A, Debtor. | A, Creditor. | B, Debtor. | B, Creditor. | | | To sundries £100|By sundries £500|To sundries £600|By sundries £400 To B . . . 400| |To Balance 200|By A . . . 400 ----| ----| ----| ---- £500| £500| £800| £800 And the entry in the balance account will be, “Creditor by B, £200,” shewing that, on these two accounts, the credits exceed the debits by £200. Still, before the balance account is made up, it is desirable that the profit-and-loss account should be transferred to the stock account; for the profit and loss of this year is of no moment as a part of next year’s ledger, except in so far as it affects the stock at the commencement of the latter. Let this be done, and the balance account may then be made in the form required. The stock account and the profit-and-loss account, the latter being the only direct channel of alteration for the former, differ in a peculiar manner[60] from the other preliminary accounts, and the balance account is a species of umpire. They represent the merchant: their interests are his interests; he is solvent upon the excess of their credits over their debits, insolvent upon the excess of their debits over their credits. It is exactly the reverse in all the other accounts. If a malicious person were to get at the ledger, and put on a cipher to the pounds in various items, with a view of making the concern appear worse than it really is, he would make his alterations on the _debtor_ sides of the stock and profit-and-loss accounts, and on the _creditor_ sides of all the others. Accordingly, in the balance account, the net stock, after the incorporation of the profit-and-loss account, appears on the _creditor_ side (if not, it should be called amount of _insolvency_, not _stock_), and the debts of the concern appear on the same side. But on the debit side of the balance account appear all the assets of the concern (for which the balance-clerk is debtor to the clerks from whom he has taken them). [60] The treatises on book-keeping have described this difference in as peculiar a manner. They call these accounts the _fictitious accounts_. Now they represent the merchant himself; their credits are gain to the business, their debits losses or liabilities. If the terms real and fictitious are to be used at all, they are the _real_ accounts, end all the others are as _fictitious_ as the clerks whom we have supposed to keep them.