t profits are transferred to a
separate account called _current account_. This plan is but rarely
observed in the case of undertakings owned by individuals, or private
firms, but is invariably adopted in connexion with joint-stock
companies, although in such cases the name _appropriation of profit
account_ is generally employed.

Journal.

Although it is now usual to employ several books of first-entry, in the
case of comparatively small businesses one such book is sufficient for
all purposes, in that it is practicable for one person to record all the
transactions that take place as and when they occur. A book of this
description is called the _journal_, and for many years represented the
only book of first-entry employed in book-keeping. An example of the
journal is given below. The entries appearing therein are such as would
be necessary to prepare the trading and profit and loss accounts from
the trial balance shown above, and to bring the capital account up to
date.

In modern times, however, with the growth of business, it was soon found
impracticable to keep one book of first-entry for all transactions, and
accordingly it became necessary either to treat the journal as an
intermediate book, in which the transactions might be brought together
and focused as a preliminary to being recorded in the ledger, or else to
split up the journal into numerous books of first-entry, each of which
might in that case be employed for the record of a particular class of
transaction. The first method has been generally adopted in the
continental countries of Europe, as will be shown later on, whereas in
Great Britain and in North America the latter method more generally
obtains; that is, instead of having one journal in which all classes of
transactions are recorded in the first instance, it is usual to employ
several journals, as follows:--a _sales journal, sales book_ or _day
book_, to record particulars of goods sold; a _bought journal, invoice
book_ or _purchases book_, to record particulars of goods purchased; a
_returns inwards book_, to record particulars of goods sold but
subsequently returned by customers; a _returns outwards book_, to record
the like particulars with regard to goods purchased and subsequently
returned; a _bills receivable book_, to record particulars of bills of
exchange received from debtors; and a _bills payable book_, to record
particulars of bills of exchange given to creditors.

JOURNAL 1