Book Keeping, the method of exhibiting in a clear and concise manner the state of a man's pecuniary affairs. The system of bookkeeping in general use among men of business, called the " Italian method," from the country of its invention, and "double entry," from the construction of its ledger, is of great antiquity. The first treatise on the subject was written by Luca Pacioli, better known as Luca di Borgo (Venice, 1495). The first German treatise on bookkeeping was written by Johann Gottlieb (Nuremberg, 1531). In 1543 Hugh Oldcastle produced at London "A profitable Treatyce to learn to knowe the good order of the kepying of the famouse reconynge, called in Latin, Dare et habere, and in Englyshe, Debitour and Credi-tour." In 1602 a work in French on double entry appeared at Ley den, followed in 1652 by Collins's "Introduction to Merchants' Accounts." Mair's "Bookkeeping Modernized," the most elaborate exposition of the old Italian school published, appeared the following century, and passed through many editions.

In 1789 Benjamin Booth modified the system, introduced many valuable improvements, and gave to the world the first and best work extant on the modern practice of monthly journalizing, under the title of "A Complete System of Bookkeeping," an improved mode of double entry, comprising a regular series of transactions, as they have occurred in actual business. - The 'following are the fundamental principles upon which the science of double entry is based: The essentials of this art consist in the classification and arrangement of data in a book called the ledger. Each collection of data is called an account. An account, whether of persons or things, is a statement of all the transactions whereby the property of the concern has been affected by the person or thing in question. The accounts are designated by distinct titles, and articles of opposite kinds are placed in opposite columns. The space which an account occupies in the ledger being vertically divided, the left-hand side is denominated debtor and the right-hand side creditor. These terms, when applied to the personal accounts, are used in their ordinary sense; but when applied to an impersonal account, they have a more extended signification.

All debit items are not sums owing to the concern, nor are all credit items sums owing by the concern; in short, the terms Dr. and Cr. serve merely to distinguish the left from the right-hand side of an account, and the arithmetical signs plus and minus would equally answer this purpose. The nature and object of the principal accounts in a merchant's ledger are briefly as follows: 1. The receipts and payments of money are recorded under the title of cash. All receipts are entered in the left or debtor money column, and all payments in the right-hand or creditor money column. The difference between the two sides, technically called the balance, represents the cash in hand. 2. Written securities, such as drafts, notes, or acceptances, received by the merchant, and for the payment of which other parties are responsible, are recorded under the title of bills receivable, and those issued or accepted by the merchant, for the payment of which he is responsible, are recorded under the title of bills payable; the former account invariably represents assets, and the latter liabilities, in the shape of bills. 3. An account must be opened for each person or firm with whom the merchant has dealings on trust under their respective names, or the name of the firm with which they are connected.

The design of a personal account is to show what is owing to or by the person in question. The terms debtor and creditor are here used in their ordinary sense; since each person is made debtor for what he owes, and creditor for what is owing to him. 4. Purchases and sales are recorded under the name of the specific property bought or sold; the cost or outlay being entered on the debtor side, and the sales or returns, as well as the value unsold, at the time the accounts are adjusted, on the credit side. The result is gain or loss as the case may be. 5. The capital invested in business, in the outset, is recorded under the title of stock, or capital stock, and the gains and losses under the double title of profit and loss. Commission, charges, interest, and the like are merely subdivisions of the profit and loss, and the latter is simply a branch of the stock account. The stock account exhibits the capital collectively, that is, in one mass; the other accounts exhibit its component parts. The fundamental law of double entry is this: everv transaction which affects or modifies the capital, or its component parts, must be twice entered; that is, to the debit of one or more accounts, and vice versa.

When the accounts are completed, there remains the last process, which consists in balancing the books; that is, in closing and equilibrating the several accounts, and in collecting the results, so as to exhibit in a concise form the gains and losses, the assets and debts, and the present capital. This is generally done at stated intervals on a balance sheet which contains every account of the ledger. Every transaction in business being virtually a transfer between two accounts, it must be entered to the debit of the one and to the credit of the other; these two balancing entries are made in the ledger, and comprise all that is scientific in the system of double entry. The entries in the primary books are merely preparatory arrangements, totally unconnected with the principle and proof of accounts. The most indispensable preliminary in the process of bookkeeping is the registration of all the data of which the accounts are composed in chronological order, and in language as clear and concise as possible.

The subsidiary books in general use are: The cash book, which contains a daily record of the receipts and payments of money; the bill book, which contains a daily record of the bills, notes, or acceptances received and issued; the invoice book, which contains the particulars of goods purchased, and is simply a transcript of the invoices or bills of parcels; the sales book, which contains the particulars of goods sold on credit, or shipped abroad on consignment; the day book, which is used to record such transactions as do not properly belong to either of the other subsidiary books. The journal is a record of the transactions compiled from the subsidiary books, daily, weekly, or monthly, as may be expedient. The rules for distinguishing the accounts which are to be debited and credited are inferred from the arrangement of the ledger. The thing received, or the person accountable to you, is debtor; the thing delivered, or the person to whom you are accountable, is creditor; thus: 1. The person to whom anything is delivered is debtor to the thing delivered when nothing is received in return.

Therefore, when money is paid, the receiver is debtor to cash; when goods are sold upon credit, the purchaser is debtor to goods. 2. The thing received is debtor to the person from whom it is received when nothing is delivered in return. Therefore, when money is received, cash is debtor to the payer; when goods are bought on credit, goods are debtor to the seller. 3. The thing received is debtor to the thing given for it. Therefore, goods bought for ready money are debtor to cash; when goods are sold for ready money, cash is debtor to goods. 4. When one person delivers anything to another on your account, the person who receives the value is debtor, and the person who gives it creditor.