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of books.

do not think it necessary to follow the precedent of writers on commercial book-keeping by tracing the entries of an imaginary firm through a series of model Specimen

books. We do not hesitate, however, to give rulings.

specimen rulings of the books and forms suggested in these pages for adoption, and for facility of reference these specimens are numbered consecutively, Exterior of

as indeed should be the case in actual pracbooks and

tice. In this connection it may be well to distinguishing features. premise that some regard, should be had to the exterior of the books, an advantage being derivable from the books of each department or of each class being distinguishable by their bindings; similarly, papers of

different colours should be used for the various General applicability forms suggested. As in the majority of busi

nesses the articles dealt in are reckoned in weight we think it well to show the specimen rulings with weight columns. The principles enunciated are, however, equally applicable to the liquid and mixing trades, such as those of brewers, distillers, manufacturing chemists and others, as well as to paper and other industries in which there is a continuous production of one kind of commodity. As it is not possible to show the specimen rulings of books applicable to every trade we show only those of one class. The relation of

the various books to each other will be found Diagrams.

further elucidated by the diagrams at the conclusions of Chapters II. to V., showing the manner in which the books and forms assimilate to each other and converge into the Commercial Ledger.

Whilst not presuming to suggest that the forms and books of which specimen rulings are given apply universally and are incapable of modification either by


subdivision or concentration, it is believed that the principles underlying them are of general application and that the rulings will serve as useful examples.

In the next chapter we deal with the subject of Labour, defining the requisites of a proper wages system; and explaining, in as much detail as is needful, the purpose Outune of

of the books and the nature of the routine

which in our opinion should be adopted by manufacturers. It will then be necessary to explain the forms it is desirable to observe in connection with the purchase and consumption of materials for the purpose of manufacture, or the maintenance of plant and buildings. The question of Stores and the manner of dealing with the invoices for goods purchased will next demand our attention. In this connection we shall have occasion to explain the uses of the Stores Ledger and its relation to the subsidiary stores books and to the Commercial Ledger. Having considered the book-keeping and routine relating to the two chief classes of expenditure for the purpose of production of commodities, i.e. labour and material, we shall be in a position to consider the important books in which this expenditure is concentrated, analysed, and properly apportioned to the resultant objects. The books by means of which this is accomplished are the Prime Cost Books. Their object is to enable a manufacturer to ascertain the cost to him of any given operation, and thus afford him one of the principal factors in the conduct of his business. There Definition of are many systems of Prime Cost in vogue, but prime cost.

the writers who in dealing with book-keeping generally have touched upon the subject are not agreed upon the definition of the term Prime Cost. In some instances the confusion of ideas and language has been

between stores and stock.

carried so far as to render it necessary to speak of net and gross prime cost. Throughout these pages we take Prime Cost to mean, as shown in the Glossary, and as in fact the words imply, only the original or direct cost of an article. Cost of production, on the other hand, we define to be the total expenditure incurred in the production of a commodity.

The sale or distribution of manufactured commodities will next be dealt with, and at this point we think it Distinction well to draw a clear distinction between

materials for manufacture and articles in the

manufactured state. Until materials are converted into manufactured articles we speak of them as stores, but when so converted they are termed stock; and the book-keeping we recommend is based on this view. The accounts in the Prime Cost Ledger are debited with wages and materials spent in manufacture, and are credited with the stock produced. The importance of this distinction between stores and stock will be evident when the subject is dealt with in detail. The fifth chapter treats of the Stock Books, which, though in some respects analogous in their functions to the Stores Books, are as distinct from them as is consistent with the principle of a system by which all the books of the establishment are required to merge into the Commercial Ledger.

This practically completes the outline of what constitutes the absolutely essential books in a system of Factory Accounts. But there are many other matters which have too important a bearing upon the subject of this work to admit of being passed over in a treatise upon factory book-keeping. Such are the questions of depreciation of buildings, plant, tools, stores and stock,

and of surveys or inventories. These matters are dealt
with in subsequent chapters. In our cursory considera-
tion of the former of these questions we refer to various
methods of determining a rate of depreciation. As re-
gards the question of surveys or stock-taking we do not
presume, in view of the varying requirements of different
trades, to do more than to offer some more or less
obvious suggestions which have a general application.

The Appendices contain a reprint of a paper on the
advantages derivable from the use of symbolic nomen-
clature for parts of machines, a summary of the Factory
and Workshop Acts, some notes on the law of rating of
factories containing machinery, and also some notes on
the law of Fire Insurance and on the Income Tax Acts
and other matters having reference to the subject of this



A wages

zation of a


mises error.

THE initial step in the organization of a factory must perforce be the adoption of a system by which each per

son employed at a rate of pay on a time scale system the shall receive payment for the exact time eminitiative in ployed. Such a system should necessarily be the organi

one in which the workpeople have confidence, factory.

and in which they themselves co-operate. In the present chapter we show how each employé's record of his or her own time may, through the instru

mentality of the leading hand in the shop Proper

and of the time clerk, be compared, checked, system mini- and if need arise, corrected by the record Summary kept by the timekeeper. By these means the of chapter.

possibility of an error either by over or under payment is reduced to a minimum, whilst fraud necessitates for its successful perpetration the complicity of the employé, the timekeeper, the leading hand of the shop in which such employé works, the time clerk, and of the clerk in the counting-house who makes up the Wages Book, and also of the cashier who pays the wages. Such collusion is almost, if not altogether, impossible.

Further, we show that, by means of a weekly return, it is impossible for any one connected with either the counting-house or the factory to enter in the books

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