(1)

(2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) | (13) |(14)

Bank.

Balance to

next day.

Cash in Hand.

Total.

NOTES ON BOOKS OF ACCOUNT

1. Pledge Book.-This book is made obligatory by the Law of 1872. The legal form is also prescribed in the third schedule of that Act, as also regulations as to the time when entries therein have to be made. The form given in this article does not exactly follow the legal form, but as it embodies all its characteristics, and is found more convenient in practice, the form of book in use and not the model prescribed in the schedule is given. This book is generally kept in two portions: one for recording what are known in the trade as "Low" pledges, .e. under 10s., and the other for recording all pledges above 10s., called in the trade "Auctions." In other cases a third section is set apart for recording all "special contracts," i.e. pledges over £2, for the loan on which the pawnbroker is entitled by law, should he think well, to make special terms with the pledger.

The method of entry of this book or books is as follows: On agreement having been come to between the pawnbroker and the pledger as to the amount to be advanced on the tendered goods, the pawnbroker issues a ticket to the pledger printed in statutory form and in duplicate. One portion, showing the number of the pledge in bold figures, he attaches to the parcel, and the other portion is handed over to the pledger as evidence of the transaction. On the same day the pawnbroker enters the same up in his Pledge Book under the same number as that of the ticket. These numbers follow each other in proper sequence. The pledge is then stored away until it is redeemed or until such time as it expires by effluxion of time. The legally prescribed time for the termination of loan is in ordinary cases twelve months, with seven days of grace. In the case of special contracts, however, they may be made terminable at any date not less than three months from the date of pawning.

On the pledge being redeemed by the pawner, the pawn-ticket is given up to the pawnbroker and the amount of loan plus interest tendered. The rate of interest is according to the rate prescribed by the Act of 1872. At the close of the day these tickets are entered up in the Redemptions Book,

the stock of pledges having been reduced by this amount, and the broker's cash in till being increased by a like amount.

It will be noted that in the form of Pledge Book prescribed by the Act provision is made for recording the date of redemption of each pledge. The total "Redemptions" is usually obtained, however, not from the Pledge Book but by counting the tickets into £5 batches as a banker would coin. This plan of action, however, does not furnish any continuous record, hence the suggestion made for—

2. Redemptions Book. It is not necessary to discuss this book at length. It will be noted that not only the total "Redemptions" is arrived at from this book but also the separate total of "Interest charged," both items being required for the Daily Balance Book.

Ticket-money is the amount charged by the pawnbroker for the tickets issued. It is a source of revenue which is governed strictly by the Act of 1872. The total is arrived at by taking the number of pledges entered in the pledge books on any specific day, and adding the same up, reckoning for each the charge the law allows. Such amount has already been paid

into the till.

3. Auction Sales Book.-When pledges are forfeited by lapse of time they are disposed of in two ways. The "accountable or "auction" pledges can only be realised by the pawnbroker through the agency of the auctioneer. The law compels this course, so that any surplus produced on their sale over and above the amount lent plus interest can be claimed by the pledger within a specified time. To follow each such realisation the "Auction Sales Book" is devised, the pledger having the right of access to the same under certain conditions. It will be observed from the specimen ruling how this object is facilitated. At the same time this book fulfils a useful purpose in the scheme of accounts by enabling the pawnbroker to easily arrive at the totals of amounts lent on forfeited pledges (over 10s.), and the amount of cash received on sale of the same, together with the total profit or loss on the realisation. These, it will be noted, are all required for the Daily Balance Book, though it will be found in practice that the totals are posted not daily but monthly.

4. Unredeemed Pledge Book.-This book fulfils the purpose of recording all forfeited pledges under 10s. in value. The manner of dealing with these is usually as follows:-Each month the pawnbroker takes from his stock all the pledges that have "run out," that is to say, been forfeited through lapse of time. These now become his own property, and his first duty is to go through them and "re-mark" them, after which he passes them into his sale stock. On some of these forfeited goods he is able to make a profit, not having lent up to the full value. On others he loses. It will be seen from the ruling given of this book that columns are provided to enable the pawnbroker to tabulate the above information so as to facilitate its being posted in total to the Daily Balance Book.

5. Petty Cash Book.-This book records shop expenses, and is generally kept on the counter. The total is posted daily to the Balance Book, in which a column is provided for the purpose. The analysis of such expenditure is given as being fairly representative of an ordinary business.

6. The Purchase Book.-As to the purchases made by pawnbrokers in connection with their sale trade, a custom long observed in England in this trade was to regard as purchases and expenses in the books of account only those items actually paid for. This, it was thought, simplified the system by avoiding many credit entries, such being noted simply in a Memorandum Book. This practice is a most reprehensible one, so we provide in the list

of books for all credit purchases. It will be observed that the cash and credit purchases are entered in separate columns in the Purchase Book. This is necessary for the purpose of balancing at any date, as only the credit purchases are posted to the Purchase Ledger. Both, however, in daily totals are carried to the Daily Balance Book.

7. Cash Takings Book.-This book is generally kept on the shop's counter, and contains a record of all takings whether for goods sold for cash or moneys received in satisfaction or on account of outstanding accounts in the Debtors' Ledger. The column for "Laid-by No." is merely for noting the number of the parcel of goods (as per the "Instalment Book") towards which a sum or instalment has been received. It will be noted that there is provided a column for "cost" and another for the "profit" on cash sales. This is necessary for stock-balancing purposes, and is not a difficult matter to carry out, as both sets of prices are usually marked on each article.

8. Credit Sales Day Book.-Some pawnbrokers do no credit sale trade, in which case this book would be unnecessary. Here again it will be noticed that both cost and credit prices need to be given. The gross amount goes to the Debtors' Ledger, whilst the three totals are required each day for the Daily Balance Book.

9. Deposits Forfeited Book.-To explain the utility of this book it is necessary to remark on the system of selling goods on the "instalment" system customary in this trade. The terms are usually "weekly payments," or at any rate regular periodical payments. When the transaction is arranged the pawnbroker packs up the articles it is proposed to purchase on the instalment plan and puts them on one side. He then opens an account in a book called "Laid-by" or "Instalment" book, such book having a special number for each transaction, and providing either a number of columns or a section of space for the subsequent entry of further instalments. The parcel placed on one side bears the same number as the entry in the Instalment Book. To enter these transactions up in a way that does not interfere with the pawnbroker's daily balancing books is not a little puzzling to the outsider. Perhaps the most popular plan observed is the following. The whole amount involved as a sale is not entered in one amount, but each instalment only as it is received. This goes into the Customers' Instalment Book, which for the present takes the place of the Customers' Ledger Account. The cash received goes through the Cash Takings Book as a cash sale, the Laid-by No. being given and no profit being entered, the cost column containing the same figures as the sale column. When, however, the instalments received cover the cost of the articles purchased the remaining instalments are considered as profit, and are entered as such in the cash takings column, and in the column set apart for profit. If, however, the instalments become forfeited, as is often the case, the instalments received are charged again as goods bought, and on the other hand go to the profit column. This is a curious system, but found to be as workable as any under the circumstances. The Deposits Forfeited Book is for registering these forfeits, the total of which is taken periodically to the Daily Balance Book.

10. Principal's Cash Book.-For this purpose a book is required to register all payments to the till or drawings from the business by the principal as well as the bank transactions. An ordinary Cash Book with the usual three columns is found useful, the chief payments being made up of the following items: credit purchases, payments to till, payments to bank. The receipts are chiefly drawings from till and bank. Of these entries bank transactions and private drawings and payments to till all go