Sec. 9] INCOME SUMMATION 159

are sold. The dealer credits his stock of goods and debits
his “cash,” while the buyer does the opposite.

 

 

 

 

Stock of Goods Stock of Cash
Seller. +. iced ert ausnalts +.§2 — $2
Buyer a — $2 + $2

 

 

 

The two transfers into which any exchange may be
resolved are represented by the two columns of the table.
But an exchange may also be resolved into two pairs of
items represented by the two lines of the table. The
items in the same horizontal line record the part taken in
the exchange by one of the two exchangers. This pair of
items constitutes his transaction, while the remaining pair
constitutes, in like manner, the transaction of the other
party to the exchange. The term “ transaction,” though
somewhat vague in ordinary use, appears well suited to
express the share in an exchange of one of the two who
participate in it.
Every exchange, then, consists of four items, and may
be resolved either into two transfers (one for each property
 exchanged) or into two transactions (one for each
exchanger). The first resolution has been considered;
we proceed now to the second, and enter the subject of
“ double-entry bookkeeping.”
By double entry is meant the record of every doublefaced
 event pertaining to a particular person, whether it
be a transaction of that person with another or an interaction
 between the various categories of capital within
his own possession. Double-entry book-keeping is most
perfectly illustrated in the case of a fictitious person.
The following account represents the entries during a
given year for a dry goods company. In this account we
observe that every item on the income side is balanced