Bank Accounting

Bank accounting consists in making written, permanent records of every transaction. Every penny must be accounted for. The statement of the bank, which we have just discussed, shows the general, or control, accounts of the bank, and the various books of the bank show the detail of these items. It would not be impossible, but it would be entirely impractical, to enter every figure directly on the statement of condition. We might imagine an enormous sheet on which the capital is entered as to the ownership of each share of stock. Instead of total deposits, the balance of each depositor would appear opposite his name. On the other side, instead of loans and discounts, there would be an itemized list of the loans with the names of the borrowers. With such a sheet spread out over a floor space of great area, we might imagine the clerks crawling up and down the columns like flies making debits and credits. This is, of course, absurd, but it is precisely what happens, except that the entries are made on books, loose leaves or cards, and the final results are posted on the statement of condition which is thus altered day by day.

As in other matters we have mentioned, banks are also alike with respect to bank accounting, the same principles govern whether the bank is large or small or trust company.All the books are a part of the general books, and the extent to which they are divided depends on the size of the bank. Division is made to fit the capacity of the clerk. When any part of the work becomes too burdensome for one man, he may be given an assistant or the books and records will be further divided, so that two men can do the same thing without conflicting. In very large banks a clerk may spend all his time listing checks upon a sheet, or adding up certain columns of figures or doing any one of a thousand things that must be done in the process of keeping accounts. Unless he is studious and observant, he loses sight of the fact that his work is a part of the whole, he becomes mechanical, falls into a rut and banking, instead of being an interesting employment full of possibilities, is to him mere drudgery. He is standing so close to the machinery that he allows it to master him instead of broadening his vision by study and thus mastering his task.