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count, might be presented as evidence
of any payment whenever a question
as to payment might arise. This is
an excellent point for the teacher to
give the pupil instruction in a general
way as to methods of doing business-
Introducing the student to the pur-
chase book. Perhaps it is wise to in-
troduce the student to the purchase
book after he has become acquainted
with the cash book. He should be
told that for the sake of accounting
analysis today, it is necessary to keep
a separate record of all purchases, the
parties from whom they were pur-
chased, the price at the time of pur-
chase, so that the price at any future
time may be compared with the price
at any former time. Likewise, it is
necessary to keep a record of the
source of all purchases, so that the
purchasing agent of a concern, or the
business executive, may have a record
of the possible sources of supply of
all material. It is also possible to
impress upon the student of book-
keeping at the very outset the neces-
sity for careful buying. Much money
is saved by advantageous purchasing.
One man whom the writer happens
to know of, the owner of a large store,
once made the remark to a friend,
who complimented him on his sales-
manship ability, that any man could
sell, but it took a wise man to buy.
Purchasing is a very important factor
in modern business. The student
might be reminded that all of the
large department stores, employ at
big salaries, men and women whose
business it is to purchase the stock of
goods. The successful purchasing
agent and buyer must be able to fore-
cast demands and markets, so that
rare ability in this line is not only
highly paid for but worth consider-
able study on the part of any student.



^^J^u4/n^ii4/<^i^iu^i^ %



Purchase book transaction material.

The illustration used in tlie cash book
might be continued. The student
mig-ht be asked to list, let us say, the
firms from which some merchant, or a
number of merchants in the town in
which his business college is located,
purchase their material. The student
may be asked to interview merchants
and clerks, to get such information,
at a time when they are not busy.
The student might then be asked to
bring in a statement as to the kind
of materials such merchants keep in
stock, the persons from whom they
Iniy them, and the approximate
amount of material bought, say in a
month, together with the purchase
price. This same material may fur-
nish the data for instruction in the
purchase book.

The student should devise his own
fo:ms. The student should devise his
own purchase book. This is a method
of instruction that should be more
generally used. Forms should be
drawn by the student, so that he may
learn what each column is to be used
for. and may put his own headings
at the top of the columns. In fact,
he is thus taught the rudiments of
systematizing from the very start.
\Vhencver the forms are furnished the
student in blank books, which have
lieen printed, even though it may
save time at the start, in the opinion
of the writer, a very necessary ele-
ment in bookkeeping instruction is
dispensed with. The writer knows
few business college and high school
teachers, who have realized and taken
advantage of the opportunity of hav-
ing the student devise his own forms.
The student should be instructed as to
the number of columns needed, in
order to gather the statistical infor-
mation that such a merchant would
want in order to keep track' of his
purchases. He should readily under-
stand that there should be a column
for the total amount of the purchase,
the separate columns to record the
amount of the various kinds of ma-
terial purchased. A little later on in
his work, he should add at least two
columns in his purchase book — one
for recording purchases which are to
be paid at a future time, or on ac-
count, as the student later learns,
and one for cash purchases.

Rules for journalizing purchase
book transactions. This is the logical
moment for the teacher to introduce
the student to more rules of journal-
izing, namely to "debit merchandise
when purchased, and credit the per-
son from whom the merchandise was
bought." In other words "credit per-
sons when we get into their debt" is
the rule that should be taught in con-
nection with purchase book transac-
tions.

The sales book should follow the
purchase book. The student, having
been introduced to the uses and ad-
vantages of the purchase book, this
instruction should be followed by a
description of the sales book, the ne-
cessity for keeping a record of sales,
in order that proper inventory records
may be kept; that stock can be pro-



perly checked up; that the names and
addresses of persons to whom sales
have been made can be kept; the kinds
of goods sold; the methods of pay-
ment (whether cash or credit). The
necessity of recording the names of
all customers, in order that the good
will value of the concern might be
properly judged at any time, should
be emphasized. The value of such a
list could be pointed out to the stu-
dent, by showing that the large de-
partment stores never fail to get the
name of the purchaser, and to record
it on the sales slip. The writer has
observed sales clerks in many large
department stores, and never yet has
he seen one who has failed to ask
him for his name when he was mak-
ing a purchase, and also to record his
name on the sales slip, even though
he paj'S cash for his purchase. These
sales slips, when filed, contain the
names of all customers, and become
increasingly valuable, as the student
can readily see, if his attention is
called to the fact by his bookkeeping
teacher.

Sales transactions devised by the
student. The basis for the sales
transactions might be obtained in the
same way as the purchase transac-
tions were, namely, by having the
student interview the merchants of
the town, many of whom would be
willing to give him at least estimated
sales figures.

Teaching the journalizing rule. .\s

in the case of the purchase book, this
is the logical time for the teacher to
introduce another rule of journalizing,
namely: "debit the account of per-
sons who buy from us on any terms
of credit, calling for payment at a
later date." The rule to be followed
for journalizing such sales is as fol-
lows: "debit persons when they get
into our debt; credit persons when
we get into their debt." This likewise
might be a suitable place for intro-
ducing the two opposite rules of jour-
nalizing, which have been learned in
connection with the purchase and the
sales books, namely: "debit persons
when we get out of their debt, or pay
what we owe them, and debit them
for the amount that we pay them:
credit persons when they get out of
our debt, and credit them for the
amount they pay us." The teacher
should now introduce a sufficient
number of transactions, illustrating
journal rules, already taught, so as to
thoroughly test the student's ability
to journalize purchase and sales book
transactions.

Perpetual inventory. The next na-
tural step in the development of book-
keeping instructions is to teach the
student the usefulness of a perpetual
inventory, which, of course, depends
upon the records kept in the purchase
and sales books. Likewise, this is the
logical time to teach the student how
to record inventory prices, market or
purchase, whichever is lower. Em-
phasis should be placed upon the ne-
cessity' of recording the lower price,
in order that any estimate of assets
may not sihrk on realization, but that



there may be a sufficient reserve, or
margin, in case a forced sales should
occur and market price be larger than
purchase price. Attention should be
called to the fact that the merchant
whose methods are efficient, does not
need to place the sign "closed on ac-
count of taking inventory" over his
doors, on any business day of the
year. His inventory is perpetual and
may be checked at any time by an
estimated physical count. Perhaps
the teacher, likewise, should call at-
tention right here to the fact that
stock is the basis of business, and that
as careful attention should be paid to
an accurate record of stock as to an
accurate record of business. Stock
should be checked to the ounce or
the pound, as well as cash checked
to the last penny. Stock represents
so much money invested. The teacher
should at this point call attention to
this fact.

More capital needed to do business
today. .At the present time, as the
teacher might well state, it takes more
capital to enter most every business.
For instance, flour is selling today in
one of the towns on our Eastern Sea-
board, at $17.50 a barrel. The quota-
tion at the present time in a town
on our Western seaboard is $14.40.
Attention might be called to the "fact
that a merchant selling flour, in an
Eastern town today, would need $3.10
more for every barrel of flour he
bought to sell, than would the mer-
chant on the Western coast today.
This will illustrate the- importance of
keeping up with the prices, as well
as the importance of keeping an ac-
curate record of the inventory. This
will, at least in part, indicate the
charge the man on the Eastern sea-
board who uses flour, must pay for
transportation.

Introducing the journal. The stu-
dent having learned the use of the
cash book, purchase book and sales
book, and inventory, may now well
take up the journal and its uses. It
should be pointed out that the journal
is used for recording opening entries,
and entries that cannot be recorded in
other special books. (Notes receiv-
able and notes payable book may be
introduced, previous to this point, or
later, in the judgment of the teacher,
and in accordance with the character
of the transactions which the student
reports as having been given him by
the merchants whom he has inter-
viewed.) The student now is ready
to be introduced to his rules of jour-
nalizing. A review of what he has
already learned should be given now.
He will have learned from the three
Ijooks already studied, the following
rules:

1. Debit whatever comes into the
business.

3. Credit whatever goes out of the
business. Emphasis should now
be placed on the fact that these
are general rules, and that they
do not apply in all cases.

3. Credit persons when we get into
their debt.



^ .^^^fiJ/^i^U^^/iu^i^ ^



4. Debit persons when we get out
of their debt.

5. Debit persons when they get in-
to our debt.

6. Credit persons when we get out
of their debt.

Dhill may be had on the six rules
already learned, by having the student
now journalize every transaction in
the cash book, in the purchase book
and in the sales book. The student
may be asked whether these six rules
cover every transaction he can think
of. for every kind of an account.

Notes receivable and notes payable
books. Wlien the business is a credit
business, the teacher might call at-
tention to the fact that it is always
better for the merchant or business
man to have some evidence of his
payment of obligations and his debts,
and for his creditor to have some re-
cord of his debts. Legally such obli-
gations are shown by notes. Here
the teacher should illustrate by using
a blank note, teaching the student
who the parties to a note are, the
maker and the payee, etc. Careful
distinction should be made, and con-
siderable drill should be given the
student, so that he may be able to
distinguish between the parties to a
note. The various kinds of notes
might be explained in detail — a judg-
ment note, collateral note, plain note,
single name paper and endorsed note.
The teacher can readily get samples
of these notes at some bank. They
should be placed on cardboard, and
hung in the room so that a student,
when in doubt at any time, might
read the conditions printed on any
kind of note. It might l)e well also,
in connection with the cash transac-
tions, to show bank checks of various
banks, and probably a postal and ex-
press money order also. The teacher
can get money and express orders for
small sums and use such orders for
illustrative purposes. The way in
which capital is obtained by borrow-
ing at the bank might be explained.
the method of approaching the bank-
er, the kind of collateral that must be
placed in the banker's hands until the
loan is repaid, the difference between
a line of credit, which is the amount
the borrower is permitted to receive
without placing collateral in the bank-
er's hands, and a secured loan or a
collateral loan might be pointed out.
The student, likewise, should be
shown the importance of keeping an
accurate record of the date that each
note was given, of the signers or en-
dorsers on the note, the bank or place
at which it is payable, the length of
time it is to run, the interest it is
to bear, the proceeds of the note, the
record as to whether it was discount-
ed or not, the time it was discounted,
the proceeds, etc. All of these facts
regarding notes receivable and notes
payable, or notes given to the busi-
ness man and notes given l)y him,
should be pointed out.

The student should have frequent
drill. Perhaps the student should be
drilled carefully and repeatedly until
he is able to tell the difference he-



tween notes receivable and notes pay-
able. He should be made to draft his
own notes receivable and notes pay-
able books, attention being called to
the fact that perhaps the easiest meth-
od of constructing such books is to
have a separate column for each
month, and to record the date on
which a note becomes due, under the
column heading for that month. For
instance, with the 12 months of the
year, there would be 12 columns,
headed 1, 2, 3, i, 5, G, T, 8, 9,
10, 11, 12. A note due June 10, would
be recorded by placing in the column
headed 6, which is the column for the
sixth month, or June, the figure 10.
Attention likewise should be called
to the fact that there should be an
extra column at the extreme righthand
side of the notes receivable and notes
payable books for recording the
•■fate," as the banker calls it,— the pay-
ment or non-payment of the note —
and perhaps an additional column for
any remarks or notations that might
be needed in connection with it. At
this stage the teacher might teach a
rule for journalizing m connection
with notes receivable as follows:
"Debit the notes receivable account
when the note is received; credit the
account of the giver of the note. Debit
the amount received when a note is
discounted at the bank and credit the
notes receivable account." (Atten-
tion of the student should be called,
a little later, to the fact that when
notes receivable are discounted, they
still remain an obligation of the firm
discounting them, until they are paid
fty the maker. A reserve account,
notes receivable discounted, should be
set up, as should be explained in con-
nection with a later lesson on re-
serves. ) In connection with the
notes payable, the student should be
drilled on the following rule; "Debit
the account of the person to whom
the note of the business is given, and
credit the notes payable account.
When the note is paid, debit the
notes payable account and credit the
cash account."

Other special books. Sometimes it
is necessary, in order to carry out the
plans of the bookkeeping set studied,
to teach the student something about
the voucher record and he workings
of a voucher system. Here is the
point at which this instruction might
naturally enter. The student should
be taught what a voucher is and
vouchers of various types, which the
teacher can easily procure from busi-
ness firms using a voucher system,
might be shown the student. Atten-
tion should be called to the fact that
the voucher system fixes responsibil-
ity, so that no one person should have
all money passing through their
hands. The signatures called for on
the vouchers should be, in many in-
stances, those of the president of the
concern, the treasurer and perhaps
the secretary. At any rate, the usual
voucher calls for more than one sig-
nature. This system provides^ that
more than one person knows what
expenditures of the concern have been
authorized. Usually the bank is in-



structed not to cash the check, unless
the signatures of the officials called
for on the voucher are authentic and
signed to the voucher. The reverse
side of the voucher, in many in-
stances, contains an expense analysis,
giving the various expense accounts,
and recording the amount written on
the face of the voucher as charged
against one of the expense accounts,
printed on the back of the voucher.
Usually the invoice or bill is pinned to
the voucher, so that the whole record
may be seen at a glance.

Attention should be called, likewise,
to the fact, that with such a system,
it is possible to make out the voucher
as soon as the invoice is received and
checked. The voucher may then, af-
ter having been recorded in the
voucher record, be filed in a tickler
file, which will contain under every
date in the mouth, the vouchers that
should be sent out for payment on
that particular date. After the vouch-
er is returned stamped paid by the
bank it might be filed alphabetically,
rather than chronologically or by
number.

The voucher record. In connection
with every voucher system, there
should be a voucher record for re-
cording the vouchers made out, to-
gether with those vouchers that are
paid. The columns of the voucher
record should be explained to the
student — the vouchers receivable and
vouchers payable sheets usually hav-
ing the same number of columns, with
slight changes in the headings, in or-
der to suit the conditions, depending
upon whether the voucher is receiv-
able or payable. There should be
columns, likewise, for the distribution
of expense. The columns in the
voucher record should correspond
with the classifications of expense ac-
counts on the back of the voucher.
There should be columns, likewise,
for indicating the date when the
voucher is paid. The obligations of
the concern at any time, outside of
accruals, should be the difference be-
tween vouchers which have been paid
and vouchers which are yet to be
paid. The teacher should explain
that some businesses are particularly
suited to this system, especially gov-
ernment, state and municipal ac-
counting systems, which are usually
run on the voucher method.



Washington Business Gollege, Wash-
ington, D. C, 1321 G. Street North-
west, is the new commercial school
venture in the Capitol. The proprie-
tors are Poteet & Whitmore. The
latter is a very skillful penman and
will give to the pupils the highest
efficiency in handwriting instruction.
Doubtless the increased demand for
office workers in Washington will
more than justify the opening of this
school, and we therefore wish for
them the prosperity they deserve.
Mr. H. G. Wood, formerly with the
Wasatch Academy, Mt. Pleasant,
Utah, will have charge of the work in
Willcox, Ariz., Union High School
the coming year.



^ ^^i^^ud/n^sd^^fi^iu^i/i^




Planning a Civil

Service Course

J. F. SHERWOOD, B. A., Ft. Wayne, Ind.

Formerly in the Department of Commerce,
Washington. D. C.

Wanted — Stenographers, Typewriters,
Clerks, Etc. — Uncle Sam.

On July 13, 1917, John A. Mcllhen-
ny, President of the U. S. Civil Ser-
vice Co m m i s s i o n,
Washington, D. C, is-
s u e d the following
bulletin:

"The United States
Government needs,
and needs badly, great
numbers of stenog-
raphers and typewrit-
ers, both men and
women, for service in
the departments at Washington, D. C,
and the situation in Federal offices
outside of Washington is scarcely less
urgent. The suply of qualified per-
sons on the Commission's lists for
this class of work is not equal to the
demand, and the Commission urges.
AS A PATRIOTIC DUTY, that citi-
zens with this special knowledge ap-
ply for examination for the Govern-
ment service. At present all who pass
the examination for the Departmental
Service are certified for appointment.
Examination pipers are rated without
delay.

Examinations for the Departments
m Washin'4ton. I>. C, for both nifii
and women, are held every Tuesday
in 40'0 of the principal cities of the
United States. Examinations for the
Field Service (positions outside of
Washington. D. C.,) are held fre-
quently.

The usual entrance salary ranges
from $900 to $1,200 a year. Advance-
ment of capable employees is reason-
ably rapid.

Applicants must have reached their
eighteenth birthday on the date of the
examination.

The typewriting part of the exami-
nation has been changed by the omis-
sion of the copying and spacing test
and the addition of the subject of
spelling.

Students just starting a course of
study may be informed that there is
now practically no limit to the num-
l)er of stenographers and typewriters
the Government needs, and that while,
of course, no absolute assurances as
to the future can lie given, there is no
present prospect that the demand will
be materialy less at an earlv date; in
other words, THAT THE COMMIS-
SION BELIEVES THAT THE
STUDY OF STENOGRAPHY AND
TYPEWRITING BY A GREAT
NUMBER OF PERSONS WITH
THE VIEW OF ENTERING THE
GOVERNMENT SER\^ICE WILL
BE JUSTIFIED."

It is plainly evident that school offi-
cials can perform a patriotic duty by
urging upon their students the advisa-
bility of preparing for the Govern-
ment examinations.



A course of study should be care-
fully planned and students should be
thoroughly coached for the examina-
tion. The omission of the test in
copying and spacing and the substitu-
tion of the test in spelling should be
welcomed. The copying and spacing
test has been a difficult one, and a
large percent of those applicants who
fail in the examination, failed in this
subject.

Applicants will now be examined in
the following subjects:

1. Stenography.

2. Penmanship.

3. Report Writing.

4. Arithmetic.

5. Spelling.

li. Typewriting; Copying from
Rough Draft; Copying from Plain
Copy.

7. Time consumed on the typewrit-
ing subjects will also be rated.

If the applicant takes the combined
examination but passes in only the
stenography subjects, his name will
be entered upon the register of the
Commission as a stenographer, and
he will be eligible to an appointment
as a stenographer only. If he passes
in only the typewriting subjects but
fails in stenography he will be eligible
to an appointment as a typewriter. An
applicant who fails to secure a pass-
ing grade in either the stenographic
or typewriting subjects may, if he de-
sires, upon filing a new application, be
e;camined in those subjects in which
he failed, again, and if successful his
papers will be averaged for the com-
bined examination. In determining
the average, stenography will be given
a weight of two and typewriting a
weight of one.

Never before has there been such
opportunities to get on the pay-roll
of "UNCLE SAM." The salary is
higher than most business firms are
willing to pay beginners, and the op-
portunity for advancement is good.
Government stenographers and type-
writers work seven hours a day and
are given a :iO day vacation with full
pay each year. In case of sickness, 30
days additional leave may be granted
with pay. Considering these facts,
the appointments should prove unus-
ualy attractive to both young men
and women.

The Washin.gton Star recently
made the statement that 10,000 ap-
pointments would be made in the near
future. It has come to my attention
recently that young fnen who a few
months ago took the Railway Mail
Clerk examination for Income-Tax
Deputy Collectors, Agents and In-
spectors, have been asked by the
Commission if they would be willing
to accept appointment in the Depart-
ments at Washington, D. C, at a sal-
ary of $1200 per annum.

I believe that the private commer-
cial school and the commercial de-
partments of high schools should at-
tempt to supply this demand for ste-
nographers, typewriters, and clerks.



Classes can be organized in day and
evening schools, and a large number
of young men and women will most
certainly be interested in preparing
for these positions.

The Civil Service Commission has
said that they "will appreciate your
assistance in bringing this need of the
Government to the attention of pos-
sible applicants." We must all co-
operate during the present emergency
and the private and public commercial
school instructor can help by properly
training the young people who come
under their instruction, for efficient
service in the commercial field and in



Online LibraryAuguste LutaudThe Business Educator (Volume 23) → online text (page 5 of 93)