if it is a goods account; or the income or expenditure for the period under that head, if it be a branch of the Profit and Loss Account.

The term is also commonly used to signify a statement rendered periodically by a creditor to his debtor, showing their transactions and the balance payable to settle. In fact, the term in its widest sense embraces every form of statement which brings out the result of business dealings in money.

Account Current.-An account current is an account that runs on more or less indefinitely, as opposed to one balanced at regular intervals. The liability under an account current is usually reduced from time to time by sums paid on account and not appropriated against specific debits.

From the very nature of the account, it is usual to charge interest on the various items making up the balance of an account current, the rate of such interest varying according to agreement or the usage of the trade.

For the purpose of charging interest, and also for the purpose of comparing the items in the account, interest statements are delivered at regular intervals; when such statements have been accepted by the parties as correct, the charge for interest, as shown on the statement, is passed into the ledger, and the balance of the account struck; this balance, which is the same balance as that shown in the statement, is then brought down, and the usual plan is to make a note in the ledger stating that such balance is the agreed balance "as per statement rendered," giving the date of the statement and a reference to the copy-book in which a copy of the statement may be found.

Accounts current are common in many businesses, especially in certain commission businesses; a familiar example of an account current is furnished by the ordinary running account with a banker.

The terms current account" and "account current" are sometimes used as meaning an account not yet stated, or an account not yet due for payment; but these terms, so used, must not be confounded with the more specific meaning of the term "account current" which is well recognised as having the meaning given above.

The form most frequently used in rendering a statement of an account current is appended. In many businesses it happens that, at the date when such statement is rendered, some of the debit items are not yet due for payment, or some of the credit items, e.g. a bill of exchange, have not yet matured. As the interest is calculated to the date of the statement it is necessary to make an allowance in respect of such items; the usual plan is to show the interest on such items in red ink, the reason being that the interest appearing against such of these items as are debits (and therefore appearing on the debit side of the account) is interest that has to be credited, and vice versa interest that appears against such of these items as are credits is interest that has to be debited.

The mode of dealing with such items is clearly shown on the accompanying form:

[FORM

The foregoing remarks explain the mode of dealing with the interest in the above statement. The interest items in bold type of 3s. 6d., 2s. 9d., and 9s. 3d. respectively on the debit side of the account are items that have to be allowed to the customer as the interest for the days between the date of the statement and the dates when the items, in respect of which such interest is calculated, are due for payment; this credit is effected by transferring the total of the interest in bold type on the debit side into the credit interest column, where it appears under the heading "Interest in red per contra "the same process is gone through with respect to the debit interest"in red" of £1:16:2. After these transfers are made, in casting the interest columns, for the purpose of charging the balance of interest, no notice is taken of the figures in red which have already been dealt with. HERBERT L. TEBBS.

Account Current, Interest on.-Interest is very often charged on the debit balances and allowed on the credit balances of accounts current. Thus, in the case of a trust estate the factor might charge the trust, interest say at 5 per cent or at bank overdraft rates, on all monies advanced by him, and might allow the trust, interest at, say 2 per cent or at bank deposit receipt rates, on sums belonging to the trust in his hands.

There are various ways in which accounts current with interest are stated, but the working-out of the various methods is either performed by means of interest tables or by products, as now shown.

Let the following be taken as an example of an account current :

The methods in which the account may have interest charged on it are as follows:

In the above example interest is charged at the rate of 5 per cent on the debit items and allowed at the same rate on the credit items up to 31st December. The difference between the two interest columns gives the interest due on the whole account for the year.

Another way of arriving at the same result is by calculating interest on the balances from day to day. The account would, in this case, appear as

follows:

The other method of calculating interest is by means of products, and the foregoing example, with interest calculated in this way, would appear as follows:

Form III.

The rule for arriving at the interest by means of products is as follows:Multiply each item in the account by the number of days from its date to the date of settlement, or to any given date to which it is desired to find the interest. Take the balance of the products, multiply by twice the rate per cent, and divide by 73,000. This gives the interest on the account.

If the interest on the debit and credit sides is at different rates, the multiplication by twice the rate should be performed on the totals of the two sides, and thereafter the balance should be divided by 73,000.

In the example given the balance of interest numbers is 38,500. Twice the rate per cent, which is 5 per cent, is 10. Then 38,500 multiplied by 10 gives 385,000. Dividing 385,000 by 73,000 we get £5:5:53, as follows, using contracted division:

73000)385000(5·2739 = £5: 5:53.

365000

20000

14600

5400

5110

290

219

71

63

Working out this example by products, but taking the balances from day to day, the account would appear as follows :—