When an account is closed, the final cheque withdrawing the balance should be pasted in the Ledger itself, as a record and receipt. Before the amount standing to credit of a person deceased is thus withdrawn, the Probate or the Letters of Administration must be exhibited, and a note should be written and signed in the Ledger at the time; the cheque of the executors or administrators being appended as above described.

It is, or was, the practice in some banks to retain customers' cheques until the time of the annual balance, and then only to return them when a receipt for them was signed. The object of this is to prevent question about amounts debited to the account, such as might sometimes arise in case of lost or stolen cheques, or of any fraud; but it is not generally regarded as necessary.

It is exceedingly desirable that anything unusual in the conditions on which a current account is kept should be distinctly recorded, in such a manner that it may not escape the notice of the clerk having charge of the ledger. If there is a "minimum balance" to be maintained; if there are procurations empowering parties other than the principals named at the head of the account to sign, and if these procurations are in any way limited, as, for example, confined to signing cheques" without power to accept bills"; if any commission is to be charged, or any agreed rate of interest to be allowed; if any periodical statement of the account is required;-then these and other similar particulars should appear at the head of the account or be in some form entered in the ledger, and the clerk keeping it should be responsible for the due observance of them.

2.-The Credit or Cash Account Ledger.-The same rules and practice of book-keeping as have now been explained in respect to the Current Account Ledger, are likewise applicable, after precisely the same methods, to the case of "Credit " or " Cash" Accounts; which differ from the ordinary current accounts in being debtor, and not creditor accounts to the bank. A banker who opens a credit account for one of his customers, permits him, without his depositing funds, to draw on the account to an extent agreed upon; personal bonds, or other security being given such as to the banker appear sufficient. The dissimilarities between a Cash Account of this kind, and an ordinary drawing account, are, of course, very important to the banker, but they in no way affect the keeping of the books. Such accounts might, indeed, be kept in the Current Account Ledger, though this course is not usual, and might be inconvenient.

3.-The Customer's Pass Book.-Every customer who opens a current account with a bank is furnished with a Pass Book, in which are entered all sums paid in to his account, or drawn from it. The Pass Book is a copy of the Ledger, and sometimes is made an exact copy, with the cheques and credit-slips entered on the same sides as in the Ledger; but more frequently the two sides of the account are reversed. In this case, as the heading in the bank's Ledger is

"James Smith and Co., in account current with the .. Banking Company," the heading in the Pass Book, which is supposed to be the customer's book, is "The ... Banking Company in

account current with James Smith and Co.," so that everything that is debtor in the Ledger becomes creditor in the Pass Book, and vice versa. Sums paid in appear, therefore, on the left hand, or debit side of the customer's Pass Book, and sums drawn out, upon the credit side.

In making the entries in the Pass Book, it has been customary for some banks to have the one side, containing sums paid in to credit of the customer, written up by the bank's clerks, and to allow the customer to enter on the other side the sums drawn. This method, designed to save trouble, is more likely to cause it; as, for example, in the case of cheques drawn by a customer, but not presented for a lengthened period, during which, if they stand in the Pass Book, the latter cannot be agreed with the ledger, and the one cannot, at any rate so readily, be used as a check upon the other. This may prove troublesome at the time of the general balance. The best plan is to have the Pass Book written up by the banker's clerks, from the credit-slips and cheques, and quite independently of the Ledger keeper, who should only examine, compare, and initial it before handing it to the customer. Credit-slips and cheques, after being posted in the Ledger, should be kept where they may be at once accessible when required for reference or for writing up the Pass Book; and a good arrangement is, to have every account in the Ledger represented by a card, with the name of the customer written conspicuously upon it, these cards being placed in alphabetical order in a drawer designed for the purpose, and the cheques and creditslips put with them day by day as they come in.

4.-The Check Ledger.-This is a book in simple form, containing nothing but date at the top, and money columns debtor and creditor. The ledger-keeper lists in it merely the amounts of credit-slips and cheques, before posting them to the accounts; and the totals in it should be agreed with the totals of the Received-Waste-Book and Paid-Waste-Book, or corresponding books. It is necessary that each Current Account Ledger should have such a check ledger appropriated to it; and the totals of all must be summed together to agree with the Waste-Books. Such a plan obviously forms a good and an easily-applied test of the accuracy of the Current Account Ledgers.

DEPOSIT ACCOUNTS.

The Deposit Receipt Book.-Between a current account of moneys deposited, intended to be drawn upon by cheque, and a deposit account, where the money is to remain for some time untouched, important distinctions are drawn. In many cases no interest whatever is allowed upon drawing accounts, and even where it is given, the rate is always lower, and frequently much lower, than purely

deposit funds command. These different classes of accounts, therefore, are invariably kept apart, and generally in separate books. The ordinary plan has been to issue to the customer lodging money on deposit, a Deposit Receipt for the amount. The form of such a Receipt is as follows:

The form used by different banks varies, but only in non-essential particulars.

When this document is subsequently presented to the bank for payment, either the whole amount or part only may be demanded. In either case the interest should be calculated to the date of payment, and the receipt cancelled. Where only a part is withdrawn, a new Receipt is to be given for the remainder. By some banks the Receipt is only cancelled on payment of the whole amount, partwithdrawals being merely marked on the back of the document. The less intricate method, and certainly from the book-keeper's point of view the more satisfactory, is to issue invariably a new Receipt; as then the list in the Deposit Receipt Book is alike throughout, instead of being one of sums untouched, and others partly withdrawn. The Deposit Receipt Book should be ruled with columns for

The filling in of the last three columns distinguishes the paid from the outstanding accounts. A perfect check upon the correctness of the book is obtained by making out a complete list of amounts not marked paid, and comparing the total with the balance of Deposit Receipts in the General Ledger, with which it should agree.

In some establishments the Deposit Receipt Book has been superseded by a Deposit Account Ledger, closely resembling in its arrangement that for Current Accounts; and all the transactions of this kind the bank has with each individual customer are entered together on one page, headed by his name. The advantages of such a plan are obvious, and will be most felt where the largest amount of this kind of business has to be done.

CHAPTER IV.

BILL BOOKS.

We now turn to that important section of the system of books which has to do with the proper recording of all transactions relating to bills. The bills in the possession of a bank are of two distinct classes, Bills Discounted and Bills Deposited; the first, those which belong to the bank by purchase, and the second, those which belong to the customers but are confided to the bank for safe custody and for collection. The first have been discounted as an investment, the second will merely be collected and accounted for to the customers who have deposited them. The operations connected with both classes of bills, and the books required to keep an orderly statement of them, will form the subject of this chapter.

We begin with the Bills Deposited, or Bills for Collection, because the operations upon them are of a less intricate character than those upon bills discounted. When bills are left with the bank for collection they must first of all be entered in the Bills for Collection Book. At the close of each day a total is made of these bills and carried to credit of "Bills Deposited Account" (or "Bills for Collection Account") in the Ledger. They form part of the liabilities of the banker, but to precisely the same extent they also form part of his assets, and the entry of them, therefore, does not affect the balance. When they fall due they are debited to the "Bills for Collection Account and credited to the customer. In order that they may not be overlooked but duly credited at maturity, they are entered in another book called the Bills Diary, or Journal, or Daily List, each bill under the date upon which it matures.

Further operations become necessary if the bill deposited for collection is payable not in the bank's own neighbourhood but in some distant place. In that case the bill will be taken charge of by

the corresponding clerk and forwarded to the bank's agent in the place where the bill has been made payable, the bill being first endorsed to order of the bank's agent there. It must first be credited, however, as above shown, to the Bills for Collection Account, and debited to the account in the ledger for Bills Remitted, and on the date when due the reverse operation of crediting Bills Remitted and debiting Bills for Collection takes place, thus clearing those two accounts of the transaction. But at maturity a bill is supposed to become cash, and, as such, a deposited bill remitted will, when due according to the entry in the Bills Diary, be debited to the agent or correspondent to whom it has been sent, and credited to the account of the customer to whom it belongs. This is the end of the transaction, if the bill is paid, but it is needful to withhold actual encashment of the proceeds until such time elapse as would suffice to receive notice of its dishonour from the place where it is payable. Should the bill be returned unpaid the customer's account is debited with its amount and charges, and the account of the agent from whom it is thus received is credited.

Many of the above operations, of course, apply equally to Bills Discounted. In some banks, when bills are presented for discount, they are first entered with full particulars in a book called the Bill Register, that contains columns for day's date, endorser, drawer, acceptor and his address, date of bill, currency, amount, and daily total. The managers, or the directors' committee, who decide for or against their discount, have this book, with the bills themselves and the Discount Ledger, submitted to them,-every essential particular relative to the bills being thus brought at once under their view. Substantially this should always be done, though it may not always be done so formally. The managers or committee should be aware of the present total of the Bills Discounted Account, and the amount for which each customer is under obligations to the bank, either as discounter, or as acceptor or party to any bill which the bank holds under discount. By this means they are enabled to judge of the desirability of any further business proposed.

When a bill is passed for discount, the clerk who takes charge of it, will examine it first to ascertain whether it is in due form and drawn upon a stamp of the value legally required. He will then write the date of maturity very distinctly at the top of the bill, and proceed to calculate the amount of interest which is to be deducted, adding thereto the amount of commission, if commission be charged. The marking of the date of maturity, and the interest calculation, should be carefully checked by a second clerk. It has been not an unusual practice for some banks to hand over, when so desired, the amount of a bill discounted to the customer in cash, deducting the interest and taking a receipt from him on the back of the discountslip. It seems the more satisfactory method, from the book-keeping point of view, to enter the full amount of the bill to credit of the