Page:Encyclopædia Britannica, Ninth Edition, v. 4.djvu/56

46 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, &quot; Cotton&quot; account shows the actual result of the speculation per &quot; Mary Jane ; &quot; John Bevan and Co. s &quot; account exhibits the whole transac tion with them, and how it was settled; &quot;Bills Payable&quot; account at once shows that the cotton bill is retired or paid ; and &quot; Cash&quot; account declares a balance of 851 in cashier s hands, being the actual profit on the cotton, as further shown in &quot; Profit and Loss &quot; 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.

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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.

—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.