The manifold banking operations bills give rise to, and the necessity of recording such operations distinctly, require the use of a whole set of bill books, some of which are kept for the mere sake of information ; others, on the contrary, belong to the book-keeping department of a bank.

The bills a bank has usually to deal with may be divided as follows:-

(a) Bills discounted by the bank.

(b) Bills received from customers or correspondents, to be cashed for their account.

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Both these kinds of bills must be presented to the acceptor for payment when due. It is necessary, therefore, to have at hand a ready indication of the maturity of each bill, besides keeping a separate account of all bills discounted by the bank, as well as of those received for collection.

Three different books are regularly employed for this object, viz.:-

(a) The bills diary, wherein all bills received by the bank must be entered, the book being intended to point out what bills fall due on each day. For this purpose every page in the book bears on its head-line the date of a day chronologically arranged, and each bill is entered under the date of its maturity.

(b) The bills discounted book, which shows all bills discounted by the bank, numbered according to the order of their presentation.

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From this book, both the sum laid out for discounts, and the amount of interest and commission charged, are daily transferred in bulk, under their proper heading, to the day hook and thence to the general ledger.

For customers regularly accommodated with discount, sepa­rate accounts are very often kept in another book, called the discount ledger, by which the banker may see at a glance the amount of accommodations granted to each of them, and judge whether it is safe for him to make new advances of money.

(c) The bills for collection book, being a regular record of all bills to be cashed by the bank for the account of third parties. From this book, also, the amount is daily posted under its proper heading, first in the day book, and then in the general ledger.

These records are sufficient when bills are collected directly by the hank; but it often happens that the acceptor of a bill does not live in the same town or neighborhood, and the presentation for payment must then needs be effected through some agent or correspondent, to whom the bill is remitted for col­lection. The account of such operation must, there­fore, be entered in a different book, viz.:-

ADVERTISEMENTS:

The bills remitted book, wherein all bills remitted to agents for collection are noted; having been entered first, either in the discounted bills book or in the bills for collection book, as the case may be, and in the bills diary, as above explained.

The amounts of bills remitted are likewise duly entered in the day book and posted in the ledger, under their proper headings.

The natural close of all operations on a bill is pay­ment, through which the bill itself is cancelled. When a bill is paid, the book-keeper makes the necessary entries to balance his accounts, and the bill is thus cleared out of the books; but in case of its being dis­honoured, further entries are necessary, in order to discharge it from the original accounts and keep a due record of it, for the possible recovery of its amount, together with noting or protesting charges, etc.

This is done through another book, called the over­due bills book, where all dishonoured bills are registered and numbered, an entry being contemporarily made in the debit side of the day book, and thence posted to the debit of the overdue bills account in the ledger.

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In case of an overdue bill being paid, the account is balanced by a credit entry in the day book, to be posted as usual, and by a memorandum against the original record in the overdue bills book.

It is understood that each of the bill books must show in separate columns: (a) the date and number of entry; (3) the date of the bill; (c) the party on whose behalf the bill is discounted, or from whom it was received ; (d) the drawer and the acceptor’s name; [e) the term of maturity; (f) the amount; (g) the rate of interest; [h) the number of days for which interest is charged; (i) the commission, if any.

Other particulars, if required by the nature of the book wherein the entry is made, are also to be stated in order that the full description of the bill and of the parties to it may be seen at a glance, which cannot be the case with the accounts in the ledger, where, as already explained, the transactions are posted in bulk either daily or at regular periods.