount to the business from his private means.
Cash Book and Bill Book—Special Forms.
Bookkeepers vary the form of the Cash Book and the Bill Book to suit different kinds of business. When used as principal books, that is, as posting media, they may be called Cash Journal and Bill Journal respectively.
The form of Cash Journal, shown in Section 120, illustrates the use of special columns. The check mark in the folio column indicates that Merchandise and Expense are not to be posted in separate items, but in totals from the footings of the Merchandise and Expense columns.
The form of Bill Book, shown in Section 85, is a general form and will teach the parties to notes and drafts. In the form of Bill Journal, shown in Section 121, a simple change is made from the form in Section 85 ; in the Bills Receivable Journal, the items are posted to the various accounts mentioned in the " Accounts Cr." column, and Bills Rec. Account is debited with the total of the " Amount " column ; in the Bills Pay. Journal, the items are posted to the various accounts mentioned in the " Accounts Dr." column, and Bills Pay. Account is credited with the total of the "Amount " column.
If the Pupil understands the forms of Cash Book and Bill Book illustrated in the text, he will readily understand any special forms he may afterward meet with in his bookkeeping career.