19—
Jan. 10 Notes Receivable 10 1,000.00
James Jackson14 1,000.00
60-day note, payable at First National Bank,
Perryville, Maryland, with interest at
6% per annum. Due March 10, 19—

Form 6. Standard Form of Journal

The date is sometimes shown in the middle of the first blank line; but it is better to place it at the extreme left. The account titles are placed on separate lines unencumbered with other data, because they are of first importance in posting. The name of the debit account is shown on the extreme left of the explanation column, with a uniform margin to the right for the credit account. The debit and credit amounts are placed in the left and right money columns respectively. Data giving full explanation of the entry are shown directly below the classified debit and credit entry, slightly to the right of the margin of the credit account title, and a uniform margin is maintained down the page. The column to the left of the money columns shows the ledger pages to which the entry is posted. The entry is read thus: Notes Receivable, debit; James Jackson, credit, $1,000.00.

CHAPTER XVII
THE SUBDIVISION OF THE JOURNAL

Inadequacy of the Old Journal.—As explained in the previous chapter, every business transaction was formerly entered in the journal. This necessitated the making of a formal debit and credit entry for every item, many of which were of the same kind. As the object of every business is to sell something, during any business day a large number of sales, in consequence, had to be analyzed, classified, and entered separately. The entry in each case was a credit to Sales, and either a debit to the customer if the sale was “on time,” or a debit to Cash if the sale was for cash. It was soon perceived that instead of making a separate entry for each sale, one entry could be used for bringing into the books all the sales for a given day. This was accomplished by carrying a memorandum of the individual transactions until the close of the day when a formal summary or compound entry was made in the journal. Such a summary or compound journal entry is illustrated below:

A. Jackson175.00
D. Hayes25.00
J. M. Marshall132.50
T. P. Pollard79.40
I. M. Cranston93.20
M. V. Johnson17.15
Sales 522.25
To record the day’s sales.

The memorandum of each sale was made in a blotter to record the quantities and kind of goods sold but such entry formed no part of the double-entry record, being merely the source of information for the formal summary entry.

The Special Journal a Labor-Saving Device.—This use of the journal can also be made in connection with other transactions, with similar great saving of labor. Throughout the day in every business there is a large number of cash transactions—receipts and disbursements—which require a debit and credit record. Also purchases of merchandise, although not numerous for any particular day, comprise a large number of entries during the course of a month or year. To save the labor of so many entries, the original journal is divided into separate books known as special journals, each containing the original entries for a particular group of similar transactions, the number of books corresponding to the number of groups into which the various transactions are divided.

For instance, where the policy of the business is to encourage the settlement of outstanding customers’ accounts by notes, the use of a notes receivable book or journal effects a very appreciable saving of labor. Through the use of such a book, limited to a record of nothing but notes receivable, it is unnecessary to write each time a note is received, a complete journal entry as follows: