To whom are all these parties, or accounts, bound, and from whom are they released? Undoubtedly the merchant himself, or, more properly, the balance-clerk, presently mentioned. But it is customary to say that the accounts are debtors to each other, and creditors by each other. Thus, cash debtor to bills receivable, means that the cash account (or the clerk who keeps it) is bound to answer for a sum which was paid on a bill of exchange due to the house. At full length it would be: “Mr. C (who keeps the cash-box) has received, and is answerable for, this sum which has been paid in by Mr. A, when he paid his bill of exchange.” On the other hand, the corresponding entry in the account of bills receivable runs—bills receivable, creditor by cash. At full length: “Mr. B (who keeps the bills receivable) is freed from all responsibility for Mr. A’s bill, which he once held, by handing over to Mr. C, the cash-clerk, the money with which Mr. A took it up.” Bills receivable creditor by cash is intelligible, but cash debtor to bills receivable is a misnomer. The cash account is debtor to the merchant by the sum received for the bill, and it should be cash debtor by bill receivable. The fiction of debts, not one of which is ever paid to the party to whom it is said to be owing, though of no consequence in practice, is a stumbling-block to the learner; but he must keep the phrase, and remember its true meaning.
The account which is made debtor, or bound, is said to be debited; that which is made creditor, or released, is said to be credited. All who receive must be debited; all who give must be credited.
No cancel is ever made. If cash received be afterwards repaid, the sum paid is not struck off the receipts (or debtor-side of the cash account), but a discharge, or credit, is written on the expenditure (or credit) side.
The book in which the accounts are kept is called a ledger. It has double columns, or else the debtor-side is on one page, and the creditor side on the opposite, of each account. The debtor-side is always the left. Other books are used, but they are only to help in keeping the ledger correct. Thus