This section is from the "Practical Banking" book, by Albert S. Bolles.
Form 4, or what is commonly known as the Boston method, possesses some advantages which have influenced its adoption in many places. It is intended to serve as a day-book and ledger combined. The asset balances are entered in red, and the liability balances in black ink. In our illustration we give a page, or portion of a page, showing the closing entries for two days. It will be seen that the depositors' accounts run horizontally across the page (two accounts occupying a compartment). First comes the balance brought forward from the page where the name previously appeared. Then there are two narrow columns under the heading "Checks in detail." The first of these columns belongs to the second account in the compartment, and the second column to first account in the compartment. The next two columns are for the totals of checks and deposits. The sixth column is a space for explanations upon the deposits or other credits. The seventh column contains the balance at the close of the day. Following this, still to the right, the same is repeated under another day. A page nineteen inches in width will give space for three days' transactions. Running across both pages of the book, six days' business is recorded before the name is rewritten. The object of dividing the page into compartments with horizontal lines, and placing only two accounts in one compartment, is to aid the eye in its sighting across the page from the side where the name is written.
In footing the balance columns the overdrafts are deducted, making the footing show, not the total liability of the bank for deposits, but the "net total deposits." This is one of the objections to be urged against the system. The overdrafts of depositors are assets. They may be serviceable in paying depositors, and they may not; they are certainly not as reliable as money in the vault. And, besides, a statement of a bank for the benefit of stockholders ought to show the total deposits and the aggregate of overdrafts as two separate items.
After footing the balance and total columns of the depositors' accounts for the day, a general statement may be written up by adding capital stock and other general accounts, if not too numerous. The column entitled "Total checks" may, in entering the impersonal or general accounts, be used for all cash disbursed. The "Total deposits" column may contain all cash receipts; in this way the balance book will serve to take the place of a general ledger.
One advantage of this method which recommends it is the easier locating of errors. Each page is susceptible of proof in itself, and thus an error may easily be pinned down to a small number of entries.