The accounts are kept as if every different sort of account belonged to a separate person, and had an interest of its own, which every transaction either promotes or injures. If the student find that it helps him, he may imagine a clerk to every account: one to take charge of, and regulate, the actual cash; another for the bills which the house is to receive when due; another for those which it is to pay when due; another for the cloth (if the concern deal in cloth); another for the sugar (if it deal in sugar); one for every person who has an account with the house; one for the profits and losses; and so on. All these clerks (or accounts) belonging to one merchant, must account to him in the end--must either produce all they have taken in charge, or relieve themselves by shewing to whom it went. For all that they have received, for every responsibility they have undertaken to _the concern itself_, they are bound, or are _debtors_; for everything which has passed out of charge, or about which they are relieved from answering _to the concern_, they are unbound, or are _creditors_. These words must be taken in a very wide sense by any one to whom book-keeping is not to be a mystery. Thus, whenever any account assumes responsibility to any parties _out of the concern_, it must be creditor in the books, and debtor whenever it discharges any other parties of their responsibility. But whenever an account removes responsibility from any other account in the same books it is debtor, and creditor whenever it imposes the same. 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.