divided when desirable, as are contained in the estimate, the Cash columns being left open for the transfers from the "B" Sheets. If the instalments, as earned, are placed on the credit side of the account, the balance of profit or loss on the total contract can be ascertained; and the total balances of the "C" Sheets, with adjustments for work in progress, will agree with the balance of Profit and Loss Account. The following example will explain the form : The "C" Sheet is a summary of the entire contract-the Ledger Cost Account of the contract, as it were-and will be found valuable both for comparison with the original tender, and for approximate information in preparing new estimates. In addition to the books and papers mentioned on page 299 vol. ii. of this Encyclopædia, under the heading of Cost Records, the following, by the author of the foregoing article, may be consulted :: Engineers' and Shipbuilders' Accounts, Gee and Co. (The Accountant's Library), London, 1902; Engineering Valuations," articles in Engineering, London, from 5th July 1901 to 29th November 1901. FRANCIS G. BURTON. Short Bills.-Bills which have less than ten days to run are named by bankers "short bills." Very often bills are paid into a bank for collection just before they become due, and it is a general custom of bankers to" enter them short," that is, not to credit the customer until the bills are paid. The term "short bills" is also applied to demand and sight bills. Single Account System. See COMPANY, vol. ii. p. 161; PROFIT, vol. v. p. 364. Solicitors' Book-keeping.-Solicitors' Book-keeping may be divided into two parts-one having reference to cash and the other to bills of costs; the books relating to the former may be termed "Books of Account," and those relating to the latter "Books of Record." An ordinary business can be conducted with only four books, namely, three for the cash transactions and one for the bills of costs; other books may be, and are often employed in larger businesses, but it must be borne in mind that the additional books are subsidiary to those above alluded to. The books required for the cash accounts are, Cash Book, Journal, Ledger, and for the costs a Draft Costs Book, either perforated or unperforated; or if the system known as "Kain's" is preferred, then the books required are: Cash Journal, Ledger, and Draft Costs Book. The subsidiary books which ought to be used in either of these systems are: Principal's Day Book, Clerks' Day Book, Expenses Book for Out of Pocket on behalf of Clients, and Office Expenses, Mortgage Register, Costs Index, and Private Ledger. The Cash Book.-This book is used solely for cash, and has two columns on each side for cash and bank transactions. The writing up of this book is usually done from the Cheque Book, Paying-in Slips, and a rough receipt and payment book, and everything must be posted to the Clients' Ledger or Private Ledger. All cash received should be paid to the bank where it is possible to do so. The Journal is used for recording costs sent out, all transfers including transfers of mortgages, allowances, bad debts, etc.; and for the opening and closing entries of each period, every item must be posted to the proper account in the Ledger. In very few instances is this much abused book kept strictly, the entries which ought to appear therein being passed through the Ledger only. By "Kain's System" the Journal is done away with by being merged into the Cash Book. The General Ledger is the ordinary Commercial Ledger, with plenty of space for narrative. Draft Costs Book. This book should certainly be kept by solicitors, one with perforated leaves being generally preferred. One client's business only is entered on a page and indexed; when this page is filled, that particular bill is continued on the next blank page and noted in the index; then when any particular bill is required it is only necessary to turn to the index, tear out the pages there shown relating to the matter, fasten them together and the draft is ready for settling. When a bill is settled and sent out to a client it is desirable to keep a press copy in a book specially kept for the purpose, but the draft itself should be the basis of the original entry in the books. For this purpose every draft when completed should be marked with a consecutive number and a special index kept. The inclusion of all the outlay in the bills is a very important matter, but no difficulty need be feared in this respect if the books are not allowed to get into arrear. By "Kain's System" the Cash Journal referred to is, as its name implies, a combination of a Cash Book and a Journal (taking the latter word in its technical sense as an indicator of double entries). The object of entering transactions both for credit and cash in the same book is that the practitioner may ascertain the results of his giving and taking of credit, as well as his receipts and payments. Only the outer columns are posted into the Ledger, the totals of the other sets of columns being dealt with at the audit and carried to the respective accounts in the Private Ledger. With reference to the subsidiary books mentioned: The Clerks' Day Book, including Call Book, is for the clerks to insert consecutively and fully every transaction relating to the business, however trivial, that arises or is done or observed by each, viz. :-Their own names and times of arrival at the office to be entered by each clerk and indeed principals. The names of all callers, with the time of their calling if possible, and the result thereof as far as known to the clerk. All drawing, copying, or engrossing done in the office, with the number of folios or sheets, costs of stamps, etc. Attendances, journeys, etc., by the clerks, with a memo. of expenses, if any. This book so kept will be found of valuable assistance to the principal or managing clerk in making up costs, and in case the Principal's Day Book be neglected, a bill of costs can at any time be made out with facility and accuracy by the aid of the information contained in the Clerks' Day Book. The Principal's Day Book is used by the principal to note the business he has been engaged in during the day. The usual plan, however, is for the principal to enter the particulars in his diary and for a clerk the next morning to copy same into the Principal's Day Book, which book is then handed to the costs clerk. Expenses Book (which includes the Petty Cash Book).—The use of this subsidiary book is indicated by its name. Its object is to relieve the Cash Book of the multifarious small expenses, to divide the payments chargeable to clients from the payments chargeable to the office, etc., etc. It is desirable that it should be kept by a clerk in such a form as to show readily what part of the expenditure is chargeable specifically to clients (through their bills of costs), and what part is office expenditure, such as salaries, stationery, etc.; thus enabling the practitioner to have a constant eye upon the expenses of carrying on his profession under these heads. Due distinction must be made between payments properly chargeable through the costs, and such as should be charged in the cash accounts (as to which see 18 L.J. 374, Ch. re Remnant, 11 Beavan 603). There is no need to keep a Disbursements Ledger, as the Expenses Book dispenses with this. The shortest way of making sure that clients' disbursements are charged to clients for whom they are incurred is for the bill clerk every few days to take the Expenses Book and enter the payments from there to the separate bills (as already explained) in the Draft Cost Book; counsel's fees, copying by law stationer, and such other charges would be entered as they are rendered or ascertained. Mortgage Register.-In this book should appear the names and addresses of mortgagor and mortgagee, date when mortgage completed, on what property secured, amount of principal, amount of interest, rate of interest, when payable (divided into months), and remarks. Costs Index. Where the business is large and the bills of costs are numerous, it is advisable to have one index only for all the costs, whatever the number, so that a bill may be found after any lapse of time with little trouble. The book should show :-date of delivery; names of clients (alphabetically); title of business; page where the bill may be found in a Draft Bills of Costs Book, or in the Press Copy Bill Book; page where the amount is brought to account in the Journal or Cash Journal; amount of the bill; date when received; Cash Book or Cash Journal folio as to receipt and amount received. This book being subsidiary, its adoption is entirely a matter of advisability. After a lapse of time, however, when information is desired as to any particular business, and the Bills of Costs Books become numerous, it will be found that such information may be obtained with great facility and accuracy on reference to a Costs Index. Private Ledger.-This book is a subdivision of the Ledger, and is intended for the purpose of entering such results as the principal may desire to keep under his own observation. The results it is intended to contain are (1) Cash Balance; (2) Bank Balance; (3) Profit and Loss Account; (4) total due to or from clients collectively; (5) Principals' Drawing Accounts; (6) Principals' Capital Accounts; (7) Balance Sheet; (8) sundry private investments, etc., etc. Suspense Profit and Loss Account. It is advisable for every solicitor or firm of solicitors to keep a Suspense Profit and Loss Account in the General Ledger, so that he or they may only draw on account of realised profits and can see at a glance whether they have overdrawn. In the latter case it means that they have been drawing on capital or on clients' moneys. The method of keeping this Suspense Profit and Loss Account is as follows. VOL. VI 6 When a bill of costs is sent out debit the client and credit Suspense Profit and Loss Account; when paid credit the client with cash received, and also debit the Suspense Profit and Loss Account and credit office costs. If this plan is carried out, a solicitor can see at a glance exactly what costs sent out have been realised and what unrealised. Separate Bank Accounts. As suggested by the Incorporated Law Society in a published report, accounts carefully kept and periodically made up and audited, and a Balance Sheet are a safeguard both to solicitor and client, and carelessness without dishonesty produces confusion, which under certain circumstances may drift into dishonesty; so that it is advisable where practicable to keep two distinct banking accounts, one for the office moneys pure and simple, and one for clients' moneys. The great argument in favour PRO FORMA SET OF ACCOUNTS ON SYSTEM KNOWN AS "KAIN'S," |