26. P Ginger // A Cash l.21 s.12 g.- p.-
50. P Cash // A Ginger l.24 s.- g.- p.-
51. P Ginger // A Profit & Loss l.2 s.8 g.- p.-
He continues through his posessions.
His ship Vallaressa, for example,
with all its equipment, is worth 250 lire.
The Journal entry for this item is
1. P Cash // A My Capital l.250 s.- g.- p.-
18. P Ship Vallaressa // A My Capital l.250 s.- g.- p.-
CASH 1. To Capital l.250 s.- g.- p.- | 26. Ginger l.21 s.- g.- p.- 50. Ginger l.24 s.- g.- p.- | CAPITAL | 1. Cash on hand l.250 s.- g.- p.- | 18. Vallaressa l.250 s.- g.- p.- GINGER 26. bought 1200 lbs. | 50. sold 1200 lbs. @ d. 18% l.21 s.12 g.- p.- | @ d. 20% l.24 s.- g.- p.- 51. To Profit & Loss l.2 s.8 g.- p.- | SHIP Vallaressa 18. to Capital l.250 s.- g.- p.- | PROFIT & LOSS | 51. From Ginger l.2 s.8 g.- p.-
A further balancing is made inside each account. If the credits exceed the debits, a profit item is added on the debit side to bring them into balance. The global balance is restored by crediting that same item to the Profit & Loss account. This is illustrated above for the Ginger account. In case the debits exceed the credits in an account, a loss item is added to the credit side of that account; the same item is debited to Profit & Loss. This interior balancing then shows clearly in the Profit & Loss account which parts of the business-household complex are contributing to, and which are draining from, the sucess of the entire enterprise.
2. Double entries and how they work
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